westchester fire insurance company v. moyes complaint

8/3/2019 WESTCHESTER FIRE INSURANCE COMPANY v. MOYES Complaint

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK xWESTCHESTER FIRE INSURANCE COMPANY, Case No.:

Plaintiff, COMPLAINT- against -

I / /

JURISDICTION AND VENUE1. The Court has jurisdiction over this action based upon the diversity of

citizenship pursuant to 28 U.S.C. 1332.2. The amount in controversy, exclusive of interest and costs, exceeds

$75,000.3. Venue is proper in the Southern District of New York pursuant to the forum

selection clause in the Agreement of Indemnity between Westchester Fire InsuranceCompany and the Defendant referred to below.

THE PARTIES4. Westchester Fire Insurance Company (hereinafter referred to as

Westchester Fire or Surety) was, at all times, a corporation organized and existingunder and by virtue of the laws of the State of New York, and duly authorized totransact surety business in the State of New York.

JERRY MOYES,Defendant.

Plaintiff Westchester Fire Insurance

respectfully alleges the following:

Case 1:08-cv-10726-FM Document 1 Filed 12/10/08 Page 1 of 11


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5. Upon information and be lief, defendant Jerry Moyes is a citizen of theState of Arizona residing at 13327 North 65h Drive, Glendale, AZ 85304.

6. On December 15, 2005, the Defendant, in par tia l consideration of and asan inducement to Westchester Fire to execute bonds as surety for Palm Beach ResortCondominiums, LLC, (hereinafter referred to as Palm Beach) as principal, executed anAgreement of Indemnity that provides in part as follows:

PREMIUMS & COLLATERAL FOR SURETYSHIP-TheINDEMNITORS shall pay or cause to be paid to the SURETYboth the agreed premium and, upon written request by theSURETY at any time, collateral security fo r its suretyship until theINDEMNITOR shall furnish to the SURETY competent writtenevidence, satisfactory to the SURETY, of the termination of anypast, present and future liability under any Bond . TheINDEMNITOR expressly waives any righ t to interest which maybe earned on the collateral security and further consents that thecollateral security provided in consideration of the suretyship maybe held by the SURETY in any investment or depository that theSURETY in its sole discretion deems advisable and prudent. TheSuretys election not to demand collateral at the inception of thesuretyship obligation shall not operate as a waiver of the right todemand and receive such collateral at any time before liability hasterminated under any Bond.

2. INDEMNITY & COLLATERAL FOR CLAIM- The INDEMNITORshall indemnify and save harmless the SURETY from and againstany and all liability, claim , demand, loss, damages, expense, cost,attorneys fees and expenses, including without limitation, feesand disbursements of counsel incurred by the SURETY in anyaction or proceeding between the INDEMNITOR and theSURETY, or between the SURETY and any third party , whichSURETY shall at any time incur by reason of its execution of anyBond or its payment of or its liability to pay any claim , irrespectiveof whether the claim is made against the SURETY as a joint orseveral obligor and whether the INDEMNITOR is then liable tomake such payment, and to place the SURETY in funds to meetall of its liability under any Bond, promptly upon request andbefore the SURETY may be required to make any paymentthereunder; and copy of the claim, demand, voucher or otherevidence of the payment by the SURETY of any liability, claim ,demand, loss, damage, expense, cost and attorneys fees, shall

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be prima facie evidence of the fact and amount ofINDEMNITORS liability to the SURETY under this Agreement.Any demand upon the SURETY by the Obligee shall be sufficientto conclude that a liability exists and the INDEMNITOR shall thenplace the SURETY with sufficient funds in a form and amountdeemed acceptable in the SURETYS sole discretion, as collateralsecurity to cover the liability.

A copy of the Agreement of Indemnity is annexed hereto as Exhibit A.7. Following execution of the Agreement of Indemnity by Defendant,

Westchester executed release of mechanics lien bonds as surety for Palm Beach in theaggregate amount of $6,382,389 to secure claims by subcontractors who had filedmechanics liens against a condominium apartment building in Las Vegas owned by thatPalm Beach.

AS AND FOR A FIRST CAUSE OF ACTION AGAINSTTHE DEFENDANT FOR DEPOSIT OF COLLATERAL8. Plaintiff Westchester Fire repeats and realleges the allegations contained

in paragraphs 1 through 7 hereof.9. Subsequently PGAL, LLC and Hardy Companies, Inc. commenced actions

in Clark County District Court in the State of Nevada against, among others, PalmBeach and Westchester Fire to foreclose on bonds Westchester Fire had executed assurety for Palm Beach.

10. By letter dated November 14, 2008, Westchester Fire further demandedthat the Defendant provide collateral in the amount of $6,382,389 pursuant to the termsof the Agreement of Indemnity.

II. Despite said demand, the Defendant has failed provide Westchester Firewith collateral.

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12. Under the Agreement of Indemnity, Defendant is obligated to immediatelyprovide Westchester with the collateral it has demanded pursuant to the Agreement ofIndemnity.

13. By reason of the foregoing, Plaintiff demands that Defendant pay collateraland deposit the sum of $6,382,389 plus any future loss, costs, fees or expensesincurred plus interest and attorneys fees with Plaintiff.

AS AND FOR A SECOND CAUSE OF ACTION AGAINSTTHE DEFENDANT FOR DECLARATORY JUDGMENT OF INDEMNIFICATION14. Plaintiff Westchester Fire repeats and realleges the allegations set forth in

paragraphs 1 through 13 hereof.15. Westchester may be required to pay the obligees under the bonds it has

executed as surety for Palm Beach and to defend the actions brought by thoseobligees.

16. Under the Agreement of Indemnity Defendant is obligated to indemnifyWestchester for all losses, expenses or other payments it may be required to incur ormake by reason of having executed the bonds.

17. Westchester Fire is entitled to a declaratory judgment that Defendant hasthe foregoing obligations.

AS AND FOR A THIRD CAUSE OF ACTION AGAINSTTHE DEFENDANT FOR A PRELIMINARY INJUNCTION18. Plaintiff Westchester Fire repeats and realleges the allegations set forth in

paragraphs 1 through 17 hereof.19. The Agreement of Indemnity requires the Defendant to post collateral with

the Plaintiff promptly upon the request of the Plaintiff.

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20. Westchester Fires right to collateral from Defendant was specificallybargained fo r and agreed to by Defendant.

21. Westchester Fire has no adequate remedy at law and will be irreparablyharmed if the Defendant fails to pay collateral in the sum of $6,382,389 to Plaintiff.

22. Westchester Fire has a strong likelihood of success on the merits in thisaction.

23. The issuance of a preliminary injunction will not create an undue hardshipfo r the Defendant as the preliminary injunction will require the Defendant only to dowhat Defendant contracted to do in the Agreement of Indemnity.

24. Westchester Fire will suffer undue hardship if a preliminary injunction isnot granted as Westchester Fire would then be required to use its ow n funds to defendand pay any claims despite the promise of the Defendant to post collateral upon therequest of Plaintiff.

25. For the aforementioned reasons, Westchester Fire respectfully requeststhat the Court issue a preliminary injunction requiring (1) Defendant to immediately postcollateral in the sum of $6,382,389 and (2) until the collateral is posted, enjoining andrestraining Defendant from selling, transferring, disposing or encumbering Defendantsassets and property and granting Westchester Fire a lien upon all the assets andproperty owned by the Defendant and in which the Defendant has an interest.

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AS AND FOR A FOURTH CAUSE OF ACTION AGAINST THE DEFENDANTFOR COSTS, EXPENSES AND ATTORNEYS FEES26. Plaintiff Westchester Fire repeats and realleges the allegations set forth in

paragraphs 1 through 26 hereof.27 . The Agreement of Indemnity requires that Defendant indemnify

Westchester Fire for all losses and/or expenses of whatsoever kind or nature, includinginterest, court costs and attorneys fees that Westchester may incur by reason of havingexecuted the bonds.

28 . Defendant is obligated to pay Westchester Fire the attorneys fees andexpenses it has incurred in connection with this action.

WHEREFORE, Plaintiff Westchester Fire Insurance Company respectfullyrequests judgment as follows:

a. On the First Cause of Action against Defendant Jerry Moyes for thedeposit of the sum of $6,382,389.00 plus any future loss, costs, fees orexpenses incurred plus interest and attorneys fees;

b. On the Second Cause of Action a declaration that Defendant isrequired to indemnify plaintiff for all losses, expenses or other payments that itmay incur or be required to make by reason of having executed the bonds;

c. On the Third Cause of Action issuing a preliminary injunctionrequiring (1) Defendant to immediately post collateral in the sum of $6,382,389and (2) until the collateral is posted, enjoining and restraining Defendant fromselling, transferring, disposing or encumbering Defendants assets and propertyand granting Westchester Fire a lien upon all the assets and property owned bythe Defendant and in which the Defendant has an interest;

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d. On the Fourth Cause of Action against Defendant Jerry Moyes forcosts, expenses and attorneys fees;

e. And for such other further relief as this Court deems just andproper.

Dated:New York, New YorkDecember 9, 2008

Richard B. Demas, Esq. (RIGottesman, Wolgel, Malamy,Flynn & Weinberg, P.C.Attorneys for PlaintiffWestchester Fire Insurance Co.11 Hanover Square, 4h FloorNew York, New York 10005(212) 495-0100

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Mixed SourcesCert no. SW-COC-002980wwwfscorg

1996 Forest Stewardship Council



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Agreement of Indemasty J Insurance Company of North AmericaJ Pacific Employers Insurance CompanyI Wcctchester Fire Insurance CompanyACEUSA i indemnity Insurance Company ofNorth AmericaACE Bond ServicesWherest the undersigned (lwwinaftcr individually and collectively called INDIIMNITOR) desirer one or more of the companies named above, us the ease ma y Ire,(hereinafter celled SURItTY) to execute bonds including urrrlrxtskings and other obligations. including any Sound or bondt predating thia Agreement, (hereinafter referredto as Bonds) on its behalf and on behalf of any of itt present or future, directly ste indirectly owned or ectoanlted subsidiaries or afttliates,whether alone or itt joint venturewith others whether or not named herein, and any corporation, partnership or pamon upon the written request of any of the undersigned (collectively hereinafter referred letas Principals) or to renew or continue and to refrain from canceling the Bonds, us the case may be, andNOW TI4EPJItrURE, in consideration of the SuRETY executing the Bonds, the I14flEMNITORS agree that

PREMIUMS & COLLATERAL FOR SURETYSHIP-The INDEMNITORS shall pay or cause to be pai d to the SURETY both the agreed pretniuno and, uponwritten request by the SURETY at any time, collateral security fur itt turetyship until the INDEMNrIOR shall furnish to the SURETY competent written evidence,tauiofuctoty to the SURETY, of the termination of any past, present and future liability under any Bond, The INf)EMNITOR ospressly waives any right to interestwhich ma y toe earned on the collateral aecurity am) further consenlo that the collateral security provided in Consideration of suretyship tnaybc held lay the sUttEfy inany investment or depository that the SURETY in its sole rliecretioo deems advisable and prudent. The Suretys election not to demand collateral at the inception ofthe oaretyslsip obligation ohalt not operale as a waiver of the right to demand and receive such collateral at any t ime before liability has terminated under any Bond.2 INDEMNITY St COLLATERAL FOR CLAIM- tire INDI3MNITOR ahati indemnity and save harmless the SUXElY from and against any aird all liability, claim,demand, loes, damages, expense, cost, attorneys fees snd espenoes, inclsding without limitation, fees and disbursements of counsel ineu#ed by the SIJRETY in anyaction or proceeding between the INI)EMNJTOR and the St)RETY, or between the SURETY and any third party, which SURETY shall at any t ime incur by reason ofits execution of any Bond tsr its payment of or its liability to pay any claire, irrespective ofwhet/sr the claim in made against the SURETY as ajoint or several obligorand whether the INDEMNIrOR is then liable to make such poymertl, arid to p10cc the SURETY in funrl to meet alt of its liability unde r any Bond , promptly uponrequest and before the SURETY maybe required to make any payment thereunder; and copy of the claire, demand, voucher or other evidence of the payrrrent by tIreSURETY of any liability, claim, demand, loss , damage, expense, coal and attorneys fees, shal l be prima Stoic evidence of the fact and amount of INDEMNITOR Sliability to the St .JRETY under thin Agr eement A ny demand apex t he SURETY by the Obliger shall be sufficient to conclude that a liability exists and therNDEMNITOR shal l then place the SURETY with oufficienl funds in a form and amount deemed acceptable in the SURETYS sole discretion, as collateral eecuriey tocover the liability.3. OTRER INDEMNITY- The INDEMNITOII. shall continue 5cr remain bound under the terms of this Agreement even though the SUIt,ElY may have heretofore orhereafter, with or without notice to or larowledgc of LIme lrinctpale and the INDEMNItOR, accepted or relented other agreements of indemnity or collateral inconnection with the exccutinn or prncuresnenl of said Honda, from the principals or INDEMNITOR or others. The rights, powers and remedies given the SIJREtYunder this Agreement shalt be and are in addition tr and not in lieu of any and all other rights, powers acid remedies which the SURETY may have or acquire againstthe Principals and INDEMNITORov others, whether by the teems of any agreement or by operation uf law or otherwine.4. INVALIDITY- In ease any of the lNl)EMNITORS fail to execute thia Agreement, or i n c as e the execution hereof by any of the lNl)SMNITORS be defect/vt orinvalid for any reason, such failure, defect or invalidity shall not in any nianner affect the validity of thi s Agreement or the liability hereunder of any of theINDEEtNrIOBS e,tecmstisrg the sante, but each and every tNt3t/MNITOK so executing shall be antI remain full bosmtt sod liabte hesestnder us the same extent us ifsuch failure, defector invalidity had riot esiuled,5. SURETIES Alt of the terms, proviaionu and conditions of this Agreement strati be extended to and for the benefit not only of the SURETY, either us a direct writingcompany or an a co-surety or reinaurer, but a lso f ur She benefit of arty surety or inaurance company or comnpanies with which the SURETY may participate as a cosurety or reinsurer and also for the benefit of any other company which may execute any bond or bends at the request of the SURBIY on behalf of any of thePrincipals.

DECLINE EXECUTION - Ustlese otherwise specifically agreed in writing, the SURETY may decline to execute soy borrd and the Priseipals and INDEMNITORshall moire no cluim to the contraryCItAI4GES, WAIVER OF NOTICE - The SURETY is autltoriecd snd empowered, without notice t o o r knowledge of the INDEMN1TOR, to assent mrs any changewhatsoever in Btonds and/or the esntrsuts or obligations covered by any said Bonds including but not limited to time time for perfomnassee a nd a ny continuations,uvtcnsioss or renewals of the Bonds, the execution of any snbstitule or substitutes therefore, with the sante or differest conditions, provisions and obligeeu with thesame or larger or smaller penalties; it being expressly understood sod agreed that the INDEMNITOR shall remain bound under the lemt of this Agreement eventhsugh arty such assent by she SURETY does or might substantially increase rIte liability of the INDEMNITOR. The INDEMNITOR waives notice of the execulinu ofBonds, scceprunce of this Agreemeet, default or other sets giving rice to a bond claim or liability of star SURETY antler Bonds.TERMINATION - This Agreemenl tray be temsinaletl by the INl)EMNflOR upon twenty days written notice sent by registered mail to the SURETY at its homeoffice at ACE I3ond Servicm, TI,33B, 1601 Chestnut Sleet, Philadelphia, Pensoylvunia 19103, but any such notice of termination shall not operate to modify, bar ordischarge the t tIDEMNITOR as to tire Bonds that may have been therefore executed.sEvEp,AIaa,ITV -If ssy provision or provisions of this Agreement be declatnd void or unenforceable under any law governing its construction or enforcerrterrt, thisAgreement slrsll not be sold or vitiated thereby, but shall Ire cunabued und enforced with the sante effect on though such provision or provisions were omitted.

a. CHOICE OF LAW/FORUM - It is mutually agreed that this Agreement it deserted mads in the State ef New York. regardless of the order in which tise signatures ofthe pantres shalt have beets affixed end shalt be interpreted, and the rights arid liabilities of the parties determined in accordance with the lawn of the Slate of New York.INDI2MNITOR agrees that alt actions or proceedings arising directly or indirectly from this Agreement shall be litigated only in courts having status withirr thc StateofNew York. and couseetts to the personal jrtriscliction and venue of any local, State or Federal Court located therein.I. JOINT/SEVERAl. - Each undersigned lndtrtmitor, i ts successors and uuuigrsc, are jointly and srraeratly bound by the foregoing conditions of tha Agreement.3. FACSIMSLEThis Agreement bearing the signature of the Indemsiter(s) shallh valid, effective and enforceable whether received by the Surety as an original sir asa facsimile transmission.4 WITNdSS WI4EREOI. D4DEMNTfOR has signed this Agrnenrnrs this_i6__day of4t?41 2005aim Beach Resort Condominiums, LLC951 Las Vegas Boulevard South,as Vegas, NV 89119

By:_______- . t

oy , on ly aud Indovaduallyamo. Richard 3. 1 eteroitle: ManaEinEMemberame: 4tatemata3L tb: Managing Member;.lf,l 1,01 (over)



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(Either attach copies of resolutions of Boards f Directors or executO notoriat acknowledgment)FOR NOTARIAL ACXNOWLED(MENTOP ?RINCIPAIJINDEMNITORS

CORPORATE ACKNOWLEDGMENTStateCounty of as:/ day of 20 betbnt mc per so na ll y cameto mc known , who bei ng b y t oe duly sworn, deposcd and nays that - he in thePalm Beach Resort Condominiums. LLC the corporation described in and which executedlbs foregoing Agreement: that he knows t i le seal of tIle said corporation; that the neal affixed to the said Agreement is uc h corporate seal; that it woo so uffixol by the orderof the Board of Directors f said corporation, and that to signed (her)sis) name therettt by l ike orden.

(Signatso story Public)

INDIVIDUAL ACKNOWLEDGMENT TE OFState of t, 2 tVl 0.. Naas.Countyof (Cjtt, so: tmeett roaNov 10,2009

On thie j day of ,P1 InLY , 20 csS , betbre me personally sante JERRY MOYES to meknown, wh o acknowledged that he exceutod the foregoing Agreement as a free act.TN WflNESS WHEREOTt, I have hereunto s et my hand and affixed my oflicist seal, at my office in the aibresaid County, the clay acid year in this certificate first abovewritten.

CP(Signature ofNotary toblic)

My commission eppirce -wI . OF1ClAL SEALI AThC1ASV4NBENSCHOTENI JNOTARyptJglJC.6teofmCORPORATE ACKNOWLEDGMENT [State of_________On tins day of 20 beibte me personally caineto me known, who taring by mc dul y oworet, deposed and osys that he is the

of _ the corporation dtecdhcd in and ichexeceted tltc foregoing Agreement; that he knows the Seal of the mid corporation; that the teat offixcd to the said Agreement ie such corporate seal ; that i t was so affixed bythe order of the Board ofDirectors of said corporation, and that tar signed (her)(his) name thereto by like order

(Signature ofNotarylsblic)My commission expires

CORPORATE ACKNOWI,EDGMENTSlate ofCounty of Sn:

Os thts day of 20 before roe personally cameto me known, who bei ng by me duty sworn, deposed and nays that he is theof _________ the corporation dgscribed in and whichexecuted the foregoing Agreesniettt; t ha t he knows t he s ea t of the said corporation; that the neat affixed to the snid Agreement is such corporate scat; that it war so affixed bythe order of the Board of Directors of said corpnrntion, and tbat_ tsr signed (herxltio) name thereto by like order(Signature of NotaryPublic)

My commission expires



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Index No . Year 2022.O51O wIeg,I.orn

UNiTED STATES DISTICT COURTSOUTHERN DISTRICT OF NEW YORKWESTCHESTER FIRE INSURANCE COMPANY

Plaintiff,. -against-

JERRY MOYESDefendant.

COPY COMPLAINT

GOTTESMAN, WOLGEL, MALAMY,FLYNN & WEINBERG, P.C.Attorneys for Plaintiff Westchester Fire Insurance Co.

11 HANOVER SQUARENEW YORK, N.Y. 10005TEL. NO . (212) 495-0100FAX NO. ( 212) 480-9797

Pursuant to 22 IVYCRR 130-1.1-a, the undersigned, an attorney admitted to practice in the courts ofNew York State,certifies that, upon information and belief and reasonable inquiry, (1) the contentions contained in the annexeddocument are not frivolous and that (2) if the annexed document is an initiating pleading, (i) the matter was notobtained through illegal conduct, or that if it was, the attorney or other persons responsible for the illegal conduct arenot participating in the matter or sharing in any fee earned therefrom and that (ii) if the matter involves potential.claims for personal injury or wrongful death, the matter was not obtained in violation of 22 NYCRR 1200.41-a.Dated: Signature

Print Signers NameService of a copy of the within is hereby admitted.Dated:

Attorney(s) for

that the within is a (certified) true copy of aentered in the office of the clerk of the within-named Court on 20

that an Order of which the within is a true copy will be presented for settlement to theHon. , one of the judges of the within-named Court,at20 ,at M.

Dated: GOTTESMAN, WOLGEL, MALAMFLYNN & WEINBERG, P.C.

Attorneys for

PLEASE TAKE NOTICE0

a

C.)

NOTICE OFENTRY

NOTICE OFSETTLEMENT

on

11 HANOVER SQUARE


westchester fire insurance company v. moyes complaint

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