United States District Court, D. South Dakota, Southern Division
UNITED STATES OF AMERICA, for the use and benefit of Ash Equipment Co., Inc., and ASH EQUIPMENT CO., INC., a Maryland corporation, d/b/a American Hydro, Plaintiffs,
MORRIS, INC., a South Dakota corporation; UNITED FIRE AND CASUALTY COMPANY, an Iowa corporation; and RED WILK CONSTRUCTION, INC., a South Dakota corporation, Defendants.
MEMORANDUM OPINION AND ORDER DENYING MORRIS
INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT
LAWRENCE L. PIERSOL, UNITED STATES DISTRICT JUDGE
Morris, Inc. (Morris), the general contractor on a
construction project at the Fort Randall dam, asks for a
summary judgment ruling that the indemnity provision of its
subcontract with Defendant Red Wilk Construction, Inc. (Red
Wilk), entitles it to indemnity for the attorney's fees
it is expending in defending this lawsuit brought against it
by American Hydro.
general contractor for the project at the Fort Randall dam is
Defendant Morris, a South Dakota corporation with its
principal place of business in Pierre, South Dakota. On
September 17, 2013, Morris entered into the Prime Contract
for the Fort Randall dam project with the United States Army
Corps of Engineers (US ACE). Morris obtained a Miller Act
payment bond on September 18, 2013, from Defendant United
Fire and Casualty Co. in the amount of $7, 472, 670.25 as
required by U.S. ACE. On October 8, 2013, Morris contracted
with Red Wilk to complete certain work, including the
concrete removal using hydrodemolition methods as required by
USACE in its project plans and specifications. Red Wilk is a
South Dakota corporation with its principal place of business
in Huron, South Dakota. The President of Red Wilk, Red Wilk,
and Mark Morris, Secretary of Morris, signed the subcontract.
The subcontract signed by Wilk and Morris contains an
indemnity provision which states that Red Wilk agrees:
To pay for all materials, skill, labor and instrumentalities
used in, or in connection with the performance of this
Subcontract when and as bills for claims therefore become
due, and to save and protect the Project, the Owner, and the
Contractor from all claims and mechanics' liens on
account thereof, and to furnish satisfactory evidence to the
Contractor when and if required, that he has complied with
the above requirements.
(Subcontract § II, Doc. 49-2.)
April 9, 2014, Red Wilk contracted with American Hydro to
provide the labor, equipment and other facilities for
concrete removal by hydrodemolition. American Hydro began the
concrete hydrodemolition work in May, 2014. American Hydro
removed its equipment and labor forces from the work site as
of August 25, 2014.
Hydro filed the summons and complaint in this lawsuit on
August 22, 2014, alleging that it has been paid for some but
not all of the work it provided. Red Wilk contends that
American Hydro failed to perform some work in accordance with
the contract specifications and failed to complete other work
required by the contract. Red Wilk asserts that any amounts
allegedly owed to American Hydro above and beyond what has
been paid are completely offset because Red Wilk had to hire
others to correct or complete the hydrodemolition work on the
project. Both parties seek damages for the other's breach
of the contract.
Complaint, American Hydro alleges a claim for Quantum Meruit
against Morris. Morris brought a cross-claim for
indemnification against Red Wilk, asserting that American
Hydro's only claims against Morris result from the
alleged breach of contract by Red Wilk. (Doc. 9 at p. 7.) On
June 3, 2015, Morris' lawyer sent a letter to Red
Wilk's attorney formally tendering the defense of
American Hydro's claims against Morris to Red Wilk. (Doc.
58-5.) In the pending motion for summary judgment, Morris
acknowledges that liability has not yet been determined in
the lawsuit, but requests a ruling that the indemnity
provision of its subcontract with Red Wilk requires Red Wilk
to pay for Morris' attorneys' fees incurred in
defending American Hydro's claims against Morris.
of the Federal Rules of Civil Procedure provides that summary
judgment shall be granted "if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). In ruling on a motion for summary
judgment, the Court is required to view the facts in the
light most favorable to the non-moving party and must give
that party the benefit of all reasonable inferences to be
drawn from the underlying facts. AgriStor Leasing v.
Farrow, 826 F.2d 732, 734 (8th Cir. 1987). The moving
party bears the burden of showing both the absence of a
genuine issue of material fact and its entitlement to
judgment as a matter of law. Fed.R.Civ.P. 56(a); Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). Once
the moving party has met its burden, the non-moving party may
not rest on the allegations of its pleadings but must set
forth specific facts, by affidavit or other evidence, showing
that a genuine issue of material fact exists. Fed.R.Civ.P.
56(c); Anderson, 477 U.S. at 257; City of Mt.
Pleasant v. Associated Elec. Coop., Inc., 838 F.2d 268,
273-74 (8th Cir. 1988). All facts presented to the district
court by the non-moving party are accepted as true if
properly supported by the record. See Beck v. Skon,
253 F.3d 330, 332-33 (8th Cir. 2001).
Rule that Each Party Bears the Cost of Their Own
diversity proceedings, state law governing the provision of
attorney's fees is generally considered
"substantive" and thus controlling for purposes of
the Erie doctrine. Ferrell v. West Bend Mut.
Ins. Co., 393 F.3d 786, 796 (8th Cir. 2005); see
also Lamb Eng'g & Const. Co. v. Neb. Pub. Power
Dist., 103 F.3d 1422, 1434 (8th Cir. 1997). "South
Dakota generally follows the 'American Rule' on
attorney's fees, under which each party usually bears the
cost of their own attorneys." Hewitt v.
Felderman, 841 N.W.2d 258, 264 (S.D. 2013). "There
are two exceptions to this rule: 'first[, ] when a
contractual agreement between the parties entitles the
prevailing party to attorney fees, and second [, ] when an
award of attorney fees is authorized by statute.'"
Eagle Ridge Estates Homeowners Ass'n, Inc. v.
Anderson, 827 N.W.2d 859, 867 (S.D. 2013) (alterations
in original). Even if attorney's fees are recoverable,
the award of such fees must always be reasonable in light of
the services rendered. Id.
for Attorney ...