Casey Surety Company, Inc. v. Jerome Charles (2009)

MEMORANDUM OF DECISION ON MOTION FOR SUMMARY JUDGMENT

This is an action, commenced by Casey Surety Co., to claim indemnification from Jerome Charles for execution of a bail bond issued by plaintiff Casey Surety Co., and paid on client's failure to appear.

On July 17, 2009 defendant filed this motion for summary judgment claiming that plaintiff lacks standing to pursue this action because the defendant's indemnification agreement was with Accredited Surety & Casualty Company, Inc., and not the plaintiff.

The following facts are undisputed.   On April 21, 2001, the defendant, Jerome Charles, entered into an indemnification agreement to secure a surety “bail bond” for his son, in the amount of $150,000.   The agreement names Accredited Surety & Casualty Company, Inc., (Accredited) as the surety on the appearance bond.   The transaction was facilitated through Patrick J. Moynihan, a bail bondsman.   The first page of the agreement provides, inter alia, that “[t]his agreement may be enforced by Patrick J. Moynihan, bail bondsman, acting as agent on behalf of Accredited Surety and Casualty Company, either in his own name or in the name of the company.”   The second page of the agreement contains a clause that states the undersigned principal hereby agrees to indemnify and/or hold harmless, the surety company and its agents for any and all losses not otherwise prohibited by law ․ that may result from the execution of the foregoing described bond.”

The one-count complaint alleges that at all times relevant to the complaint, the plaintiff was an agent of Accredited, and that Moynihan was the plaintiff's agent, and as such, was authorized to execute the indemnification agreement.   The plaintiff subsequently performed all of the terms and conditions required by the indemnification agreement, including paying the forfeited bail bond when the defendant's son failed to appear before the court.

I

Defendant argues that the plaintiff cannot assert any rights pursuant to the indemnity agreement because Accredited, and not the plaintiff, was the contracting entity;  that Moynihan is the only third party that has a right to enforce the agreement on behalf of the Accredited;  that plaintiff has not alleged that the plaintiff was an agent for Accredited regarding the indemnity agreement, nor that it was assigned any rights to enforce the agreement.

The issue of standing implicates the court's subject matter jurisdiction ․ Standing focuses on the party seeking to be heard and not on the issues that party wants to have heard ․

Accordingly we treat the defendant's challenge to the court's jurisdiction as a motion to dismiss, which essentially attacks the jurisdiction of the court.   Blumenthal v. Barnes, 261 Conn. 434, 442, 804 A.2d 152 (2002).

II

Construing the allegations of the complaint in their most favorable light;  id.;   the plaintiff has sufficiently alleged that it has standing to pursue its claim.   The plaintiff has sufficiently alleged a right to indemnification based on its status as Accredited's agent.   Specifically, the complaint alleges that the plaintiff was an agent of Accredited and that the defendant agreed to indemnify Accredited and its agent from all claims resulting from the execution of the bail bond.   Paragraph five provides that the plaintiff performed the conditions required in the agreement, thus providing the necessary connection.   Moreover, the complaint further alleges damages as a result of the bond execution, because it was forced to pay the sum of $75,000 to the State of Connecticut when the bailed person failed to appear in court.   Thus, if the pleaded facts were admitted, pursuant to the terms of the agreement, the defendant agreed to indemnify the plaintiff because it was Accredited's agent and plaintiff has a claim as a result of the execution of the bail bond.   Thus, the plaintiff has a right to enforce the agreement as a result of its alleged damages.   See, e.g., Pac v. Southington, Superior Court, judicial district of Litchfield, Docket No. CV 94-0067026 (December 19, 1996, Dranginis, J.) (plaintiff properly alleged breach of contract based on a theory of agency because plaintiff alleged that it was contracting town's agent, and while plaintiff was not a party to the agreement, defendant agreed to indemnify and hold harmless town and its agents).   The affidavit submitted by plaintiff strongly supports its claim of standing.   Of course the existence of an agency relationship is a question of fact to be determined by the trier of fact.   See Beckenstein v. Potter & Carrier, Inc., 191 Conn. 120, 133, 464 A.2d 6 (1983).

III

In the alternative, the plaintiff has established standing through the doctrine of equitable subrogation.  “The law has recognized two types of subrogation:  conventional;  and legal or equitable ․ Conventional subrogation can take effect only by agreement and has been said to be synonymous with assignment.   It occurs where one having no interest or any relation to the matter pays the debt of another, and by agreement is entitled to the rights and securities of the creditor so paid ․ By contrast, [t]he right of [legal or equitable] subrogation is not a matter of contract;  it does not arise from any contractual relationship between the parties, but takes place as a matter of equity, with or without an agreement to that effect ․ The object of [legal or equitable] subrogation is the prevention of injustice.   It is designed to promote and to accomplish justice, and is the mode which equity adopts to compel the ultimate payment of a debt by one who, in justice, equity, and good conscience, should pay it ․ As now applied, the doctrine of [legal or] equitable subrogation is broad enough to include every instance in which one person, not acting as a mere volunteer or intruder, pays a debt for which another is primarily liable, and which in equity and good conscience should have been discharged by the latter.”  Wasko v. Manella, 269 Conn. 527, 532-33, 849 A.2d 777 (2004).

In Alfred Chiula & Sons, Inc. v. Hanover Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV 06-5002478 (November 14, 2007, Elgo, J.) [44 Conn. L. Rptr. 519], the court held that the doctrine of equitable subrogation extends to a surety that pays a debt for which another is primarily liable, and which, in equity, should have been discharged by the latter.   See also Fidelity Deposit Co. of Maryland v. Bradley, Superior Court, judicial district of Hartford, Docket No. CV 94-0544726 (December 22, 1997, Mulcahy, J.), holding that an insurance company, seeking reimbursement for claims it paid when the defendant misappropriated funds from his employer, the plaintiff's insured, had standing because it actually paid the claims.

Since the plaintiff has standing to bring this action, and there are issues of material fact to be resolved, the motion for summary judgment is denied.

Wagner, J., JTR

Wagner, Jerry, J.T.R.