NLR Contractor Loses $1.6M Lawsuit to Philadelphia Insurance

A Philadelphia insurance company was the beneficiary of a $1.6 million default judgment last week against a North Little Rock contractor.

U.S. District Judge Susan Webber Wright awarded the amount to Philadelphia Indemnity Insurance Co. of Bala Cynwyd, Pennsylvania, over a contract dispute against TEAM General Contractors LLC.

The insurance company stated in a complaint filed in November that it entered into an indemnity agreement with TEAM and issued surety bonds for the contractor, which was required to provide the bonds for construction contracts it arranged.

The insurance company issued “a number of surety bonds” for TEAM for construction projects around the state, including ones for the city of Heber Springs, the Arkansas Department of Parks & Tourism and Arkansas Tech University. But then “a number of obligees under the Bonded Contracts” and some of the projects’ subcontractors filed claims against the insurance company under the bonds.

The insurance company calculated it had paid a loss in excess of $736,682 from those claims and established a reserve of $940,094 for potential losses and expenses. The company demanded reimbursement and collateral for the reserve fund, but never received any deposit, according to the complaint.

The insurance company filed a motion for default judgment in February after TEAM did not respond to the lawsuit. TEAM’s owners responded to the motion March 3, but Wright wrote in her order that it was “insufficient to preclude entry of default judgment.”

Wright also noted that “a business entity such as TEAM General Contracting LLC may not appear pro se,” which its owners had attempted to do.