United States District Court, D. South Carolina, Columbia Division
CASUALTY INSURANCE COMPANY: William H. Sturges, Esq. Megan M.
Stacy, Esq. Shumaker, Loop & Kendrick, LLP Attorney of
Record for Plaintiff Ohio Casualty Insurance Company.
LIFEGUARD FIRE PROTECTION, INC., CAREY M. SMITH, MELBA D.
SMITH, JAMIE PATTERSON, and KIM PATTERSON: Frank Smith, Esq.
Richardson Plowden and Daniel T. Brailsford, Esq. Attorneys
of Record for Defendants Lifeguard Fire Protection, Inc.,
Carey M. Smith, Melba D. Smith, Jamie Patterson, and Kim
CONSENT ORDER CONCERNING COLLATERAL SECURITY
matter is before the Court on Plaintiff Ohio Casualty
Insurance Company's (“Ohio Casualty”), Motion
for Preliminary Injunction (ECF No. 9), filed on June 23,
2017, seeking specific performance of the collateral security
provisions in the General Indemnity Agreement
(“Motion”). Defendants Lifeguard Fire Protection,
Inc. (“Lifeguard”), Carey M. Smith, Melba D.
Smith, Jamie Patterson, and Kim Patterson (collectively,
“All Defendants”), responded to the Motion and
opposed the requested preliminary injunction. Both parties
filed Memorandums of Law with the Court. The Court scheduled
a hearing on the Motion for August 1, 2017. Prior to the
hearing, the parties advised the Court that they had reached
an agreement to resolve Ohio Casualty's Motion and would
be presenting a proposed Consent Order Concerning Collateral
Security (“Consent Order”) for the Court's
upon the consent of the parties, as indicated by their
attorneys' signature to this Consent Order and the
Court's review of the file, Ohio Casualty's Motion
for Preliminary Injunction seeking the posting of collateral
security is GRANTED and the Court
ORDERS, as follows:
While all Defendants may be jointly and severally liable to
Ohio Casualty to post collateral security in the total amount
of at least $652, 172.43, only Defendants Carey M. Smith and
Melba D. Smith are financially able to post collateral to
secure Ohio Casualty against failure of payment of any final
judgment against Defendant Carey M. Smith and Melba D. Smith
or other default as defined herein.
Defendant Carey M. Smith and Defendant Melba D. Smith
(“Defendant Smiths”) are ordered to take the
following actions in connection with the Sentinel Security
Life Insurance Company Annuity Contract Number 012-08-005970:
(1) Provide notice to Sentinel Security Life Insurance
Company that Defendant Smiths will not extend the annuity
beyond September 28, 2017, and that Defendant Smiths will
surrender said annuity and redeem the contract amount and any
interest due thereon; (2) Terminate this Annuity Contract and
collect the cash proceeds to be used as collateral security
in this case; and (3) To deliver said cash proceeds from the
annuity along with additional cash as necessary to deposit a
total of $318, 756.18, to the Trust Account of Shumaker, Loop
& Kendrick, LLP, to be held as collateral security
pursuant to the General Indemnity Agreement executed by the
Defendant Smiths, and to the extent action is needed by other
Defendants, are ordered to take the following actions in
connection with the Equitrust Life Insurance Company, Annuity
Contract Number EQ0001180863F: (1) Provide notice to
Equitrust Life Insurance Company that Defendants are
assigning as collateral their interest in said Annuity
Contract to Ohio Casualty; (2) Take all action necessary to
promptly grant a fully perfected security interest in said
annuity to Ohio Casualty; (3) Cooperate in obtaining from
Equitrust Life Insurance Company acknowledgement of the
receipt of the collateral assignment and obligation to honor
said assignment; and (4) Fully execute the attached
Assignment As Collateral (Exhibit A) and cooperate in the
delivery of the Assignment As Collateral to Equitrust Life
Defendants will take all action necessary in connection with
the above annuity contracts to accomplish the above,
including providing and obtaining written permission of all
parties identified in the annuity contracts, including
primary and contingent beneficiaries, who might be required
to consent to the above actions being taken.
regard to the Assignment as Collateral of Equitrust Life
Insurance Company Annuity Contract Number EQ0001180863F
(“Equitrust Annuity”) the following provisions
(a) Upon assignment of the Equitrust Annuity, Ohio Casualty
will have a secured interest in it and will be able to take
full ownership of it upon default by Defendants Carey M.
Smith or Melba D. Smith.
(b) A default occurs upon Ohio Casualty obtaining a judgment
against Defendants Carey M. Smith or Melba D. Smith in this
action and their failure to pay the judgment within thirty
(c) A default also occurs if Defendants Carey M. Smith and
Melba D. Smith file for bankruptcy.
(d) During the time when there is no default, Defendant
Smiths may receive the monthly payments due under the
Equitrust Annuity, as long as such payments do not reduce the
original contract amounts.
(e) Ohio Casualty may, but is not required, to file a UCC-1
in connection with the ...