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RLI Insurance Co. v. JLA Construction Solutions — Court entered default judgment on liability and ordered a $550,000 collateral deposit

Reported / Citable

Case
RLI Insurance Company v. JLA Construction Solutions, LLC; John R. Alvarez; and Nakita Alvarez
Court
U.S. District Court for the Southern District of Texas
Judge
Sim Lake
Date Decided
October 30, 2026
Docket No.
4:26-cv-04079
Topics
Default Judgment; Breach of Contract; Specific Performance; Damages

Background

RLI Insurance Company moved for default judgment against JLA Construction Solutions, LLC, John R. Alvarez, and Nakita Alvarez. The court referred to the three defendants collectively as the “Indemnitors.”

Each defendant had been served, and the executed summonses were filed with the court. Their deadlines to answer expired, but none appeared or answered.

The Court’s Holding

The court granted RLI’s motion and entered default judgment against the defendants, jointly and severally, as to liability on RLI’s claims for breach of contract, breach of fiduciary duty, attorney’s fees, and costs and interest.

The court reserved determination of the damages amounts under Federal Rule of Civil Procedure 55(b)(2). It directed RLI to submit an accounting or request a damages hearing within 30 days after the damages become fully liquidated. The court also granted specific performance and ordered the defendants, jointly and severally, to deposit $550,000 in good funds with RLI as collateral security within 10 days after service of the order.

Key Takeaways

  • The defendants’ failure to appear or answer after service resulted in default judgment on liability.
  • The defendants are jointly and severally liable on the claims identified in the judgment.
  • The damages amount remains unresolved, but the defendants must deposit $550,000 as collateral security within 10 days after service of the order.

Why It Matters

The judgment separates liability from the amount of monetary relief: RLI prevailed on liability, while the court retained the damages question for a later accounting or hearing.

The order also provides immediate equitable relief by requiring a substantial collateral deposit before the court determines the final damages amounts.

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