The opinion of the court was delivered by: SWEET
Plaintiff General Accident Insurance Company of America ("GAIC") has moved for an order of prejudgment attachment, pursuant to Rule 64, Fed. R. Civ. P., and for summary judgment against defendants Merritt-Meridian Construction Corp. ("Merritt"), Beacon Building Materials, Inc. ("Beacon"), R.K.D.K. Associates ("RKDK"), Richard Capolino, Dennis Capolino, Miranda Capolino, and Karen Capolino (the "Capolinos"), pursuant to Rule 56, Fed. R. Civ. P..
For the reasons set forth below, GAIC's motion for summary judgment will be granted and its motion for an order of prejudgment attachment will be denied as moot.
GAIC is a corporation engaged in the business of insurance and bonding. It is organized and existing under the laws of the State of Pennsylvania, with a principal place of business in Philadelphia. GAIC is authorized to conduct business in New York.
Merritt is a corporation organized and existing under the laws of the State of New York, with a principal place of business in Beacon, New York. Merritt is engaged in the construction business. RKDK is a partnership organized and existing under the laws of the State of New York. Richard, Dennis and Karen Capolino are officers of Merritt and partners in RKDK. Miranda Capolino is the wife of Dennis Capolino.
Rule 56(e) of the Federal Rules of Civil Procedure provides that a court shall grant a motion for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See Silver v. City Univ., 947 F.2d 1021, 1022 (2d Cir. 1991). In determining whether a genuine issue of material fact exists, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Brady v. Town of Colchester, 863 F.2d 205, 210 (2d Cir. 1988); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). The facts presented here are construed accordingly.
This case arises out of several construction projects in Virginia and New York, for which Merritt served as general contractor. The New York projects were: (1) City of Beacon Water Treatment Plant, (2) City of Beacon Housing Authority, (3) Rehabilitation of Route 28 Bridges, (4) Rehabilitation of bridges in Selkirk, (5) Arvin Gym, and (6) Pine Bush Elementary School. The Virginia projects were: (1) Patrick Henry Library, (2) OCS Troop Clinic, (3) Orange County Field House, and (4) Waynesboro Elementary School. Merritt engaged numerous subcontractors and suppliers for these projects.
GAIC, as a surety, issued payment bonds, which protected subcontractors in the event of default by Merritt, and performance bonds, which protected the owners in the event of default by Merritt, in connection with each of these projects.
On May 27, 1993, as an inducement to and consideration for GAIC issuing the surety bonds, Merritt and the other defendants each executed a written Indemnity Agreement in favor of GAIC. Defendants have admitted issuance of the bonds and execution of the Indemnity Agreement.
The Indemnity Agreement provides:
"INDEMNITY -- the principals and indemnitors shall exonerate, indemnify, and keep indemnified the surety from and against any and all liability for losses and/or expenses of whatsoever kind or nature (including, but not limited to, interest, court costs, and counsel fees) and from and against any and all such losses and/or expenses which the Surety may sustain and incur: (1) By reason of having executed or procured the execution of the Bonds, (2) By reason of the failure of the Principals or Indemnitors to perform or comply with the covenants and conditions of this Agreement or (3) In enforcing any of the covenants and conditions of this Agreement.
In the event of any payment by the Surety the Principals and Indemnitors further agree that in any accounting between the Surety and the Principals, or between the Surety and the Indemnitors, or either or both of them, the Surety shall be entitled to charge for any and all disbursements made by it in good faith in and about the matters herein contemplated by this Agreement under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether or not such liability, necessity or expediency existed; and that the vouchers or other evidence of any such payments made by the Surety shall be prima facie evidence of the fact and amount of the liability to the Surety."
Indemnity Agreement P 2. The Indemnity Agreement further provides:
"SETTLEMENTS -- The Surety shall have the right to adjust, settle or compromise any claim, demand, suit or judgment upon the Bonds, unless the Principals and the Indemnitors shall request the Surety to litigate such claim or demand, or to defend such suit, or to appeal from such judgment, and shall deposit with the Surety, at the time of such request, cash or collateral satisfactory to the Surety in kind and amount, to be used in paying any judgment or judgments ...