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NOBEL INS. CO. v. HUDSON IRON WORKS

April 21, 1999

NOBEL INSURANCE COMPANY, PLAINTIFF,
v.
HUDSON IRON WORKS, INC., JAMES GIANNOPOULOS, CATHY GIANNOPOULOS, PHILIPPOS KAPNISIS AND MELANI KAPNISIS, DEFENDANTS.



The opinion of the court was delivered by: Berman, District Judge.

ORDER

Plaintiff Nobel Insurance Company ("Nobel") has moved for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Fed.R.Civ.P."), against defendants Hudson Iron Works, Inc., James Giannopoulos, Cathy Giannopoulos, Philippos Kapnisis and Melani Kapnisis ("Hudson Defendants").

For the reasons set forth below, Nobel's motion for summary judgment is granted in part and denied in part.*fn1

I. BACKGROUND

  The relevant facts are as follows. On or about August 24, 1993, the
Hudson Defendants, among others, executed a document

styled Application for Performance and Payment Bonds and Indemnity
Agreement ("Indemnity Agreement"). For certain consideration given by the
Hudson Defendants under the Indemnity Agreement, Nobel and Republic
Western Insurance Company ("Republic Western") executed a payment bond
and performance bond, on behalf of the Hudson Defendants, among others,
in the amount of $3,205,500. The bonds pertained to a construction
contract awarded by the Triborough Bridge and Tunnel Authority ("TBTA")
to RCR Builders, Inc. ("RCR") for the construction of a new maintenance
facility at the Verranzano Narrows Bridge in Brooklyn, New York. The
Indemnity Agreement identified the Hudson Defendants, among others, as
"applicant" and "Indemnitor." The Indemnity Agreement also identified
Nobel and Republic Western as the "Sureties," and provides, in relevant
part that the Hudson Defendants:

   . . hereby jointly, severally and unconditionally
  agree to indemnify and reimburse the Sureties and each
  of them from and against any and all loss, costs,
  damages, expenses and attorneys' fees, and any and all
  liability arising, resulting, sustained or incurred,
  or which can or may arise, result from or be sustained
  or incurred by said Sureties, or any of them, by
  reason of having executed said bonds, or any bond or
  bonds required by said applicants and given by said
  Sureties, or any of them, in connection with the
  performance of said contract . . .

The Indemnity Agreement states that the "Amount of Obligation Assumed" by each of the Hudson Defendants is $330,000.*fn2

On or about August 27, 1993, Nobel and Republic Western executed a document styled Co-Surety Agreement. The Co-Surety Agreement provides, in relevant part, that:

  The respective obligations and liabilities of the
  parties hereto for all claims, demands and losses
  under the Bond shall be limited . . . to the following
  proportions: In the case of Republic Western Insurance
  Company the proportion that $2,875,500 bears to the
  penalty of the Bond. In the case of Nobel Insurance
  Company the proportion that $330,000 bears to the
  penalty of the Bond [i.e., 10.3%].

Prior Proceedings

In 1995, RCR defaulted with respect to its involvement in the construction project, as a result of which Republic Western incurred expenses of $1,082,678.88 in bringing the project to completion. Thereafter, Republic Western commenced an action in this Court, before the Honorable Jed S. Rakoff, to recover Nobel's contribution allegedly owed under the Co-Surety Agreement for the losses, costs, expenses and fees incurred under the bonds which amounted to $111,515.91, plus interest.*fn3

On February, 13, 1998, in the proceedings before Judge Rakoff, Republic Western and Nobel cross-moved against one another for summary judgment under the Co-Surety Agreement. By Order dated May 1, 1998, Judge Rakoff granted Republic Western's motion and denied Nobel's motion. Judge Rakoff ordered Nobel to pay to Republic Western the amount of $111,515.91, plus interest, for its proportionate share of the losses, costs, expenses and fees incurred under the bonds as of June 26, 1997. Republic Western Insurance Co. v. Nobel Insurance Co., 2 F. Supp.2d 548 (S.D.N.Y. 1998).

Republic Western subsequently sued Nobel in this Court (again, before Judge Rakoff) to recover an additional $95,565.31, representing additional losses, costs, expenses and fees incurred under the bonds after June 26, 1997.

Nobel later settled with Republic Western by agreeing to pay them the total amount of $170,000 covering losses, costs expenses and fees incurred under the bonds both before and after June 26, 1997. This amount was in satisfaction of both the judgment issued by Judge Rakoff of $111,515.91 and Republic Western's claim in the second action before Judge Rakoff seeking an additional $95,565.31. Nobel has since paid the sum of $170,000 and, thus, has incurred ...


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