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BONAVIST v. INNER CITY CARPENTRY

February 21, 2003

RALPH BONAVIST, AS PRESIDENT OF THE SUBURBAN NEW YORK REGIONAL COUNCIL OF CARPENTERS AND RALPH BONAVIST, FRED DAUBER, WILLIAM BLECKICKI, HOWARD JONES, WILLIAM HAMILTON, CHARLES FUCHS, JOHN FUCHS, WAYNE ROGERS, PATRICK MORIN, WILLIAM WEITZMAN, WILLIAM MACCHIONE, GERALD SCAFFETTA, ROBERT CARLINO, JOSEPH GANIRO, GEORGE FRANK, ARTHUR GODSELL, PAUL O'BRIEN, JOSEPH OLIVERI, ROSS PEPE, ALFREDO REZENDE, AS TRUSTEES OF THE SUBURBAN NEW YORK REGIONAL COUNCIL OF CARPENTERS WELFARE, PENSION, VACATION, ANNUITY, APPRENTICE TRAINING AND CHARITABLE TRUST FUNDS, PLAINTIFFS,
v.
INNER CITY CARPENTRY, INC., YORK HUNTER CONSTRUCTION, INC. AND NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., DEFENDANTS.



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

MEMORANDUM OF DECISION AND ORDER

Plaintiffs, Trustees of the Suburban New York Regional Council of Carpenters Welfare, Pension, Vacation, Annuity, Apprentice Training and Charitable Trust Funds, and Ralph Bonavist, as President of the Suburban New York Regional Council of Carpenters (the "Union") (collectively, the "plaintiffs") commenced this action to recover unpaid wages and fringe benefits based on work performed for construction of residential housing. Presently before the Court is a motion for summary judgment by defendant National Union Fire Insurance Company of Pittsburgh, PA ("National Union").

I. BACKGROUND

The following facts are undisputed unless otherwise indicated. On or about July 11, 1997, Avalon Properties, Inc. ("Avalon" or the "Owner") entered into a written agreement with defendant York Hunter Construction, Inc. ("York Hunter") to build residential housing in Mamaroneck, New York, known as Avalon Willow (the "Project"). As the construction manager of the Project, York Hunter entered into subcontract agreements with various subcontractors, including defendant Inner City Carpentry, Inc. ("Inner City") to perform specific tasks at the Project.

Section 5.06 of the subcontract with Inner City provides: "To the extent permitted by applicable law, a condition precedent to payment by Construction Manager to Trade Contractor is the receipt of funds by Construction Manager from Owner designated for payment to Trade Contractor. Trade Contractor acknowledges it is relying solely on the credit of Owner and not the credit of Construction Manager for payment for Work performed by Trade Contractor."

Inner City employed Union carpenters for the Project. According to the plaintiffs, while York Hunter was a party to a project labor agreement with the Union covering construction work on the Project, Inner City was a party to a collective bargaining agreement with the Union covering carpentry work on the Project.

As required under the contract for the construction of the Project, York Hunter obtained a labor and material payment bond ("Payment Bond") from National Union, which named Avalon as the obligee and York Hunter as the principal. The Payment Bond guaranteed that York Hunter would use the funds it received from Avalon as payment for work performed to pay York Hunter's subcontractors. The Payment Bond provided:

This Bond only covers claims of Subcontractors, Sub-Subcontractors, Suppliers, and Laborers to the extent the Contractor has been paid for the labor, services, or materials provided by such persons. This Bond does not preclude you from serving a notice to Owner or Filing a claim of lien on this Project.
1. The Contractor and Surety, jointly and severally, bind themselves . . . to the Owner to pay for labor, materials and equipment furnished for use in the performance of the Construction Contract, which is incorporated herein by reference.
2. With respect to the Owner, this obligation shall be null and void if the contractor:
a) promptly makes payment, directly or indirectly, for all sums due claimants which have been paid to Contractor by Owner, and
b) Defends indemnifies and holds harmless the Owner from claims, demands, liens or suits by any person or entity whose claim, demand, lien or suit is for the payment for labor, materials or equipment furnished for use in the performance of the Construction Contract, provided Owner has promptly notified the Contractor and the Surety of any claims, demands, liens or suits, and tendered defense of such claims, demands, liens or suits to the Contractor and the Surety, provided there is no Owner Default, and provided Owner has paid all sums due and owing to Contractor.
3. With respect to claimants, this obligation shall be null and void if the contractor promptly makes payment, directly or indirectly, for all sums properly due Claimants for which Contractor has received payment from Owner.

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