United States District Court, E.D. New York
July 16, 2004.
UNDERPINNING & FOUNDATION CONSTRUCTORS, INC. Plaintiff,
UNITED STATES FIDELITY AND GUARANTY COMPANY, Defendant.
The opinion of the court was delivered by: I. LEO GLASSER, Senior District Judge
MEMORANDUM AND ORDER
Defendant United States Fidelity & Guaranty Company ("USF&G" or
"Defendant"), a Maryland corporation, brings this motion seeking
summary judgment in an action brought by plaintiff Underpinning &
Foundation Constructors, Inc. ("Underpinning" or "Plaintiff"), a
New York corporation, to recover for work in performed on a
public works project for the New York Power Authority, payment
for which was assured by defendant's bond.
Defendant argues that plaintiff is not a proper claimant under
the bond because the underlying contract was in the name of
"Underpinning & Foundation-Skanska, Inc." ("U&F-Skanska") instead
of "Underpinning & Foundation Constructors, Inc."
For the reasons that follow, defendant's motion is denied.
On or about December 19, 2001, the New York Power Authority
entered into a contract with North Star Contracting Corporation ("North Star") for
construction of a project designated as the Poletti 500 MW
Combined Cycle Power Plant ("the Project").
On or about February 11, 2002, USF&G, as surety, and North
Star, as principal, executed and delivered to the Power
Authority, as obligee, a Payment Bond, Bond No. SN9763, in the
penal amount of $5,944,000 ("the Bond").
In June 2002, a subcontract was created for the performance of
piledriving, steel sheet piling and caisson work on the Project
for the sum of $1,446,006.03 ("the Subcontract"). North Star is
named as the Contractor. The named subcontractor is "Underpinning
& Foundation-Skanska, Inc., a New York corporation having a place
of business at 46-36 54th Road, Maspeth, New York." (Def. Notice
of Mot. Ex. B.) It is undisputed that the Subcontract was
prepared by North Star. It is also important to note that the
heading in Rider "A" to the Subcontract references "Underpinning
& Foundation" as the Subcontractor, not "Underpinning &
Foundation-Skanska, Inc.," and the text of Rider "A" refers
simply to "Underpinning." (Def. Notice of Mot. Ex. B.)
Plaintiff alleges that it performed the work required by the
Subcontract, but that North Star has refused to pay beyond a
single payment of $388,467.16.
On or about April 9, 2003, a Notice Under Mechanic's Lien Law
for Account of Public Improvement ("the Lien") was filed in the
name of U&F-Skanska.
In November 2003, plaintiff filed the present suit against
defendant, asserting that pursuant to the terms of the Bond,
defendant is obligated to pay plaintiff $1,057,538.87, the amount
owed to it by North Star under the Subcontract, plus an
additional $338,196.33 for work it performed beyond the scope of
the Subcontract at North Star's request. III. DISCUSSION
The principles informing a court's judgment in a motion for
summary judgment have been stated and restated so frequently as
not to warrant restating again. See Matsushita Electric
Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); Celotex
Corp. v. Catrett, 477 U.S. 317 (1986).
Defendant's assertion that the plaintiff was not the party to
the Subcontract with North Star, given the plaintiff's exhibits
and affidavits opposing this motion, is startling. It can only be
ascribed to a bold attempt to avoid an obligation which is
plainly theirs. North Star's use of "Skanska" in the Subcontract
and plaintiff's acquiescence to it appear to be attributable to
mere inadvertence on the part of both parties.
I begin with the plaintiff's letterhead used in all
correspondence with North Star. The upper left corner of the
letterhead includes the words "Underpinning & Foundation," in
large type with the word "Skanska" directly underneath, separated
by a thin black line. The upper right corner includes the words
"Underpinning & Foundation Constructors, Inc.," with the address
46-36 54th Road, Maspeth, New York, 11378-1020 (the same address
indicated on the Subcontract), phone and fax numbers, and a web
site address which is represented as
Affidavits submitted by the plaintiff which convincingly
demonstrate the frivolous basis upon which the defendant's motion
1. The affidavit of Peter MacKenna, the plaintiff's President;
2. The affidavit of Fabio Liscindini, the plaintiff's Senior
Estimator; 3. The affidavit of Edward P. Forte, the plaintiff's Vice
4. The affidavit of George R. Jung, the plaintiff's Manager of
Contracts and Administration.
Each affirmatively and unequivocally swears that the
subcontract giving rise to the action was between Underpinning &
Foundation Constructors, Inc. and North Star, and that North Star
knew it and did not believe otherwise, as the exhibits annexed to
Mr. MacKenna's affidavit conclusively show.
The only affidavit in support of the defendant's motion is one
by Peter Boltrek, the Vice-President of North Star, dated March
3, 2004, which the Court finds disturbing. In it, Mr. Boltrek
swears that "North Star did not enter into an agreement with the
plaintiff Underpinning & Foundation Constructors, Inc.
("Underpinning")." (Boltrek Aff. ¶ 6.) In paragraph 14, he swears
that "plaintiff, Underpinning, did not have a contract with . . .
North Star and did not furnish the labor, materials or equipment
to the Project as alleged in the complaint." (Boltrek Aff. ¶ 14.)
In stark contrast to that affidavit is a letter, dated October
31, 2003, on North Star stationary, addressed as follows:
Underpinning & Foundation Constructors, Inc.
46-36 54th Road
Maspeth, New York 11378-1020
Attn: Peter E. MacKenna
President & CEO
Re: NYPA's Poletti Plant
(MacKenna Aff. Ex. C.) That letter, among other things, contains this sentence:
"Please note, that you have an obligation under our subcontract
agreement to close out the project. . . ." (emphasis added). The
letter is signed, "Peter Boltrek, Vice President." Wigmore was
clearly correct in observing that "the moral efficacy of the oath
has long since ceased to be what it once was." 6 James H.
Chadbourne, Wigmore on Evidence § 1827 (rev. ed. 1976).
Among the other exhibits annexed to Mr. MacKenna's affidavit
which belie Mr. Boltrek's denial of an agreement between the
plaintiff and North Star is a letter, on the plaintiff's
letterhead described above, dated January 2, 2002, addressed to
"Mr. Peter Boltrek, North Star, 567 5th Avenue, New Rochelle,
N.Y., 10801," concerning "Proposal for Pile Installation, Poletti
Power Plant, Site Work Contract D050, Astoria, New York." That
letter begins as follows: "Dear Mr. Boltrek, Underpinning &
Foundation Constructors, Inc. (Underpinning) is pleased to
submit this proposal to install piles for the referenced
project," and is signed "Fabio Liscidini, Underpinning &
Foundation Constructors, Inc." (emphasis added) (MacKenna Aff.
Exhibit K is a similar letter addressed to Peter Boltrek
relating to the same project and beginning in the same way,
namely "Underpinning & Foundation Constructors, Inc.
(Underpinning) is pleased to submit. . . ." (MacKenna Aff. Ex.
K.) Exhibit U is a letter to Peter Boltrek, referencing the
project and signed by "George R. Jung, P.E., Manager, Contracts &
Administration, Underpinning & Foundation Constructors, Inc."
(MacKenna Aff. Ex. U.)
More disturbing, given Boltrek's denial, is Exhibit O, which is
a letter dated September 25, 2002 from North Star to Mr. George
R. Jung at Underpinning & foundation Constructors, Inc.,
referencing "Subcontract," that reads, "Attached is a fully
executed original of your subcontract for piling and caisson work
at the Poletti Power Plant. We look forward to a successful project and to working with you. Should you have any
questions or comments, so advise." (MacKenna Aff. Ex. O.) The
letter is signed by John R. Stone, Project Manager, North Star
The citation of authority for the principle that an immaterial
variance in the corporate name on a contract is of no legal
significance (e.g., Hellenic Lines, Ltd. v. Winkler,
249 F. Supp. 771 (S.D.N.Y. 1966)) is surely superfluous, given the
foregoing affidavits and exhibits in opposition to the
defendant's motion, and compels the conclusion that the motion
must be denied. The Court is also prompted to observe that this
motion is of the kind Rule 11 of the Federal Rules of Civil
Procedure was designed to obviate.
For the foregoing reasons, defendant's motion for summary
judgment is denied.
Underpinning Underpinning & Foundation
& Foundation Constructors, Inc.
SKANSKA 46-36 54th Road
Maspeth, N.Y. 11378-1020
March 27, 2003 02-231-045
Mr. Peter Boltrek, Vice President
North Star Contracting Corp.
One Ramada Plaza
New Rochelle, New York 10801
Dear Mr. Boltrek:
We are in receipt of your letter dated March 26, 2003
transmitting costs that you claim are the responsibility of
Underpinning & Foundation.
Please be advised that we completely and without equivocation
reject your assertions. The contract between North Star and
Underpinning is quite clear, and your claims are specious at
best. Further, we believe that your motivation in transmitting
this claim is an attempt to deflect Underpinning's upcoming
action against North Star resulting from your inability to pay us
for work performed.
North Star continues to refuse to return signed extra work
orders for the additional work referenced in your letter. We
will, however, price the work under the assumption that you agree
with these extra work orders without reservation. This
information will be forwarded to you shortly.
We are available to meet with you if you think it will prove
useful, however we advise you of our demand for immediate payment
in full for the work performed. Additionally, by copy of this
letter, we are advising NYPA and your Surety of the situation.