United States District Court, S.D. New York
September 21, 2004.
HENICK-LANE, INC., Plaintiff,
EL AL ISRAEL AIRLINES; MDM INTERNATIONAL; UNITED STATES FIDELITY & GUARANTY; AND, ST.PAUL SURETY, Defendants. EL AL ISRAEL AIRLINES, LTD., Third-Party Plaintiff, v. D.A.G. FLOORS, INC., OLYMPIC PLUMBING & HEATING CORP., NORLANDER CONTRACTING CORPORATION, L&L PAINTING CO., INC., BAYBRENT TILE CORP., BUCCO DEVELOPMENT, BERGEN CONCRETE CUTTING, INC., CERTIFIED GLASS CORP., INTERSTATE DRYWALL CORP., J&A CONCRETE CORP., McKEON ROLLING STEEL DOOR CO., TESTWELL LABS, INC., Additional Defendants on Interpleader Counterclaim.
The opinion of the court was delivered by: LEWIS KAPLAN, District Judge
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement, dated as of September 2,
2004 (the "Settlement"), is entered into by and among D.A.G.
Floors, Inc., El Al Israel Airlines, Ltd. ("El Al"), Henick-Lane,
Inc. ("Henick-Lane"), L & L Painting Co., Inc., ("L & L
Painting"), Norlander Contracting Corporation ("Norlander"),
Olympic Plumbing & Heating Corp. ("Olympic"), USF&G/St.Paul
Surety ("St. Paul Surety"; together, the "Parties"), through
their undersigned attorneys.
A. On or about April 11, 2003, Henick-Lanc commenced an action
against El Al, MDM International LLC ("MDM"), and St. Paul Surety
in the Supreme Court of the State of New York (the "Supreme Court
Action") to recover the unpaid portion, including accrued and
accruing interest, under a construction contract made by MDM and
Henick-Lane for work to be performed for El Al Airlines at JFK
International Airport. B. On May 16, 2003, St. Paul Surety filed its Answer in the
Supreme Court Action.
C. On or about May 28, 2003, El Al Airlines Removed the Supreme
Court Action to the United States District Court for the Southern
District of New York (the "District Court."). Thereafter, on or
about August 21, 2003, El Al Airlines in its Answer asserted an
interpleader action through counterclaims, cross-claims and
third-party claims in this Court (collectively, the "District
Court Action") that named DAG, Olympic and Norlander as
D. On June 2, 2003, MDM filed its Answer to the Complaint.
E. On or about March 30, 2004, El Al filed an Amended Answer
("El Al Amended Answer") and added further additional defendants
that included all of the defendants named in the caption.
F. The following named parties failed to answer the El Al
Amended Answer with interpleader claims before the time to do so
expired and El Al entered default against each of the following
entities; MDM, Baybrent Tile Corp., Bucco Development, Bergen
Concrete Cutting, Inc., Certified Glass Corp., Interstate Drywall
Corp., J & A Concrete Corp., Mckeon Rolling Steel door Co., and
Testwell Labs, Inc. (together, the "Defaulting Interpleader
G. On or about July 30, 2004, El Al filed a notice of motion
for partial summary judgment against St. Paul Surety. That motion
has been held in abeyance pending the Parties' settlement
H. On or before September 7, 2004, El Al Airlines served a
notice of entry of default on each of the Defaulting Interpleader
I. The Parties desire to enter into this Settlement (i) to,
settle disputes, claims, counterclaims, cross-claims and third
party claims and related issues raised in the the District Court
Action (ii) to provide for the distribution of $113,875 in
"retainage" on deposit with El Al; (iii) to provide for the full
and final discharge of El Al from all existing or future
obligations or liabilities, if any, to the Parties and the
Defaulting Interpleader Defendants; and (iv) to provide for the
full and final discharge of St. Paul Surety from all existing or
future obligations, if any, to the Parties under the particular
"performance bond" and "payment bond," both bearing No. SC3572,
issued by USF&G on behalf of MDM in connection with the
underlying construction project (together, the "Surety Bonds").
NOW, THEREFORE, in consideration of the above recitals and
agreements set forth below, the sufficiency of which is expressly
acknowledged, it is agreed as follows:
1. Effective Date. This Settlement shall be effective on the
date on which this Settlement is approved and entered on the
docket in the District Court Action. 2. Discontinuance of Litigation. On the Effective Date, all
claims, counterclaims, cross-claims and interpleader claims in
this Action against the Parties to this stipulation shall be
deemed dismissed with prejudice. Except for El Al's interpleader
claims against the Defaulting Interpleader Defendants (which is
or will be the subject of a motion for default judgment), all
other claims against the Defaulting Interpleader Defendants shall
be deemed dismissed without prejudice. Plaintiff shall file and
circulate to all Parties a Stipulation of discontinuance promptly
after receipt of the payment required to be made to it under
Paragraph 3 below.
3. Disbursement of Retainage and Settlement Payment. Within
twenty (20) business days of the Effective Date, El Al shall
cause to be delivered to each of the Parties attorney escrow
checks or certified checks made payable as follows:
Recipient Amount Paid To
D.A.G. Floors, Inc. $17,000.00 Jeffrey Cassuto, Esq.
350 Fifth Ave. Suite 6101 New
York, New York 10118
EL Al Airlines $2,500.00 Biedermann, Hoenig, Massamillo
90 Park Avenue
New York, New York 10016
Henick-Lane, Inc. $52,875.00 Kahan & Kahan
1025 Westchester Ave.
White Plains, N.Y. 10604
L & L Painting Co., Inc., $7,500.00 Ross & Cohen
711 Third Avenue
New York, New York 10017
Norlander Contracting Corp. $17,500.00 Leonard Catanzaro
434 Broadway-Suite 900
New York, New York 10013
Olympic Plumbing & Heating Corp. $7,500.00 Cullen and Dykman Bleakley Platt
100 Quentin Roosevelt Blvd.
Garden City, N.Y. 11530
USF & G/St. Paul Surety $9,000.00 Wolff & Samson
One Boland Drive
West Orange, N.J. 07052
4. Releases. Except as set forth in Paragraph 5, below, on
the Effective Date, the Parties shall hereby release and be
deemed to release each other from any and all further claims,
suits, actions, causes of action, debts, dues, sums of money,
accounts, bonds, bills, covenants, contracts, controversies,
agreements, promises, damages, judgments, executions and demands
whatsoever, in law or equity, which the Parties ever had, now
have or hereafter can, shall or may, have for, upon, or by reason
of any matter, cause or thing whatsoever arising out of or in
connection with any transaction or events arising in connection
with Lawsuit. Upon approval of this Settlement, the Parties shall
be deemed to have consented to (i) the entry of defaults against
the Defaulting interpleading Defendants (ii) El Al's discharge
from any and all existing and future obligations and or
liabilities to the Parties and the Defaulting Interpleader
Defendants in regards to the Retainage and the subject matter of
the litigation; and (iii) St. Paul Surety's discharge from any
and all existing and future obligations and or liabilities to the
Parties arising under the Surety Bonds.
5. No Release of MDM International. This Settlement is not
intended to affect a release of obligations and/or liabilities of
MDM or its principals to any of the Parties, including St. Paul
Surety, whose rights and claims, contractual or otherwise, as
against MDM and its principals, are expressly excluded from the
scope of this Settlement and preserved.
6. Authority. The Parties represent and warrant that they
have the full authority to enter into and perform their
respective obligations under this Settlement.
7. Entire Agreement. The Settlement contains the entire
agreement between the parties pertaining to the subject matter
contained in this Settlement. This Settlement may only be
modified in writing signed by the Parties or their duly appointed
agents. All prior agreements and understanding between the
Parties concerning the subject matter of this Settlement, with
the exclusion of any agreement, including any agreement of
indemnity, executed by MDM and/or its principals in favor of St.
Paul Surety, are superceded by the terms of this Settlement. No
waiver of any of the provisions of this Settlement shall be
deemed to have occurred or be binding unless exccuted in writing
by the party making the waiver.
8. Jurisdiction. This Settlement shall be governed by and
construed in accordance with the laws of the State of New York.
The District Court shall retain jurisdiction over the Parties to
interpret and enforce the terms of this Settlement.
9. Successors. This Settlement and the covenants and recitals
contained herein shall apply to, be binding upon, and inure to
the benefit of the Parties' respective successors.
10. Non Assignability. This Settlement is not assignable and
the duties are not delegable. 11. Counterparts. The Settlement may be executed in separate
counterparts and by facsimile, each of which shall be treated as
an original, but all of which shall be one and the same document.
[EDITORS' NOTE: SIGNATURES ARE ELECTRONICALLY NON-TRANSFERRABLE.] Kahan & Kahan
Attorneys at Law
1025 Westchester Avenue, Suite 106
White Plains, New York 10604-3508
Telephone: (914) 946-0115; Fax: (914) 946-0116
(PLEASE DELIVER AS SOON AS POSSIBLE)
TO: Honorable Debra Freeman
NUMBER: (212) 805-4258
DATE: September 22, 2004
FROM: Douglas Kahan, Esq
Office Tel. No.: (914) 946-0115
Fax Tel. No.: (914) 946-0116
PAGES: ___ 12 ___ (Including Cover Page) NOTICE OF MOTION FOR DEFAULT JUDGMENT
PLEASE TAKE NOTICE, that upon the annexed Affidavit of
Lawrence Mentz, Esq., sworn to on September 20, 2004, and the
Exhibits annexed thereto, the Memorandum of Law submitted
simultaneously herewith, and upon all the pleadings and
proceedings heretofore had herein, the undersigned moves this
Court for an Order, pursuant to Rule 55(b)(2) of the Federal
Rules of Civil Procedure, granting default judgment to El Al
Israel Airlines, Ltd. ("El Al") against Defendant MDM
INTERNATIONAL LLC, and against Additional Defendants BAYBRENT
TILE CORP., BERGEN CONCRETE CUTTING, INC., CERTIFIED GLASS CORP.,
INTERSTATE DRYWALL CORP., J&A CONCRETE CORP., McKEON ROLLING
STEEL DOOR CO., and TESTWELL LABS, INC., along with such other
and further relief as the Court deems proper.
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