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HENICK-LANE, INC. v. EL AL ISRAEL AIRLINES

September 21, 2004.

HENICK-LANE, INC., Plaintiff,
v.
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.

  RECITALS

  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 additional defendants.

  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 Defendants").

  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 discussions.

  H. On or before September 7, 2004, El Al Airlines served a notice of entry of default on each of the Defaulting Interpleader Defendants.

  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 ...


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