The opinion of the court was delivered by: Seybert, District Judge
On June 27, 2007, Plaintiff, United States of America, brought this action for the use of Miller Proctor Nickolas, Inc. ("MPN") against Lumbermens Mutual Casualty Company ("Lumbermens" or "Defendant"), seeking to recover the balance owed on its contract with D.C.I. Danaco Contractors, Inc. ("DCI"), $48,453.00, plus interest, on account of materials and labor supplied by MPN to the Plum Island Power Plant Replacement project ("Project"). MPN sued Lumbermens as DCI's payment bond surety under the Miller Act (the "Act"), 40 U.S.C. §3131, et seq. Presently pending before the Court are Plaintiff's motion and Defendant's cross-motion*fn1 for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons that follow, the Court GRANTS Plaintiff's motion and DENIES Defendant's cross-motion for summary judgment.
The purpose of the Miller Act is "to protect persons supplying labor and material for the construction of federal public buildings in lieu of the protection they might receive under state statues with respect to the construction nonfederal buildings." Sherman v. Carter, 353 U.S. 210, 216 (1957). As part of its safeguards, the Act requires "a prime contractor on a federal construction project involving over $2,000 [to] post a payment bond to protect those who have a direct contractual relationship with either the prime contractor or a 'subcontractor.'" J. W. Bateson Co. v. United States, 434 U.S. 586, 587, 98 S.Ct. 873, 874, 55 L.Ed. 2d 50, 53 (1978).
DCI, as a general contractor, entered into a contract with the United States Department of Agriculture to provide labor, materials, and services in connection with a power plant project on Plum Island. (MPN 56.1 Stmt. ¶ 3.) Shortly thereafter, DCI subcontracted certain work to MPN, a supplier and installer of industrial-sized boilers and related equipment. (Id. ¶ 5.) Lumbermens is an insurance company that, pursuant to the Miller Act, provided a payment bond to the United States, as Surety, bound jointly and severally with DCI, guaranteeing payment to other contractors providing labor/services to the Plum Island project. (Id. ¶ 4.) MPN contracted with DCI via purchase orders issued by DCI. The parties do not dispute that MPN performed a substantial portion of the contracted work. Accordingly, of the total contract price of $887,141.00, to date, DCI has paid $838,688.00. (Id. ¶ 8.)
In a purchase order dated March 1, 2002, item #9 required "Owner Operator Training." (Id. ¶ 13; Downs Aff., Ex. D.) On September 25 and 26, 2006, MPN provided owner operator training. (MPN 56.1 Stmt. ¶ 14.) Additionally, item #10 of the purchase order required "Boiler Testing and Adjustment." (Id. ¶ 15; Downs Aff., Ex. D.) On July 19, 2006, MPN began the required 28 day testing. (MPN 56.1 Stmt. ¶ 16.)
On December 21, 2004, DCI filed a petition under Chapter 7 for bankruptcy. (Def.'s 56.1 Stmt. ¶ 6.) On January 19, 2005, MPN filed a proof of claim in DCI's bankruptcy case, in which it asserted a debt due of $95,465.99, for work performed in 2003 and 2004. (Id. ¶ 7.) On October 31, 2005, DCI filed a motion seeking to expunge MPN's proof of claim. MPN neither opposed the motion nor attended the hearing before the Bankruptcy Court. Additionally, after failing to file any objections to settlement of the proposed order granting DCI's motion, on December 20, 2005, the Bankruptcy Court granted DCI's motion and expunged MPN's proof of claim. (Id. ¶¶ 14-18.) On December 4, 2006, the Bankruptcy Court ordered the structured dismissal of DCI's bankruptcy case.
After conveying demand for payment and being refused, on June 27, 2007, the United States brought this action for the use of MPN against Lumbermens, as Surety, to recover the remaining $48,453.00, plus interest, it contends it is owed under the contract. MPN states that the action is timely under the Miller Act because it commenced suit more than 90 days but less than one year from the date it last supplied services/materials to the Plum Island project. Lumbermens does not dispute that MPN prepared invoices totaling $887,141.00 or that DCI has paid MPN $838,688.00. Defendant maintains, however, that no additional payment is due based on the following arguments: (1) the action is untimely because MPN's work under the contract was completed on June 29, 2005 and it commenced this action on June 27, 2007, more than one year after the contracted work was completed; (2) MPN's proof of claim was expunged by the bankruptcy court; (3) MPN misapplied funds it received after DCI's petition date; and (4) MPN provided defective equipment and services.
I. Rule 56: Standard of Review
A party seeking summary judgment has the burden to establish that "there is no genuine dispute concerning any material facts," and, therefore, it "is entitled to judgment as a matter of law." Harvis Trien & Beck, P.C. v. Fed. Home Loan Mortgage Corp., 153 F.3d 61, 67 (2d Cir. 1998) (citing Fed. R. Civ. P. 56(c)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed. 2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed. 2d 202 (1986); McLee v. Chrysler Corp., 109 F.3d 130, 134 (2d Cir. 1997). "In assessing the record to determine whether there is a genuine issue to be tried as to any material fact, the court is required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." McLee, 109 F.3d at 134.
Once the moving party establishes its initial burden, "the non-movant must 'set forth specific facts showing that there is a genuine issue for trial.'" Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000) (quoting Anderson, 477 U.S. at 256). Under the law of the Second Circuit, "when no rational jury could find in favor of the nonmoving party because the evidence is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo v. Prudential Residential Servs., L.P., 22 F.3d 1219, 1224 (2d Cir. 1994) (citing Dister v. Continental Group, Inc., 859 F.2d 1108, 1114 (2d Cir. 1988)). Mere conclusory allegations, speculation or conjecture will not avail a party opposing summary judgment. Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996). Indeed, when a motion for summary judgment is made, it is time to "to put up or shut up . . . .
[U]nsupported allegations do not create a material issue of fact." Weinstock, 224 F.3d at 41 ...