The opinion of the court was delivered by: Gold, S., U.S.M.J.
Plaintiff MJJ Trucking LLC ("MJJ") brings this action pursuant to New York State Finance Law Section 137(3) against Fidelity and Deposit Company of Maryland ("Fidelity").*fn1
Plaintiff seeks to recover the unpaid balance due for work it performed for BD Haulers, Inc., ("BD"), a subcontractor on a municipal construction project. Defendant Fidelity provided a surety bond for the general contractor on the project, Perfetto Contracting Co. ("Perfetto").
The primary issue in dispute is whether plaintiff complied with the notice requirements of § 137(3). On March 19, 2010, I held a bench trial. Following the trial, the parties submitted written summations and replies addressing whether notice was sufficient under § 137(3) and whether attorney's fees should be awarded to the prevailing party. For the reasons set forth below, I find that plaintiff complied with the notice requirements of § 137(3) and that Fidelity is therefore liable to plaintiff in the amount of $255,591. I also conclude that plaintiff's application for attorney's fees pursuant to § 137(4)(c) should be denied.
In July 2008, MJJ contracted with BD to remove debris on a construction project where BD was a subcontractor of Perfetto, the general contractor. Tr. 23-24, 68-69. As noted above, Perfetto obtained a surety bond in connection with the project from defendant Fidelity.
Jose Alvarado ("Jose"), vice president of MJJ, testified that, at some point during the project, BD stopped paying MJJ's invoices, and that he then approached Perfetto in an attempt to get paid. Tr. 31-32, 34, 39-40. Jose first tried to call Perfetto's president, Cesare Perfetto ("Cesare"), but was unable to reach him by telephone. Tr. 40-41. Thereafter, on November 24 or 25, 2008, Jose and his wife, Mayra Alvarado ("Mayra"), president of MJJ, went to an address of a Perfetto office in Staten Island they found by researching the name Perfetto online. Tr. 41-42, 111-12, 117. Both Jose and Mayra testified that they brought with them BD's unpaid invoices in a yellow envelope, and that they showed the invoices to two women at the Staten Island office. Tr. 41-42, 46, 112-13, 115. After looking at the invoices, the women informed the Alvarados that the general contractor on the construction project indicated on the invoices was Cesare Perfetto, whose office was located in Brooklyn, and that they were at the office of Cesare's brother, Carlos Perfetto. Tr. 41-42, 113. One of the women gave Mayra a business card, and Mayra wrote down the address of the Brooklyn office on the back of the card. Tr. 42, 113; Pl. Ex. 20.
The Alvarados then went to the Brooklyn office, where they met with Cesare's secretary, Linda Palermo ("Palermo"). Tr. 43, 114. Jose informed Palermo that the purpose of their visit was to talk to Cesare about the unpaid invoices. Tr. 43, 114-15. Jose and Mayra testified that Palermo told them that Cesare was unavailable, but that she would give Cesare the envelope containing the invoices and Jose's phone number when Cesare returned. Tr. 43-44, 47, 114-15. Mayra testified that Palermo gave her a business card before they left. Tr. 115; Pl. Ex. 21.
Jose received a phone call from Cesare while he and Mayra were driving home from Cesare's office. Tr. 47. Jose testified that he and Cesare spoke for forty minutes, a fact that was corroborated by cell phone records indicating that Cesare called Jose on November 24, 2008 and that the phone call lasted forty-three minutes. Tr. 47, 50-51; Pl. Ex. 22. Jose told Cesare that MJJ's invoices for the BD job totaled more than $400,000, but that BD had paid MJJ only about $150,000 or $160,000. Tr. 48. Jose asked Cesare whether Perfetto still owed money to BD and suggested that, if so, Perfetto pay MJJ instead. Tr. 48. Cesare refused to go along with Jose's suggestion, but told Jose that Frank Gillette, the owner of BD, was getting paid on the job and that Cesare would talk to Gillette about paying MJJ. Tr. 48-49.
After his conversation with Cesare, Jose received a phone call from Gillette's lawyer, Ronald Weisenberg. Weisenberg told Jose that BD's position was that it did not owe MJJ any more money. Tr. 51. Jose told Weisenberg that MJJ had a claim for $274,000 and that MJJ would file a claim in court. Tr. 51.
About two to three weeks after their first visit, the Alvarados, this time together with two other contractors who worked for MJJ on the BD job and who also had not been paid, returned to Perfetto's Brooklyn office. Tr. 52-53, 116. Mayra waited in the car while Jose and the two others went upstairs. Tr. 116. Palermo greeted them again and told them that Cesare was not available. Tr. 53-54. Jose asked Palermo if she gave Cesare the envelope containing the unpaid MJJ invoices he had provided to her on his first visit, and Palermo replied that she had put it on Cesare's desk. Tr. 53. Jose and the two contractors then waited outside Perfetto's office for about ten minutes, but when Cesare did not appear, they left. Tr. 54, 116. Sometime thereafter, Cesare called Jose, and Jose again pressed Cesare about getting paid. Tr. 54. Cesare replied that they would have to turn the matter over to their lawyers. Tr. 54.
Cesare's testimony was in several respects consistent with the testimony of the Alvarados. According to Cesare, he learned about both of the Alvarados' visits to his office from Palermo. With respect to the first visit on November 24 or 25, 2008, Cesare testified that that Palermo left him a message on his desk with Jose's phone number on it, but that he did not receive anything else. Tr. 131-32. Palermo informed Cesare that people had come to the office that day and wanted to meet with him about monies they claimed were owed to them. Tr. 131-32. Cesare testified that he recalled a telephone conversation with Jose on November 24 that lasted about five or ten minutes, during which Jose told him that MJJ was owed "approximately between $465,000 to a half million dollars." Tr. 132-33, 149. Cesare told Jose that he was paying BD weekly and that Jose should discuss the matter with Gillette because MJJ did not have a contractual relationship with Perfetto. Tr. 133. Cesare subsequently called Gillette, who told Cesare that he was paying MJJ's invoices. Tr. 150.
Cesare, like the Alvarados, recalled a second visit to his office. With respect to this second visit, Cesare testified that Palermo called him to report to him that there were people in his office, that she was intimidated by them, and that they were demanding monies for unpaid invoices. Tr. 134. Following this visit, Cesare called Jose again, and also called Gillette to tell him about MJJ's complaints. Tr. 134. Cesare stated that Gillette told him that BD was paying MJJ, and that any discrepancy between BD and MJJ about amounts due concerned deductions for union dues. Tr. 134. Cesare also acknowledged that Gillette came to his office to discuss the issue of payment to MJJ four to five times in December 2008. Tr. 151-52, 154. Cesare believed Gillette when he stated that MJJ was getting paid, but also acknowledged on cross-examination that a claimed ...