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Superior Site Work, Inc. v. NASDI, LLC

United States District Court, E.D. New York

January 23, 2017

SUPERIOR SITE WORK, INC., DIVERSIFIED CONSTRUCTION CORP., HARRISON AVENUE PROPERTIES LLC, Plaintiffs,
v.
NASDI, LLC, Defendant. NASDI, LLC, Third Party Plaintiff,
v.
CASE FOUNDATION COMPANY, THE CITY OF NEW YORK, and THE NEW YORK CITY DEPARTMENT OF PARKS AND RECREATION, Third Party Defendants.

          Zabell & Associates, P.C. Attorneys for the Plaintiffs By Saul D. Zabell, Esq., Of Counsel

          The Law Office of John E. Osborn, P.C. Attorneys for the Defendant and Third Party Plaintiff By: Daniel H. Crow, Esq., Of Counsel

          Peckar & Abramson Attorneys for the Third Party Defendant Case Foundation Company By Alan H. Winkler, Esq., Of Counsel

          New York City Law Department, Office of Corporation Counsel Corporation Counsel for Third Party Defendants the City of New York and the New York City Department of Parks and Recreation By Amanda M. Papandrea, Assistant Corporation Counsel

          MEMORANDUM OF DECISION AND ORDER

          ARTHUR D. SPATT United States District Judge

         This action arises out of a contract dispute between the parties. The contract concerned work related to the Ocean Breeze Indoor Athletic Facility in Staten Island, New York (the “Ocean Breeze Project”). The City of New York (the “City) and the New York City Department of Parks and Recreation (the “Parks Department”) contracted with NASDI, LLC (“NASDI”) to build the Ocean Breeze Project. NASDI allegedly subcontracted with Superior Site Work, Inc. (“Superior”), Diversified Construction Corp. (“Diversified”), and Case Foundation Company (“Case”). NASDI allegedly leased office space from Harrison Avenue Properties LLC (“Harrison”) during the project.

         Presently before the Court are three motions: 1) a motion by Case to either dismiss the third party complaint or hold the third party action in abeyance pursuant to the abstention doctrine; 2) a motion by the City and the Parks Department to hold the entire action in abeyance, or, in the alternative, for a judgment on the pleadings on the third party complaint pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ. P.” or “Rule”) 12(c); and a motion by Superior, Diversified and Harrison to strike NASDI's third party complaint pursuant to Rule 12(f), or, in the alternative, to sever the third party action pursuant to Rule 14(a).

         For the following reasons, the Court grants Case's motion to hold the third party action in abeyance; grants the City and the Parks Department's motion in part and denies it in part; and denies the motion to strike or sever as moot.

         I. BACKGROUND

         A. Procedural History

         The procedural history is drawn from the pleadings filed with this Court, the motions filed by the parties, and affidavits and exhibits attached to those motions. Namely, the Court notes that the parties included, as exhibits attached to their memoranda of law, the New York State Supreme Court complaints for two cases mentioned below. The Court can take judicial notice of those filings. See Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991) (“[C]ourts routinely take judicial notice of documents filed with other courts, . . . not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings”); Staehr v. Hartford Fin. Servs. Group, 547 F.3d 406, 424-25 (2d Cir. 2008) (holding it was proper for the district court to take judicial notice of, inter alia, state court complaints).

         On November 20, 2012, Case brought an action in New York State Supreme Court, Richmond County, against NASDI and its surety bonding company, for money that Case claims it was owed on a subcontract (“the NYS bond action”). Case alleged breach of contract claims against NASDI and a payment bond claim against NASDI and its surety bonding company, seeking $2, 228, 777.64 for work performed on the Ocean Breeze Project.

         On January 22, 2015, Case brought a second action in New York State Supreme Court, Richmond County. This was a public improvement lien action against NASDI and the City (the “NYS lien action”). Case amended its complaint to include Superior as a defendant. Case sought payment for the work it had performed on the Ocean Breeze Project pursuant to a contract with NASDI, and to foreclose on a public improvement lien filed in connection with that project. NASDI filed crossclaims in the NYS action against Superior and the City, where it alleged that Superior and the City were responsible for Case's damages under a theory of indemnification. NASDI further set forth contractual defenses to Case's recovery.

         The instant action was brought by Superior, Diversified, and Harrison against NASDI, on February 14, 2014. The complaint against NASDI alleges claims for breach of contract, and unjust enrichment in the alternative. NASDI asserted a counterclaim against Superior for defective and incomplete work. The Court entered a scheduling order on November 6, 2014, providing that new parties should be joined by January 9, 2015. (ECF No. 28).

         NASDI filed two motions to dismiss. The Court granted in part and denied in part the first motion to dismiss, and denied its second motion to dismiss. During that time, Superior, Diversified and Harrison filed two amended complaints.

         NASDI filed its first answer on March 11, 2016, which was an answer to the second amended complaint. On March 25, 2016, NASDI filed a third party complaint against Case, the City and the Parks Department. NASDI brought various claims sounding in breach of contract and indemnification.

         On May 23, 2016, Case filed a motion to dismiss NASDI's third party complaint against it based upon the abstention doctrine. Case asked in the alternative that the Court stay the third party action.

         On May 24, 2016, the City and the Parks Department filed a motion for a judgment on the pleadings. The City and the Parks Department also asked, in the alternative, that the Court stay the entire matter.

         On June 22, 2016, Superior, Diversified, and Harrison filed a motion to strike NASDI's third party complaint as procedurally improper, or, in the alternative, to sever it.

         B. The Relevant Facts

         On March 5, 2010, NASDI entered into a contract with the City and the Parks Department to build the Ocean Breeze Project at 625 Father Capodano Boulevard, Staten Island, New York 10305. On June 30, 2010, NASDI entered into a subcontract with Case. Case agreed to perform certain construction work involving furnishing and installing auger cast piles for the Ocean Breeze Project's foundation.

         On December 16, 2010, NASDI entered into a contract with Superior. Pursuant to its contract with NASDI, Superior, as a subcontractor, was to install the concrete foundation for the Ocean Breeze Project. Diversified is a wholly owned subsidiary of Superior. NASDI and Diversified entered into a contract where Diversified agreed to negotiate with subcontractors to get lower subcontracting prices for the Ocean Breeze Project, and in exchange Superior would receive fifty percent of NASDI's cost savings. Diversified alleges that it secured lower priced subcontractors, and that NASDI bought out ...


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