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J.T. Magen & Company, Inc. v. Allen Edmonds Corp.

United States District Court, S.D. New York

June 23, 2017

J.T. MAGEN & COMPANY, INC., Plaintiff,

          OPINION & ORDER

          LOUIS L. STANTON U.S.D.J.

         Allen Edmonds Corp. ("Allen Edmonds") moves, pursuant to Fed.R.Civ.P. 56, for summary judgment in its favor and to dismiss with prejudice J.T. Magen & Company, Inc.'s ("JT") complaint. For the reasons that follow, the motion is denied.

         Plaintiff JT and non-party Swenson Construction Company ("Swenson") were retained to carry out the general construction work at a store belonging to Allen Edmonds. The dispute is over which one was the general contractor. JT claims Swenson was acting as Allen Edmonds' agent, and JT as its general contractor. Allen Edmonds claims Swenson was its general contractor, and JT a subcontractor of Swenson. Their roles matter, because if JT was Swenson's subcontractor it is Swenson who is responsible for paying for JT's work, not defendant Allen Edmonds. (Swenson is now out of business, and some of JT's work remains unpaid-for.)

         On this motion, the issue is whether the answer to that dispute is so clear that it can be given as a matter of law, or whether there are genuine facts at issue which must be resolved at a trial.

         Subject matter jurisdiction exists under 28 U.S.C. § 1332(a)(1) because the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between citizens of different states.


         Plaintiff JT is a New York corporation based in New York City. It is a general contractor who performs work in and around New York. Defendant Allen Edmonds is a Wisconsin corporation based in Port Washington, Wisconsin and owns the retail company by the same name.

         Swenson is a California based corporation. Swenson had been general contractor on a number of Allen Edmonds' prior construction projects. Swenson usually provided on-site project supervision but did not itself perform construction work. In the Allen Edmonds construction projects that Swenson did not work on, Allen Edmonds required its general contractors to sign a written contract that contained terms and conditions, but with Swenson Allen Edmonds relied on a one page purchase order that did not contain terms and conditions.

         On November 15, 2012, JT submitted a proposal to Swenson "to provide all labor and materials necessary to carry out the general construction work as per James Dayton Design drawings dated 09/17/2012 and Lynstarr Engineering, PC drawings dated 08/09/2012" at the Allen Edmonds store located on West 43rd Street in New York City for $478, 081.00. Swenson, with Allen Edmonds' approval, accepted JT's proposal.

         On November 16, 2012, Swenson submitted a bid sheet to Allen Edmonds for $561, 089.10. Swenson's bid sheet contains nearly identical line items and prices as JT"s proposal to Swenson. Swenson's bid sheet also includes an item called "Contractor Overhead & Profit (10%)" for $51, 008.10, which is based on the total cost in Swenson's bid. Allen Edmonds selected Swenson's bid, and on November 19, 2012 it issued a purchase order to Swenson for $561, 089.10. JT's proposal is attached to the purchase order Allen Edmonds issued to Swenson.

         JT claims that it submitted its proposal, whereby it agreed to perform general construction work for Allen Edmonds, to Swenson who was Allen Edmonds' agent. Allen Edmonds claims that Swenson was its general contractor for the project, and that Swenson independently hired JT.

         After Allen Edmonds issued the purchase order to Swenson, JT began working at the project. No Allen Edmonds employees were at the site during the project. Swenson did not itself provide labor or materials for the project; it provided daily on-site supervision though Art Medley, a Swenson representative.

         Swenson and JT had regular and direct interaction throughout the project. JT's main contact for the project was Derek Swenson, another Swenson representative. All of JT's questions relating to change orders, requests for information, or the status of payment were communicated by JT to Swenson personnel, and all directions and orders to JT relating to construction services came from Swenson personnel. All change orders were signed by Derek Swenson. According to Allen Edmonds, Swenson made all decision and approvals relating to invoicing, payments, requests for information, and change orders independently without need for approval or direction from Allen Edmonds. When the project was completed, JT sent a letter of completion to Derek Swenson. JT had no interaction with Allen Edmonds personnel until the summer of 2013 when JT became worried that Swenson would not pay JT.

         When Allen Edmonds' landlord notified Allen Edmonds that its contractor must provide a certificate of insurance, Allen Edmonds did not follow its typical practice of requiring Swenson to provide insurance. Instead, JT provided the insurance. The certificate of insurance lists JT as the named insured, identifies the job operation, lists Allen Edmonds as an additional insured, and does not mention Swenson. JT also obtained the work permits required by ...

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