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Specrite Design, LLC v. Elli N.Y. Design Corp.

United States District Court, S.D. New York

July 20, 2017

SPECRITE DESIGN, LLC, Plaintiff,
v.
ELLI N.Y. DESIGN CORP., J. KOKOLAKIS CONTRACTING, INC., LIBERTY MUTUAL INSURANCE COMPANY, AND JOHN DOES 1-10, JOHN DOES 10-20, Defendants.

          OPINION AND ORDER

          EDGARDO RAMOS, U.S.D J.

         Specrite Design, LLC (“Specrite” or “Plaintiff”) brings this action against Elli N.Y. Design Corp. (“Elli”), J. Kokolakis Contracting Inc. (“Kokolakis”), and Liberty Mutual Insurance Company (“Liberty Mutual, ” collectively, the “Defendants”), alleging that Elli breached an agreement under which Plaintiff performed labor and furnished materials in connection with a contract for a public improvement project. Specrite also seeks to foreclose on a lien and asserts a claim against the discharge of lien bond acquired to insure it (the “Lien Foreclosure Claims”). Before the Court is Kokolakis and Liberty Mutual's motion to stay Counts I and II of the Complaint, pending the outcome of a related action in New York County Supreme Court. For the reasons set forth below, Kokolakis and Liberty Mutual's motion is GRANTED.

         I. Background

         A. Factual Background[1]

         On August 2, 2012, Kokolakis entered into a public improvement contract (the “Contract”) with the Dormitory Authority for the State of New York (“DASNY”) for a project known as the Bronx Mental Health Redevelopment, Children's Center, Bronx, New York (the “Project”). Complaint (“Compl”), Doc. 1, ¶¶ 8, 16; Trif Decl. Ex A, at 1‒2. On April 28, 2014, Kokolakis entered into an agreement (the “Subcontract”) with Elli wherein Elli agreed to fabricate and install architectural woodwork, casework, and millwork for the Project. Answer at 8; Trif Decl. Ex. A, at 23. The Subcontract expressly allows Kokolakis to “deduct any monies due or to become due” to Elli in case of Elli's default. Id. at 14. Sometime thereafter, Elli, in turn, entered into an agreement with Specrite (the “Specrite Subcontract”) pursuant to which Specrite agreed to furnish certain labor and materials for the Project. Compl. ¶ 8.

         Elli allegedly breached the Specrite Subcontract by failing to pay Specrite the full amount due for labor performed and materials furnished for the Project. Id. at ¶ 11. On March 14, 2016, Specrite filed with the DASNY a Notice of Lien for Public Improvement (the “Lien”), claiming that Elli owed $109, 763.91 for work performed under the Specrite Subcontract. Id. at ¶¶ 13‒14. Subsequently, Liberty Mutual issued a bond, bearing the bond number 015049636, discharging the Lien (the “Discharging Bond”).[2] Id. at ¶ 18.

         B. Related State Action

         On March 21, 2016, Elli filed a contract breach claim against Kokolakis and Liberty Mutual in the Bronx County Supreme Court (“State Court Action”), seeking to recover $221, 716.77 due under the Subcontract. Trif Decl., Ex. B. On June 27, 2016, Kokolakis and Liberty Mutual filed an answer to the state court complaint, denying the breach claim, and counterclaiming that Elli breached the Subcontract by, among other things, “performing its scope of work in a poor and unworkmanlike manner and failing to cure its defaults under the Subcontract.” Id., Ex. C, at 6.

         On September 12, 2016, the State Court Action was transferred to New York County pursuant to the parties' stipulation. Id., Ex. D. On July 7, 2016, the parties commenced discovery in the State Court action. Id., Ex. E & F.

         C. Procedural History

         On August 3, 2016, Specrite filed this action to recover money due under the Specrite Subcontract. Compl. (Doc. 1). In the Complaint, Specrite asserts eight causes of action, two of which are relevant to this motion: Count I is a claim for foreclosure of the Lien, and Count II is a claim to recover under the Discharging Bond (together with Count I, the “Foreclosure Claims”). Id. at 3‒5. Elli answered on September 29, 2016. Doc. 20. In the same document, Elli also asserted cross-claims against Kokolakis and Liberty Mutual for breach of the Subcontract, asking to recover $221, 716.77.[3] Id.

         On October 25, 2016, Kokolakis and Liberty Mutual filed the instant motion to stay the Foreclosure Claims. Doc. 28.

         II. Legal Standards

         A stay is “not a matter of right, ” even where irreparable injury might result. Virginian Ry. Co.,272 U.S. 658, 672 (1926). Rather, it is “an exercise of judicial discretion, ” and “[t]he propriety of its issue is dependent upon the circumstances of the particular case.” Id. at 672‒73. Yet the Court's discretion is not unguided. Kappel v. Comfort,914 F.Supp. 1056, 1058 (S.D.N.Y. 1996). A court may stay proceedings in one suit to abide by the proceedings in another even if the parties or the issues in the two cases are not identical. Ca ...


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