In a December 15, 2011 decision by Justice Emerson, the court granted in part and denied in part the defendant’s motion for partial summary judgment. The case arose from a construction project entered to build a health-care treatment center on behalf of Comprehensive Care (“CCMC”). After a dispute arose between CCMC and the original construction manager (“NCI”), Utica, who issued payment and performance bonds under the contract, entered the “Takeover Agreement” with CCMC to complete the project. Pursuant to a letter agreement, Utica re-engaged NCI to complete the remaining work, but subsequently terminated NCI for allegedly breaching the letter agreement by failing to timely complete the project. CCMC then sued Utica for allegedly breaching the Takeover Agreement. The court denied that branch of the motion seeking to dismiss the first cause of action insofar as it sought attorney’s fees and liquidated damages, which Utica claimed were not provided for under the Takeover Agreement. The court found that: attorney’s fees and liquidated damages were permitted under both the original contract and the performance bond; that neither the contract nor bond was extinguished by the Takeover Agreement; and that CMCC met the performance bond’s requirements for such relief. Further interpreting the bond, the court limited CCMC’s recovery to attorney’s fees incurred in completing the work under the contract. Finally, the court granted the part of the motion to dismiss the second cause of action for a declaratory judgment that NCI’s mechanic’s lien was null and void and directing Utica to remove or satisfy it, and all other liens against the property. The court held that NCI was a necessary party to such a declaratory judgment but had not been joined it this action.
Comprehensive Care Mgt. Corp. v Utica Mut. Ins. Co., Sup Ct, Suffolk County, December 15, 2011, Emerson, J, Index No. 24923/09