Customweld Indus., Inc. v Pike Co., Inc.
2012 NY Slip Op 30992(U)
April 4, 2012
Supreme Court, Suffolk County
Docket Number: 24105-2010
Judge: Emily Pines
Republished from New York State Unified Court
System's E-Courts Service.
Search E-Courts (http://www.nycourts.gov/ecourts) for
any additional information on this case.
This opinion is uncorrected and not selected for official
publication.
[* 1]
SHORT FORM ORDER
-
SUI'REME COURT - STATE OF NEW YORK
COMMERCIAL DIVISION, PART 46, SUFFOLK COUNTY
iJreOEat:
Molion Date:
Submit Dale:
Motion Nu.:
linn. £mildinell
C
12-06-2012
01-03-2012
003
MD
JJllstin' §l1prclllc C!Iourt
[ ] Final
[x
____________________
CUSTOMwELD
SLIP FIT,
1 Non Final
.X
INDUSTRIES,
Action 1# 1
Index Number: 24105-2010
INC, and
Plaintiffs,
-against-
THE PIKE COMPANY, INC.,
Defendants.
.
X
Action 1# 2
Index Number 11759-201 1
THE PIKE COMPANY, INC.,
Plaintiffs,
-against-
CUSTOMwELD
SLIP FIT,
INDUSTRIES,
INC, and
Defendants.
___________________X
FACTUAL AND PROCEDURAL
BACKGROUND
On December 17, 2009, The Pike Company, Inc. (pike) and CustomwcId Industries, Inc.
(Customweld) entered into a contract pursuant to which Custom weld agreed to fabricate steel for a
•
[* 2]
COJlstruction proJecL in Patchogue., New York (Project) undertaken
of $1,000,000 (Custolllwcld
Contract).
The Custolllweld
CustOl11\veld by Lce Dorlinan, as President.
by PIke in exchange
Contract
wus cxecuted
for paymcnt
all behalf or
On that same datc, Pike entered into a contract w1th Slip
Fit Inc. (Slip Fit) pursuant to which Slip Fit agrccu to erect the steel for the Pro.iect 111
e:-:chunge for
payment 01'$ I 75,000 (Slip Fit Contract).
by I_cc !)orlnwn,
on behalf oCSlip h(
as President.
/\nielc 60fthe Customwcld
PA YMENT
'fhe Slip FIt Contract \vas executed
BOND, provides,
Contract, entitled PERFORMANCE
BONn and MATERIAL
in relevant part:
1\ Performance Bond and Material Payment Bond
. shall be furnished
in the full amount oflhis Agreement ... [CustomweldJ shall fumish Per!'onmmcc
Bond and Material Paymcnt Bonds in all amount cqual lo onc hundred percent
(100%) 01' tIle total contract pricc as security for f'aithful pcrforlTIill1ce of this
contract, and lor the paymenl oral Ipersons performing labor or rum ishing materials
in connection with this contract
If bonds are not procured ilnd delivered to The
Pike Company, Inc. within thirty (30) calendar days form [sic] the date of this
subcontracl, [Custornwdd] is to produce an Irrevocable Letler of Credit in the
amount or thirty percent (30'%) of the value of this subcontraCl.
I['bond ing is nol provided [Custom weld] wi 11 paid by [pike) with dualbe
parry checks naming both [Customweld] and Vendors/Sub-subcontractors.
It is undisputed
on the contracts.
that Mr. Dorllnan
Mr. Dorfman
knew that Pike was requiring
that time be of the essence
admitted that he could not provide bonds on behalf of Slip Fit to
Pike. Pikc agreed to e:-:tcnd Custom weld's time to obtain the required bonds but the parties disagree
as to the length of time . It is undisputed
that Custol1lwcld
due and that by May 5, 20 t 0, Custol11wdd
By letter dated Apnl 30,2010,
under the contract to supplcment
delivery or fabricated
performance
and payments
amounts
bonds.
Pike notified Custol11wcld that it was exerCIsing its option
the provision or Llbncated steel due to a continuing
steel to the job site, and that Custornweid
provtde payment and performance
Custon1\vcld
had not pnwlded
did not pay its subcontractors
problem with
had 48 hours to curc its hlilurc to
bonds as required by Article 6 urthe
Custolllweld
Contract.
did not provide the bonds by May 5, 2010.
By Ict.kr dated May:'i, 20 10, Pike terminated
failurc to cure as dcmanded
the Custom weld Contmct due to Custol1l\vckJ' s
ill the icuer u3tcd April 30, 2010.
Page 2 of 6
[* 3]
Pike also sent a letter dated May 5. 20 I D. to Slip Fit dch'lSll1gSlip Fit that it had 48 hours
lO
cure numerous alleged defaults in Slip Fit's performance.
By letter dated May 10.2010. Pike terminated the Slip Fit contract due to Slip Fit's purported
bilure to cure the defaults outlined in the letter dated May 5, 2010.
Both Custonnveld and Slip Fit filed mechanic's liens, which did not reflect payments made
by Pike to subcontractors of CuslOmweld and Slip Fit
It is unchsputcd that at the time that the
Cuslomweld and Slip Fit contracts were terminated. steel had not becn fabricated for the project's
west building and steel erection had not been completed for any building.
On June 29, 2010. Pike commenced Action 2 against Customwcld and Slip Fit in Supreme
Court Monroe County. The complaint alleges, among other things, that Custol11wdd breached its
contract by failing to supply structural steel for the project on time and of sufficient quality, and by
failing to provide payment and performance bonds. It is also alleged that Slip Fit breached its
contract by failing to install structural steel for the project on time and of sufficient quality, and by
failing to complete the entire installation/erection
of structural steel prior to receiving payment in
lieu of providing a bond.
OnJuly2. 20 I0, Customweld and Slip Fit commenced Action No.1 agamst Pike and fidelity
and Deposit Company of Maryland in Supreme Court, Suffolk County. The Verified Amended
Complaint in Action 1 alleges, among other things, that up until the time the contracts ,"verc
terminated, both Customweld and Slip Fit had completed all of their \vork in a timely and
professional manner. It is alleged that Pike breached the Customweld Contract by failing to pay
Custo1l1wcld $702,000. the balance due under the Custonnveld Contract for approved and accepted
work. It is also alleged that Pike breached the Slip Fit Contract by failing to pay Slip Fit $114,300.
the balance due I~)rapproved and accepted work.
CL1stomweldand Slip Fit also sought to foreclose
their respective mechanic's liens.
Pike now moves j~)rsummary judgment (I) declaring that the Customwcld Contract was
properly tcnnmatcd for hilure to post payment and performance bonds and lor other breaches of its
contract, (2) declaring that the Slip Fit Contract V'iasproperly terminated due to Slip Fit's failure to
per!()rm and dismissing the complaint in Action I as asserted by Slip Fit, (3) directing that the
mcchanic's liens filed hy Customwcld and Slip Fit be removcd or reduced, (4) scheduling a ht'aring
to detcrminc Pike's damages. and (5) awarding costs and disbursements to Pike on the instant
Pagc 3 of 6
[* 4]
motIOn
In support of the motion, Pike submits un affidavit 11'omWilliam Tehan, its Fxecutlve
President, Chicn:inancial
Onicer and Secretary.
had not provided performance
fallen
behind
seheuule,
subcontractors
purp0rlmg
subcontractors
T chan statcs, among other things, that CuslOlllwdJ
or payments bonds by May 1.2010. by 'vvhich time the steel work had
the
vvork was
were not being paid.
to detail
Vict
ongoing
Tehan annexed
problems
ofCustmmvc:ld
not bemg
performed
properly,
and
several letters and e-mails
with construction.
J'ehan alleges
and Slip Fit, and hired Island Steel to complete
contends that it is entitled to summary judgment
because It is undisputed
Custu1llwcld's
to IllS 3tTidavit
th,lt i>ike paid the
the contracts.
thut Custoillweid
Pike
I~liled to
furnish the requm:d bonds and because Custom weld and Slip Fit j~lilcd to pertzmn lheir work ill
timely and workmanlike
In opposition
[)orfillan,
President
,!
manner.
to Pike's
motion.
Customweld
of both companies.
Dorfman
and Slip Fit submit an arJiduvit
lh1l11 Lee
states, among other things, that the two main
reasons j{)l"
problems on the Project were Pike's consistent and repeated failure to provide approved
shop drawings in a timely manner and Pike's failure to pay Customwcld
the contracts.
Dorfillan stutes that it was his understanding
or Slip Fit any amount on
that Pike was amenable
to let work on
the Project continue without the bonds being posted '>vhileCustom weld sought the bonds. He claims
that he kept Pike informed
Customwcld
of Custom weld's
with the necessary
paperwork.
According
to Dorlillan,
it was not until Customweld
more than $700,000 worth of work (70%) and expected
had completed
day, that Pike sent the default letter demanding
Customweld
efforts to obtain the bonds and that Pike aSSisted
the bonds to be issued any
that Custom weld provide the bonds within 48 hours.
admits that it did not provide the bonds but it contends that the contract provides that
Pike's remedy for a failure to provide bonds was to issue two party checks.
Additionally,
it contends
that by allowing the work to continue without the bonds in place, Pike waived the contract proviSIOn
rcquiring bonds.
With regard to the allegations
letter dated April26,
point Customweld
the contract,
subcontractors
1010, from Pike to international
had performed
and that it \Vas unaware
of any claims
that worked lor Custol1lweld
paid suppliers of Customwcld
from laborers,
stating that to that
material
men, suppliers
With regard to Pike's claim that the meehalllc's
or
licns
Dorfman states that he did not learn that Pike had
until uCtcr this action was commenced.
the west building had not been commenced
shop drawings.
Fidelily Insurance Company
a copy of a
37% of the work, thaI it appeared satisl'3.ctory under Ihe terms of
filed by Custom weld and Slip Fit arc cxaggcrated,
approved
of defective \\lork, Dorfman provides
as oftlle termination
I Ie also states that Pike's
Dorlinan
further states tlwt
date because Pike had not provided
complaints
about the workmanship
arc
Ull!zlullded because Slip Fit \}o,'<.1S middle oCthe erection process so that it had nol yet tightened
in the
all connections
practice.
performed
or completed
C'ustomweld
the plumbing
of the building,
In accordance
with standard
admits lhat it did not provide the bonds but it conlends
its obligations
and is entitled to be paid.
Page4of6
industry
that it substantwlly
[* 5]
DISCUSSION
A party moving lar summary judgment
entitlement
to judgment
of any makria!
issues
has the burden of making a prima f~K:ieshowing
as n matter of lav\'. offering sufficient eVIdence demonstrating
Dr fact (Wineguul
\'. New VOl"k VI/iv. !vied 01'.,64
or
the absence
N Y2d gS. 487 NYS2d 316
119851: /.uckenI1UI11' City (!fNew York, 49 NY2d 557, 427 NYS2c1595l1980j).
Once a prima !~lCi...:
showing has been madc by the movant. the burden shirts to the party opposing the motion to produce
evidentiary
proof in admissible
form sufficient
10 establish
material issues or fact which require a
trial (set', %ayas v. I faff Hol/olI' Hills Cent. S'c/IOO/Disf., 226 J\D2d 713, 641 NYS2d 70 I [2"J Dcpt.
1996 J). '"lIJn determining
a motion for summary judgment.
most favorable to the nonmovanC
Since summary judgment
evidence
must be viewed
in the light
(Pearson v Dix .~IfcB,.ide,U,c. 63 AD3d 895 f2d Dept 200(1).
is the procedural
equivalent
ora trial, the motion should be denied irthere
is any doubt as to the existence ora triable issue or when a material issue of fact is arguable (Salil1o
v IPT Trucking, Inc., 203 AD2d 352 [2d Dcpt 1994]).
The clements
of a cause of action for breach of contract arc (I) the existence
between plaintiff and defendant,
(2) performance
by the plaintifL (3) defendant's
of a contract
failure to perform,
and (4) damages resulting from such failure to pcrfonll (see Furia v. Furia, 116 AD2d 694 [2d Dept.
19861l.
Ilere. it is undisputed
that Customweld
failed to provide Pike with performance
bonds by May 5, 2010. the date on which Pike terminated
Custom weld contends
that Pike was not permitted
!he Customweld
to terminate
the contract
and payment
Contract.
based upon its failtln~
to provide the bonds because thc contract provided that if the bonds were not provided,
pay CustDl11wl.::ldwith dual party checks naming
Contrary to CustolTIv •.
'C1d's contention,
with two-party
Customwcld's
regard,
checks
docs
In facL as correctly
an irrevocable
that Pike was not permitted
failure to provide the bonds.
Pike would
both CUslol1lv,'eld and vendors/subcontractors.
the fact that the contract permitted
not mean
However,
The CUSlol11weld Contract
Pike to pay Customwcld
to tcrminate
based
is not ambiguous
un
in this
pointed out by Pike, the contract also required Custol11wcld to produce
Iclter of credit for 30% of the value of the contract if bonds were not procured and
delivered to Pike within 30 dnys from the date of the contract.
Contrary to Custol11wt:ld' s contention.
the hlet that Pike agreed to provide Custom weld with an unspecified
amount or additional
time to
provide the bonds docs not create an issue of fact as to whether the bonds were even required.
N<.:vertll<.:less.the affidavit
0 I'Custoll1\Vcld'
s President demonstrates
Pngc 5 of 6
the <.:x
istencc
0 Llll
issue
[* 6]
or fact as to \vhcther
Pike, in allowing
the work on the Project
to be commenced
and colltinue
without the bonds in place, waived its right to bonds under Article 6 of the CustolTI\\-cld Contract.
Additionally,
completed
the submissions
raise an issue or fact as to whether
its \vork at the time Pike terminated
precludes contract terminatioll
Umifed /I(/rlnership
the contract.
and limits a contracting
\' F/our Cify l1rchifeclwa/
Finally, Pike has failed io submit evidence
CuslOmwcld
"The substantial
Mefa{s,
Inc .. 28 i\D3d 271,27211'1
demonstrating,
as a mutter
11·0111
William Tehan contains nothing more than unsupported
affidavit
and adequacy
Custolllweld's
oj'
performance.
Accordingly,
and adequacy
Depl. 2U(61).
law, that Cuslomweld
manner.
The anidavit
regarding the
In any event, Dorll1l<m's
of CustoJllwc1d's
and Slip Fit's
it is
ORDERED that the motion (motion sequence #
Action 2, the Pike Company,
This constitutes
rule
assertions
eonclusory
and Slip Fit's performance.
raises issues of fact as to the timeliness
performance
pany to a speci tic damage n;mcdy·· (8-15 UII
and/or Slip Fit f~liled to perCofm their work in a timely and/or workmanlike
timeliness
had substantially
Inc., fOf summary judgment
the DECISION
am)
by derendant
in Action IfPlainti IT in
is denied.
and ORJ)ER of tile Court.
(\
'Leo \)
13atell: i\pril 'I, 2012
1'Riucrl,rai), NClU 11!l1rl{
V\ \
~W/l
iEJnilu IElincs
JI.
[
.J Final
l x] Non Final
To:
Attorn!.''' of Plaintiff
Kushnick l'allaci PLLC
Vincent T. Pallaci. Esq_
445 Broadhollow Road, SUI!C124
Melville, New York 11747
Attornc\' of ()cfcndunt
Phillips Lytic Lt.P
Mark J Moretti, Esq.
Richard T. Tuckcr, Esq_
140() Firsl !"cdcl-ail'laza
R()ch~stcr Ncw York 146],1
Page 6 of 6
§.
(!J:.
