404 F.3d 566 (2nd Cir. 2005), 04-0843, Aetna Cas. and Sur. Co. v. Aniero Concrete Co., Inc.

Docket Nº:Docket Nos. 04-0843-CV(L), 04-1162-CV(XAP).
Citation:404 F.3d 566
Party Name:The AETNA CASUALTY AND SURETY CO., Plaintiff-Defendant-Appellant-Cross-Appellee, v. ANIERO CONCRETE CO., INC., Plaintiff-Appellee--Cross-Appellant, General Accident Insurance Company of America, Defendant-Counter-Claimant-Appellee, New York City School Construction Authority, Defendant-Counter-Claimant-Cross-Appellee, Kreisler Borg Florman General
Case Date:February 01, 2005
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 566

404 F.3d 566 (2nd Cir. 2005)

The AETNA CASUALTY AND SURETY CO., Plaintiff-Defendant-Appellant-Cross-Appellee,

v.

ANIERO CONCRETE CO., INC., Plaintiff-Appellee--Cross-Appellant,

General Accident Insurance Company of America, Defendant-Counter-Claimant-Appellee,

New York City School Construction Authority, Defendant-Counter-Claimant-Cross-Appellee,

Kreisler Borg Florman General Construction Company, Acrom Construction Services Co., Inc., Construction Managers, A Joint Venture, David M. Pharis, S.T. Hudson, doing business as Hudson International, Hudson International, Crevani Bros. Realty, Crevani Concrete Construction Co., Inc., Crevani Farms 1979 Trust Agreement and Vertolomo's, Inc., Defendants.

Docket Nos. 04-0843-CV(L), 04-1162-CV(XAP).

United States Court of Appeals, Second Circuit.

Feb. 1, 2005.

Argued: Jan. 11, 2005

Appeal and cross-appeal from a Memorandum Opinion and Order of the United States District Court for the Southern District of New York (Charles S. Haight, Jr., Judge), holding a construction contract invalid because an express condition precedent was not satisfied.

Affirmed. Cross-appeal dismissed as moot.

Benjamin D. Lentz, Torre, Lentz, Gamell, Gary & Rittmaster LLP, Jericho, NY, for Plaintiff-Defendant-Appellant-Cross-Appellee.

John M. Agnello (James E. Cecchi and Lindsey H. Taylor, on the brief), Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein, Roseland, NJ, for Plaintiff-Appellee-Cross-Appellant.

Vincent J. Zichello, Zichello & McIntyre, LLP, New York, NY, for Defendant-Counter-Claimant-Appellee.

Fay NG (Pamela Seider Dolgow; Michael A. Cardozo, Corporation Counsel, on the brief), Office of the Corporation Counsel of the City of New York, New York, NY, for Defendant-Counter-Claimant-Cross-Appellee.

Before: KEARSE, CABRANES and SACK, Circuit Judges.

PER CURIAM.

This case, brought in the United States District Court for the Southern District of

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New York (Charles S. Haight, Jr., Judge) under the Court's diversity jurisdiction, arises out of efforts to renovate the Morris High School in Bronx, New York. The District Court held that a contract to complete the renovation--the "Completion Agreement" memorialized on March 18, 1994 by The Aetna Casualty and Surety Company ("Aetna") and Aniero Concrete Company, Inc. ("Aniero")--was invalid due to an unsatisfied condition precedent. On appeal, Aetna disputes the District Court's conclusion. We affirm.

In 1992, the New York City School Construction Authority ("SCA") contracted with the P.J. Carlin Construction Company ("Carlin") to perform the Morris High School renovation. The SCA's arrangement with Carlin subsequently collapsed, leading Aetna, Carlin's surety, to solicit bids for completing the work. See Aniero Concrete Co. v. N.Y. City Constr. Auth., 1997 WL 3268 (S.D.N.Y. Jan. 3, 1997). Aetna accepted Aniero's bid, and the two parties memorialized the Completion Agreement. See id. at *1. After "mobiliz[ing]" on the job site, Aniero claims to have discovered that it had been "given an inaccurate and misleading description of the work completed by Carlin." Id. at *1.

In December 1994, Aniero commenced this action, asserting tort and contract claims against, inter alia, Aetna and the SCA. Aetna subsequently filed an action against General Accident Insurance Company of America ("General"), Aniero's surety, in New York state court; that action was removed to federal court and consolidated with Aniero's action. On March 24, 1997, the SCA filed a counterclaim against Aniero and a cross-claim against Aetna. Further background facts, as well as the history of this litigation's motion practice, are set forth in detail in the District Court's Memorandum Opinions and Orders dated January 3, 1997 (reprinted below at Appendix A), see id.; February 27, 1997 (reprinted below at Appendix B), see Aniero Concrete Co. v. N.Y. City Constr. Auth., 1997 WL 83308 (S.D.N.Y. Feb. 27, 1997); and March 30, 1998 (reprinted below at Appendix C), see Aniero Concrete Co. v. N.Y. City Constr. Auth., 1998 WL 148324 (S.D.N.Y. Mar. 30, 1998).

In due course, on March 30, 1998, the District Court issued a Memorandum Opinion and Order addressing, inter alia, the parties' motions for summary judgment. See id. The Court concluded that the Completion Agreement was invalid due to an unsatisfied express condition precedent--the SCA's written consent to the assignment of the Carlin contract to Aniero. Id. Accordingly, the SCA's counterclaim against Aniero was dismissed because it was premised on the validity of the Completion Agreement. Id. Moreover, the Completion Agreement having been declared invalid, the District Court held that "the performance bond issued by General as security for the Completion Agreement is also a nullity." Id. The District Court thus dismissed Aetna's claims against General. Id. The Court further noted that Aniero and General had agreed not to press their claims if the Completion Agreement were held invalid; the Court, therefore, regarded as moot any motions seeking the dismissal of Aniero's or General's actions, as well as General's own cross-motion for summary judgment in its favor. 1 Id. On May 19, 1998, the District

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Court denied Aetna's motion for reconsideration.

On appeal, Aetna argues that the District Court incorrectly interpreted the Completion Agreement and that, in any event, the Completion Agreement was so ambiguous as to preclude summary judgment. Aniero cross-appeals, seeking to reinstate its claims if we reverse the District Court's judgment and hold that the Completion Agreement was valid.

For substantially the reasons stated in the District Court's Memorandum and Order of March 30, 1998, we affirm. We therefore need not reach the question raised by Aniero's protective cross-appeal, and we dismiss the cross-appeal as moot.

APPENDIX A

ANIERO CONCRETE COMPANY, INC., Plaintiff,

v.

NEW YORK CITY CONSTRUCTION AUTHORITY; The Aetna Casualty and Surety Company; Kreisler Borg Florman General Construction Company; Acrom Construction Services, Inc.; Kreisler Borg Florman General Construction Company, Inc. and Acrom Construction Services, Inc., Construction Managers, a Joint Venture; David M. Pharis and S.T. Hudson d/b/a Hudson International, Defendants.

The Aetna Casualty and Surety Company, Plaintiff,

v.

General Accident Insurance Company of America, Defendant-Counterclaimant.

General Accident Insurance Company of America, Third-Party Plaintiff,

v.

New York City School Construction Authority; Kreisler Borg Florman General Construction Company, Inc.; Acrom Construction Services, Co., Inc.; Kreisler Borg Florman General Construction Company, Inc. and Acrom Construction Services Co., Inc., Construction Managers, a Joint Venture; David M. Pharis and S.T. Hudson d/b/a Hudson International; Aniero Concrete Co., Inc.; Crevani Construction Co., Inc.; Vertolomo's Inc.; Crevani Bros. Realty Co., Inc.; Crevani Farms 1979 Trust Agreement; Stephen G. Crevani, Jr. Trust Agreement; Stephen G. Crevani, Jr. Business Buy-Pass Trust Agreement; Stephen G. Crevani; and Stephen G. Crevan, Jr., Third-Party Defendants.

Nos. 94 Civ. 9111, 95 Civ. 3506.

Jan. 3, 1977.

MEMORANDUM OPINION AND ORDER

HAIGHT, Senior District Judge.

This action is before the Court on a motion by defendant The Aetna Casualty and Surety Company ("Aetna"), to dismiss the complaint brought by Aniero Concrete Company, Inc. ("Aniero"), pursuant to Rule (12)(b)(6), or in the alternative for summary judgment. Defendant David M. Pharis and S.T. Hudson d/b/a Hudson International ("Hudson") 1 also moves to dismiss Aniero's complaint, as well as that brought by third-party plaintiff General

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Accident Insurance Company of America, Inc. ("General"), under Rule 12(b)(6). For reasons set forth herein, Aetna's Rule 12(b)(6) motion is converted into a summary judgment motion, and is granted in part and denied in part. Hudson's Rule 12(b)(6) motion is also granted in part and denied in part. The plaintiffs' claims of fraudulent inducement, fraudulent concealment, negligent misrepresentation, and rescission on the ground of unilateral mistake are dismissed under Fed.R.Civ.P. 9(b), with leave to amend. The parties have made various other applications, which are addressed below.

BACKGROUND

The instant action, brought under this Court's diversity jurisdiction, 2 arises out of the collapse of a contractual arrangement for the renovation of Morris High School in the Bronx ("the Project" or "the Morris Project"). Aniero's complaint paints the following portrait of the events that led to the instant suit:

On July 1, 1992, defendant New York City School Construction Authority ("SCA") contracted with the P.J. Carlin Construction Company ("Carlin") for the modernization of Morris High School ("the Carlin Contract"). After little more than a year, Carlin was terminated from the Project, and its surety, Aetna, was called in to complete the work. Aetna solicited bids for this task, and its construction consultant, defendant Hudson, prepared materials describing the nature of work done by Carlin, and that remaining to be finished. Among the documents provided by Hudson were Carlin's Request for Payment No. 15, which set forth the approved work performed by Carlin as of September 30, 1993 and the dollar value thereof; the Change Order List, which contained 43 approved change orders, 3 and the value of change order work completed by Carlin; and the Punchlists, which detailed the defective work that the completion contractor would need to remedy (collectively "the Project Documents"). Complaint ¶ 31.

Aniero submitted a bid of $18,800,000, which was "ultimately" accepted by Aetna. Complaint pp 29, 32. The parties memorialized this...

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