Aniero Concrete Co. v. New York City Const. Auth.

• Decision Date: 23 December 2003
• Docket Number: No. 94 Civ. 9111(CSH).,94 Civ. 9111(CSH).
• Citation: 308 F.Supp.2d 164
• Parties: ANIERO CONCRETE COMPANY, INC., Plaintiff, v. NEW YORK CITY CONSTRUCTION AUTHORITY; and the Aetna Casualty and Surety Company, Defendants.
• Court: U.S. District Court — Southern District of New York

308 F.Supp.2d 164

ANIERO CONCRETE COMPANY, INC., Plaintiff, v. NEW YORK CITY CONSTRUCTION AUTHORITY; and the Aetna Casualty and Surety Company, Defendants.

No. 94 Civ. 9111(CSH).

United States District Court, S.D. New York.

December 23, 2003.

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Charles M. Carella, Carella, Byrne, Baine, Gilfillan, Cecchi, Stewart & Olsstein, Roseland, NJ, Benjamin D. Lentz, Torre, Lentz, Gamell, Gary & Rittmaster, L.L.P., Jericho, NY, for Plaintiff.

Bob Bailey, Soraya Berg, Paul A. Crotty, Corporation Counsel of the City of New York, Monroe Weiss, Lambert, Weiss & Pisano, New York City, for Defendants.

MEMORANDUM OPINION AND ORDER

HAIGHT, Senior District Judge.

At a bench trial in this diversity action, a construction company asserted a claim against a surety company to recover in quantum meruit for work performed during the renovation of a high school in the Bronx. The parties exchanged post-trial main and reply briefs. Counsel presented oral summations. This Memorandum Opinion and Order constitutes the Court's findings of fact and conclusions of law pursuant to Rule 52(a). Fed.R.Civ.P.

I. FINDINGS OF FACT

1. Plaintiff Aniero Concrete Company, Inc. ("Aniero") is a New Jersey corporation maintaining its principal place of business in that state.

2. Defendant Aetna Casualty and Surety Company ("Aetna") is a Connecticut corporation maintaining its principal place of business in that state.

3. In July 1992 the New York City School Construction Authority ("SCA") contracted with the P.J. Carlin Construction Company ("Carlin") for a large-scale modernization and renovation of the Morris High School in the Bronx ("the Project"). Carlin was the general contractor for the Project, and retained the services of a number of subcontractors. Aetna had issued a performance bond obligating Aetna to complete the Project at its expense if Carlin failed to do so. That eventuality came to pass. Carlin was terminated from the Project, nowhere near completion, after little more than a year.

4. Aetna retained Aniero to act as replacement general contractor. At that time, Aetna and Aniero purported to enter into a written contract referred to as the "Completion Agreement." However, the Court held in an earlier opinion that the Completion Agreement was invalid because Aetna failed to obtain the SCA's written consent of Aetna's assignment of the Carlin contract to Aniero. See Aniero Concrete Company, Inc. v. New York City Construction Authority, 1998 WL 148324 (S.D.N.Y. March 30, 1998). Accordingly Aniero's claim against Aetna sounds in quantum meruit.

5. Aniero mobilized on the job site in March, 1994. It kept on some of Carlin's subcontractors and retained others of its choosing. Aniero ceased working on the uncompleted Project on December 22, 1994, and, complaining of Aetna's delays in making payments under the purported contract, commenced this action against Aetna on that day.¹

6. Aniero claims that Aetna owes Aniero a total amount of $4,007,620.75 in addition to the amounts Aetna previously paid to Aniero. Aetna clams that it overpaid Aniero in the amount of $2,548,174.41, and in consequence owes Aniero nothing in quantum meruit. Aetna did not press a claim for overpayment at the trial, although it has not abandoned that claim. The procedural posture of the case was such that at the trial Aetna confined its efforts to denying Aniero any recovery in quantum meruit.

7. The president and principal owner of Aniero is Stephen Crevani, Sr. (hereinafter "Crevani"). His son, Stephen Crevani, Jr. (hereinafter "Crevani Jr.") was also active in Aniero during the pertinent times.

8. Aniero was an active company from 1970 until 1995, when it withdrew from the Project. It was a general contractor, developer, and reinforced concrete contractor. During Aniero's years of operation, Crevani at one time or another performed all functions at this small company: estimating costs for bids, working and supervising at the job sites, working in the office, and overseeing all aspects of the business.

9. Having been retained by Aetna as the general contractor replacing Carlin, Aniero began work at the site of the Project during the week ending on March 25, 1994. Aniero's last day on the job was December 22, 1994.

10. Aniero established several trailers at the job site. The main trailer was used as a field office, containing computers, copy machines, fax machines, calculators, filing cabinets, and other office equipment. Aniero's permanent office was located in Hackensack, New Jersey. Other trailers at the job site were used for storage purposes and to accommodate some of Aniero's subcontractors.

11. Given the near total renovation of a large multi-story school building, it is not surprising that Aniero used the services of many subcontractors specializing in the full gamut of the building trades. The names of those subcontractors, some 95 in number, are listed in Appendix A to Aniero's Main Post-Trial Brief, and incorporated in these Findings by reference.

12. When Aniero began working on the Project in March 1994, Crevani Jr. was in charge at the job site every day. However, in May Crevani Jr. told his father that he was encountering difficulties which required his father's greater experience to confront. From May until Aniero ceased work in December 1994, Crevani was at the job site virtually every day.

13. Also present at the job site on a daily basis, working out of the Aniero trailers, were Steve Berdel, Aniero's field superintendent for the Project, and Paul Jennings, Aniero's project manager. Berdel was an employee of S2 Management, Ltd., with which Aniero contracted to obtain his services. Berdel oversaw the subcontractors, made sure that they performed their work according to plans and specifications and on schedule, checked the quantity and quality of the subcontractors' work, and reported his observations to Jennings. Jennings, a licensed architect, was employed by R.J.W. Architecture, P.C., with which Aniero contracted to obtain Jennings' services. Aniero considered that it was important to have a licensed architect as the manager of a Project which required renovations and new work to be incorporated into a large existing structure. Jennings made sure that the work performed was architecturally, structurally and mechanically correct and in accordance with the SCA's drawings. Jennings and two other individuals employed by R.J.W. Architecture reviewed and coordinated the shop drawings pursuant to which the subcontractors performed their work. Jennings, together with Berdel, reviewed the quantities of work performed by the subcontractors and, in connection with the payment requisition process described infra, met with representatives of Kreisler Borg Florman General Construction Co. ("KBF"), SCA's construction manager.

14. Aniero was responsible for the payment of invoices submitted to it by its subcontractors. Such payments, when made, became items of cost incurred by Aniero on the Project. Aniero periodically prepared requisitions for payment ("requisitions") by which it sought payments on account for the work it had performed and costs it had incurred on the Project during a specified time frame. Aniero submitted those requisitions to SCA, to KBF, and to Hudson International Group ("Hudson"), consultants and engineers, which Aetna, required by its surety bond to accomplish completion of the Project, had retained as "its construction consultant."² Carlos Guerrero was the consultant advising Aetna on the Project; he had rendered such services to Aetna in the past and worked out of Hudson's offices in this case. Hudson would review the requisitions on behalf of Aetna. The payment requisition process is further described in ¶ 23 of these Findings.

15. Two of these requisitions and accompanying correspondence are in evidence as PX 1248 and PX 1250.³ PX 1248 includes a 12-page single-spaced "Request for Payment" prepared by Aniero covering work performed and costs incurred from June 1 through June 30, 1994. The first of these pages contains six numbered columns captioned, left to right, "Item of Work," "Total Value of Work (Dollars Only)," "Percent Completed," "Total Value of Work Completed," and "Value of Work Completed," the last-named column being broken down into two sub-columns captioned "Last Request (Dollars Only)" and "This Request (Dollars Only)" The column captioned "Item of Work" contains references to 27 particularized sorts of work ("Auditorium," "Structural," "Plumbing," and the like), as well as references to "All Other Work," "Exterior Work," and "Change Orders." Dollar figures or percentages (as the case may be) appear for each of these references under the respective captions. There is also a 5% deduction for "retainage" (the amount that building owners typically retain in an effort to assure that the contractor will finish the job satisfactorily). The next 11 pages contain a "detailed break down thru 06/30/94," with comparable captions; 516 separate work items are listed.

16. Aniero's "Request for Payment" forming a part of the requisition which is PX 1250 follows the same format and covers the work performed and costs incurred during the period July 1, 1994 to August 31, 1994.

17. Hudson examined Aniero's Request for Payment included in PX 1248 and, after making certain adjustments, certified the amount of $1,120,903 as the "Net Amount Due Completion Contractor this Pay Application from the Surety."⁴ In the parlance of the Project, Aniero was the "Completion Contractor," Carlin was the "Defaulted Contractor," and "the Surety" was Aetna. Hudson's analysis is dated August 9, 1994, and the exhibit contains a copy of a check bearing that date and in that amount, drawn by Aetna to Aniero's order.

18. Hudson's analysis, dated September 16, 1994, of Aniero's Request for Payment forming a part of PX 1250 certified the amount of $3,064,135 as the "Net Amount Due Completion...