Cives Corp. v. Hunt Constr. Grp., Inc.

• Decision Date: 19 January 2012
• Court: New York Supreme Court — Appellate Division
• Parties: CIVES CORPORATION, Plaintiff, v. HUNT CONSTRUCTION GROUP, INC., Respondent,andAASHA G.C., Inc., et al., Appellants.

2012 N.Y. Slip Op. 00284
91 A.D.3d 1178
937 N.Y.S.2d 426

CIVES CORPORATION, Plaintiff,
v.
HUNT CONSTRUCTION GROUP, INC., Respondent,andAASHA G.C., Inc., et al., Appellants.

Supreme Court, Appellate Division, Third Department, New York.

Jan. 19, 2012.

[937 N.Y.S.2d 427]

Menter, Rudin & Trivelpiece, P.C., Syracuse (Michael Balestra of counsel), for appellants.

Hancock Estabrook, L.L.P., Syracuse (Michael S. McNamara of Pillsbury, Winthrop, Shaw & Pittman, L.L.P., Washington, D.C., of counsel), for respondent.

Before: PETERS, J.P., ROSE, McCARTHY, GARRY and EGAN JR., JJ.

ROSE, J.

[91 A.D.3d 1178] Appeal from an order of the Supreme Court (Demarest, J.), entered October 12, 2010 in St. Lawrence County, which, among other things, denied a motion by defendants AASHA, G.C., Inc. and Barry Halbritter for partial summary judgment on a cross claim against defendant Hunt Construction Group, Inc.

The Oneida Indian Nation, as owner, entered into a prime contract with defendant Hunt Construction Group, Inc., a general contractor, to construct a $93 million expansion of the Nation's Turning Stone Casino Resort. The prime contract required Hunt to subcontract $18 million of the work to contractors owned by Nation members. When Hunt sought the names of such contractors, the only name provided was that of defendant AASHA G.C., Inc., which is owned by defendant Barry Halbritter, the brother of the Nation's chief. Recognizing that AASHA was a shell corporation with no resources or experience necessary to perform any required work on the project, Hunt agreed to funnel $18 million of the work through AASHA, permitting it to act as a mere payment conduit to non-member contractors who would then supply the actual materials and labor directly to Hunt. AASHA was to perform no work other than to receive requests for payment from the actual suppliers, add an eight percent markup and pass the marked-up requests along to Hunt for payment. As part of this arrangement, Hunt entered into a subcontract with AASHA, and AASHA entered into a sub-subcontract with plaintiff, to perform the steel work on the project.

After the steel work was completed and accepted, and plaintiff had been paid except for retainage, change orders and extras, plaintiff commenced this action against Halbritter, AASHA and Hunt to recover these unpaid amounts. AASHA then cross-claimed against Hunt for the unpaid amounts due plaintiff plus AASHA's eight percent markup on these amounts. When AASHA and Halbritter later moved for partial summary judgment on AASHA's cross claim against Hunt for breach of the Hunt–AASHA subcontract, Hunt cross-moved for, among other things, summary judgment dismissing AASHA's separate cross claim asserting that it is a third-party beneficiary of the Nation–Hunt prime contract. As part of Hunt's cross motion, it disclosed that it had settled plaintiff's claim for $1,050,000 and that [91 A.D.3d 1179] plaintiff had released Hunt and assigned its claim against AASHA to Hunt. AASHA and Halbritter then amended the motion seeking partial summary judgment against Hunt by limiting the amount AASHA sought to recover to its eight percent...