Cleveland Bros. Equipment v. Dominick Dan Alonzo Inc.

• Decision Date: 31 July 1997
• Citation: 241 A.D.2d 869,660 N.Y.S.2d 483
• Parties: , 1997 N.Y. Slip Op. 6965 CLEVELAND BROTHERS EQUIPMENT COMPANY, Respondent, v. DOMINICK DAN ALONZO INC. et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 483

660 N.Y.S.2d 483

241 A.D.2d 869, 1997 N.Y. Slip Op. 6965

CLEVELAND BROTHERS EQUIPMENT COMPANY, Respondent, v. DOMINICK DAN ALONZO INC. et al., Appellants, et al., Defendants.

Supreme Court, Appellate Division,

Third Department.

July 31, 1997.

As Amended Oct. 23, 1997.

Di Fabio, Tommaney & Legnard (Michael D. Di Fabio, of counsel), Albany, for appellants.

McNamee, Lochner, Titus & Williams P.C. (Kevin Laurilliard, of counsel), Albany, for respondent.

Before MIKOLL, J.P., and CREW, CASEY, YESAWICH and SPAIN, JJ.

SPAIN, Justice.

Appeal from an order of the Supreme Court (Connor, J.), entered November 6, 1996 in Columbia County, which, inter alia, granted plaintiff's cross motion for summary judgment against defendants Dominick Dan Alonzo Inc. and United States Fidelity and Guaranty Company.

In July 1993 plaintiff and defendant Merric Associates Inc. executed a lease agreement wherein Merric agreed to lease a truck from plaintiff at a rate of $7,500 per month for a minimum four-month rental period. Merric was acting as a subcontractor on two projects; a public construction project at a State Division for Youth facility in the Town of Claverack, Columbia County (hereinafter public project), and a private restaurant construction project in the City of Poughkeepsie, Dutchess County (hereinafter private project). Nothing in the lease agreement states the location of the project or projects where Merric would be using the truck. Defendant Dominick Dan Alonzo Inc. (hereinafter DDA) was the general contractor on both jobs. Defendant United States Fidelity and Guaranty Company (hereinafter USF & G) issued two separate labor and material bonds with DDA as principal and USF & G as surety on the two projects; notably, the public project required a statutory bond pursuant to State Finance Law § 137. Each bond provides for payment only for labor and/or material furnished in accordance with the contract for the construction of the project specified in the bond. The record reveals that Merric defaulted on its contract with DDA by walking off both projects and failed to tender payment to plaintiff for the remainder of its lease agreement.

In January 1994 plaintiff filed a "Notice Under Mechanic's Lien Law For Account of Public Improvement" regarding the public project; however, the record is devoid of any evidence that plaintiff filed a notice of claim regarding the private project. In November 1994 plaintiff commenced this action against Merric, DDA and USF & G seeking payment of the amount due plaintiff under the lease agreement. DDA and USF & G (hereinafter collectively referred to as defendants) answered and asserted several affirmative defenses including, inter alia, that the bond issued on the public project cannot be used to pay for Merric's use of the equipment on another project and that plaintiff failed to file a notice of claim against the bond on the private project. Thereafter, plaintiff moved for summary judgment in its favor and defendants cross-moved for summary judgment. Supreme Court denied both motions, stating that defendants were entitled to further discovery. After further discovery, defendants moved for summary judgment on the ground that the complaint failed to state a cause of action. Plaintiff cross-moved for summary judgment, claiming that because the general contractor and the surety were identical on both projects, defendants should be found liable as a matter of law for the full amount due plaintiff on the lease agreement. Supreme Court granted plaintiff's cross motion and awarded plaintiff damages in the requested amount of $19,451.99. Defendants now appeal.

Initially, we find merit in defendants' contention that plaintiff failed to comply with the unambiguous terms of the labor and material bond issued for the private project. The bond states, in pertinent part, as follows;

No suit or action shall be commenced hereunder by any [plaintiff], (a) Unless [plaintiff] * * * shall have given written notice to any two of the following: The Principal, the Owner, or the Surety above named, within ninety (90) days after...