L.G. Defelice, Inc. v. Fireman's Ins. Co.
| Decision Date | 21 September 1998 |
| Docket Number | No. 3:97 CV 18(PCD).,3:97 CV 18(PCD). |
| Citation | 41 F.Supp.2d 152 |
| Court | U.S. District Court — District of Connecticut |
| Parties | L.G. DEFELICE, INC. v. FIREMAN'S INSURANCE CO. and Continental Casualty Co. |
Raymond A. Garcia, William S. Wilson, II, Garcia & Milas, New Haven, CT, for Plaintiff.
David A. Haught, Louis B. Blumenfeld, Cooney, Scully & Dowling, Hartford, CT, Gary M. Elden, Pamela A. Bitsas, Lynn H. Murray, Grippo & Elden, Chicago, IL, for Defendants.
RULING ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT
On December 9, 1996, plaintiff L.G. Defelice, Inc. ["Defelice"], a road construction company, commenced an action in state court against CNA Financial Corporation ["CNA"], and Fireman's Insurance Company ["Fireman's"], a CNA-owned surety company that was to provide Defelice with a bid bond for a reconstruction project along 1-95 in Bridgeport. The case was removed to federal court on January 3, 1997. (Dkt.# 1). On March 24,1997, CNA was dismissed as a party to the suit. (Dkt.# 6-1). The plaintiff amended the complaint on April 9, adding Continental Casualty Company ["CCC"], the principal processing entity for CNA's surety companies, as a defendant. (Dkt.# 8). Count One of the amended complaint alleges that the defendants breached a contract with Defelice to provide a bid bond that complied with the regulations set forth by the Connecticut Department of Transportation ["ConnDOT"]. Count Two alleges that the plaintiff sustained damages caused by the defendants' negligence in failing to comply with the standard of care in the surety industry. Count Three alleges that defendants engaged in unfair and deceptive acts that violated the Connecticut Unfair Trade Practices Act, CONN. GEN. STAT. § 42-110a, et seq. ["CUTPA"].
On February 21, 1998, defendants filed a motion for summary judgment as to all counts,1 a Local Rule 9(c) Statement of Undisputed Facts ["Defendants' Statement"] and a memorandum of law in support of its motion. (Dkt.# # 43-45). Two days later, plaintiff filed a Motion for Partial Summary Judgment, a memorandum of law in support of its motion, Local Rule 9(c) Statement of Undisputed Facts ["Plaintiffs Statement"], and various attachments to its motion.2 (Dkt.# # 46-49). On April 8, 1998, Defelice filed its memorandum in opposition to defendants' motion for summary judgment, a statement of material facts as to which a genuine issue exists to be tried, and various attachments to its memorandum. (Dkt.# # 53-4, 57).3 On the same day, defendants filed a Response to Plaintiff's Local Rule 9(c) Statement of Undisputed Material Facts and its own Statement of Undisputed Material Facts, as well as a Response to Plaintiff's Motion for Partial Summary Judgment ["Defendant's Response"].4 (Dkt.# 55-6). On April 23, 1998, defendants filed a reply to the plaintiff's response to its motion of summary judgment,5 (Dkt.# 58); plaintiff filed a reply and various attachments to defendants' response to its own motion for summary judgment.6 (Dkt.# # 59-60). For the reasons stated below, defendants' motion for summary judgment, (Dkt.# 43), is denied and plaintiff's cross-motion for partial summary judgment, (Dkt.# 46), is denied.
The following facts are apparently undisputed.7 Defelice is a road construction company that previously worked for ConnDOT. (Plaintiff's Statement ¶ 1; Defendant's Response at 1). When it assembled bids for the State, Defelice often used CNA's Vice-President/Surety Manager Robert Campbell ["Campbell"] to prepare its bid bonds.8 (Plaintiff's Statement ¶ 4; Defendant's Statement at 5, 8). Campbell has been employed by several insurance companies throughout the twenty-five year time period during which he performed this service. (Plaintiff's Statement ¶¶ 5, 7; Defendant's Response at 5, 8). Currently, he is employed by CCC, the principle processor for all the surety companies owned by CNA. (Plaintiff's Statement ¶¶ 2-3; Defendant's Statement ¶ 4).
On March 13, 1996, ConnDOT advertised for bids on a project to reconstruct a portion of I-95 spanning the Yellow Mill Channel in Bridgeport ["Yellow Mill 1"]. (Plaintiff's Statement ¶ 3; Defendant's Statement ¶ 1). On March 21, 1996, Defelice contacted Campbell to request that he prepare a bid bond for Yellow Mill 1 and it sent him information on the project. (Plaintiff's Statement ¶ 3; Defendant's Statement ¶ 2). Campbell assembled a bid bond issued by Fireman's, one of the surety companies owned by CNA and processed through CCC. (Plaintiff's Statement ¶ 14; Defendant's Statement ¶ 6). He used Ernest Susanin, owner of a local insurance broker, the E.S. Susanin Agency ["Susanin"], as the agent of record for the Defelice account, an arrangement which earned Susanin a small commission from CNA. (Plaintiff's Statement ¶ 30; Defendant's Response, Statement ¶¶ 30, 31). On May 15, 1996, Defelice submitted its bid together with the bid bond that Campbell prepared. (Plaintiff's Statement ¶ 16; Defendant's Response at 19).9 For a bid to be considered by ConnDOT, it must comply with the Department's regulations and requirements specific to individual projects. (Plaintiff's Statement ¶ 17; Defendant's Statement ¶ 12). Although Defelice's bid was the lowest submitted, ConnDOT rejected it as nonresponsive because its bid bond did not comply with its standards. (Plaintiff's Statement 120; Defendant's Statement ¶ 17).
ConnDOT's requirements are set forth in its Standard Specifications for Roads, Bridges and Incidental Construction, Form 814A, section 1.02.07 (1995) ["Standard Specifications Book"].
Except when otherwise specified in the bid documents, no proposal will be considered unless ... it is accompanied by a proposal guaranty in the form of a bond from a surety company [a bid bond], satisfactory to the Commissioner, in an amount equal to at least 1/3 of the amount of the bid....
At the time of the bid opening, the surety must be a corporate surety licensed by the Insurance Commissioner of the State of Connecticut and must hold a Certificate of Authority as an acceptable Surety ... acceptable to the Federal Department of Treasury. The surety's underwriting limitation must not be less than the full amount required by the bond, itself.
(emphasis added)(plaintiff's Statement ¶ 21; Defendant's Statement ¶¶ 7-8). A surety's underwriting limitation, established by the U.S. Department of Treasury, is known as its "T-limit."10 (Id.). While ConnDOT maintains that this policy was in place for over a year before Defelice's bid was rejected, it first put the T-limit requirement in writing on March 13, 1996, when it mailed a notice to construction companies stating that the policy was to be effective for projects advertised on May 1, 1996 or later. (Plaintiff's Statement ¶ 22; Defendant's Statement ¶¶ 18-20; Defendant's Response at 12-13). Campbell did not check the T-limit of Fireman's or any other one of CNA's companies before issuing the bid bond. (Plaintiff's Statement 1 27; Defendant's Response at 27).
After Defelice objected to the grounds on which its bid was rejected, ConnDOT re-advertised the Yellow Mill Channel project ["Yellow Mill 2"] and conducted an entirely new bidding round. (Plaintiff's Statement ¶ 25; Defendant's Statement ¶ 22). After this round, Defelice's bid was no longer the lowest and as a result, the company was not awarded the contract. (Plaintiff's Statement ¶ 25; Defendant's Statement ¶ 29).
Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). The moving party bears the burden of establishing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). When the moving party meets this burden, the adverse party must then affirmatively set forth specific facts which demonstrate that a genuine issue for trial exists. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual issue is genuine and precludes summary judgment when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248, 106 S.Ct. 2505. In evaluating whether a genuine issue of material fact exists, the court must "assess the record in the light most favorable to the non-movant and ... draw all reasonable inferences in its favor." Id. at 255, 106 S.Ct. 2505.
To survive a motion for summary judgment, a nonmoving party alleging the existence of a contract has the burden of presenting evidence that the other party agreed to some form of contractual commitment. Coelho v. Posi-Seal Int'l, Inc., 208 Conn. 106, 111-12, 544 A.2d 170 (1988); ambiguous contractual terms are to be construed in favor of the nonmoving party. Bouzo v. Citibank, N.A., 96 F.3d 51, 58 (2d Cir.1996). Moreover, summary judgment only is appropriate when the language of the contract is unambiguous. Id. In the absence of definitive contractual language, the parties' intentions as to the scope of their contractual commitments is an inference of fact best left to the jury. Coelho, at 113, 544 A.2d 170.
Defendants seek summary judgment as to all claims set forth in plaintiff's complaint. Plaintiff in its cross-motion seeks summary judgment as to the first claim.
In Count One, plaintiff alleges that a contract existed whereby defendants prepared bid bonds for Defelice in exchange for Defelice's continued business. (Dkt.# 8, ¶¶ 4, 19). Defendants argue that no such contract existed because no meeting of the minds indicated that defendants bore this responsibility. (Dkt. # 45, at 1, 8.)
Plaintiff also claims that the terms of the alleged contract between...
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