WBP Cent. Assocs., LLC v. DeCola

• Decision Date: 24 January 2012
• Citation: 91 A.D.3d 861,2012 N.Y. Slip Op. 00510,937 N.Y.S.2d 306
• Parties: WBP CENTRAL ASSOCIATES, LLC, appellant, v. Richard DeCOLA, et al., respondents.
• Court: New York Supreme Court — Appellate Division

2012 N.Y. Slip Op. 00510
91 A.D.3d 861
937 N.Y.S.2d 306

WBP CENTRAL ASSOCIATES, LLC, appellant,
v.
Richard DeCOLA, et al., respondents.

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

Jan. 24, 2012.

[937 N.Y.S.2d 307]

Eric W. Berry, P.C., New York, N.Y., for appellant.

Mauro Lilling Naparty LLP, Great Neck, N.Y. (Matthew W. Naparty and Timothy J. O'Shaughnessy of counsel), for respondent Richard DeCola.

PETER B. SKELOS, J.P., L. PRISCILLA HALL, LEONARD B. AUSTIN, and ROBERT J. MILLER, JJ.

[91 A.D.3d 861] In an action, inter alia, to recover damages for breach of contract and to enforce an indemnification agreement, the plaintiff appeals, on the ground of inadequacy, from a judgment of the Supreme Court, Westchester County (Loehr, J.), entered April 8, 2010, which, upon a decision of the same court entered August 19, 2009, made after a nonjury trial, is in favor of it and against

[937 N.Y.S.2d 308]

the defendants in the principal sum of only $8,800.

ORDERED that the judgment is modified, on the law and the facts, by increasing the principal sum awarded to the plaintiff from $8,800 to $550,000; as so modified, the judgment is affirmed, with costs to the plaintiff, payable by the defendants, and the matter is remitted to the Supreme Court, Westchester County, for the entry of an appropriate amended judgment.

On January 24, 2001, the plaintiff and Deco Construction Corporation (hereinafter Deco), which was then owned by the defendants, entered into a contract for the excavation of a construction site in Yonkers (hereinafter the contract). The contract was secured by a performance bond in the face amount of $750,000. Deco abandoned the project before it was completed. The plaintiff completed the project on its own, with the assistance of several of Deco's subcontractors. The plaintiff secured an arbitration award pursuant to the bonded contract, and ultimately entered a judgment on the award in the sum of $1,812,353.35 against Deco. Deco unsuccessfully sought to vacate the award, which was confirmed by the Supreme Court. The order confirming the arbitration award was affirmed by this Court ( see Matter of WBP Cent. Assoc., LLC v. Deco Constr. Corp., 44 A.D.3d 781, 842 N.Y.S.2d 730).

The plaintiff and the surety on the performance bond also engaged in litigation with respect to the performance bond. Those parties settled their litigation in January 2007. Specifically[91 A.D.3d 862] , the surety paid the plaintiff the sum of $550,000, and assigned the plaintiff its rights in an indemnity agreement executed by the surety and the defendants, Richard DeCola (hereinafter DeCola) and his then-wife, Patricia DeCola, also known as Patricia Snowden. DeCola is now the sole shareholder of Deco. The indemnity agreement provided, in pertinent part, that the defendants would “indemnify and save” the surety “harmless from and against every claim, demand, liability, loss, cost [or] charge ... payable on demand of Surety, whether actually incurred or not [and any] expense, suit, order, judgment and adjudication whatsoever, and any and all liability therefore [sic], sustained or incurred by [the surety] by reason of having executed or procured ... the execution of said [performance bond], and will place [the surety] in funds to meet same.” The indemnity agreement also recited that the surety “shall have the right to pay, settle or compromise any expense, claim or charge of the character enumerated in this agreement, and the voucher or other evidence of such payment shall be prima facie evidence of the propriety thereof,” as well as of the defendants' liability to the surety.

“Surety bonds—like all contracts—are to be construed in accordance with their terms” ( Walter Concrete Constr. Corp. v. Lederle Labs., 99 N.Y.2d 603, 605, 758...