Summary Judgment Motions Resolved On Tangled Claims Amongst Construction Sub-Contractors, Against Sureties, Relating to Javits Center Renovations

On September 25, 2024, Justice Nancy M. Bannon granted partial summary judgment on various claims amongst subcontractors and sub-subcontractors, and by them against sureties, relating to renovations at the Javits Center in Manhattan. The case is Interebar Fabricators LLC v C.B. Contr. Corp., Index No. 655852/2021.

The Prime Contractor on the project, third-party defendant Turner Construction Company Joint Venture (the “JV”), subcontracted with third-party defendant E.E. Cruz & Company, Inc. (“Cruz”) for excavation and foundation work. This included an obligation by Cruz to furnish and install concrete reinforcing, which Cruz subcontracted to defendant C.B. Contracting Corp. (“CBC”). CBC, in turn, sub-subcontracted with the predecessor-in-interest to plaintiff Interebar Fabricators LLC to provide CBC with reinforced steel bars (“rebar”). (Like the Court, we refer to both Interebar and the subcontractor to whose rights it succeeded as “Interebar”).

Interebar sought summary judgment on its contract claim against CBC for CBC’s failure to pay Interebar’s rebar invoices, and against various surety defendants seeking to recover on a payment bond for that CBC obligation. CBC sought summary judgment against Cruz for Cruz’s failure to fully pay CBC’s rebar invoices, and against certain surety defendants for failure to cover Cruz’s lack of payment.

Justice Bannon found that Interebar had shown a prima facie case on its contract claim against CBC, based on the contract documents, invoices and an affidavit from its Chief Financial Officer regarding non-payment. The Court rejected CBC’s attempt to rebut that showing by arguing that “it cannot pay because it has not been paid by Cruz, which has withheld payment based on CBC’s alleged failure to furnish as-built drawings for the rebar it installed.” Slip op., p. 5.

CBC argued that summary judgment should be denied Interebar because CBC’s asserted obligation to furnish as-built drawings had passed down to Interebar as CBC’s sub-subcontractor, and Interebar’s failure to perform prevented CBC from getting paid by Cruz. Justice Bannon held that CBC had no contractual obligation to provide as-built drawings to Cruz and, even if it did, CBC had failed to show that any such obligation would “flow down” to Interebar. Id., pp. 5-6.

Justice Bannon therefore granted Interebar’s motion for summary judgment against CBC on its contract claim.

The Court also granted summary judgment on CBC’s claims against the sureties for the amount due to it from Cruz. The sureties had posted bonds “‘secur[ing] payment for, among others, all persons furnishing materials to a subcontractor for use in the prosecution of a public improvement [project].’” Id., pp. 6-7 (quoting State Finance Law § 137.) Their arguments arising from the assertion that Cruz did not owe anything further to CBC were futile “given the grant of CBC’s third-party breach of contract claim against Cruz, as discussed further below.” Id., p. 7.

As the foregoing language anticipates, Justice Bannon granted CBC summary judgment on its third-party breach of contract claim against Cruz (and therefore also dismissed Cruz’s contractual counter-claim against CBC.) CBC had established its prima facie case through invoices and deposition testimony showing its delivery of rebar to Cruz, and Cruz’s failure to pay for it in full. Cruz’s argument that CBC failed to provide as-built drawings failed for the same reasons the Court had set forth in granting Interebar judgment against CBC. Id., p. 8. Cruz’s arguments based on CBC’s alleged failure to provide Cruz with shop drawings before commencing work also failed. In the face of witness testimony suggesting that such drawings had been delivered, Cruz failed to “submit proof sufficient to raise a triable issue of fact on that score.” Slip op., p. 8.

CBC was denied summary judgment on its claim against the sureties for amounts due it from Cruz because it failed to submit the bond sued upon with its moving papers. Id., p. 11.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning construction litigation or bonding obligations.