Marco & Sitaras, PLLC obtains a judgment against surety for $4,748,191.00 plus interest at 1% per month under the N.Y. “Prompt Payment Act” in favor of a subcontractor on a payment bond claim against Arch Insurance Company.
The judgment was entered in the United States District Court for the Southern District of New York, after a five day bench trial before U.S. District Court Judge Alison J. Nathan that was held in February 2014.The case, Innovative Design and Building Services, LLC v. Arch Insurance Company (S.D.N.Y 12 cv. 5474), arose out of the construction of $50 million multifamily housing project in Orange County, New York. The plaintiff-subcontractor entered into a series of subcontracts with the general contractor, J.K. Scanlan Company, Inc. (the “GC”) to furnish and install modular building units for the price of about $24 million. The GC defaulted in making payments to the subcontractor, leaving a balance due and owing in the amount of $4,748,191, and its surety, defendant Arch Insurance Company (the “Surety”), which issued a payment bond guaranteeing payments to the GC’s subcontractors, denied payment on the bond. The Surety asserted that the subcontractor’s bond claim was partially released based on a release and waiver of lien claim form given by the subcontractor in exchange for a progress payment, and that the balance of its claim should be barred under the doctrine of equitable estoppel, among other defenses. After a five-day bench trial held in February 2014, the court issued an Opinion and Order on September 24, 2014, dismissing each of the Surety’s defenses and awarding judgment to the subcontractor in the amount of $4,748,191.00, plus pre-judgment interest in the amount of 1% per month under the New York “Prompt Payment Act” (N.Y. Gen. Bus. Law § 756-b).Marco & Sitaras, PLLC 33 Whitehall Street, 16th Floor, New York, NY 10004
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