February 18, 2013

Jordan R. Pavlus Obtains a Decision in a Case of First Impression Regarding State Finance Law Bond Claims

Jordan R. Pavlus recently obtained a decision in a case of first impression at the Appellate Division level in the State of New York.  In the case, a material supplier made a claim on a labor and material payment bond posted on a public project pursuant to State Finance Law section 137.  The surety denied the claim because it took the position that the roofing contractor to whom the materials were furnished had absconded with the materials and diverted them to other projects.  The Saratoga County Supreme Court granted summary judgment in favor of the material supplier, including interest and attorney’s fees, and the surety appealed.  The Third Department Appellate Division affirmed the Supreme Court decision, stating:  “contrary to Colonial’s contention, we have never required a supplier to demonstrate that it actually delivered the materials to the project site in order to recover on a bond pursuant to State Finance Law § 137.”  The Court also upheld the award of attorney’s fees.  The decision can be found at Erie Materials, Inc. v. Universal Group of New York, Inc., et al, and Colonial Surety Company, 101 A.D.3d 1529 (3rd Dept. 2012).