1942. BOVIS LEND LEASE (LMB) INC., PLAINTIFF, v. LOWER MANHATTAN DEVELOPMENT CORPORATION, def — BOVIS LEND LEASE (LMB) INC., Third-Party Plaintiff-Appellant-res, v. ARCH INSURANCE CO., Third-Party Defendant-res-res — ASSOCIATED GENERAL CONTRACTORS OF NYS, LLC, AMICUS CURIAE. Sutherland Asbill & Brennan LLP, New York (Jennifer W. Fletcher of counsel), for appellant-res — Torre, Lentz, Gamell, Gary & Rittmaster, LLP, Jericho (Kevin M. Gary of counsel), for res-res — COUCH WHITE LLP, ALBANY (JOEL M. HOWARD, III OF COUNSEL) FOR AMICUS CURIAE.— Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered April 21, 2015, which, insofar as appealed from as limited by the briefs and insofar as appealable, granted third-party defendant’s (Arch) motion for summary judgment dismissing the third-party cause of action for breach of performance bonds, granted Arch’s cross motion for summary judgment to the extent of limiting its liability under paragraph 3(a) of the “Companion Agreement” to costs incurred by nonparty subcontractor John Galt Corporation (Galt), and denied third-party plaintiff’s (Bovis) motion for partial summary judgment on its third-party causes of action for breach of the Companion Agreement and the performance bonds, unanimously modified, on the law, to deny Arch’s motion for summary judgment dismissing the cause of action for breach of the bonds, and grant Bovis’s motion for partial summary judgment on that cause of action, and otherwise affirmed, without costs.
The court erred in dismissing the claim asserted by Bovis, the general contractor on the construction project and obligee of the performance bonds, that Arch, as surety thereof, breached the bonds. The court found that Arch’s alleged nonperformance was excused by Bovis’s breach of the bonds by prohibiting Arch from retaining Galt to complete its work after it was terminated. However, the bonds expressly required Arch’s replacement of Galt to be “in accordance with” Galt’s subcontracts, which incorporated the prime contract. Those contracts required the prior written approval of Bovis and defendant Lower Manhattan Development Corporation (LMDC) for any replacement subcontractor, which applied to the selection of Galt to complete its own work after it was terminated upon default. It is undisputed that Bovis, in terminating Galt, expressly and unequivocally disapproved of Galt’s continued performance of the building abatement work. Moreover, Galt’s criminal conviction arising from its performance on the project showed that Galt was a non-responsible contractor and thus disqualified from serving as a subcontractor on the public New York City project (see Matter of N.J.D. Elecs. v. New York City Health & Hosps. Corp., 205 AD2d 323, 324 [1st Dept 1994]; see also 9 RCNY 2-08). Bovis is entitled to judgment as a matter of law on this claim regardless of which option of the bonds Arch is deemed to have pursued.
