SCAN SHORT FORM ORDER

SUPREME COURT - STATE OF NEW YORK COUNTY OF NASSAU

PRESENT: HON. IRA B. WARSHAWSKY

Justice. TRIAL/IAS PART 12 THE HAMLET AT WILLOW CREEK DEVELOPMENT CO. LLC , MT. SINAI ASSOCIATES LLC and THE HOLIDAY ORGANIZATION , INC.

Plaintiffs INDEX NO. : 007536/2005

MOTION DATE: 04/30/2007 MOTION SEQUENCE: 013 , 014 and 015

-againstNORTHEAST LAND DEVELOPMENT CORPORATION PAV- CO ASPHALT , INC. , WILLIAM FEHR and FIDELITY AND DEPOSIT COMPANY OF MARYLAND

Defendants. FIDELITY AND DEPOSIT COMPANY OF MARYLAND

Third- Party Plaintiff

-againstPRIMA ASPHALT CONCRETE , INC. , SEALER SUPPLY CO. , INC. , PURE RECYCLED PRODUCTS INC. , SBR REALTY CORPORATION , ALL COUNTY PAVING CORP. , RONALD FEHR , NORTHEAST LOAND IMPROVEMENT , INC. and ZORN INDUSTRIES , INC.

Third- Party Defendants.

The following papers read on this motion: Order to Show Cause , Affirmation & Exhibits Annexed........................................ Order to Show Cause , Affirmation & Exhibits Annexed........................................ 2 Notice of Cross Motion , Affirmation & Exhibits Annexed...................................... Affirmation in Opposition to Plaintiffs ' Order to Show Cause of Kevin M. Gary & Exhibits Annexed....................................................................... Affrmation in Opposition to Motion by Fidelity to Vacate Appellate Undertaking of Robert M. Calica........................................................................... Exhibits to Affirmation of Robert M. Calica dated April 25 , 2007........................... 6 Supplemental Affirmation in Support of Motion to Renew and for Vacatur of Judgment Originally Noticed December 6 , 2006 of Bradley C. Abbott & Exhibit Annexed..................................................................................................... 7 Exhibits to Accompany the Supplemental Affirmation of Bradley C. Abbott.......... Reply Affirmation of Steven G. Pinks & Exhibit Annexed......... ............................. 9 Affirmation in Opposition to Second Renewal Motion of Defendants Pav- Co Asphalt , Inc. and William Fehr of Robert M. Calica & Exhibits Annexed..

This motion by plaintiff to reargue defendants , Northeast Land Development

Pav- Co Asphalt , Inc. and William Fehr , and Fidelity and Deposit Company of Maryland (Fidelity and Deposit) motions to renew their prior motions for an order dismissing the

complaint , which resulted in an order dated March 23 , 2007 dismissing the complaint as to Fidelity and Deposit and denying such relief as to Northeast Land Development and

Pav- Co

and Fehr ,

and upon reargument for an order denying such relief as to Fidelity

and Deposit and denying such relief as to the other defendants on different grounds is determined as follows.

The cross motion by defendants , Pav- Co and Fehr , to renew their motion to renew the 2006 motion to dismiss the complaint and the collateral order granting summary judgment in favor of plaintiff (Order dated May 30 , 2006) and upon renewal

dismissing the complaint is denied. On this motion to renew movants do not submit new information on the issue of their joint venture with Northeast which would change

the prior holding of the Court that a joint venture existed , CPLR S 2221 (e)2 , or that Fehr was a signatory on a bond.

The motion by Fidelity and Deposit for an order vacating the undertaking filed

with the Clerk of the Court pending the appeal of the Order dated May 30 , 2006 is

granted. Insofar as summary judgment is not granted against Fidelity and Deposit , the judgment is ordered to be vacated.

This case involves the excavation of dirt and the Town of Brookhaven s limit on

the amount of excavation and its requirement that fees be paid for the dirt excavated. At the outset of the case plaintiff sought , inter alia , summary judgment against

Pav-

, Fehr and Northeast for the amount plaintiff paid the Town in excavation fees

although Northeast had contracted to do so for the Hamlet. Plaintiff was granted judgment on a theory that its rights were equitably subrogated to the Town s to receive

payment , and on the fact that the excavators were in breach of their duty by failing to perform that obligation. Order dated May 5 , 2006 at pp. 3 and 11; see also

Brown v.

Bellamv , 170 A.D. 2d 876 (3d Dept. 1991). The parties represented that " bonds " had been issued relative to the excavation fees. It was thought that Fideliy and Deposit had issued a performance bond in favor of the Town for payment of the fees , and also that Pav- Co and William Fehr provided personal undertakings in the form of a payment bond issued by All Country Paving

Corp. (a Pav- Co affiliate), and William and Ronald Fehr in the amount of $1 500 000. Thus , judgment entered against Northeast and Pav- Co as joint venturers and against Fidelity and Deposit , and Fehr to the extent they had guaranteed payment for the

amount of fees upon which the primary payor had defaulted. Nearly one year later defendants moved to renew their initial applications to dismiss the complaint , which had been converted on notice to plaintiff' s motion for summary judgment ,

on the grounds of the newly discovered evidence that there was no

performance bond issued by Fidelity and Deposit. Two arguments were propounded the Court. First , that the Performance Bond was not accepted by the Town and therefore there was no bond relative to the excavation fees. Second , that if there was a bond , it was a Restoration Bond which only covered restoring the property to its original

condition in the event that the Hamlet did not complete the development. It was asserted that there was no coverage for the excavation fees.

Plaintiff' s motion to reargue is granted and upon reargument the prior Order is

amended to provide that Northeast , Pav- Co and Fehr are still liable to plaintiff on a

theory of equitable subrogation since plaintiff had paid the excavation fees to the Town which the aforesaid defendants had promised to pay. Their failure to pay is striking in its willfulness as they were selling the dirt at a profit at the same time they were mining it. In

simple language , the payment of excavation fees was de minimus in relation to

the money they earned from the sale of the dirt , and in comparison to the damages resulting to plaintiff when the project was stopped mid-stream. Defendants ' recent complaints that there was no over excavation nor fees due , does not change the fact

that plaintiff had no recourse but to pay their obligations to the Town.

The only qualification to the judgment entered in favor of plaintiff and against Northeast , Pav- Co and Fehr was whether a surety bond exists from which plaintiff can

recover. The former decision against Fidelity and Deposit is , however , affected by the

discovery that the supposed bond guaranteeing payment is cast in doubt. Summary judgment had been granted in favor of plaintiff and against Fidelity and Deposit at the

time that they were represented by the same counsel who was representing Pavwhose very obligations they backed. There has been no answer to the question of why not a single party knew in 2006 that the Town wanted the Performance Bond called a Restoration Bond.

The decision of this Court against Fidelity and Deposit on May 30 2006 was

analyzed on a standard of summary judgment. Applying the same standard to the Fidelity and Deposit motion to renew discloses that it made a prima facie case that the

Restoration Bond was intended only to restore the premises upon plaintiffs default which has not been demanded.

Winegrad v. New York University Med. Ctr.

64 N.Y.

851 , 853. In opposition , plaintiff argues that the initial bond , referred to as a

Performance Bond , was more encompassing than simply restoring the property and

was not abrogated by the Town s request that the title " restoration " be appended , and

certain language included. The original clause provided that the removal of fill was to

be in accordance with the construction specification of the Town of Brookhaven and the

plot and drainage plan approved by the Planning Board. The modified clause contained the further requirement that removal of the fill be in accordance with the and

construction specifications of the Town of Brookhaven

as approved , pursuant to the... Planning

Board' s

the Town Planning Board

Subdivision Grant dated August 5

2002 , and ... Planning Board' s Site Plan Grant dated July 8 , 2002.... "

The modified

clause provided that if the removal was in accordance with these construction

specifications , this obligation was to be void. Otherwise , the obligation under this bond for the restoration of the site " was to remain in full force and effect. Accordingly, the initial grant of summary judgment in favor of plaintiff and against Fidelity and Deposit must be vacated since the Court finds a triable issue of fact as to Zuckerman v. City of New York , 49 N.Y. 2d 557. what the bond , or bonds , do cover.

Summary judgment cannot be granted in favor of Fidelity and Deposit in the presence of this unsettled issue , but neither can a motion to dismiss be granted.

Based upon the foregoing, it is ORDERED that the Clerk of the County of Nassau is directed to cancel and return to Fidelity and Deposit the Undertaking on

Appeal issued by Zurich American Insurance Company as surety dated July 6 2006 and filed on or about July 10 , 2006. All other requests for relief not expressly addressed are denied. This Order supplants in all respects the March 23 , 2007 Order of the Court.

Dated: May 10 , 2007