Opinion
X06UWYCV156029923
01-30-2018
FOREST MANOR, LLC v. TRAVELERS C & S CO., et al.
UNPUBLISHED OPINION
OPINION
TERENCE A. ZEMETIS, J.
ORDER RE TRAVELERS’ MOTIONS FOR SUMMARY JUDGMENT, EN 209-12 & 285 AND OBJECTION EN 272, 273, & 286
Court docket Entry Number.
The defendant Travelers Casualty and Surety Company of America, Travelers, moves for summary judgment on Count Six in the plaintiff’s January 19, 2016 Amended Complaint. The plaintiff objects.
EN 124
BASIS FOR THE MOTION
In Count Six of the Amended Complaint Forest Manor seeks to recover damages from Travelers under the Performance Bond issued by Travelers to Petra Construction Corporation, Petra, to benefit Forest Manor.
EN 124, Count Six (BREACH OF CONTRACT VS. TRAVELERS)
Travelers’ moves for summary judgment because Forest Manor failed to comply with the conditions precedent in the Travelers’ Performance Bond paragraphs 2-6 inclusive.
Forest Manor objects to Travelers’ motion because Petra defaulted, Forest Manor has not defaulted, and Forest Manor seeks damages for breach of contract.
NECESSARY FACTS
Forest Manor LLC’s, Forest, complaint alleges:
1. On November 24, 2014 Forest, in consideration of $6,843,488.00, contracted with Petra Construction Corporation, Petra, to repair, renovate, and reconstruct an 80-year-old brick building on Orange Avenue, West Haven CT, formerly used as a furniture warehouse, for residential and retail usage to be " The Atwood." EN 124, ¶ 8.
Using AIA Document A101-2007, Standard Form of Agreement Between Owner and Contractor dated November 24, 2014, Forest engaged Petra Construction Corporation to act as the general contractor for the Atwood project. This Contract included AIA Document A201-2007, General Conditions of the Contract for Construction (" General Conditions" ). EN 211 & 212, Ex. A.
2. Petra, complying with the contract, purchased a Performance Bond from Travelers. EN 124, ¶ 9.
EN 124, Ex. B, The American Institutes of Architects, AIA Document A312-1984.
3. The Performance Bond creates a surety relationship amongst Forest, owner/obligee, Petra, primary obligor, and Travelers, secondary obligor assuring the performance of Petra’s contractual obligations to Forest.
4. Petra subcontracted site work to Mizzy Construction, Inc., Mizzy. EN 124, ¶ 12.
5. On February 9, 2015 Mizzy’s employee substantially damaged Forest’s building. The nature and extent of the damage is contested. EN 124, ¶ 19.
6. Forest’s design professionals detailed " make safe" work following the damage, Petra performed the " make safe" work in February 2015. EN 212, Guido Petra’s affidavit, ¶ 14.
7. Forest’s design professionals prepared preliminary repair plans, Petra prepared preliminary cost estimates. EN 212, Guido Petra’s affidavit, ¶ 15-17.
8. Petra prepared two preliminary repair plan cost estimates- the first, $438,542.00, submitted March 27, 2015 and the second, $1,065,042, submitted April 9, 2015. EN 212, Ex. C and D, and Guido Petra’s affidavit, ¶ 17.
9. Petra sought a " change order" from Forest to proceed with the repairs, but Forest did not authorize Petra to proceed. Petra was ready, willing, and able to proceed with either repair plan at the estimated cost. EN 212, Guido Petra’s affidavit, ¶ 18-20.
10. On April 23, 2015 Forest emailed Petra to " ‘HOLD’ all future items including the elevator." EN 212, Ex. E, and Guido Petra’s affidavit, ¶ 20.
11. On July 16, 2016, the Forest gave notice to Petra and Travelers, as required under section 3.1 of the Bond, Forest was considering declaring Petra in contractual default. On July 17, 2015, Travelers acknowledged receipt of Forest’s notice and attended a meeting on July 30, 2015 at Forest Manor’s office. EN 273, Gary Letendre’s affidavit, ¶ 7.
12. By letter dated August 21, 2015, Forest notified Petra and Travelers that Mr. Gerald R. Kagan, Architect of the Atwood project, as required by section 14.2 of the General Conditions, certified sufficient cause existed to terminate Petra’s right to proceed under the Contract. Forest’s letter was the seven-day notice, required by the 14.2.2 of the General Conditions, indicating the Contractor’s right to proceed would be terminated seven days thereafter. The notice directed the Contractor to remove material and equipment from the project. EN 273, Gary Letendre’s affidavit, ¶ 8, Ex. A.
13. However, Forest did not terminate Petra’s right to proceed but instead mediated their dispute. The mediation was unsuccessful: the dispute was not amicably resolved.
14. On September 11, 2015, the Building Official of the City of West Haven issued an order directing that the building be razed. Travelers and Petra were provided notice of this order. Forest Manor provided Travelers and Petra notice it intended to comply with the Building Official’s order to raze the building. Forest provided Travelers the demolition schedule. EN 273, Gary Letendre’s affidavit, ¶ 11.
15. On October 8, 2015, following the cessation of Forest’s agreement to hold-off on Petra’s termination, Forest sent a second seven-day notice letter to Petra and Travelers terminating Petra’s right to complete the contract, effective October 15, 2015, EN 211, Ex. B.
16. On December 7, 2015, the building was demolished. EN 273, Gary Letendre’s affidavit, ¶ 14.
17. If there is no Default by Forest, Travelers Bond obligations in ¶ 4, 5, and 6 arise after Forest satisfies the conditions in ¶ 3.
EN 124, Ex. B, ¶ 12.4 " Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the Contractor as required by the Construction Contractor or to perform and complete or comply with the other terms thereof."
18. Forest terminated Petra’s contractual rights effective October 15, 2015.
19. Before October 15, 2015 Forest decided to raze, rather than repair, the existing structure. Gary Letendre deposition, pp. 375-81 and Exhibit 56 to that deposition, further attached to and verified by Sherer in his Affidavit, ¶ 9.
20. Forest did not agree to pay the balance of the Contract price to Travelers in accordance with the terms of the Construction Contract or to a contractor selected to perform the Construction Contract in accordance with the terms of the contract with Forest. Gary Letendre deposition, pp. 378-81; Sherer Affidavit, ¶ 14.
EN 124, Ex. B, ¶ 3.3.
21. Forest never afforded, permitted, or allowed Travelers to perform the Contract and repair or rebuild the portions of the building damaged. Gary Letendre deposition, pp. 378-81; Sherer Affidavit, ¶ 11.
EN 124, Ex. B. ¶ 4.1, 4.2, 4.3, & 4.4.
22. The Travelers’ Performance Bond, ¶ 2, provides:
2. If the Contractor performs the Construction Contract, the Surety and the Contractor shall have no obligation under this Bond, except to participate in conferences as provided in Subparagraph 3.1., EN 124, Ex. B.
23. The Travelers’ Performance Bond, ¶ 3, provides:
3. If there is no Owner (Forest Manor) Default, the Surety’s (Travelers) obligation under this Bond shall arise after:
3.1. The Owner has notified the Contractor (Petra) and the Surety at its address described in Paragraph 10 below that the owner is considering declaring a Contractor Default and has requested and attempted to arrange a conference with the Contractor and the Surety to be held not later than fifteen days after receipt of such notice to discuss methods of performing the Construction Contract. If the Owner, the Contractor and the Surety agree, the Contractor shall be allowed a reasonable time to perform the Construction Contract, but such an agreement shall not waive the Owner’s right, if any, subsequently to declare a Contractor Default; and
3.2 The Owner has declared a Contractor Default and formally terminated the Contractor’s right to complete the contract. Such Contractor Default shall not be declared earlier than twenty days after the Contractor and the Surety have received notice as provided in Subparagraph 3.1; and
3.3 The Owner has agreed to pay the Balance of the Contract Price to the Surety in accordance with the terms of the Construction Contract in accordance with the terms of the contract with the Owner. EN 124, Ex. B.
22. The Travelers’ Performance Bond, ¶ 4, provides:
4. When the Owner has satisfied the conditions of Paragraph 3, the Surety shall promptly and at the Surety’s expense take one of the following actions:
4.1 Arrange for the Contractor, with consent of the Owner, to perform and complete the Construction Contract; or
4.2 Undertake to perform and complete the Construction Contract itself, through its agents or through Independent contractors; or
4.3 Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner for a contract for performance and completion of the Construction Contract, arrange for a contract to be prepared for execution by the Owner and the contractor selected with the Owner’s concurrence, to be secured with performance and payment bonds executed by a Qualified surety equivalent to the bonds issued on the Construction Contract, and pay to the Owner the amount of damages as described in Paragraph 6 in excess of the Balance of the Contract Price incurred by the Owner resulting from the Contractor’s default; or
4.4 Waive its right to perform and complete, arrange for completion, or obtain a new contractor and with reasonable promptness under the circumstances:
.1 After Investigation, determine the amount for which it may be liable to the Owner and, as soon as practicable after the amount is determined, tender payment therefor to the Owners: or
.2 Deny liability in whole or in part and notify the Owner citing reasons therefor.
23. The Travelers’ Performance Bond, ¶ 5, provides: If the Surety does not proceed as provided in Paragraph 4 with reasonable promptness, the Surety shall be deemed to be in default on this Bond fifteen days after receipt of an additional written notice from the Owner to the Surety demanding that the Surety perform its obligations under this Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the surety proceeds as provided to Subparagraph 4.4, and the Owner refuses the payment tendered or the Surety has denied liability, in whole or in part, without further notice the Owner shall be entitled to enforce any remedy available to the Owner.
24. The Travelers’ Performance Bond, ¶ 6, provides:
6. After the Owner has terminated the Contractor’s right to complete the Construction Contract, and if the Surety elects to act under Subparagraph 4.1, 4.2, or 4.3 above, then the responsibilities of the Surety to the Owner shall not be greater than those of the Contractor under the Construction Contract, and the responsibilities of the Owner to the Surety shall not be greater than those of the Owner under the Construction Contract. To the limit of the amount of this Bond, but subject to commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on the Construction Contract, the Surety is obligated without duplication for:
6.1 The responsibilities of the Contractor for correction of defective work and completion of the Construction Contract;
6.2 Additional legal, design professional and delay costs resulting from the Contractor’s Default, and resulting from the actions or failure to act of the Surety under Paragraph 4; and
6.3 Liquidated damages, or if liquidated damages are not specified in the Construction Contract, actual damages caused by delayed performance or non-performance of the Contractor.
STANDARD OF REVIEW OF SUMMARY JUDGMENT MOTIONS
" Practice Book [§ 17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party ... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and [if the movant has met its burden] the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact ... A material fact ... [is] a fact which will make a difference in the result of the case ..." (Internal quotation marks omitted.) Dipietro v. Farmington Sports Arena, LLC, 306 Conn. 107, 116, 49 A.3d 951 (2012). Stuart v. Freiberg, 316 Conn. 809, 820-21 (2015). The court " resolv[es] all ambiguities and draw[s] all factual inferences in favor of the party against whom summary judgment is sought." O’Bert ex rel. Estate of O’Bert v. Vargo, 331 F.3d 29, 37 (2nd Cir. 2003).
APPLICABLE LEGAL STANDARDS
Travelers, a surety (secondary obligor), issued a Performance Bond to Petra (obligor) for the benefit of Forest Manor (owner/obligee).
" The obligation of a surety is an additional assurance to the one entitled to the performance of an act that the act will be performed. The purpose of a performance bond is to guarantee the completion of the contract upon default by the contractor." (Internal citations omitted; Internal quotation marks omitted.) Capstone Bldg. Corp. v. Am. Motorists Ins. Co., 308 Conn. 760, 791-92, 67 A.3d 961 (2013).
" [T]he obligation of a surety is an additional assurance to the one entitled to the performance of an act that the act will be performed ... The liability of the sureties is to be determined by the specific conditions of the bond." Ames v. Comm’r of Motor Vehicles, 70 Conn.App. 790, 797, 802 A.2d 126 (2002). A surety’s obligation under a bond only matures if the obligee complies with all conditions precedent. Id. A condition precedent is " a fact or event which the parties intend must exist or take place before there is a right to performance ... A condition is only distinguished from a promise in that it creates no right or duty in and of itself, but is merely a limiting or modifying factor ... If the condition is not fulfilled, the right to enforce the contract does not come into existence." Gianetti v. Health Net of Conn., 116 Conn.App. 459, 468, 976 A.2d 23 (2009) (quoting Blitz v. Subklew, 74 Conn.App. 183, 189, 810 A.2d 841 (2002). Paragraph 3 of the AIA A312 Bond enumerates certain conditions precedent that must be complied with in order to trigger the surety’s obligation to perform. See Stonington Water Street Assoc., LLC v Hodess Building Co., Inc. et al., 792 F.Supp.2d 253 (2011), aff’d 472 Fed.Appx. 71 (2012), and U.S. Fid. & Guar. Co. v. Braspetro Oil Servs. Co., 369 F.3d 34, 51 (2d Cir. 2004) (holding that paragraph 3 of the AIA A312 Bond contains a number of conditions precedent to the surety’s obligation under the bond).
" A party cannot recover on a contract unless he has fully performed his obligations under it, has tendered performance, or has some legal excuse for not performing." Ravitch v. Stollman Poultry Farms, Inc., 165 Conn. 135, 149 (1973); see also Stonington Water St. Assoc., LLC v. Hodess Bldg. Co., 792 F.Supp.2d 253, 266 (D.Conn. 2011) (" In Connecticut, a material failure of performance by one contracting party relieves the other party from any further performance under the contract" ). Burke v. Apogee Corp., No. 3:15-CV-01012 (VAB), 2017 WL 3328358, at *7.
DISCUSSION
First, Travelers argues, under ¶ 2 of the Performance Bond, because Petra has not defaulted on its contractual obligations to Forest Manor, Travelers has limited bond obligations to Forest. Travelers adopts Petra’s summary judgment arguments: because Petra has not defaulted, the Bond requires only that the Surety participate in conferences as provided in Subparagraph 3.1. As Travelers participated in the 3.1 meetings with Forest and Petra, Travelers has no further obligation under the Performance Bond.
Ex. 124, Ex. B, ¶ 2 provides, " If the Contractor performs the Construction Contract, ..." ‘Contractor Default’ is defined in ¶ 12.3 as an unexcused failure to perform its’ contractual obligations.
I reject these arguments for the same reasons described in the Order addressing Petra’s motion for summary judgment. There is a genuine issue of material fact on whether Petra defaulted, as defined, or failed to fulfill its contractual obligations.
Second, Travelers argues that Forest failed to fulfill the conditions precedent, in Bond ¶ 3.3, to obligate Travelers to act as described in either ¶ 4 or 6.
[ ¶ 3].3 of the Performance Bond provides:
3. If there is no Owner (Forest Manor) Default, the Surety’s (Travelers’) obligation under this Bond shall arise after: (emphasis added)
3.1 ... 3.2 ... and 3.3 ...
First, Travelers argues the Owner did Default by wrongly refusing to allow Petra to complete the repairs and rebuilding of the building prepared by plaintiff’s design professionals though Petra was ready, willing, and able to complete the repairs.
Travelers failed to establish Forest’s design professionals completed all necessary drawings and specifications to effectuate repairs for the damage caused by Mizzy, and the parties executed an effective Change Order and written modification of the contract, to repair/rebuild the damage caused by Mizzy. Though some preliminary drawings and specification were prepared by Forest’s design professionals following the Mizzy damage, evidence of signed and sealed drawings, specifications, an effective Change Order and written modification of the parties’ contract, as required by the General Conditions Article 7, was not offered. Forest, Petra, and Seneca did not, and still do not, agree upon damage caused by Mizzy’s February 9, 2015 conduct. This disagreement on the scope of the harm caused implicates the repair necessary. Whether Forest’s failure to agree with Petra on the scope, timing, and cost of work to repair that damage constitutes a " default" by Forest presents questions of fact for the trier of fact.
Second, Travelers argues Forest failed to procure " property insurance written on a Builder’s Risk ‘all risk’ or equivalent policy form in the amount of the initial Contract Sum ... comprising total value for the project at the site on a replacement cost basis ..." Though Forest obtained builder’s risk insurance, Forest did not obtain a builder’s risk insurance policy as specified in Article 11.3.1 of the Contract. EN 124, Seneca policy declarations, exhibit to Amended Complaint.
Travelers characterizes, without citation, support, or analysis, Forest’s failure to obtain contractually required builder’s risk insurance coverage as a condition precedent to relief under the Performance Bond. Travelers offered insufficient evidence that the contractual obligation to procure particular insurance coverage is a condition precedent to Travelers’ Bond obligations.
Forest procured a builder’s risk policy with " actual cash value" damage coverage, rather than " replacement cost" damage coverage. The former was required by Article 11.3.1. Actual cash value is equal to the replacement cost minus any depreciation (ACV = replacement cost less depreciation), C.G.S. 38a-307.
A condition precedent is " a fact or event which the parties intend must exist or take place before there is a right to performance ... A condition is only distinguished from a promise in that it creates no right or duty in and of itself, but is merely a limiting or modifying factor ... If the condition is not fulfilled, the right to enforce the contract does not come into existence." Gianetti v. Health Net of Conn., 116 Conn.App. 459, 468, 976 A.2d 23 (2009) (quoting Blitz v. Subklew, 74 Conn.App. 183, 189, 810 A.2d 841 (2002).
Whether Forest’s failure to obtain the required builder’s risk coverage is a material breach of the agreement cannot be determined at this time because the nature and extent of the damage caused by Mizzy on February 9, 2015 is undetermined and disputed. Travelers failed to establish Seneca’s, the builder’s risk insurer, payments tendered to Forest for the February 9, 2015 damage would be different had Forest obtained the builder’s risk coverage contractually specified.
As Travelers failed to carry the burden of proof to permit a summary judgment on the assertion that Forest defaulted under Bond ¶ 3 or 4, the court need not address Forest’s response. Whether the Owner, Forest, defaulted or materially breached the contract by failing to fulfill its contractual obligations remains a genuine issue of material fact.
Next, Travelers argues Forest failed to fulfill condition precedent in Bond ¶ 3.3 by failing to " agree to pay the Balance of the Contract Price to the Surety in accordance with the terms of the Construction Contract or to a contractor selected to perform the Construction Contract in accordance with the terms of the contract with the Owner."
Forest did not agree to pay the Balance of the Contract Price to the Surety or to a contractor.
Forest responds, first, that complying with Bond ¶ 3.3 is not a condition precedent to Travelers’ bond obligations.
Forest also asserts that " (P)aragraph 3.3 does not apply because Forest Manor is not seeking completion of the Work or compensation to complete the Work. Rather, Forest Manor seeks: (1) indemnification from Travelers for those damages arising from Petra’s breach of contract pursuant to, inter alia, sections 10.2.5 and 3.18 of the General Conditions and (2) damages related to Travelers’ breach of the Bond through its refusal to provide such indemnity. EN 124.00, Amended Complaint, Count 6."
Forest relies upon International Fidelity Ins. Co. v. Rockland, 98 F.Supp.2d 400 (S.D.N.Y. 2000), as persuasive precedent and analysis that Forest’s satisfaction of Bond ¶ 3.3 is neither a condition precedent to recovery under the bond nor that claims for indemnity against Travelers need satisfy ¶ 3.3.
International Fidelity ’s holding that ¶ 3 of the AIA DOCUMENT A312-1984 creates no condition precedent predates and is contrary to Stonington Water Street Assoc., LLC v Hodess Building Co., Inc., supra, p. 262, as affirmed by the Second Circuit Court of Appeals, and substantial precedent from jurisdictions across the nation. International Fidelity applies New York common law; our case involves Connecticut common law. The Connecticut federal district court, with diversity jurisdiction applying Connecticut’s common law, found that the language of AIA Performance Bond A312, ¶ 3, creates conditions precedent to surety’s obligations. " As this is a diversity case arising in the state of Connecticut, we apply Connecticut law. See Wilson v. Nw. Mut. Ins. Co., 625 F.3d 54, 60 (2d Cir. 2010). " [T]he liability of sureties is to be determined by the specified conditions of the bond." Ames v. Comm’r of Motor Veh., 267 Conn. 524, 839 A.2d 1250, 1254 (2004). " [I]f an express ‘condition [in the contract] is not fulfilled, the right to enforce the contract does not come into existence.’ " Christophersen v. Blount, 216 Conn. 509, 582 A.2d 460, 462 (1990) (second alteration in original). " As to all conditions precedent the plaintiff sustains the burden of proof" as to whether he or she performed the condition. Benanti v. Delaware Ins. Co., 86 Conn. 15, 84 A. 109, 110 (1912)." Stonington Water St. Associates, LLC v. Nat’l Fire Ins. Co. of Hartford, 472 Fed.Appx. 71, 72 (2d Cir. 2012).
" Section 3 of an AIA A312 bond enumerates certain conditions precedent that must be complied with in order to trigger the surety’s obligation to perform. See Braspetro, 369 F.3d at 51 (holding that paragraph 3 of the AIA A312 bond contains a number of conditions precedent to the surety’s obligation under the bond)." Stonington Water St. Assoc., LLC v. Hodess Bldg. Co., Inc., 792 F.Supp.2d 253, 262 (D.Conn. 2011).
" Here, Paragraph 3 of the bond sets forth three express conditions that Stonington had to fulfill before National Fire’s " obligation" under the bond would arise. The district court correctly held that National Fire had no duty to Stonington under the bond because Stonington failed to perform the conditions precedent set forth in Paragraphs 3.2 and 3.3 and we therefore affirm." Stonington Water St. Associates, LLC v. Nat’l Fire Ins. Co. of Hartford, 472 Fed.Appx. 71, 72 (2d Cir. 2012).
See extensive listing of national and Connecticut cases finding AIA A312 ¶ 3 creates conditions precedent to claims against the surety, EN 285, p 2-6.
AIA A-324 ¶ 3 creates conditions precedent to Travelers’ obligations under the Performance Bond because ¶ 3 lists events which the parties agreed must exist or take place before the surety must perform as described in ¶ 4, 5, and/or 6. ¶ 4 confirms the need for Owner/obligee to satisfy the conditions of ¶ 3:
4. When the Owner has satisfied the conditions of Paragraph 3, the Surety shall promptly and at the Surety’s expense take one of the following actions:
The ¶ 3 listed conditions create no right or duty in and of themselves, but are a necessary predicate to the surety’s obligation or duty to perform. The surety’s obligations are determined by the specified. conditions of the bond. ¶ s 3 and 4 of the Bond unambiguously specify the Surety’s obligations " shall arise after :" followed by three paragraphs describing actions the Owner (Forest) must complete before the surety’s obligations arise. And ¶ 4 begins " [W]hen the Owner has satisfied the conditions of Paragraph 3, the Surety shall ..." The Bond’s language and the case law, other than International Fidelity, persuade me the listed conditions of ¶ 3 are conditions precedent to Travelers’ bond obligations or duties under Bond ¶ s 4, 5, and/or 6.
The surety concedes that Forest completed the actions described in 3.1 and 3.2.
Forest concedes it did not complete the action described in 3.3.
Because Forest did not complete the express condition or condition precedent in AIA A312-1984 ¶ 3.3, Forest’s contractual right of action against Travelers under ¶ 3, 4, 5, and/or 6 of the Performance Bond does not come into existence. Christophersen v. Blount, supra .
Summary judgment enters for Travelers insofar as Forest Manor seeks damages or performance under AIA A312-1984 Performance Bond ¶ 3, 4, 5, and/or 6.
But Forest neither sought in 2015 nor currently seeks " performance of the Construction Contract" by Petra, Travelers, or a substitute contractor- remedies available under the Performance Bond, see AIA A-324 ¶ 4.1, 4.2, and 4.3 above. Instead, Forest announced a demolition schedule within days of the October 15, 2015 termination of Petra’s contractual rights and foreclosed Travelers from exercising its rights under ¶ 4. Forest did not seek " performance of the Construction Contract" by Petra, Travelers, or a substitute contractor under the Performance Bond, instead Forest seeks " indemnification from Travelers for ... [breach of contract] damages" under ¶ 1 of the Performance Bond.
Forest’s Objection to Travelers’ Motion for Summary Judgment, EN 282, p. 19: " In any event, paragraph 4 is moot, where, as here, the Owner seeks indemnification rather than completion of the Contract. See Int’l Fid. Ins. Co. v. Cty. of Rockland, 98 F.Supp.2d 400, 438."
" 1. The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns to the Owner for the performance of the Construction Contract, which is incorporated herein by reference."
In ¶ 1 of the Performance Bond Petra and Travelers jointly and severally bound themselves to Forest for performing the, incorporated by reference, Construction Contract. Forest does not seek performance of the construction aspect of the Construction Contract, but a guarantee for performing Petra’s fiscal responsibilities under the Construction Contract.
" The Owner demanded indemnification from Travelers as a guarantor of Petra’s fiscal obligations to the Owner. See EN 124, Amended Complaint, 81-90; Letendre Affidavit, ¶¶ 15, 16." Forest’s Objection to Travelers’ motion for summary judgment, EN 272, p. 7.
Forest argues that because it seeks, under Bond ¶ 1, " indemnification from Travelers for those damages arising from Petra’s breach of contract and (2) damages related to Travelers’ breach of the Bond through its refusal to provide such indemnity(.)," EN 124, Count Six, any obligation of the Owner/Forest to satisfy the requirements of Bond ¶ 3 are relevant only to an Owner seeking relief under Bond ¶¶ 4, 5, or 6. Forest, without conceding that Bond ¶ 3 creates conditions precedent to surety obligations under and ¶¶ 4, 5, or 6, argues the surety’s obligations in Bond ¶ 1 have no preconditions. The court agrees.
Bond ¶ 1 states:
1. The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns to the Owner for the performance of the Construction Contract, which is incorporated herein by reference. " When a party asserts a claim that challenges the ... construction of a contract, we must first ascertain whether the relevant language in the agreement is ambiguous ... A contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself ... Accordingly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party’s subjective perception of the terms ... When the language of a contract is ambiguous, the determination of the parties’ intent is a question of fact ... Moreover, in construing contracts, we give effect to all the language included therein, as the law of contract interpretation ... militates against interpreting a contract in a way that renders a provision superfluous." (Internal quotation marks omitted.) O’Connor v. Waterbury, 286 Conn. 732, 743, 945 A.2d 936 (2008). " [W]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law." (Internal quotation marks omitted.) Levine v. Massey, 232 Conn. 272, 277-78, 654 A.2d 737 (1995). " ... It is axiomatic that a party is entitled to rely upon its written contract as the final integration of its rights and duties." (Citation omitted; internal quotation marks omitted.) Id., at 279, 654 A.2d 737. Yellow Book Sales & Distribution Co., Inc. v. Valle, 311 Conn. 112, 118-19 (2014).
The Bond ¶ 1 has no conditions precedent to Traveler’s promise, jointly and severally with Petra, to perform the construction contract.
Further, ¶ 1 of the Performance Bond incorporates the Construction Contract by reference and states that Travelers is, with Petra, " jointly and severally" responsible to plaintiff: " for the performance of the Construction Contract." The surety’s obligations are coextensive with its principal’s obligations under the contract. When a construction contract is incorporated by reference into a performance bond, the two are to be read together. If Petra can be held liable for breach of a construction contract, so may the Travelers.
Petra’s legal liability, as described in the Order about Petra’s motion for summary judgment, remains a question of fact.
Travelers’ motion for summary judgment is granted in part and denied in part. Traveler’s motion is granted on relief available to Forest Manor under the Performance Bond ¶¶ 4, 5, and/or 6, but denied on relief available to Forest Manor under the Performance Bond ¶ 1 insofar as Petra may be liable to Forest Manor under the Construction Contract.