Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Developers Surety & Indemnity Co. v. Mathias

United States District Court, M.D. Pennsylvania

May 22, 2014

DEVELOPERS SURETY & INDEMNITY CO., Plaintiff,
v.
SHAHNAWAZ MATHIAS, DEBRA MATHIAS, EASTERN DEVELOPMENT & DESIGN, and CHARTER HOMES BUILDING COMPANY, Defendants.

MEMORANDUM

CHRISTOPHER C. CONNER, Chief District Judge.

Presently before the court in the above-captioned matter is plaintiff Developers Surety & Indemnity Co.'s ("DSIC") motion for reconsideration (Doc. 38), arising from the court's memorandum and order dismissing DSIC's breach of contract claim against defendant Charter Homes Building Company ("Charter"). (Docs. 36, 37). For the reasons that follow, the court will deny the motion.

I. Factual Background and Procedural History

In the context of a motion for reconsideration, the court will only summarize the relevant factual background and procedural history. A more detailed account is set forth in the court's memorandum and order dated December 11, 2013 (Docs. 36, 37), familiarity with which is presumed.

In or about 2000, defendants Shahnawaz Mathias, Debra Mathias, and Eastern Development & Design ("EDD") (collectively, "Indemnitor Defendants"), and Slater & West, Inc. ("Slater")[1] executed an indemnity agreement in favor of DSIC to induce DSIC to issue construction bonds for their benefit. (Doc. 1 ¶¶ 10-11; Doc. 1-2, Ex. A). On October 9, 2001, Slater submitted a plan to York Township for construction of a residential subdivision known as Spring Ridge Phases II & III (the "Subdivision Project"). (Doc. 1 ¶ 15). On November 28, 2001, DSIC issued Subdivision Improvements Performance Bond No. 526400S (the "subdivision bond") to York Township, as obligee, on behalf of Slater, as principal, guaranteeing Slater's completion of certain public improvements for the Subdivision Project. (Id. ¶¶ 17-18; see Doc. 1-3, Ex. B).

In 2003, Slater filed for bankruptcy protection in the United States Bankruptcy Court for the Middle District of Pennsylvania. (Doc. 1 ¶ 19); see In re Slater & West, Inc., No. 1-03-BK-1633 (Bankr. M.D. Pa. filed March 20, 2003). DSIC contends that (1) it was not notified of the bankruptcy action, and (2) it was not listed as a creditor. (Doc. 1 ¶ 20). On March 25, 2004, Indemnitor Defendants, Slater, and Charter entered into a stipulation (the "bankruptcy stipulation") by terms of which Charter assumed responsibility for construction of the Subdivision Project. (Id. ¶¶ 21, 23; Doc. 1-4, Ex. C). The bankruptcy stipulation required Charter to exercise good faith to complete both the Subdivision Project and related public improvements (the "Development Improvements"), and to secure the release of the subdivision bond upon completion of the Development Improvements. (Doc. 1 ¶¶ 25-26; Doc. 1-4, Ex. C ¶ 5(k)). Charter and Indemnitor Defendants further agreed to keep the subdivision bond in place during Charter's completion of the Subdivision Project. (Doc. 1 ¶ 24; Doc. 1-4, Ex. C ¶ 5(k)).

According to the complaint, DSIC was not privy to the bankruptcy stipulation or the terms contained therein, and DSIC did not receive notice of the bankruptcy stipulation until May 27, 2004. (Doc. 1 ¶¶ 22, 27). Consequently, DSIC asserts that it had no obligation to extend coverage of the subdivision bond to Charter's performance of the Development Improvements. (Id. ¶ 28). Nevertheless, DSIC claims that Indemnitor Defendants and Charter induced DSIC to keep the subdivision bond in place by making representations in the bankruptcy stipulation that Charter would complete the Development Improvements and secure a release of the subdivision bond. (Id. ¶ 30; Doc. 1-4, Ex. C ¶ 5(k)).

On March 23, 2012, York Township provided formal notice of Charter's defective performance of its obligation to complete the Development Improvements. (Doc. 1 ¶¶ 31-32; see Doc. 1-6, Exs. D, E). Charter refused to cure the alleged defects. (Doc. 1 ¶ 33; see Doc. 1-7, Ex. F). Hence, pursuant to the terms of the subdivision bond, DSIC expended over $1 million to complete the Development Improvements. (Doc. 41 at 4; see Doc. 1 ¶¶ 34-40).

On November 6, 2012, DSIC filed a seven-count complaint (Doc. 1) against Indemnitor Defendants and Charter, including claims for breach of contract. (See id. ¶¶ 51-60). On January 14, 2013, Charter filed a motion to dismiss (Doc. 23) pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. In a memorandum and order dated December 11, 2013, the court granted the motion to dismiss on all claims except unjust enrichment. (Docs. 36, 37). On December 24, 2013, DSIC filed the instant motion for reconsideration pursuant to Federal Rule of Civil Procedure 59(e) regarding the breach of contract claim against Charter. (Doc. 38). The motion has been fully briefed and is ripe for disposition.

II. Legal Standard

Motions for reconsideration under Federal Rule of Civil Procedure 59(e) serve primarily to correct manifest errors of law or fact in a prior decision of the court. See United States v. Fiorelli , 337 F.3d 282, 288 (3d Cir. 2003); Harsco Corp. v. Zlotnicki , 779 F.2d 906, 909 (3d Cir. 1985). Under Rule 59(e), "a judgment may be altered or amended if the party seeking reconsideration establishes at least one of the following grounds: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion for summary judgment; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice." Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros , 176 F.3d 669, 677 (3d Cir. 1999).

However, "[a] motion for reconsideration is not to be used as a means to reargue matters already argued and disposed of or as an attempt to relitigate a point of disagreement between the Court and the litigant." Ogden v. Keystone Residence , 226 F.Supp.2d 588, 606 (M.D. Pa. 2002) (internal citation and quotations omitted). Reconsideration of a judgment is an extraordinary remedy, and the court grants such motions sparingly. D'Angio v. Borough of Nescopeck , 56 F.Supp.2d 502, 504 (M.D. Pa. 1999).

III. Discussion

In its complaint, DSIC alleges that Charter breached certain promises in the bankruptcy stipulation made for DSIC's benefit by failing to complete the Development Improvements and by failing to secure release of the subdivision bond. Charter moved to dismiss the breach of contract claim because DSIC is not an intended third-party beneficiary of the bankruptcy stipulation. Therefore, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.