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BT Granite Run, LP v. Bondex Insurance Co.

United States District Court, E.D. Pennsylvania

October 17, 2017

BT GRANITE RUN, LP, Plaintiff,
v.
BONDEX INSURANCE COMPANY, Defendant.

          MEMORANDUM

          Schiller, J.

         BT Granite Run, L.P. entered into a contract with RCD Group, Inc. as part of the plan to demolish the Granite Run Mall. Bondex Insurance Company (“Bondex”) issued a payment bond and a performance bond related to the project. RCD Group defaulted on the contract to tear down the mall, and BT Granite Run sued Bondex for payment under the bonds. Presently before the Court is Bondex's motion for summary judgment. For the reasons that follow, the motion is denied.

         I. BACKGROUND

         BT Granite Run entered into a written agreement with RCD Group, Inc., in which BT Granite Run agreed to pay RCD Group $455, 400, and RCD Group agreed to provide the labor and materials to demolish the Granite Run Mall. (Compl. Ex. A [Agreement].) Bondex issued a payment bond and a performance bond. (Compl. ¶ 7.) BT Granite Run claims that it is an intended beneficiary under the payment bond and has rights pursuant to both bonds. (Id. ¶ 8.) Under the terms of the payment bond, RCD Group and Bondex jointly and severally agreed with BT Granite Run that “every claimant . . . who has not been paid in full before the expiration of a period of ninety (90) days after the date on which the last of such claimant's work or labor was done or performed, or materials were furnished by such claimant, may sue on this bond as set forth herein for the use of such claimant, prosecute the suit to final judgment for such sum or sums as may be justly due claimant, and have execution thereon.” (Compl. Ex. B [Payment Bond].) A claimant is defined as “one having a direct contract with the Principal for labor, material, or both, used or reasonably required for use in the performance of the contract, labor and material being construed to include that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental or equipment directly applicable to the Contract.” (Id.) The Principal is RCD Group. (Id.) The Payment Bond states that “[i]n no event shall the Surety be liable for an amount in excess of the penal sum of this bond.” (Id.)

         The Performance Bond includes a penal sum of $455, 400 and states that “no one other than the named “Obligee” shall have any right of action under this bond.” (Compl. Ex. C [Performance Bond].) The obligee is BT Granite Run. (Id.) The Performance Bond states that

If the Principal is in default under the contract and the Obligee has declared the Principal in default, the Surety may remedy the default or shall: A. Complete the work, through the Principal or otherwise; B. Arrange for the completion of the work by a contractor acceptable to the Obligee, or C. Waive its right to complete and reimburse Obligee the amount of its reasonable costs to complete the Work less the Contract balance, not to exceed the Bond Sum.

(Id.) The Performance Bond also states that “[i]n no event shall the Surety be liable for an amount in excess of the penal sum of this bond.” (Id.)

         RCD Group defaulted and BT Granite Run sued it on December 9, 2016. (Compl. ¶ 11.) BT Granite Run's lawsuit against Bondex includes a claim for breach of the payment bond and a claim for breach of the performance bond.

         BT Granite Run has produced evidence that it has made direct payments to subcontractors to complete work that RCD Group failed to complete and to defend BT Granite Run's property against mechanics' lien claims filed by subcontractors. (Pl.'s Br. in Opp'n to Def.'s Mot. for Summ. J. [Pl.'s Opp'n] Ex. 1 [Krauss Aff.]; Exs. A-M [Evidence of mechanics' liens].)

         II. STANDARD OF REVIEW

         Summary judgment is appropriate when the admissible evidence fails to demonstrate a genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). When the movant does not bear the burden of persuasion at trial, it may meet its burden on summary judgment by showing that the nonmoving party's evidence is insufficient to carry its burden of persuasion. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         Thereafter, the nonmoving party demonstrates a genuine issue of material fact if it provides evidence sufficient to allow a reasonable finder of fact to find in its favor at trial. Anderson, 477 U.S. at 248. In reviewing the record, a court “must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor.” Prowel v. Wise Bus. Forms, Inc., 579 F.3d 285, 286 (3d Cir. 2009). The court may not, however, make credibility determinations or weigh the evidence in considering motions for summary judgment. See Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150 (2000); see also Goodman v. Pa. Tpk. Comm'n, 293 F.3d 655, 665 (3d Cir. 2002).

         III. DISCUSSION

         A. ...


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