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Comtel Technologies, Inc. v. Paul H. Schwendener

March 26, 2010

COMTEL TECHNOLOGIES, INC. AND SOLAI & CAMERON, INC., PLAINTIFFS,
v.
PAUL H. SCHWENDENER, INC., NULINE TECHNOLOGIES, INC., PLAINFIELD COMMUNITY CONSOLIDATED SCHOOL DISTRICT CO. 202, AND AMERICAN HOME ASSURANCE CO., DEFENDANTS.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiffs Comtel Technologies, Inc. ("Comtel") and Solai & Cameron ("Solai") (collectively "Plaintiffs") brought suit against Paul H. Schwendener, Inc. ("PHS") and Nuline Technologies ("Nuline") alleging violations of Plaintiffs' civil rights and bringing various tort claims related to Plainfield school construction projects for which PHS was the general contractor and the other parties were electrical subcontractors. Defendant American Home Assurance Company ("American") issued a payment surety bond ("the Bond") to PHS in connection with two relevant projects, the Plainfield Fourth Middle School ("the Middle School Project") and the Plainfield Second High School (the "High School Project") (collectively "the Projects"). The Court has supplemental jurisdiction over Plaintiffs' bond claims against American pursuant to 28 U.S.C. § 1367(a).

American now moves for summary judgment on the grounds that Plaintiffs' suit to recover under the Bond was not timely filed and that Plaintiffs' claims are barred by the doctrine of res judicata. For the reasons set forth below, American's Motion for Summary Judgment is granted.

UNDISPUTED FACTS

I. The Underlying Contracts

PHS entered into a construction contract ("the Contract") with the Plainfield Community Consolidated School District No. 202 ("the District") on April 5, 2001. (Pl. 56.1 Resp. ¶ 5.)*fn1 The Contract provided for four school construction projects, including the Middle School Project and the High School Project that are at issue here. (Pl. 56.1 Resp. ¶ 6.) Healy, Snyder, Bender & Associates, Inc. ("HSB") was the architect for the two projects. (Pl. 56.1 Resp. ¶ 7.)

The Contract provided that the projects would be deemed "substantially complete" when they were "sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for its intended use." (Pl. 56.1 Resp. ¶ 8.) The Contract further stated that when each project "or designated portion thereof is substantially complete, the Architect will prepare a Certificate of Substantial Completion which shall establish the date of Substantial Completion...." (Pl. 56.1 Resp. ¶ 9.) The Contract required the projects to be substantially completed on or before July 15, 2002, and stated that the District would pay a bonus of $2,000 for each day prior to July 15 that each of the two projects was substantially complete. (Pl. 56.1 Resp. ¶ 11.) The Contract also contained a liquidated damages clause allowing the assessment of $2,000 in damages for each day following July 15 that the projects were not ready. (Pl. 56.1 Resp. ¶ 11.)

PHS obtained a Payment Bond for the Contract with American as the listed surety. (Pl. 56.1 Resp. ¶ 12.) The Bond provided that no suit could be brought more than one year following the earlier of the date on which the party bringing suit gave notice of a claim under the Bond or the last day on which any labor or service was performed or any materials or equipment were furnished under the Contract. (Pl. 56.1 Resp. ¶ 13.)*fn2 American and PHS also entered into a General Agreement of Indemnity, assigning to American all of PHS's rights, claims, and defenses arising under the Bond. (Pl. 56.1 Resp. ¶ 14.)

PHS hired the Plaintiffs as the electrical subcontractor for the projects. (Pl. 56.1 Resp. ¶ 15.) Under their contracts with PHS, Plaintiffs were to be paid $1,108,840 for the Middle School Project, and $1,008,160 for the High School Project. (Pl. 56.1 Resp. ¶ 15.) Plaintiffs began work on the projects in June 2001; PHS subsequently terminated them from the Middle School Project on June 7, 2002 and from the High School Project on June 15, 2002. (Pl. 56.1 Resp. ¶¶ 16-18.)

II. Completion of the Projects and Initial Claims

The High School Project reached substantial completion on July 5, 2002, upon which HSB issued a Certificate of Substantial Completion. (Pl. 56.1 Resp. ¶ 19.) The Middle School Project reached substantial completion on July 17, 2002, and a Certificate of Substantial Completion was issued that day. (Pl. 56.1 Resp. ¶ 21.) In both cases, the District took possession of the projects on the dates of substantial completion and assumed responsibility for their heat, electricity, water, security, and maintenance. (Pl. 56.1 Resp. ¶¶ 20, 22.) The District issued Certificates of Occupancy for both projects on August 26, 2002. (Pl. 56.1 Resp. ¶ 25.) In accordance with the Contract, the District agreed to pay PHS a $20,000 bonus for early completion of the High School Project and to assess $4,000 in liquidated damages for late completion of the Middle School Project. (Pl. 56.1 Resp. ¶ 26.)

On or about June 5, 2002, Plaintiffs notified American of a claim under the Bond in the amount of $537,118.30, which Plaintiffs claimed to be owed for labor and materials related to the Middle School Project. (Pl. 56.1 Resp. ¶ 27.) On the same day, Plaintiffs notified American of a Bond claim in the amount of $559,553.60 for labor and materials related to the High School Project. (Pl. 56.1 Resp. ¶ 28.)

III. Amended Claims

On December 3, 2002, Plaintiffs filed notice to American of additional Bond claims over and above those which they had originally claimed. (Pl. 56.1 Resp. ¶¶ 31, 32.) Plaintiffs' amended claims sought an additional $1,152,915.70 over the original Bond claim for the High School Project, for a total claimed amount of $1,690,034; and an additional $336,041.99 over the original Bond claim for the Middle School Project, for a total claimed amount of $895,595.59. (Pl. 56.1 Resp. ¶¶ 31, 32.) These new claims (the "Change Order Claims") were based upon asserted "Change Orders" amending the terms of Plaintiffs' original ...


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