VULCRAFT OF NEW YORK INC v. Fidelity and Deposit Company of Maryland, Defendant–Appellant–Respondent. (2019)

MEMORANDUM AND ORDER

It is hereby ORDERED that the order and judgment so appealed from is unanimously modified on the law by denying the cross motion in its entirety and reinstating the counterclaim of defendant Fidelity and Deposit Company of Maryland and as modified the order and judgment is affirmed without costs.

Memorandum:  Plaintiff commenced this action, inter alia, to recover on a payment bond issued by Fidelity and Deposit Company of Maryland (defendant).  Defendant appeals from an order and judgment that, inter alia, denied defendant's motion for summary judgment dismissing the complaint against it, granted that part of plaintiff's cross motion for summary judgment on its cause of action against defendant, and sua sponte dismissed defendant's counterclaim against plaintiff.  Plaintiff cross-appeals from the same order and judgment insofar as it, in effect, denied that part of plaintiff's cross motion for attorneys' fees pursuant to State Finance Law § 137(4)(c).

Contrary to defendant's contention on its appeal and plaintiff's contention on its cross appeal, triable issues of fact exist concerning plaintiff's demand for payment on the bond and whether such demand was “actually received” by the general contractor within the time period prescribed by law (State Finance Law § 137[3];  see generally Mills v. Niagara Frontier Transp. Auth., 163 A.D.3d 1435, 1438, 80 N.Y.S.3d 824 [4th Dept. 2018];  New York & Presbyt. Hosp. v. Allstate Ins. Co., 29 A.D.3d 547, 547–548, 814 N.Y.S.2d 687 [2d Dept. 2006]).  Thus, while Supreme Court properly denied defendant's motion, it erred in granting plaintiff's cross motion with respect to its cause of action against defendant (see generally Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980]), and we modify the order and judgment accordingly.  Moreover, given that plaintiff never sought summary judgment dismissing defendant's counterclaim against it, the court further erred in sua sponte dismissing that counterclaim (see Sunrise Nursing Home, Inc. v. Ferris, 111 A.D.3d 1441, 1442, 976 N.Y.S.2d 340 [4th Dept. 2013]).  We therefore further modify the order and judgment by reinstating the counterclaim.  Finally, given our determination that the court erred in granting plaintiff's cross motion in part, we reject plaintiff's contention on its cross appeal that it was entitled to attorneys' fees pursuant to section 137(4)(c).