WALTER CONCRETE CONSTRUCTION CORP v. International Fidelity Insurance Company, Third-Party Defendant-Appellant. (2001)

In an action to recover damages for breach of contract, the third-party defendant appeals from a judgment of the Supreme Court, Rockland County (Meehan, J.), entered August 9, 2000, which, upon an order of the same court dated August 2, 2000, denying its motion for summary judgment dismissing the third-party complaint and granting the motion of the third-party plaintiff for summary judgment, is in favor of the third-party plaintiff and against it in the principal sum of $547,552.32.

ORDERED that the judgment is affirmed, with costs.

The defendant third-party plaintiff, Fred L. Holt, Inc. (hereinafter Holt), entered into a subcontract with the plaintiff to perform construction work on a building project for the defendant Lederle Laboratories.   The third-party defendant, International Fidelity Insurance Company (hereinafter International), issued a performance bond for the project, naming the plaintiff as the principal and Holt as the obligee.

 Contrary to International's contention, Holt was not required to notify it that the principal had defaulted under the subcontract.   The performance bond International issued did not expressly require a notice of default as a condition precedent to any legal action on the bond (see, Zacher v. Oakdale Islandia Ltd. Partnership, 271 A.D.2d 441, 706 N.Y.S.2d 126;  Menorah Nursing Home v. Zukov, 153 A.D.2d 13, 548 N.Y.S.2d 702;  Babylon Assoc. v. County of Suffolk, 101 A.D.2d 207, 475 N.Y.S.2d 869).   In addition, by incorporating in its performance bond a subcontract containing an arbitration clause, International agreed to be bound by the determination of the arbitrator in any dispute arising under the subcontract between the plaintiff and Holt (see, Matter of Fidelity & Deposit Co. of Md. v. Parsons & Whittemore Contrs. Corp., 48 N.Y.2d 127, 421 N.Y.S.2d 869, 397 N.E.2d 380).

International's remaining contentions are without merit.