17‐2997‐cv
M.E.S., Inc. et al. v. Safeco Insurance Co. of America, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2018
(Argued: December 10, 2018 Decided: December 14, 2018)
Docket No. 17‐2997‐cv
M.E.S., INC., M.C.E.S., INC., and GEORGE MAKHOUL,
Plaintiffs‐Appellants,
v.
SAFECO INSURANCE COMPANY OF AMERICA, LIBERTY MUTUAL
INSURANCE COMPANY, S.A. COMUNALE CO. INC., RONALD GOETSCH,
DAVID PIKULIN, and CARYN MOHAN‐MAXFIELD,
Defendants‐Appellees.*
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NEW YORK
Before:
SACK, PARKER, and CHIN, Circuit Judges.
The Clerk of Court is directed to amend the official caption to conform to the above.
Appeal from a judgment of the United States District Court for the
Eastern District of New York (Chen, J.), granting summary judgment and
dismissing all claims in the Second Amended Complaint against defendants‐
appellees. On appeal, plaintiffs‐appellants argue that the district court erred in
holding that they failed to demonstrate the existence of a triable issue of fact as to
their claims that defendants‐appellees breached their contractual obligations and
engaged in bad faith and tortious conduct.
AFFIRMED.
MICHAEL CONFUSIONE, Hegge & Confusione, LLC,
Mullica Hill, New Jersey, for Plaintiffs‐Appellants.
VIVIAN KATSANTONIS, Watt, Tieder, Hoffar & Fitzgerald,
L.L.P., McLean, Virginia, for Defendants‐Appellees
Safeco Insurance Company of America, Ronald
Goetsch, David Pikulin, and Caryn Mohan‐Maxfield.
JONATHAN BONDY (Stephen A. Wieder, Beth J.
Rotenberg, on the brief), Chiesa Shahinian &
Giantomasi PC, West Orange, New Jersey, for
Defendant‐Appellee Liberty Mutual Insurance
Company.
JAMES A. KASSIS, Schenck, Price, Smith & King, LLP,
Florham Park, New Jersey, for Defendant‐Appellee
S.A. Comunale Co. Inc.
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PER CURIAM:
Plaintiffs‐appellants M.E.S., Inc. (ʺMESʺ), M.C.E.S., Inc., and George
Makhoul (collectively, ʺPlaintiffsʺ) appeal the district courtʹs August 25, 2017
judgment dismissing all claims in the Second Amended Complaint against
defendants‐appellees Safeco Insurance Company of America, Ronald Goetsch,
David Pikulin, and Caryn Mohan‐Maxfield (collectively, ʺSafecoʺ); Liberty
Mutual Insurance Company (ʺLiberty Mutualʺ); and S.A. Comunale Co. Inc.
(ʺComunaleʺ). We assume the partiesʹ familiarity with the underlying facts,
procedural history, and issues on appeal.
This case arises from three construction projects undertaken by the
United States Army Corps of Engineers (the ʺCorpsʺ) between 2003 and 2006.
The Corps hired MES as the general contractor on two of the projects and
Hirani/MES, JV (the ʺJoint Ventureʺ) as the general contractor on the third.1 At
MESʹs request, Safeco issued performance and payment bonds for all three
projects, and MES agreed to indemnify Safeco for any losses resulting from its
issuance of the bonds for two of the projects. The Joint Venture is identified as
1 The Joint Venture is listed in the captions in the district courtʹs memorandum and order, but not
in the judgment or notice of appeal. Plaintiffsʹ brief on appeal does not indicate that it was submitted on
behalf of the Joint Venture, nor has a separate brief been filed on its behalf.
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the ʺPrincipalʺ in an identical indemnity agreement with Safeco for the third
project, which was executed by the Joint Venture, Hirani Engineering & Land
Surveying, P.C., and MES. Thereafter, MES executed a subcontract with
Comunale to perform fire protection work on two of the projects. Liberty Mutual
issued performance and payment bonds for these subcontracts.
In 2008, the Corps issued Cure Notices for each project, notifying
MES and the Joint Venture of their respective failures and requiring them to cure
all failures within 14 days. The Corps subsequently terminated each contract for
default and made a bond demand on Safeco to complete the remaining work for
each project. Safeco incurred losses in responding to the Corpʹs bond demands
and performing its attendant obligations.
Safeco and MES brought separate actions in the United States
District Court for the Eastern District of New York related to the three
construction projects. In its June 16, 2015 Minute Order, the district court
dismissed Plaintiffsʹ claims based on the third project for lack of standing,
reasoning that MES had not shown that it was a third‐party beneficiary of the
contract in question. On September 3, 2015, the district court granted the parties
leave to file cross summary‐judgment motions in both cases. The district court
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decided these motions in a detailed 76‐page memorandum and order under
captions for both cases, and entered separate judgments for each case. This
appeal concerns only the action initiated by MES.2
The district court dismissed Plaintiffsʹ claims arising from the third
project for lack of standing. We have some doubt as to whether this decision was
correct,3 but we need not decide the question for MESʹs claims based on the third
project are essentially identical to its claims based on the other two projects. We
conclude that MESʹs claims fail on the merits, substantially for the reasons given
by the district court in its memorandum and order of March 30, 2017. Indeed,
after nine years of litigation, including five years of discovery, MES fails to
articulate any support for its accusations that Safeco breached its contractual
obligations or engaged in bad faith or tortious conduct. The claim that Safeco
acted inappropriately by attending the cure meetings is particularly frivolous, as
the record shows that, in its Cure Notices, the Corps ʺrequiredʺ the ʺpresence of
[MESʹs] bonding companyʺ at the meetings. J. App. at 4042, 4045; see also J. App.
2 The judgment in this case dismisses claims in the Second Amended Complaint and does not
address any other claims. There is an appeal pending in the action initiated by Safeco, No. 18‐2672.
3 The record does not indicate whether the Joint Venture is a separate legal entity or whether it was
operating through the two joint venturers. See, e.g., Geneva Pharm. Tech. Corp. v. Barr Labs. Inc., 386 F.3d
485, 514 (2d Cir. 2004) (holding that a member of a joint venture had standing to pursue claims for
injuries to the joint venture). Moreover, the original contract was in MESʹs name and was signed on
behalf of MES, and while the indemnity agreement identified the Joint Venture as principal, it was signed
by and on behalf of three entities, including MES.
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at 4079, 4110. MES has failed to identify any good faith basis, in law or on the
basis of the agreements at issue, for its assertion that Safeco had no right to take
steps to meet its obligations under the surety bonds. The contention that Safeco
somehow was motivated to induce MES to fail obviously makes no sense, for
MESʹs failure to meet its obligations would have triggered Safecoʹs liabilities as
surety.
CONCLUSION
We have considered MESʹs remaining arguments and find them to
be without merit. Accordingly, we AFFIRM the judgment of the district court.
Defendants‐appellees have not requested sanctions for MESʹs numerous
arguments lacking a basis in law or face. We, however, sua sponte award Safeco
double costs.
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