In re New York Surety Co.

Appellate Division of the Supreme Court of New York

In re New York Surety Co.

300 A.D.2d 401, 751 N.Y.S.2d 764

CourtAppellate Division of the Supreme Court of the State of New York

DecidedDecember 9, 2002

StatusPublished

This text of 300 A.D.2d 401 (In re New York Surety Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re New York Surety Co., 300 A.D.2d 401, 751 N.Y.S.2d 764 (N.Y. Ct. App. 2002).

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Opinion

—In a proceeding pursuant to Insurance Law article 74 for the liquidation of New York Surety Company, the Superintendent of Insurance, as Liquidator, appeals from a judgment of the Supreme Court, Nassau County (Phelan, J.), dated July 31, 2001, which, upon an order of the same court, dated June 21, 2001, granting the motion of the respondents, Melvin Fischman, Arnold Fischman, and Brooklyn Villas, LLP, to confirm a Referee’s report dated March 13, 2001, made after a hearing, and denying the cross motion of the Superintendent of Insurance, as Liquidator, to disaffirm the Referee’s report, is in favor of the claimants and against it in the principal sum of $100,000.

Ordered that the judgment is affirmed, with costs.

It is well settled that a surety may secure its rights by a written contract with the principal or another who promises to make good for the loss (see Acstar Ins. Co. v Teton Enters., 248 AD2d 654; International Fid. Ins. Co. v Spadafina, 192 AD2d 637, 639). The agreement between the parties governs their rights and obligations (see BIB Constr. Co. v Fireman’s Ins. Co. of Newark, N.J., 214 AD2d 521, 523).

The Supreme Court correctly determined that the appellant was not entitled to retain the balance of collateral owed to the claimants Melvin Fischman and Arnold Fischman in connection with a bond given by Brooklyn Villas, LP, as an offset against an unrelated debt that arose in connection with certain bonds of the New York Modular Housing Corp. Notwithstanding the broad language employed in the receipt for collateral executed by the claimants in connection with the Brooklyn Villas, LP bond to discharge a mechanic’s lien, the New York Modular bonds secured a different construction project by a different corporate entity, and were subject to a separate indemnity agreement. While Melvin Fischman was one of the [402]*402four indemnitors guaranteeing the New York Modular bonds, the claimant Arnold Fischman was not a signatory to that agreement. The appellant was not free to summarily disregard corporate identities and pierce corporate veils to withhold the $100,000 payment concededly otherwise owed to Melvin Fischman and Arnold Fischman.

The appellant’s remaining contentions are without merit. Florio, J.P., S. Miller, Adams and Crane, JJ., concur.

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—In a proceeding pursuant to Insurance Law article 74 for the liquidation of New York Surety Company, the Superintendent of Insurance, as Liquidator, appeals from a judgment of the Supreme Court, Nassau County (Phelan, J.), dated July 31, 2001, which, upon an order of the same court, dated June 21, 2001, granting the motion of the respondents, Melvin Fischman, Arnold Fischman, and Brooklyn Villas, LLP, to confirm a Referee’s report dated March 13, 2001, made after a hearing, and denying the cross motion of the Superintendent of Insurance, as Liquidator, to disaffirm the Referee’s report, is in favor of the claimants and against it in the principal sum of $100,000.

Ordered that the judgment is affirmed, with costs.

It is well settled that a surety may secure its rights by a written contract with the principal or another who promises to make good for the loss (see Acstar Ins. Co. v Teton Enters., 248 AD2d 654; International Fid. Ins. Co. v Spadafina, 192 AD2d 637, 639). The agreement between the parties governs their rights and obligations (see BIB Constr. Co. v Fireman’s Ins. Co. of Newark, N.J., 214 AD2d 521, 523).

The Supreme Court correctly determined that the appellant was not entitled to retain the balance of collateral owed to the claimants Melvin Fischman and Arnold Fischman in connection with a bond given by Brooklyn Villas, LP, as an offset against an unrelated debt that arose in connection with certain bonds of the New York Modular Housing Corp. Notwithstanding the broad language employed in the receipt for collateral executed by the claimants in connection with the Brooklyn Villas, LP bond to discharge a mechanic’s lien, the New York Modular bonds secured a different construction project by a different corporate entity, and were subject to a separate indemnity agreement. While Melvin Fischman was one of the [402]*402four indemnitors guaranteeing the New York Modular bonds, the claimant Arnold Fischman was not a signatory to that agreement. The appellant was not free to summarily disregard corporate identities and pierce corporate veils to withhold the $100,000 payment concededly otherwise owed to Melvin Fischman and Arnold Fischman.

The appellant’s remaining contentions are without merit. Florio, J.P., S. Miller, Adams and Crane, JJ., concur.

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Bluebook (online)

300 A.D.2d 401, 751 N.Y.S.2d 764, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-new-york-surety-co-nyappdiv-2002.

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