Comprehensive Care Management Corp v. Utica Mutual Ins. Co. 2011 WL 6338907 (Supreme Ct, Suffolk County; Dec 15, 2011) On this private project the owner, Comprehensive Care, entered into a contract with NCI Construction, and Utica Mutual issued performance and payment bonds (apparently AIA A-312). After a dispute arose between the owner and NCI, the owner defaulted NCI and made a demand on Utica’s performance bond. Utica agreed to complete the project after entering into a takeover agreement with the owner. As one of the terms of the takeover agreement, the owner permitted Utica to use NCI as its completing contractor.  After one month Utica terminated NCI. In the takeover agreement Utica agreed to achieve substantial completion by Sept 15, 2008; however the project was not substantially complete until Jun 30, 2009. The court found that under the takeover agreement the contract and performance bond were to remain in full force and effect except to the extent modified by the takeover agreement. As a result, all three agreements were held to be enforceable against Utica. The owner sued Utica for breach of the takeover agreement on various grounds, including failing to pay the owner’s legal expenses and liquidated damages, and failing to remove NCI’s lien on the owner’s property.  Taking these in order: Legal Fees Owner sought to recover its legal fees incurred in arranging completion of the work under the contract, prosecuting this action, and defending a third-party action brought by NCI. The court, citing Mount Vernon CSD, 78 AD3d 1028, 2d Dep’t, held that under Para 6 of the bond, the owner was only entitled to recover its legal expenses incurred in getting the work completed. It held that “neither the contract nor the performance bond contained ‘unmistakably clear’ language obligating the surety to reimburse the owner for attorney’s fees incurred in connection with the litigation.” Liquidated Damages The court held that the owner was entitled to recover liquidated damages under both the contract and the bond. The court noted that the owner could not recover both liquidated and actual damages under NY law. Mechanic’s Liens Lastly, the owner sought a judgment directing Utica to remove or satisfy all liens on the property, including a lien by NCI. The court held, however, that Utica was only responsible for those liens for which NCI was responsible. Thus Utica was not under a duty to remove or satisfy NCI’s lien.