73 A.D.2d 797 | N.Y. App. Div. | 1979
Judgment unanimously modified and, as modified, affirmed, without costs, in accordance with the following memorandum: This is an action to recover damages on two performance bonds issued by defendant in connection with two construction contracts entered into between plaintiffs, as owners, and Ferguson and Johnson, Inc., as general contractors, for the construction of separate Ponderosa Restaurants in the State of Georgia. Plaintiffs also asserted causes of action with respect to each project under a certain letter of agreement, dated July 6, 1973, wherein defendant agreed to complete the construction projects following the general contractor’s default. On a prior appeal from a grant of summary judgment to plaintiffs on the issue of liability, we reversed and held that there was "a triable issue as to whether defendant’s interests were adversely affected by any failure of the plaintiffs substantially to perform their obligations under the construction contracts and the bonds” (Hunt v Bankers & Shippers Ins. Co. of N. Y., 60 AD2d 781, 783). We also held that there was a triable issue "as to whether plaintiffs complied with the terms of the letter of agreement” (Hunt, supra, p 783). At trial those issues were resolved against defendant and defendant appeals from the entry of judg- . ment on plaintiffs’ causes of action on the performance bonds. The underlying contracts called for the construction in the State of Georgia of two Ponderosa Restaurants, known, respectively, as the Stewart and Arrowhead projects. Each contract was in the sum of $130,000 and defendant issued performance bonds on each project in that amount. Judgment was entered against defendant on the Stewart project in the sum of $133,000 and on the Arrowhead project in the sum of $67,000. Initially, we note that the judgment entered on the Stewart project exceeds the amount of defendant’s performance bond by $3,000. Since the amount recoverable from a surety shall not exceed the amount specified in the undertaking (General Obligations Law, § 7-301; United States Fid. & Guar. Co. v Koehler, 36 Ga App 396, 414-415), the judgment must be reduced accordingly. Defendant’s claim that the judgment should be further reduced by $22,500 must be rejected, however, because the record fails to demonstrate the source of those funds.