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Associated Construction / AP Construction, LLC v. The Hanover Insurance Co.

United States District Court, D. Connecticut

August 21, 2018

ASSOCIATED CONSTRUCTION / AP CONSTRUCTION, LLC Plaintiff,
v.
THE HANOVER INSURANCE COMPANY, et al. Defendants.

          RULING ON MOTION FOR SUMMARY JUDGMENT

          Michael P. Shea, U.S.D.J.

         I. Introduction

         This lawsuit arises out of surety bonds issued for a construction project in Stamford, Connecticut. Associated Construction / A.P. Construction, LLC (“Associated Construction”), a construction contractor, alleges that the issuer of the bonds, Hanover Insurance Company (“Hanover” or the “Surety”), and its alleged agents, Scott Adams, Avalon Risk, LLC (“Avalon”), and Lighthouse Management, LLC (“Lighthouse”), failed to perform under the bonds and other related contracts and made misrepresentations in connection with the project. Associated Construction brings claims for (i) breach of contract (count one); (ii) violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq. (“CUTPA”) (count two); (iii) breach of the covenant of good faith and fair dealing (count three); and (iv) violation of the Connecticut Unfair Insurance Practices Act, Conn. Gen. Stat. § 38a-815 et seq. (“CUIPA”) (count four).

         Now before me are motions for summary judgment brought by Lighthouse and Adams as to Associated Construction's CUTPA claim.[1] (ECF No. 154; ECF No. 163.) For the reasons that follow, these motions for summary judgment are DENIED.

         II. Background

         A. Factual Background

         The following facts, which are taken from the parties' Local Rule 56(a) Statements[2] and the exhibits, are undisputed unless otherwise indicated.[3]

         Associated Construction “was formed for the purpose of soliciting, obtaining and entering into a contract with Trinity Financial (“Trinity”), as owner, for the construction of a residential apartment building at 66 Summer Street, Stamford, Connecticut, known as ‘Park Square West Phase II' (the ‘Project').” (ECF No. 155, Lighthouse's Local Rule 56(a)1 Statement (“LH's L.R. 56(a)1 Stmt.”) at ¶ 2); ECF No. 180-1, Associated Construction's Local Rule 56(a)2 Statement (“Pl.'s LH L.R. 56(a)2 Stmt.”) at ¶ 2[4].; ECF No. 164, Adams's Local Rule 56(a)1 Statement (“Adam's L.R. 56(a)1 Stmt.”) at ¶ 2; ECF No. 181-1, Associated Construction's Local Rule 56(a)2 Statement (“Pl.'s Adams 56(a)2 Stmt.”) at ¶ 2.) In September of 2013, Associated Construction executed a “Letter of Intent to Award Subcontract” with Intext Building Systems, LLC (“Intext”) to perform various work on the Project (“Sheetrock Work”). (Adams's L.R. 56(a)1 Stmt. at ¶ 56; Pl.'s Adams 56(a)2 Stmt. at ¶ 56; ECF No. 167, Exhibit FF, at 4-5 (letter of intent signed by representatives of Associated Construction and Intext).)[5]

         1. October 9, 2013 Meeting

         Although the parties dispute how it took place, Intext and Associated Construction ultimately agreed to “split [Intext's] scope of work into three subcontracts.” (Pl.'s LH L.R. 56(a)2 Stmt., Additional Material Facts at ¶ 22; ECF No. 167, Exhibit HH (email from Associated Construction's management detailing three subcontracts); Adam's L.R. 56(a)1 Stmt. at ¶ 60 (referring to Intext's three subcontracts).) “On October 9, 2013, a meeting was held at [Associated Construction's] jobsite office, which was attended by [vice president of Associated Construction Joseph] Jankowski, [executive vice president of Associated Construction Thomas] Walsh, [lead project manager at Associated Construction Joseph] Orlando, [Senior Vice President of Alliant Insurance Services Woodrow M. Baird], [Intext owner] Dean Coehlo, [Intext executive Steve] Ravis and [Scott] Adams.[6]” (Adam's L.R. 56(a)1 Stmt. at ¶ 67; Pl.'s Adams L.R. 56(a)2 Stmt. at ¶ 67.) Walsh stated in a subsequent affidavit that Adams, at the meeting, “advised [him] that [Adams] had authority to issue bonds to Intext for a face amount of $2 million per bond with $4, 000, 000 aggregate commitment” and that “the bonds [Adams] issued would in the aggregate cover the proposed contract amount and perform in the same manner as a single bond.”[7] (See ECF No. 183-1, Affidavit of Thomas J. Walsh, III (“Pl.'s Walsh Aff.”) at ¶ 10.)

         The parties eventually agreed on the issuance of three performance bonds for the Sheetrock Work. (See ECF No. 167-19, Ex. SS (“Bonds”) (the three signed performance bonds); Adams's L.R. 56(a)1 Stmt. at ¶ 93; Pl.'s Adam's L.R. 56(a)2 Stmt. at ¶ 93.) All of the bonds listed Intext[8] as the contractor, Associated Construction as the obligee, and Hanover as the surety. (See Bonds at 1, 14, 26.) The first bond was in the amount of $1, 987, 000 and applied to the “Framing Work.” (See Id. at 1.) The second bond was in the amount of $1, 881, 000 and pertained to the “Drywall Installation.” (Id. at 14.) The final performance bond was listed at $642, 000 and pertained to the “Drywall and Insulation Materials.” (Id. at 26.) Each of the bonds was executed on November 1, 2013. (Bonds at 1, 14, 26; Adams's L.R. 56(a)1 Stmt. at ¶ 93; Pl.'s Adam's L.R. 56(a)2 Stmt. at ¶ 93.) Each bond granted Adams the power of attorney “to sign, execute, seal, acknowledge and deliver for . . . any and all bonds, recognizances, undertakings, contracts of indemnity, or other writings obligatory in the nature thereof “ up to the amount of $5, 000, 000. (See Id. at 6, 20, 32.) Further, the bonds were subject to “Avalon's review and approval” prior to their issuance.[9] (Adams Decl. at ¶ 27.)

         Shortly before these bonds were executed, Intext entered into a series of Disbursement Control Agreements (“DCAs”) with Lighthouse. (See ECF No. 166-1, Exhibit A at 161-72 (October 14, 2013 DCA signed by Coehlo and Adams), 255-66 (October 14, 2013, DCA signed by Coehlo and Adams), 304-15 (October 14, 2013 DCA signed by owner of IBS and Adams).) The DCAs required Intext “to use the services of [Lighthouse] to receive and disburse all monies under the” subcontracts governing its work on the Project. (Id. at 161, 255, 304.) In effect, the DCAs set up Lighthouse as an intermediary between funds paid from Associated Construction to Intext for the Sheetrock Work. The DCAs provide that “[i]n the event of a Default . . ., no Account Funds shall be disbursed without the prior written consent of the Surety.” (Id. at 165, 259, 308.)

         2. May 8, 2014 Meeting

         “On May 8, 2014, a meeting was held among Jankowski, Walsh, Ashforth, Orlando, Ravis, Adams and Baird to discuss Intext's performance.” (LH's L.R. 56(a)1 Stmt. at ¶ 28; Pl.'s LH L.R. 56(a)2 Stmt. at ¶ 28; Adams's L.R. 56(a)1 Stmt. at ¶ 96; Pl.'s Adam's L.R. 56(a)2 Stmt. at ¶ 96.) The parties' accounts again diverge at this juncture. Associated Construction alleges that Lighthouse, having “failed to determine whether there were adequate funds in the funds control account when considered with the balance of the Contract Amount, ” “made representations to [Associated Construction] [at the meeting] that there were adequate funds to complete the Project.”[10] (Complaint at ¶ 62(k).) Associated Construction also alleges that Adams misrepresented at the meeting “that the Surety would support Intext and enable Intext to complete [its work] on schedule for what [Associated Construction] agreed to pay Intext . . . .” (Id. at ¶ 62(j).) Lighthouse and Adams aver in their Local Rule 56(a) statements that Adams stated that Intext's “cash flow was not a problem, ” that this statement was not false when it was made, and that Associated Construction did not rely upon it in any event. (LH's L.R. 56(a)1 Stmt. at ¶¶ 29-39; Adams's L.R. 56(a)1 Stmt. at ¶¶ 97-107). Associated Construction denies or qualifies most of these statements. (See Pl.'s LH L.R. 56(a)2 Stmt. at ¶¶ 29-39; Pl.'s Adams L.R. 56(a)2 Stmt. at ¶¶ 29-39.) I address the parties' differing accounts further later in this ruling.

         Associated Construction sent Intext a notice of default on June 2, 2014, and subsequently terminated Intext for failure to perform. (See ECF No. 168, Ex. 12 (“Notice of Default”)); Adam's L.R. 56(a)1 Stmt. at ¶ 109; Pl.'s Adams L.R. 56(a)2 Stmt. at ¶ 109; ECF No. 159-6, Deposition of Joseph Jankowski (“LH's Jankowski Depo.”) at 313:10-13 (Q: “And do you recall that . . . Intext was ultimately terminated by [Associated Construction]? You recall that?” A: “Yes.”).) Associated Construction later alleged that Intext's default caused Trinity to reject its bid for the next phase of the Project. (See Complaint at ¶ 43 (asserting damages based on Trinity's refusal to give Associated Construction the next phase of the project).)

         B. Subsequent Relevant Procedural History

         As a result of the events listed above, Associated Construction brought four claims against Hanover, Adams, and Lighthouse: (i) a breach of contract claim against Hanover only predicated upon Hanover's alleged breach of the “[p]erformance [b]onds' terms, ” along with the DCAs regulating the disbursement of funds to Intext (Complaint at ¶¶ 44-59); (ii) a CUTPA claim against all defendants based upon all of the conduct listed above (id. at ¶¶ 60-69); (iii) a breach of the covenant of good faith and fair dealing claim against all defendants predicated upon Adams's alleged misrepresentations and Hanover's failure to perform under the performance bonds following Intext's termination (id. at ¶¶ 70-82); and (iv) a CUIPA claim against all defendants that in effect mirrors the CUTPA claim (id. at ¶¶ 83-90). I granted Adams's and Lighthouse's subsequent motions to dismiss the breach of good faith and fair dealing and CUIPA claims against them. (See ECF No. 103 (“MTD Ruling”).) Thus, the only remaining claim against Lighthouse and Adams is Associated Construction's CUTPA claim.

         III. Standard of Review

         Summary judgment is appropriate only when the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “In making that determination, a court must view the evidence in the light most favorable to the opposing party.” Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (internal quotation marks omitted). “A fact is material if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir. 2007) (internal quotation marks omitted). The moving party bears the burden “of showing that no genuine factual dispute exists . . ., and in assessing the record to determine whether there is a genuine issue as to any material fact, the court is required to resolve all ambiguities and draw all factual inferences” in favor of the non-moving party. Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 203 (2d Cir. 1995).

         IV. Discussion

         The parties' motions for summary judgment overlap at various points due to Adams's status as the president of Lighthouse. Lighthouse contends that it is not liable under CUTPA because the basis for the CUTPA claim is an allegation that it violated CUIPA, and CUIPA does not apply to it. Lighthouse also contends that, in any event, it is not liable for Adams's alleged misrepresentation at the May 8, 2014 meeting concerning Intext's cash flow. (See ECF No. 159 at 8, 10.) Adams contends that he is not liable for his alleged misrepresentations at the October 9, 2013 and May 8, 2014 meetings. (See ECF No. 165 at 5, 10.) Since the parties' motions overlap, I address them jointly. I begin with Lighthouse's contention that CUIPA does not apply to it and then address Adams's alleged misrepresentations.

         A. Lighthouse's Liability Under CUIPA

         Lighthouse contends that its activities, along with those of Adams on its behalf, are not sufficiently related to the performance bonds in this case to subject those activities to CUIPA by way of CUTPA. (ECF No. 159 at 8.) A party may bring a CUTPA claim predicated upon a violation of CUIPA. See Mead v. Burns, 199 Conn. 651, 663 (1986) (determining that “it is possible to state a cause of action under CUTPA for a violation of CUIPA”). CUIPA provides that “[n]o person shall engage in this state in any trade practice which is defined . . . as . . . an unfair method of competition or an unfair or deceptive act or practice in the business of insurance . . . .” Conn. Gen. Stat. § 38a-815. Although Lighthouse concedes that “Connecticut courts have held that surety contracts fall within CUIPA's definition of ‘the business of insurance, '” it contends that Associated Construction “has failed to establish how the business of Lighthouse has any identifiable relationship to the bonds or surety contracts in this matter.” (ECF No. 159 at 8.) For the reasons that follow, I disagree.

         As an initial matter, there is somewhat sparse precedent discussing the scope of the term “business of insurance” in CUIPA. The precedent available, however, suggests that the scope is quite broad. As an initial matter, Connecticut law broadly defines the term “business of insurance, ” albeit in the context of out-of-state insurers, as follows:

“‘[I]nsurer' includes all corporations, associations, partnerships, and individuals engaged as principals in the business of insurance . . . . Any of the following acts effected in this state . . . is defined to be doing an insurance business in this state: (1) The making of or proposing to make, as an insurer, an insurance contract; (2) the making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety; (3) the taking or receiving of any application for insurance; (4) the receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration for any insurance or any part thereof; (5) the issuance or delivery of contracts of insurance to residents of this state or to persons authorized to do business in this state; (6) directly or indirectly acting as an agent for or otherwise representing or aiding on behalf of another any person or insurer in the solicitation, negotiation, procurement or effectuation of insurance or renewals thereof or in the dissemination of information as to coverage or rates, or forwarding of applications, or delivery of policies or contracts, or inspection of risks, a filing of rates or investigation or adjustment of claims or losses or in the transaction of matters subsequent to effectuation of the contract and arising out of it, or in any other manner representing or assisting a person or insurer in the transaction of insurance with respect to subjects of insurance resident, located or to be performed in this state. The provisions of this subdivision shall not operate to prohibit full-time salaried employees of a corporate insured from acting in the capacity of an insurance manager or buyer in placing insurance on behalf of such employer; (7) the doing of or proposing to do any insurance business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of the general statutes relating to insurance; and (8) any other transactions of business in this state by an insurer. The venue of an act committed by mail is at the point where the matter transmitted by mail is delivered and takes effect.

Conn. Gen. Stat. § 38a-271(a). At least one Connecticut Superior Court has looked to this broad definition in defining the term as used in CUIPA. See Travelers Cas. v. F&F Mech. Contractors, Inc., No. CV000444245S, 2001 WL 576662, at *3 (Conn. Super. Ct. May 8, 2001) (looking to Conn. Gen. Stat. § 38a-271 to define “business of insurance” as used in CUIPA).

         Second, the Connecticut Supreme Court has defined the scope of CUIPA expansively in determining its preemptive ambit. In State v. Acordia, Inc., the Connecticut Supreme Court held that a CUTPA claim predicated upon “an insurance related practice” had to be based on a violation of CUIPA or potentially “some other statute regulating a specific type of insurance related conduct.” 310 Conn. 1, 37 (2013) (“Because CUIPA provides the exclusive and comprehensive source of public policy with respect to general insurance practices, we conclude that, unless an insurance related practice violates CUIPA or, arguably, some other statute regulating a specific type of insurance related conduct, it cannot be found to violate any public policy and, therefore, it cannot be found to violate CUTPA.” (emphasis added)). Consistent with this broad construction, Connecticut courts have treated insurance brokers, claims adjusters, and insurance agents as subject to liability under CUIPA for their insurance practices. See Brubaker v. Ranciato, No. CV176068768S, 2018 WL 3015221, at *4 (Conn. Super. Ct. May 29, 2018) (“[C]ourts have found that public adjusters are generally subject to the requirements of CUIPA in regard to their insurance practices.” (citing LaFever v. Cambridge Mut. Fire Ins. Co., No. KNLCV156023771S, 2016 WL 3912091, at *4 (Conn. Super. Ct. June 9, 2016) (“CUIPA applies to a variety of insurance industry members, including adjusters.”))); Nazami v. Patrons Mut. Ins. Co., 280 Conn. 619, 625-27 (2006) (considering requirements for pleading violation of Conn. Gen. Stat. § 38a-816(1)(a) against insurance agent and insurer); Acordia, 310 Conn. at 27-28 (discussing requirements for CUTPA violation based on CUIPA against insurance brokers). Thus, Connecticut law supports a broad definition of “business of insurance” that includes any insurance-related practices.

         Lighthouse's role in the events underlying this case falls within this broad scope. The clearest connection between Lighthouse and the performance bonds at the heart of this case is that the latter required Intext to use the disbursement services of the former to protect Hanover's interests. (See ECF No. 159-1, Explanation of the Funds Control Process Involving a Bonding Company (document providing notice to Intext that: “As a condition for issuing its bond, [Hanover] has required you to enter into an agreement for Lighthouse to handle the receipt and the disbursement of funds on the project.”); (ECF No. 159-3, Deposition of Thomas Walsh (“LH's Walsh Depo.”) at 377: 16-22 (Q: “What did you understand Lighthouse's role to be on this project beyond simply receiving, disbursing funds on behalf of Intext?” A: “It was largely to ensure that payments were being made - properly being made to the materialmen and suppliers and the subcontractors that Intext employed.”), 378: 22-25 (“Lighthouse was the funds control agent under - as it was represented to us, under an obligation from Hanover to have a funds control agent to protect the operations under the bond.”); ECF No. 159-4, Deposition of Andrew B. Ashforth (“LH's Ashforth Depo.”) at 155: 14-19 (Q: “The payments flowed on this project such that [Associated Construction] paid money that was due and owing to [Intext] to Lighthouse, which would then disburse it to [Intext's] contractors, suppliers, and laborers. Is that right?” A: “Correct.”).) Given that Lighthouse's services were used to facilitate the issuance and operation of the performance bonds, and given that Lighthouse concedes that surety bonds fall under CUIPA, Lighthouse's services related to insurance practices in such a manner as to draw them within the ambit of CUIPA.

         Adams's simultaneous administration of the performance bonds through Avalon and the DCAs through Lighthouse further emphasizes this connection. As noted above, Adams helped facilitate the issuance of the performance bonds by reviewing and approving them through Avalon and providing funds disbursement for them through Lighthouse. Avalon and Lighthouse are located at the same address and listed at that same address on the performance bonds. (See ECF No. 159-5, LH's Adams Depo. at 347:11-21.) Adams testified during his deposition that he sent emails conducting Lighthouse business from his Avalon email address. (See Id. at 288:18-20.) He also noted that he “[didn't] do a good job at differentiating [between his work with Avalon and Lighthouse].” (Id. at 361: 6-9.) Further, Adams noted that Lighthouse's chief source of income with respect to loan origination was fees assessed for funds control. (Id. at 361: 14-20 (“I am not really sure that either Avalon or Lighthouse can take compensation for loan origination, but I think we had our eye more on [another source of income], which was that these lenders were going to want funds control used and we would charge a fee for the services of the funds control in the normal course of events.”).) Thus, even if Lighthouse's role in the disbursement of funds under the bond did not sufficiently tie it to the “business of insurance” to incur potential liability under CUIPA, the blurring of its leadership with that of Avalon- Hanover's agent in connection with the issuance of the surety bonds-draws it within the gravitational pull of CUIPA.

         B. Alleged Misrepresentations

         Associated Construction alleges that Adams made several misrepresentations at the October 9, 2013 and May 8, 2014 meetings described above, one of which it also directly attributed to Lighthouse. (See Complaint at ¶ 62(g-l).) CUIPA proscribes “[m]isrepresentations and false advertising of insurance policies.” Conn. Gen. Stat. § 38a-816(1). In assessing a CUTPA claim asserting a violation of that provision, the Connecticut Supreme Court suggested that the plaintiff had to satisfy the four elements of a negligent misrepresentation claim: “(1) that the defendant made a misrepresentation of fact (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result.” Nazami v. Patrons Mut. Ins. Co., 280 Conn. 619, 626 (2006). Whether the evidence in a case supports a claim of negligent misrepresentation is a question of fact. See Mips v. Becon, Inc., 70 Conn.App. 556, 558 (2002) (“Whether evidence supports a claim of fraudulent or negligent misrepresentation is a question of fact . . . .” (quoting Citino v. Redevelopment Agency, 51 Conn.App. 262, 273-74 (1998)); Miller v. Appleby, 183 Conn. 51, 55 (1981) (“Fraud and misrepresentation cannot be easily defined because they can be accomplished in so many different ways. They present, however, issues of fact.” (quoting Hathaway v. Bornmann, 137 Conn. 322, 324 (1950)).) I assess the defendants' challenges to each of Adams's alleged misrepresentations in turn.

         1. October 9, 2013 Misrepresentation Concerning Three Bonds

         a. Misrepresentation of Fact

         Adams challenges Associated Construction's allegation that he made a negligent misrepresentation at the October 9, 2013 meeting by representing that the three performance bonds at issue in this case would act the same as a single bond. (See ECF No. 165 at 5.) Adams first disputes that he made such a statement at all. He notes that Baird testified that Adams never made any such representation, and that Associated Construction's meeting minutes and Orlando's notes from the meeting are devoid of any reference to such a misrepresentation. (ECF No. 165 at 6-8.) This argument is a nonstarter. “On a motion for summary judgment, [a] court is not to weigh the evidence, or assess the credibility of the witnesses, or resolve issue of fact, but only to determine whether there are issues to be tried.” United States v. Rem, 38 F.3d 634, 644 (2d Cir. 1994). Here, Associated Construction presented the affidavit of Walsh attesting that Adams made the misrepresentation in question. (See Pl.'s Walsh Aff. at ¶ 9 (“At a face-to-face meeting in October 2013, Defendant Adams, a Managing General Agent of Hanover . . ., advised me that he had authority to issue bonds to Intext for a face amount of $2 million per bond with $4, 000, 000 aggregate commitment. He said that the bonds he issued would in the aggregate cover the proposed contract amount and perform in the same manner as a single bond.”).) This creates a conflict of witness testimony as to a material fact that cannot be resolved by summary judgment.

         Adams next asserts that he did not make any misrepresentation of fact, as opposed to a statement of opinion. (Id.) Under Connecticut law, a misrepresentation “must consist of a statement of a material past or present fact . . . . Statements of opinion . . . are not actionable.” Omega Engineering, Inc. v. Eastman Kodak Co., 908 F.Supp. 1084, 1097 (D. Conn. 1995). “Reliance on opinions is per se unjustifiable because opinions, unlike facts, do not purport to be incontrovertible.” Id. “The test for whether a statement is one of opinion or fact is whether ‘under the circumstances surrounding the statement, the representation was intended and understood as one of fact as distinguished from one of opinion.'” Woodling v. Garrett Corp., 813 F.2d 543, 552 (2d Cir. 1987) (quoting Crowther v. Guidone, 183 Conn. 464, 468 (1981)). Adams contends that his alleged statement that the bonds would perform exactly like a single bond “is a speculative opinion because at the time the misrepresentation was allegedly made the performance bonds were not even in existence, and Adams had no part in drafting or preparing the bonds.” (ECF No. 165 at 5.) In support of this proposition, Adams cites his own declaration submitted in support of this motion. (See Id. at 5-6 (citing Adams Decl. at ¶ 24 (“[N]either Avalon nor I had any input or involvement in the preparation of the subcontracts or the performance bonds that were ultimately executed for the Project. To the contrary, it was [Alliant Insurance Services (“Alliant”)] that pieced together the entire bond transaction, as the bonding agent for both [Associated Construction] and [Intext].”), ¶ 28 (“To be sure, annexed hereto as Exhibit “RR” is a true copy of an email from Alliant to Avalon dated November 1, 2013, in which Alliant attached copies of the three sets of proposed payment and performance bonds-one for each of the subcontracts at issue-for Avalon's review and execution.”).)

         Adams's declaration does not entitle him to judgment as a matter of law on this point. In fact, Adams's declaration suggests that he played a major role in the development, fashioning, and issuance of the performance bonds. He asserts in his declaration that the bonds issued to Intext were approved via Hanover's Emerging Contractors Program. (Adams Decl. at ¶ 15.) He also notes that the tripartite nature of the bonds stemmed from Hanover's restrictions on Avalon's bonding ability. (See Id. at ¶ 17 (“I informed Baird that Avalon would not be able to issue a bond for Intext for the proposed subcontract, but that Avalon would consider issuing a bond if the parties were able to apportion the work into segregated, discrete scopes under separate subcontracts that were under $2 million each, and under $4 million in the aggregate, consistent with Hanover's bonding limits under the [Emerging Contractors Program].”).) The performance bonds also required that Intext use Lighthouse-another venture owned by Adams-for the purposes of funds control. (See Id. at ¶ 22 (averring that Hanover required Intext to use Lighthouse for funds control for Sheetrock Work).) Finally, the fact that Alliant submitted drafts of the bonds to Avalon for its review suggests that Adams played an active role in deciding upon the content of the bonds. Adams confirms this impression when he notes in his declaration that “[u]pon receiving the bonds elected by Alliant, Avalon in its capacity as Hanover's agent, approved them as they are known as standard AIA 311 bonds which are widely used in the industry.” (Adams Decl. at ¶ 29.) Given that Avalon-and by extension, Adams- played a key role in the shaping and approval of the bonds, Adam's assertion that he played no part in their drafting rings hollow-and at least creates a genuine dispute of fact about the degree of his involvement.

         Even if Adams's declaration supported his assertion that he played a small part in preparing the bonds, it would not entitle him to summary judgment on the issue. Associated Construction attached an affidavit by Walsh attesting to a different version of events. (See Walsh states in his affidavit that “Mr. Adams developed the description of the scope of work for each of three subcontracts that covered the total amount of the bid and the scope of work covered by Intext's bid to [Associated Construction] . . . . The terms of the three bonds are the same. He also advised that Intext would have to hire Lighthouse . . . or Hanover would not issue the Bond.” (Pl.'s Walsh ...


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