International Fidelity Insurance v. Spadafina

—In an action by the plaintiff surety for reimbursement from the defendant indemnitor pursuant to an indemnity contract, the plaintiff surety appeals from so much of an order of the Supreme Court, Nassau County (McCabe, J.), dated December 5, 1990, as denied its motion for summary judgment.

Ordered that the order is reversed insofar as appealed from, on the law, with costs, the plaintiff’s motion for summary judgment is granted, and the matter is remitted to the Supreme Court, Nassau County, for determination of damages and entry of an appropriate judgment.

The basic facts of this case are not in dispute. The defendant Joseph Spadafina is the president of a company, Autotronics Products, Inc. (hereinafter Autotronics) (now in bankruptcy and not a defendant), that contracted with the United States Government to install lights at an airport in Virginia. Pursuant to this contract, Autotronics subcontracted with Kelly Electrical Construction, Inc. (hereinafter Kelly) to supply certain labor and materials. As required by Federal law, Autotronics obtained and filed various performance and payment bonds indemnifying Kelly for its work. Under an indemnity agreement, the plaintiff, International Fidelity Insurance Company (hereinafter International), agreed to be a surety for these bonds and Spadafina, both as president of Autotronics and individually, agreed to indemnify International. Kelly, claiming it was owed money by Autotronics, commenced a suit against International in Federal court in Virginia. International settled this suit. Thereafter, pursuant to the indemnity contract, International sought reimbursement from Spadafina as indemnitor. When Spadafina refused to reimburse International, International commenced this suit and moved for summary judgment. Spadafina alleged in his answer that Autotronics had tendered payment to Kelly pursuant to their subcontract and that Kelly had wrongfully refused the tender (thereby releasing Autotronics and International from liability). The Supreme Court held that this created an issue of fact as to whether Spadafina was liable on the underlying debt, and denied summary judgment. We reverse.

Pursuant to the terms of the indemnity agreement between International and Spadafina, International had the authority to: "charge [Spadafina] for any and all disbursements made by it in good faith in and about matters herein contemplated by this Agreement under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or