Superior Site Work, Inc. et al v. Nasdi, LLC et al
MEMORANDUM OF DECISION AND ORDER granting Cases 77 motion to hold the third party action in abeyance; granting in part and denying in part the City and the Parks Department's 78 motion; and denying the 62 motion to strike or sever as moot - Accordingly, the Court grants Cases motion to hold the third party action in abeyance pending the outcome of the NYS Supreme Court cases. The Court grants the City and the Parks Departments motion to the extent that the Parks Department is dismisse d from the action and the third party action is held in abeyance. The Citys motion is denied to the extent that the entire action will not be held in abeyance. The motion by Superior, Diversified and Harrison to strike the third party complaint or to sever it is denied as moot. The Clerk of the Court is respectfully directed to terminate the Parks Department as a third party defendant. The third party action is stayed until further order, and the Clerk of the Court is further respectfully direct ed to place this action on the suspense calendar. The stay is not final and may be vacated if either party demonstrates unfair prejudice or if outstanding issues remain upon completion of the state proceedings. Counsel are directed to inform the Cour t within thirty days after the conclusion of the state proceedings as to the determination of the state proceedings. So Ordered by Judge Arthur D. Spatt on 1/23/2017. City of New York (Department of Parks and Recreation) (Third-Party Deft) terminated. (Coleman, Laurie)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
SUPERIOR SITE WORK, INC., DIVERSIFIED
CONSTRUCTION CORP., HARRISON
AVENUE PROPERTIES LLC,
DECISION AND ORDER
Third Party Plaintiff,
-againstCASE FOUNDATION COMPANY, THE CITY
OF NEW YORK, and THE NEW YORK CITY
DEPARTMENT OF PARKS AND
Third Party Defendants.
Zabell & Associates, P.C.
Attorneys for the Plaintiffs
1 Corporate Drive
Bohemia, NY 11716
Saul D. Zabell, Esq., Of Counsel
The Law Office of John E. Osborn, P.C.
Attorneys for the Defendant and Third Party Plaintiff
93–02 Sutphin Boulevard
Jamaica, NY 11435
Daniel H. Crow, Esq., Of Counsel
Peckar & Abramson
Attorneys for the Third Party Defendant Case Foundation Company
41 Madison Avenue
New York, NY 10010
Alan H. Winkler, Esq., Of Counsel
New York City Law Department, Office of Corporation Counsel
Corporation Counsel for Third Party Defendants the City of New York and the New York City
Department of Parks and Recreation
100 Church Street
New York, NY 10007
Amanda M. Papandrea, Assistant Corporation Counsel
SPATT, District Judge:
This action arises out of a contract dispute between the parties. The contract concerned
work related to the Ocean Breeze Indoor Athletic Facility in Staten Island, New York (the “Ocean
Breeze Project”). The City of New York (the “City) and the New York City Department of Parks
and Recreation (the “Parks Department”) contracted with NASDI, LLC (“NASDI”) to build the
Ocean Breeze Project.
NASDI allegedly subcontracted with Superior Site Work, Inc.
(“Superior”), Diversified Construction Corp. (“Diversified”), and Case Foundation Company
NASDI allegedly leased office space from Harrison Avenue Properties LLC
(“Harrison”) during the project.
Presently before the Court are three motions: 1) a motion by Case to either dismiss the third
party complaint or hold the third party action in abeyance pursuant to the abstention doctrine; 2) a
motion by the City and the Parks Department to hold the entire action in abeyance, or, in the
alternative, for a judgment on the pleadings on the third party complaint pursuant to Federal Rule
of Civil Procedure (“FED. R. CIV. P.” or “Rule”) 12(c); and a motion by Superior, Diversified and
Harrison to strike NASDI’s third party complaint pursuant to Rule 12(f), or, in the alternative, to
sever the third party action pursuant to Rule 14(a).
For the following reasons, the Court grants Case’s motion to hold the third party action in
abeyance; grants the City and the Parks Department’s motion in part and denies it in part; and
denies the motion to strike or sever as moot.
A. Procedural History
The procedural history is drawn from the pleadings filed with this Court, the motions filed
by the parties, and affidavits and exhibits attached to those motions. Namely, the Court notes that
the parties included, as exhibits attached to their memoranda of law, the New York State Supreme
Court complaints for two cases mentioned below. The Court can take judicial notice of those
filings. See Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991) (“[C]ourts routinely
take judicial notice of documents filed with other courts, . . . not for the truth of the matters asserted
in the other litigation, but rather to establish the fact of such litigation and related filings”); Staehr
v. Hartford Fin. Servs. Group, 547 F.3d 406, 424–25 (2d Cir. 2008) (holding it was proper for the
district court to take judicial notice of, inter alia, state court complaints).
On November 20, 2012, Case brought an action in New York State Supreme Court,
Richmond County, against NASDI and its surety bonding company, for money that Case claims it
was owed on a subcontract (“the NYS bond action”). Case alleged breach of contract claims
against NASDI and a payment bond claim against NASDI and its surety bonding company,
seeking $2,228,777.64 for work performed on the Ocean Breeze Project.
On January 22, 2015, Case brought a second action in New York State Supreme Court,
Richmond County. This was a public improvement lien action against NASDI and the City (the
“NYS lien action”). Case amended its complaint to include Superior as a defendant. Case sought
payment for the work it had performed on the Ocean Breeze Project pursuant to a contract with
NASDI, and to foreclose on a public improvement lien filed in connection with that project.
NASDI filed crossclaims in the NYS action against Superior and the City, where it alleged that
Superior and the City were responsible for Case’s damages under a theory of indemnification.
NASDI further set forth contractual defenses to Case’s recovery.
The instant action was brought by Superior, Diversified, and Harrison against NASDI, on
February 14, 2014. The complaint against NASDI alleges claims for breach of contract, and unjust
enrichment in the alternative. NASDI asserted a counterclaim against Superior for defective and
incomplete work. The Court entered a scheduling order on November 6, 2014, providing that new
parties should be joined by January 9, 2015. (ECF No. 28).
NASDI filed two motions to dismiss. The Court granted in part and denied in part the first
motion to dismiss, and denied its second motion to dismiss. During that time, Superior, Diversified
and Harrison filed two amended complaints.
NASDI filed its first answer on March 11, 2016, which was an answer to the second
amended complaint. On March 25, 2016, NASDI filed a third party complaint against Case, the
City and the Parks Department. NASDI brought various claims sounding in breach of contract
On May 23, 2016, Case filed a motion to dismiss NASDI’s third party complaint against it
based upon the abstention doctrine. Case asked in the alternative that the Court stay the third party
On May 24, 2016, the City and the Parks Department filed a motion for a judgment on the
pleadings. The City and the Parks Department also asked, in the alternative, that the Court stay
the entire matter.
On June 22, 2016, Superior, Diversified, and Harrison filed a motion to strike NASDI’s
third party complaint as procedurally improper, or, in the alternative, to sever it.
B. The Relevant Facts
On March 5, 2010, NASDI entered into a contract with the City and the Parks Department
to build the Ocean Breeze Project at 625 Father Capodano Boulevard, Staten Island, New York
10305. On June 30, 2010, NASDI entered into a subcontract with Case. Case agreed to perform
certain construction work involving furnishing and installing auger cast piles for the Ocean Breeze
On December 16, 2010, NASDI entered into a contract with Superior. Pursuant to its
contract with NASDI, Superior, as a subcontractor, was to install the concrete foundation for the
Ocean Breeze Project. Diversified is a wholly owned subsidiary of Superior. NASDI and
Diversified entered into a contract where Diversified agreed to negotiate with subcontractors to
get lower subcontracting prices for the Ocean Breeze Project, and in exchange Superior would
receive fifty percent of NASDI’s cost savings. Diversified alleges that it secured lower priced
subcontractors, and that NASDI bought out its previous subcontractors to use Diversified’s
subcontractors. Diversified was also supposed to receive certain monies if certain qualifications
The subcontractors Superior and Diversified allege that NASDI did not pay them the
monies that they were owed under their contract. Case alleges similarly sought payment for the
work it performed pursuant to a contract with NASDI related to the Ocean Breeze Project. NASDI
alleges that Case did not install the auger cast piles satisfactorily, and that Superior, the Parks
Department and the City are responsible for Case’s damages.
Harrison leased office space to NASDI for a five-year term. Harrison seeks monies owed
under its lease agreement with NASDI.
The Court will first address whether it should abstain from exercising its jurisdiction over
the third party action, because if the Court were to abstain, it would render the remaining motions
A. As to Whether the Court Should Abstain From Exercising Its Jurisdiction
1. The Applicable Law
The Supreme Court has stated:
[a]bstention from the exercise of federal jurisdiction is the exception, not the rule.
The doctrine of abstention, under which a District Court may decline to exercise or
postpone the exercise of its jurisdiction, is an extraordinary and narrow exception
to the duty of a District Court to adjudicate a controversy properly before it.
Abdication of the obligation to decide cases can be justified under this doctrine only
in the exceptional circumstances where the order to the parties to repair to the state
court would clearly serve an important countervailing interest. It was never a
doctrine of equity that a federal court should exercise its judicial discretion to
dismiss a suit merely because a State court could entertain it.
Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 813–814, 96 S. Ct. 1236,
1244, 47 L. Ed. 2d 483 (1976). In Colorado River, the Supreme Court said that, in addition to two
other abstention categories that were already established, federal district courts could abstain from
exercising jurisdiction in exceptional circumstances, such as when parallel state court litigation
could result in the “comprehensive disposition of litigation” and abstention would conserve
judicial resources. Id. at 817–18. “Suits are parallel when substantially the same parties are
contemporaneously litigating substantially the same issue in another forum.” Niagara Mohawk
Power Corp. v. Hudson River-Black River Regulating Dist., 673 F.3d 84, 100 (2d Cir. 2012)
(internal citations and quotations omitted); Nat’l Union Firs Ins. Co. v. Karp, 108 F.3d 17, 22 (2d
Cir. 1997) (“Federal and state proceedings are ‘concurrent’ or ‘parallel’ for purposes of abstention
when the two proceedings are essentially the same; that is, there is an identity of parties, and the
issue and relief sought are the same.”).
If the state and federal suits are parallel, federal courts must consider six factors when
evaluating whether Colorado River abstention is appropriate. Moses H. Cone Mem’l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 2, 103 S. Ct. 927, 929, 74 L. Ed. 2d 765 (1983). The balance
is “heavily weighted in favor of the exercise of jurisdiction.” Id. The six factors are:
(1) whether the controversy involves a res over which one of the courts has assumed
jurisdiction; (2) whether the federal forum is less inconvenient than the other for
the parties; (3) whether staying or dismissing the federal action will avoid
piecemeal litigation; (4) the order in which the actions were filed, and whether
proceedings have advanced more in one forum than in the other; (5) whether federal
law provides the rule of decision; and (6) whether the state procedures are adequate
to protect the plaintiff’s federal rights.
Woodford v. Cmty. Action Agency of Greene Cty., Inc., 239 F.3d 517, 522 (2d Cir. 2001).
2. Application to the Facts of this Case
a. As To Whether The State Cases And The Federal Case Are Parallel
As stated above, the Court must first make a preliminary determination as to whether the
cases are parallel. If the cases are not parallel, the Court does not need to consider the six factors
mentioned above. Courts look to the parties, the issues and the relief sought when determining
whether cases are parallel. Niagara Mohawk, 673 F.3d at 100. “Complete identity of parties and
claims is not required; the parallel litigation requirement is satisfied when the main issue in the
case is the subject of already pending litigation.” First Keystone Consultants, Inc. v. Schlesinger
Elec. Contractors, Inc., 862 F. Supp. 2d 170, 182 (E.D.N.Y. 2012) (internal citations and
quotations omitted). However, there must “be a substantial likelihood that the state litigation will
dispose of all claims presented in the federal case.” Id.
First, the Court addresses whether it will examine the entire federal action or only the third
party action. Although the City and the Parks Department have asked the Court to stay the entire
action, Case has moved only for the Court to stay the third party action. The initial parties to this
action, Superior, Diversified, Harrison, and NASDI, state that the federal case between them is
trial ready. Diversified and Harrison are not parties to the state cases, and therefore Harrison’s
claims would not be remedied by the state cases. Therefore, the Court will not stay the federal
action brought by Superior, Diversified and Harrison against NASDI, and denies the City’s motion
to stay the action to that extent.
The Court will now examine whether the third party action is parallel to the state cases. It
is within the Court’s discretion to stay the third party action, where Diversified and Harrison are
not parties. See, e.g., Salomon v. Burr Manor Estates, Inc., 635 F. Supp. 2d 196, 201 (E.D.N.Y.
2009) (Spatt, J.) (denying a motion to stay a third party action after analyzing the Moses H. Cone
factors); Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Kunin, No. 86-cv-7070, 1988 WL 96019,
at *4 (S.D.N.Y. Aug. 24, 1988) (granting a motion to stay a third party action based on the
Here, the parties in the third party action and the state law actions are identical. Although
the Parks Department is not a party to the state law claims, it is an administrative agency of the
City and therefore cannot be sued as a separate entity. See New York City Charter § 396 (“All
actions and proceedings for the recovery of penalties for the violation of any law shall be brought
in the name of the city of New York and not in that of any agency, except where otherwise provided
by law.”); Jenkins v. City of N.Y., 478 F.3d 76, 93 n. 19 (2d Cir. 2007) (holding that “[t]he district
court correctly noted that the NYPD is a non-suable agency of the City[,]” and citing New York
City Charter § 396). Therefore, even if the Court holds the third party action in abeyance, the
Parks Department must be dismissed from this action, and the Court grants the City and the Parks
Department’s motion to that extent.
Upon a review of the claims, cross claims, and third party claims in the state cases and the
federal third party action, it appears that the claims revolve around the same issues: whether Case
adequately performed under its subcontract and whether the City is liable for any claims against
NASDI. As NASDI admits, “these actions substantively correlate  in the question of which party
is responsible for the delay damages and extra work claims made by Superior and Case, relating
to the auger cast pile installation on the Project.” (NASDI’s Mem. of Law at 5, ECF No. 84–1).
Similarly, Case seeks damages in the state case, and NASDI seeks damages in the third party
action. Although the claims are not identical at this stage in the NYS actions, there is a substantial
likelihood that the cases could nevertheless dispose of all of the claims brought here. Of
importance, every claim brought here is brought under New York State law.
Accordingly, the state law cases and the third party action are parallel and the Court will
consider the six Moses H. Cone factors.
b. As to the Six Moses H. Cone Factors
i. As To Whether The Controversy Involves A Res Over Which One
Of The Courts Has Assumed Jurisdiction
Although Case argues that its NYS lien action is a proceeding in rem, the Court disagrees.
Although “[a]ctions to foreclose mechanic’s liens are in rem in nature,” York Hunter Const., Inc.
v. Avalon Props., Inc., 104 F. Supp. 2d 211, 214 (S.D.N.Y. 2000) (citing See N.Y. LIEN LAW §
70), actions to foreclose public improvement liens are not. This is because mechanics’ liens “may
be enforced against  [real] property,” N.Y. LIEN LAW § 41, while public improvement liens “may
be enforced against the funds of the state or the public corporation for which such public
improvement is constructed.” N.Y. LIEN LAW § 42; see also Niagara Venture v. Sicoli & Massaro,
Inc., 77 N.Y.2d 175, 182, 566 N.E.2d 648, 653 (N.Y. 1990) (stating that “[public improvement]
liens protect subcontractors who supply labor or material for an improvement on public lands—
where mechanics’ liens are unavailable . . . .”).
Therefore, none of the actions involve a proceeding in rem, and the first factor weighs in
favor of retaining jurisdiction.
ii. As To Whether The Federal Forum Is Less Inconvenient For The
Case and NASDI argue that there is no serious concern that Richmond County Supreme
Court is more convenient than the Eastern District. However, the City contends in opposition that
the Central Islip Courthouse is inconvenient. The Court believes that the Richmond County
courthouse is less inconvenient than the Central Islip Federal Courthouse. The actions all center
around the Ocean Breeze Project, which is in Richmond County. The City has offices throughout
the five boroughs of New York City, including Richmond County, but does not have offices in
Case is a Pennsylvania corporation, and Richmond County is closer to
Pennsylvania. Case and NASDI’s counsel are based in New York County, closer to Richmond
County than Suffolk County. Although the difference is not great, as the City points out, Central
Islip is 60 miles away from the Ocean Breeze Project site while the Richmond County courthouse
is down the road. “The distance between the state and federal fora has been deemed to render the
federal forum inconvenient.” SST Global Tech., LLC v. Chapman, 270 F. Supp. 2d 444, 465
Accordingly, the Court finds that the second factor weighs in favor of abstention.
iii. As To Whether Staying The Third-Party Action Will Avoid
The City and Case argue that. if the Court exercises jurisdiction over the action, it will
result in piecemeal litigation. On the other hand, NASDI states that if the Court were to exercise
jurisdiction over the action, it would not necessarily create piecemeal litigation. The Court is
concerned that if the third party action were to proceed, the result would be piecemeal litigation.
“The Supreme Court has stated that ‘the most important factor in our decision to approve
the dismissal in Colorado River was the clear federal policy of avoidance of piecemeal
adjudication.’” First Keystone Consultants, Inc. v. Schlesinger Elec. Contractors, Inc., 862 F.
Supp. 2d 170, 188 (E.D.N.Y. 2012) (quoting Moses H. Cone, 460 U.S. at 16 (internal alterations
omitted)); see also Arkwright–Boston, 762 F.2d at 211 (noting that, “[a]s in Colorado River, the
danger of piecemeal litigation is the paramount consideration”); Bull & Bear Grp. v. Fuller, 786
F. Supp. 388, 392 (S.D.N.Y. 1992) (finding abstention appropriate where “avoidance of piecemeal
litigation [was] strongly implicated”). However, the “mere potential for conflict in the results of
the adjudications, does not, without more, warrant staying [the] exercise of federal jurisdiction.”
Colorado River, 424 U.S. at 816. The Second Circuit has said:
[T]he primary context in which we have affirmed Colorado River abstention in
order to avoid piecemeal adjudication has involved lawsuits that posed a risk of
inconsistent outcomes not preventable by principles of res judicata and collateral
estoppel. The classic example arises where all of the potentially liable defendants
are parties in one lawsuit, but in the other lawsuit, one defendant seeks a declaration
of nonliability and the other potentially liable defendants are not parties.
Woodford v. Cmty. Action Agency of Greene Cty., Inc., 239 F.3d 517, 524 (2d Cir. 2001)
Here, NASDI’s bond holder is not a party, and Case has asserted a breach of contract claim
against them in its NYS bond action. Furthermore, Case’s claims against NASDI, the City and
Superior are not present in the third party action.
If the third party action were to proceed, both this Court and the New York State Supreme
Court would eventually rule on whether Case had satisfied its obligations under its contract with
NASDI, and whether the City was liable to NASDI. In this situation, there is a significant risk that
the courts could issue conflicting or contradictory rulings. Furthermore, the parties would be
forced to engage in duplicative discovery as well as repetitive motion practice. As the Court said
in Ferolito v. Menashi, 918 F. Supp. 2d 136 (E.D.N.Y. 2013),
[T]he federal and state courts would be considering the same issues and will likely
hear similar pretrial motions, evidence, and witnesses. Allowing such similar
actions to proceed in the federal and state courts under the circumstances would
waste judicial resources and invite duplicative efforts. . . . Moreover, the possibility
exists that the federal and state courts could come to conflicting decisions
concerning the same events. This factor weighs heavily in favor of abstention.
Id. at 143.
NASDI states that it “would not object to splitting the Superior claims and NASDI’s related
third-party claims off from this federal action and remanding them to [the NYS lien action], leaving
only the Diversified and Harrison claims left in this action.” (NASDI’s Mem. of Law at 10, ECF
No. 84–1). The Court finds this logic to be sound. If the Court were to stay the third party action,
only Diversified, Harrison and Superior’s claims would remain. Case has similarly said that it
would not oppose any amendments made by NASDI in state court to assert any of the claims that
NASDI has asserted here. The City also references the NY CPLR rule allowing parties to amend
their pleading, implying that it would similarly not oppose any motions to amend made by NASDI.
Accordingly, the Court finds that the third factor favors abstention.
iv. As To The Order In Which The Actions Were Filed, And Whether
Proceedings Have Advanced More In One Forum Than In The Other
The third party complaint was filed on March 25, 2016. It appears that the parties in the
third party action have recently begun discovery, and that discovery in the entire case is about to
close. However, apparently, no depositions have been taken in the third party action.
The New York State cases were brought in 2012 and 2015. NASDI states that no discovery
has been taken in either state case, and that Superior has not appeared or otherwise answered in
the NYS lien action. Case argues that because discovery has progressed so far in the federal case,
and it has only just been joined, it will be unduly prejudiced. Nevertheless, Case has not yet
answered NASDI’s third party complaint in this action, and answers have been filed in both New
York State Court actions.
As the state cases were filed before the third party action and Case has not yet answered
the third party complaint, the fourth factor weighs in favor of abstention.
v. As To Whether Federal Law Provides The Rule Of Decision
This is a diversity action, and NASDI has not brought any federal claims. If the Court were
to exercise jurisdiction, it would analyze the claims under New York State law. Where state law
provides the rule of decision, this factor weighs slightly in favor of abstention. De Cisneros, 871
F.2d at 309; Ferolito, 918 F. Supp. 2d at 143–44.
The Second Circuit has noted that “[a]s all diversity suits raise issues of state law, their
presence does not weigh heavily in favor of surrender of jurisdiction.” Arkwright-Boston Mfrs.
Mut. Ins. Co. v. City of N.Y., 762 F.2d 205, 211 (2d Cir. 1985). Where, as here, “the state law
issues are neither novel nor particularly complex, the absence of federal claims weighs only
slightly in favor of abstention.” Carruthers v. Flaum, 388 F. Supp. 2d 360, 377 (S.D.N.Y. 2005);
see also Vill. of Westfield, 170 F.3d at 124 (“[T]he absence of federal issues does not strongly
advise dismissal, unless the state law issues are novel or particularly complex.”).
Accordingly, the fifth factor weighs in favor of abstention.
vi. As To Whether The State Procedures Are Adequate To Protect The
Plaintiff’s Federal Rights
The analysis of the sixth factor in this case is the same as the fifth factor, and therefore the
sixth factor also weighs in favor of abstention. See Ferolito v. Menashi, 918 F. Supp. 2d 136, 144
(E.D.N.Y. 2013) (“The state court can adequately protect [the plaintiff’s] rights. [The plaintiff]
raises only state law claims against [the defendant], all of which can be sufficiently litigated in,
and resolved by, the state court. This factor weighs in favor of abstention.”).
c. The Result
Therefore, because five out of the six Moses H. Cone factors favor abstention, the Court
grants Case’s motion to hold the third party action in abeyance. “[T]he interests of all parties will
be better served by abstention because consolidation in state court could lead to more efficient
factfinding and more reasoned decision-making on these ordinary garden variety issues of state
law.” De Cisneros, 871 F.2d at 309 (internal citations and alterations omitted).
Accordingly, the Court grants Case’s motion to hold the third party action in abeyance
pending the outcome of the NYS Supreme Court cases. The Court grants the City and the Parks
Department’s motion to the extent that the Parks Department is dismissed from the action and the
third party action is held in abeyance. The City’s motion is denied to the extent that the entire
action will not be held in abeyance. The motion by Superior, Diversified and Harrison to strike
the third party complaint or to sever it is denied as moot.
The Clerk of the Court is respectfully directed to terminate the Parks Department as a third
party defendant. The third party action is stayed until further order, and the Clerk of the Court is
further respectfully directed to place this action on the suspense calendar. The stay is not final and
may be vacated if either party demonstrates unfair prejudice or if outstanding issues remain upon
completion of the state proceedings.
Counsel are directed to inform the Court within thirty days after the conclusion of the state
proceedings as to the determination of the state proceedings.
It is SO ORDERED:
Dated: Central Islip, New York
January 23, 2017
______/s/ Arthur D. Spatt______
ARTHUR D. SPATT
United States District Judge
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