Free Response to Motion - District Court of Federal Claims - federal

Case 1:04-cv-01665-CFL

Document 11-7

Filed 04/08/2005

Page 1 of 2

The Law Offices of

Neil B. Connelly
Sharon M. Edwards, Esq.

99 Church Street White Plains, New York 10601-1505

Telephone 914-328-4100 Facsimile 914-684-0401

March 4, 2005 VIA CERTIFIED MAIL-RRR John O'Boyle, Contracting Officer United States Coast Guard 311 Battery Road Staten Island, NY 10305 RE: Contract DTCGG1-01-C-3WK143 Painting of Coney Island Light ("Project")

Dear Mr. O'Boyle, This will acknowledge receipt of your February 14, 2004 letter entitled "Contracting Officer's Final Decision" and its attachment. Based upon the Contracting Officer's Final Decision ("Final Decision") and the Coast Guard's failure to provide this office with copies of any documents upon which the Coast Guard relied for its determination that there were deficiencies in the painting of the Coney Island Light as requested in this firm's November 18, 2004 correspondence to you, Nova Casualty Company ("Nova") hereby objects to the Final Decision. The Coast Guard has failed and/or refused to supply information to support its determination that improper installation of the paint mixture, rather than the Coast Guard's faulty specifications, was the cause of the painted Coney Island Light's "blotchy" appearance. Upon observing the Coney Island Light's appearance at a June 20, 2003 site meeting and without conducting further investigation, the Coast Guard summarily concluded that the Light's "blotchy" appearance was the result of deficiencies in the general contractor, Eagle Management Enterprises' ("Eagle Management") application of the paint mixture. A full investigation by the Coast Guard at the time the "blotchy" appearance of the Light was detected, may have yielded a number of other factors that could cause such an appearance. In particular, in preparation for painting, the Project required the removal of the existing lead paint from the exterior surface of the Light. The Coast Guard has offered no proof that once the lead paint was completely removed from the Light, the quality of paint and the number of coasts of primer and paint specified by the Coast Guard was sufficient to achieve the desired results. Although the Coast Guard's Final Decision mentions a meeting held on June 30, 2003 with the paint manufacturer, the substance of that meeting has not been made known to Nova. Moreover, the Coast Guard's Final Decision overlooks the Coast Guard's acceptance of the work by the painting subcontractor, Metron Environmental Limited ("Metron"), and Metron's

Case 1:04-cv-01665-CFL

Document 11-7

Filed 04/08/2005

Page 2 of 2

statements that it applied the paint to the Light in accordance with the contract specifications. Therefore, Nova hereby denies any present or future claim against the Performance Bond issued for this Project and, which is in connection with the Light's "blotchy" appearance. Under Paragraph (a)(1) of the Bond, Nova's obligations are conditioned upon its Principal, Eagle Management's failure to perform and fulfill all the terms and conditions of its agreement with the Coast Guard. In light of the Coast Guard's failure to establish, by way of documentary or other verifiable evidence, that Eagle Management's performance and painting installation caused the "blotchy" appearance of the painted structure, Nova disclaims any present or future Performance Bond obligations in this matter. Finally, subsequent to the Coast Guard's June 20, 2003 claim of Eagle Management's deficient performance, the Coast Guard issued payment in the amount of $25,303.50 to Eagle Management in July 2003. The Coast Guard's failure to hold payments due to Eagle Management once the dispute regarding Eagle Management's performance arose is clearly in violation of Nova's rights as surety and is unduly prejudicial. The $25,303.50 payment made by the Coast Guard to Eagle Management constitutes a waiver, to the extent of that payment, of the Coast Guard's rights under the Bond. Should you have any further questions or concerns, please contact the undersigned.

Very truly yours,

Neil B. Connelly Cc: Leonard J. Catanzaro, Esq. 434 Broadway, Suite 900 New York, New York 10013 w/ encls. Roslynn R. Mauskopf, Esq. United States Attorney Eastern District of New York 147 Pierrepont Street Brooklyn, New York 11201 SME/tbm