Opinion ID: 6497766
Heading Depth: 2
Heading Rank: 5

Heading: Breakdown of Commercial Relations

Text: In mid-2012, Transit entered into a non-exclusive agreement with another supplier for the next thirty subway stations. It informed Fiber-Span of its decision during a July 17, 2012 call. In the call, Fiber-Span claimed that updates to the retrofitted Nodes were always contingent on it being awarded the Full Build, but Transit repeated that it would not commit to a Full Build until the Nodes conformed to the Purchase Agreement and passed the necessary testing. If it were not already abundantly clear to Transit, it was now beyond doubt that Fiber-Span would not replace the Initial Build Nodes without a contract for the Full Build. 15 Following that call, Fiber-Span continued to repair the Nodes, provide service, and sell spare parts to Transit, as was required under the Purchase Agreement. Fiber-Span also continued to meet with Transit to discuss its role as a potential supplier for the Full Build. On or about September 28, 2012, however, it issued an invoice to Transit for the $450,000 IBC, perhaps as an acknowledgement that it was not selected for the Full Build. Transit, in response, refused to pay the IBC because the Nodes did not meet the Purchase Agreement’s specifications. The parties failed to achieve a resolution so, by July 23, 2013, Fiber-Span stopped servicing, repairing, or selling spare parts to Transit. Fiber-Span also ceased all communications with Transit. On September 4, 2013, Transit sent Fiber-Span a formal notice declaring Fiber-Span in breach of the Purchase Agreement. Two days later, Transit sent Fiber-Span’s surety provider, Allegheny, notice that it was demanding payment on the Bond. That was its first attempt to contact Allegheny “in the 29-month period between delivery and declaration of default[.]” (J.A. at 45.) Allegheny refused to pay. And, despite sending those notices, Transit continued utilizing the Nodes through May 2014 – more than three years after delivery.