Opinion ID: 695148
Heading Depth: 2
Heading Rank: 1

Heading: The Allegations of Bolt's Amended Complaint.

Text: 5 Bolt's amended complaint (with attached exhibits) pleads that Naclerio Contracting Co., Inc. (Naclerio) was selected by the City in 1987 to be the general contractor for a project involving the restoration of the Eastern Parkway in Brooklyn, New York (the Project). In accordance with state law and City requirements, Naclerio obtained performance and payment surety bonds from Aetna Insurance Co. (Aetna). 6 On February 2, 1988, Naclerio ordered a number of items from Bolt for the Project, including world fair benches, hydrant fenders, and traffic sign posts. In 1990, the Project fell behind schedule, and Naclerio filed for bankruptcy protection. Bolt became concerned about Naclerio's ability to pay Bolt for materials ordered for the Project, and, in the summer of 1991, declined to accept any additional orders from Naclerio or to continue work on the February 1988 order unless the DOT guaranteed, in the event of a default by Naclerio, to purchase all materials ordered from Bolt by Naclerio for the Project. 7 As a result, Bernard McCoy, Deputy Commissioner of the DOT, sent a letter to Bolt dated September 25, 1991 (the McCoy Letter) which stated in pertinent part: 8 I have been requested by Naclerio Contracting Co., Inc. to communicate with you regarding payment for materials supplied by your firm, to be incorporated into the [Project]. 9 All conforming material ordered by Naclerio on their Purchase Order with you will be paid to Naclerio by the City of New York. 10 In the event Naclerio Contracting Co., Inc. defaults in its contract with the New York City Department of Transportation, the Department will purchase from Bolt Electric, Inc. all materials ordered specifically for the Eastern Parkway contract. 11 Immediately afterward, on October 1, 1991, Naclerio directed a purchase order to Bolt in the amount of $2,126,746.20 for lighting fixtures. Bolt thereafter performed under both outstanding purchase orders. In August 1992, after Bolt learned that the City was considering a declaration of default against Naclerio, Bolt obtained assurances from the City that the City stood by the commitment stated in the McCoy Letter. 12 On October 1, 1992, the City declared Naclerio in default. On October 26, 1992, prior to Bolt being informed about the default, City officials urged Bolt to continue its performance. Aetna assumed responsibility for completing the project pursuant to its performance bond. Aetna named a new general contractor and electrical contractor for the Project, but assured Bolt that it would be continued as the electrical supplier, and that the McCoy Letter would be honored. 13 Bolt was nonetheless terminated on February 12, 1993. The City and Aetna thereafter refused Bolt's demands that the City purchase the materials specified in the February 1988 and October 1991 purchase orders, as promised in the McCoy Letter, even though Bolt stood ready to perform, and had never breached, its obligations thereunder. Bolt alleged that as a result, the City ha[d] repudiated and breached the contract with Bolt memorialized in [the McCoy Letter]. 14 Bolt's complaint also alleged that Spring City Electrical Manufacturing Co. (Spring City), the new electrical supplier on the Project, had misused proprietary information supplied to Spring City by Bolt to displace Bolt as electrical supplier on the Project. Bolt's claims against Spring City are not involved in this appeal. 15