Town of New Windsor v. Inbro Development Corp.

OPINION OF THE COURT

Irving A. Green, J.

Motion by defendant for summary judgment dismissing plaintiff’s complaint.

Plaintiff seeks payment to it of the proceeds of a performance bond for the building of roads which was obtained by codefendants, developers, as a condition for final approval of a subdivision plan, which was granted.

The action to enforce payment of the bond was commenced prior to any construction by defendant surety’s principal or the issuance of any building permit to any party as to any of the six lots which comprise the subdivision parcel.

Subdivision 1 of section 277 of the Town Law places certain limitations upon the right of an obligee to collect the proceeds of a performance bond to enable the completion of improvements in relation to an approved land development. Once the performance bond has been declared to be in default, the collection of proceeds of the bond and expenditure of the proceeds to complete improvements is, nevertheless, restricted to an amount “commensurate with the extent of building development that has taken place in the subdivision”.

The plain meaning of the statute required “the payment of the face amount of the bond to the town so that it could complete improvements reasonably justified by that part of the subdivision which had been developed followed by a refund of any amount not needed to complete that portion of the work.” (Town of Shawangunk v Goldwil Props. Corp., 61 AD2d 693, 695.)

In this case, no part of the subdivision was developed which required completion of any improvements. The developers simply failed to commence any improvements or building activity in the approved subdivision. The condition of the bond, therefore, has not eventuated.

Accordingly, the motion is granted and the complaint dismissed.