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NYC v. CROSS BAY CONTR. CORP.

235 A.D.2d 10 (1997)

662 N.Y.S.2d 462

City of New York, Respondent, v. Cross Bay Contracting Corp. et al., Respondents, and Colonia Insurance Company, Appellant, et al., Defendants

Appellate Division of the Supreme Court of the State of New York, First Department.

September 16, 1997

Attorney(s) appearing for the Case

Joseph P. Asselta of counsel, Rockville Centre (Goldberg & Connolly, attorneys), for appellant.

Timothy J. O'Shaughnessy of counsel, New York City (Kristin M. Helmers on the brief; Paul A. Crotty, Corporation Counsel of New York City, attorney), for respondent.

Steven Koton of counsel, New York City (Daniel F. DeVita and Dennis C. Vacco, Attorney-General, attorney), for Commissioner of Labor of State of New York, respondent.

Kathleen M. Riedy, New York City, and Gideon A. Schor of counsel (Mary Jo White, United States Attorney for Southern District of New York, attorney), for United States of America, respondent.

MURPHY, P. J., ROSENBERGER, RUBIN and ANDRIAS, JJ., concur.

SULLIVAN, J.

The primary question on this appeal is whether a surety which has made payment under a payment bond issued in connection with a public improvement project is subrogated to the rights of the owner, the obligee under the bond, to contract funds it has withheld and entitled to priority over all other claimants to the withheld funds.

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