Performance Bond Is Null And Void Because Obligee’s Action Deprived Surety Of Ability To Protect Itself

Posted: January 30, 2026 / Written by: Joshua Wurtzel, Thomas A. Kissane, Channing J. Turner, Samuel L. Butt / Categories Commercial, Summary Judgment

Performance Bond Is Null And Void Because Obligee’s Action Deprived Surety Of Ability To Protect Itself

On December 27, 2025, Justice Andrea Masley granted the Sureties’ motion for summary judgment dismissing the counterclaim and third-party claim for breach of a performance bond in Pizzarotti, LLC v. FPG Maiden Lane, LLC, Index No. 651679/2019. The Court explained:

The Performance Bond clearly provides that, once Fortis satisfies the conditions of Section 3.3 the Sureties shall promptly act on one of the four options listed in Section 5. (NYSCEF 325, Performance Bond at 2 [Section 5 – “When the Owner has satisfied the conditions of Section 3, the Surety shall promptly and at the Surety’s expense take one of the following actions… .”].) However, only one day after terminating Pizzarotti, and inquiring which of the four options the Sureties planned to exercise, Fortis entered into an agreement with Ray Builders to replace Pizzarotti, effectively stripping the Sureties of their rights under the Performance Bond and altering the terms of such. Specifically, Fortis’ action of hiring a new contractor deprived the Sureties of their right to exercise one of the performance options as provided for in Section; thus, rendering the Performance Bond null and void. (120 Greenwich Dev. Assoc., LLC v Reliance Ins. Co., 2004 US Dist LEXIS 10514, at *26 [SDNY June 7, 2004] [internal quotation marks and citation omitted] [stating that “courts have consistently held that an obligee's action that deprives a surety of its ability to protect itself pursuant to performance options granted under a performance bond constitutes a material breach, which renders the bond null and void”].)

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