Full opinion text
MEMORANDUM OPINION AND ORDER HAIGHT, Senior District Judge. At a bench trial in this diversity action, a construction company asserted a claim against a surety company to recover in quantum meruit for work performed during the renovation of a high school in the Bronx. The parties exchanged post-trial main and reply briefs. Counsel presented oral summations. This Memorandum Opinion and Order constitutes the Court’s findings of fact and conclusions of law pursuant to Rule 52(a). Fed.R.Civ.P. I.FINDINGS OF FACT 1. Plaintiff Aniero Concrete Company, Inc. (“Aniero”) is a New Jersey corporation maintaining its principal place of business in that state. 2. Defendant Aetna, Casualty and Surety Company (“Aetna”) is a Connecticut corporation maintaining its principal place of business in that state. 3. . In July 1992 the New York City School Construction; Authority (“SCA”) contracted with the P.J. Carlin. Construction Company (“Carlin”) for a large-scale modernization and renovation of the Morris High School in the Bronx (“the Project”). Carlin was the general contractor for the Project, and retained the services of a number of subcontractors. Aetna had issued a performance bond obligating Aet-na to complete the Project at its expense if Carlin failed to do so. That eventuality came to pass. Carlin was terminated from the Project, nowhere near completion, after little more than a year. 4. Aetna retained Aniero to act as replacement general contractor. At that time, Aetna and Aniero purported to enter into a written contract referred to as the “Completion Agreement.” However, the Court held in an earlier opinion that the Completion Agreement was invalid because Aetna failed to obtain the SCA’s written consent of Aetna’s assignment of the Carlin contract to Aniero. See Aniero Concrete Company, Inc. v. New York City Construction Authority, 1998 WL 148324 (S.D.N.Y. March 30, 1998). Accordingly Aniero’s claim against Aetna sounds in quantum meruit. 5. Aniero mobilized on the job site in March, 1994. It kept on some of Carlin’s subcontractors and retained others of its choosing. Aniero ceased working on the uncompleted Project on December 22, 1994, and, complaining of Aetna’s delays in making payments under the purported contract, commenced this action against Aetna on that day. 6. Aniero claims that Aetna owes Anie-ro a total amount of $4,007,620.75 in addition to the amounts Aetna previously paid to Aniero. Aetna clams that it overpaid Aniero in the amount of $2,548,174.41, and in consequence owes Aniero nothing in quantum meruit. 'Aetna did not press a claim for overpayment at the trial, although it has not abandoned that claim. The procedural posture of the case was such that at the trial Aetna confined its efforts to denying Aniero any recovery in quantum meruit. 7. The president and principal owner of Aniero is Stephen Crevani, Sr. (hereinafter “Crevani”). His son, Stephen. Crevani, Jr. (hereinafter “Crevani Jr.”) was also active in Aniero during the pertinent times. 8. Aniero was an active company from 1970 until 1995, when it withdrew from the Project. It was a general contractor, developer, and reinforced concrete contractor. During Aniero’s years of operation, Crevani at one time or another performed all functions at this small company: estimating costs for bids, working and supervising at the job sites, working in the office, and overseeing all aspects of the business. 9. Having been retained by Aetna as the general contractor replacing Carlin, Aniero began work at the site of the Project during, the week ending on March 25, 1994. Aniero’s last day on the job was December 22,1994. 10. Aniero established several trailers at the job site. The main trailer was used as a field office, containing computers, copy machines, fax machines, calculators, filing cabinets, and other office equipment. Aniero’s permanent office was located in Hackensack, New Jersey. Other trailers at the job site were used for storage purposes and to accommodate some of Anie-ro’s subcontractors. 11. Given the near total renovation of a large multi-story school building, it is not surprising that Aniero used the services of many subcontractors specializing in the full gamut of the building trades. The names of those subcontractors, some 95 in number, are listed in Appendix A to Anie-ro’s Main Post-Trial<Brief, and incorporated in these Findings by reference. 12. When Aniero began working on the Project in March 1994, Crevani Jr. was in charge at the job site every day. However, in May Crevani Jr. told his father that he was encountering difficulties which required his father’s greater experience to confront. From May until Aniero ceased work in December 1994, Crevani was at the job site virtually every day. 13. Also present at the job site on ■& daily basis, working out of the Aniero trailers, were Steve Berdel, Aniero’s field superintendent for the Project, and Paul Jennings, Aniero’s project manager. Ber-del was an employee of S2 Management, Ltd., with which Aniero contracted to obtain his services. Berdel oversaw the subcontractors, made sure that they pem formed their work according to plans and specifications and on schedule, checked the quantity and quality of the subcontractors’ work, and reported his observations to Jennings. Jennings, a licensed architect, was employed by R.J.W. Architecture, P.C., with which Aniero contracted to obtain Jennings’ services. Aniero considered that it was important to have a licensed architect as the manager of a Project which required renovations and hew work to be incorporated into a large existing structure. Jennings made sure that the work performed was architecturally, structurally and mechanically correct and in accordance with the SCA’s drawings. Jennings and two other individuals employed by R.J.W. Architecture reviewed and coordinated the shop drawings pursuant to which the subcontractors performed their work. Jennings, together with Berdel, reviewed the quantities of work performed by the subcontractors and, in connection with the payment requisition process described infra, met with representatives of Kreisler Borg Florman General Construction Co. (“KBF”), SCA’s construction manager. 14. Aniero was responsible for the payment of invoices submitted to it by its subcontractors. Such payments, when made, became items of cost incurred by Aniero on the Project. Aniero periodically prepared requisitions for payment (“requisitions”) by which it sought payments on account for the work it had performed and costs it had incurred on the Project during a specified time frame. Aniero submitted those requisitions to SCA, to KBF, and to Hudson International Group (“Hudson”), consultants and engineers, which Aetna, required by its surety bond to accomplish completion of the Project, had retained as “its construction consultant.” Carlos Guerrero was the consultant advising Aet-na on the Project; he had rendered such services to Aetna in the past and worked out of Hudson’s offices in this case. Hudson would review the requisitions on behalf of-Aetna. The payment requisition process is further described in ¶ 23 of these Findings. 15. Two of these requisitions and accompanying correspondence are in evidence as PX 1248 and PX 1250. PX 1248 includes a 12-page single-spaced “Request for Payment” prepared by Aniero covering work performed and costs incurred from June 1 through June 80,1994. The first of these pages contains six numbered columns captioned, left to right, “Item of Work,” “Total Value of Work (Dollars Only),” “Percent Completed,” “Total Value of Work Completed,” and “Value of Work Completed,” the last-named column being broken down into two sub-columns captioned “Last Request (Dollars Only)” and “This Request (Dollars Only)” The column captioned “Item of Work” contains references to 27 particularized sorts of work (“Auditorium,” “Structural,” “Plumbing,” and the like), as well as references to “All Other Work,” “Exterior Work,” and “Change Orders.” Dollar figures or percentages (as the case may be) appear for each of these references under the respective captions. There is also a 5% deduction for “retainage” (the amount that building owners typically retain in an effort to assure that the contractor will finish the job satisfactorily). The next 11 pages contain a “detailed break down thru 06/30/94,” with comparable captions; 516 separate work items are listed. 16. Aniero’s “Request for Payment” forming a part of the requisition which is PX 1250 follows the same format and covers the work performed and costs incurred during the period July 1, 1994 to August 31,1994. 17. Hudson examined Aniero’s Request for Payment included in PX 1248 and, after making certain adjustments, certified the amount of $1,120,903 as the “Net Amount Due Completion Contractor this Pay Application from the Surety.” In the parlance of the Project, Aniero was the “Completion Contractor,” Carlin was the “Defaulted Contractor,” and “the Surety” was Aetna. Hudson’s analysis is dated August 9, 1994, and the exhibit contains a copy of a check bearing that date and in that amount, drawn by Aetna to Aniero’s order. 18. Hudson’s analysis, dated September 16, 1994, of Aniero’s Request for Payment forming a part of PX 1250 certified the amount of $3,064,135 as the “Net Amount Due Completion Contractor this Pay Application from the Surety.” The exhibit does not contain any proof of what Aetna paid on this requisition or when it was paid. 19. It should be noted that Aniero was submitting these payment requisitions at a time when all concerned shared the impression that Aniero and Aetna had entered into a binding contract for the completion of the Project after Carlin’s default. Thus it is that the Hudson documents forming parts of PX 1248 and 1250 recite that the original (Contract Sum) (Guaranteed Maximum Price) was “18,-800.000.” Those documents were generated before litigation began and this Court eventually held that the Completion Contract between Aniero and Aetna was invalid, see fn. 2, supra, thereby transforming Aniero’s claim against Aetna from one sounding in contract to a claim in quantum meruit. 20. As noted, Aniero also submitted its requisitions for payment for review by KBF, the SCA’s technical representative, which performed the oversight functions for SCA that Hudson performed for Aetna. 21. Aniero’s requisitions were accompanied and supported by detailed documentation. For example, Crevani testified that “[ejvery subcontractor had to submit a certified payroll” at the end of each month, and “[w]hen we submitted the final requisition, all that paperwork every month had to be submitted to Kreisler Borg, the representative of the SCA.” Tr. 671. A subcontractor would submit to Aniero a less formal “work sheet” on a weekly basis, which Aniero, after checking the claimed hours with Berdel and Jennings, would use to compute how much to pay the subcontractor “every week”; Cre-vani continued: Then, also, at the end of the month, then he [the subcontractor] backed it up with the certified payroll- that we had to submit to the SCA for final payment of our requisition. Without the certified payroll and all the documentation, they would not-process our requisitions. Tr. 679. Crevani expanded on this subject during re-direct examination: Q. Now, Mr. Crevani, you indicated that, and you indicated this on cross-examination, I believe .you said it just again, that the certified payrolls are part of the package that’s submitted? A. That’s correct, to Kreisler Borg in conjunction with the other paperwork for payment of our requisition for the month. Q. Could Aniero have gotten paid without a submission of certified payrolls- to Kreisler Borg? A. No, they would not have paid us. They would not process the requisition unless they received all the paperwork. That’s part of the paperwork. Q. Did Kreisler Borg, to your knowledge, review the certified payroll to determine whether or not the certified payrolls were accurate? A. Yes, they did. MR. LEPELSTAT [counsel for Aetna]: Objection. THE COURT: If he knows. A. [by the witness] Absolutely. As a matter of fact, on one occasion or two occasions, I believe it was one occasion, they had some questions about it. They brought in one of our subs because of one of the categories he put down. They had meetings with the agency that represented New York School Authority in reference to the classification because they wanted to make sure it was in conjunction with prevailing wages. That was all resolved and it was fine. But they definitely, absolutely reviewed everything, yes. Q. Is the accurate nature of the certified payroll forms that were submitted to Kreisler Borg and then to the SCA something that, if you know, was critical to Kreisler Borg and SCA? A. Yes. Tr. 755-6. 22. I accept this testimony as an accurate description of the processes by which Aniero supported and submitted its requests or requisitions for payment to Kreisler Borg and the SCA (as well as to Hudson and Aetna). 23. Carlin, the defaulted contractor, had submitted 16 requisitions to the SCA before being discharged from the Project, numbered 1 through 16. Aniero submitted five requisitions of its'own before leaving the Project in December 1994. Aniero started its own sequence of numbers, but those in charge of the Project also retained the numbering that began with Carlin. Thus Hudson’s communication dated August 9, 1994 (PX 1248) references “Aniero Requisition # 2 / NYCSCA # 18,” and its September 16, 1994 communication (PX 1250) references “Aniero Requisition # 3 / NYCSCA # 19.” Using the SCA numbering, Aniero formally submitted requisition numbers 17, 18, 19, 20, and 21 to the SCA and the technical supervisors, KBF and Hudson. Aniero also prepared a “pencil copy” for Requisition 22 and prepared a draft. of Requisition 23 at its office, but these were not formally submitted for payment. With respect to requisitions submitted by Aniero, the procedure was that if SCA, advised by KBF, approved the requisition, SCA sent a check for the authorized sum to Aetna. SCA’s payment to Aetna would trigger a payment by Aetna to Aniero of an amount approximately 21 % higher than SCA’s payment to Aetna. The reason for that increase is that SCA’s obligations were governed by the defaulted Carlin contract, which had a fixed maximum amount of $18,800,000. When Carlin defaulted, Aetna became responsible under its performance bond to complete the Project at a total cost to SCA that did not exceed the Carlin contract, which at that time had some $14,000,000 remaining to be spent. However, Aniero’s winning bid to Aetna to be the completion contractor was in a higher amount than that, and so every payment that Aetna made to Aniero included a “roughly right around 21 percent premium that was paid over and above what the SCA paid Aetna.” KBF' and SCA approved all five of Aniero’s submitted requisitions. The fifth Aniero requisition covered work on the Project during October 1944. Aniero submitted the requisition to SCA, which paid the authorized amount to Aetna. Aetna then cut a check in the amount of $315,000, payable to Anie-ro, but for some reason the record does not reveal Guerrero, whose responsibility it was, never delivered the check to Anie-ro. 24. The parties stipulated at trial that while Aniero was performing work on the Project, Aetna paid Aniero a total of $6,781,069, and also credited Aniero with $25,000 in respect of windows used on the Project and paid for by the SCA. The trial came about because Aniero claims that it is owed in quantum meruit more than Aetna paid, while Aetna claims that Aniero was overpaid. 25. Aniero’s proof at trial showed that it frequently made payments “on account,” usually in round figures, to subcontractors. Crevani described the necessity for making these payments on account during his direct testimony: Almost every single subcontractor] we paid basically on account because we didn’t receive payment for our first requisition for like three months into the project. As a matter of fact, we were on the project eight months and we only received four payments. So most of our subs in order to sustain them to continue to do work there we had to pay them money, and so we paid almost every one of our subs on account. Tr. 43. 26.For the most part, Aniero’s proof of payments “on account” to subcontractors consisted of the cancelled checks, some accompanied by minimal supporting documentation, others with no supporting documents. With respect to each such check, Crevani gave substantially similar testimony. An example is furnished by the on account payments Aniero made to Chapman & Evans, Inc., the subcontractor for heating, ventilating and air conditioning (“HVAC”). Crevani testified on direct examination: Q. I show you then a check marked P204 and ask you, have you ever seen that, and what that check is for? A. That was also a check for $10,000 for June 17 paid on account, the actual check. Q. It was paid to Chapman & Evans? A. Yes, it was. Q. Again, Mr. Crevani, at the time these on account payments are made, the work which had been performed by Chapman & Evans up until that time was equal to or in excess of the total amount that you were paying? A. Yes. Tr. 57. A main thrust of Crevani’s trial testimony was that every subcontractor who received a payment “on account” from Aniero had, at the time of the payment, performed work at the Project or furnished materials to the Project of a value equal to or in excess of the amount of the on account payment. . . . 27. The procedure by which Aniero ascertained that the value of a subcontractor’s work was equal to or in excess of a payment on account at the time the payment was made was described by Crevani in an exchange with the Court: THE COURT: Now, tell me, you may have told me earlier, but tell me again, how it comes about that a particular amount, such as the amounts appearing on Exhibit 444A, are calculated in order to quantify the payment on account? THE WITNESS: Like I previously stated before, my son at that time and myself, myself or my son, plus my superintendent, field superintendent, Steve Berdel, he would actually walk through with each subcontractor that was requesting payment and analyze the amount of work to see if it was equal or more than the moneys they were requesting. And the volume of the work that they performed, if he was satisfied and he would negotiate back and forth with them, in some cases he just said, Look, if right now we are not getting money from them, you will have to be satisfied with this amount, even though he feels'that the volume of work that they performed is more. But in no case ever did we pay a subcontractor more money than the volume of the work they performed. So it would have to be OK’d by Steve Berdel and Paul Jennings, my project manager, and either myself or Steve that was on the job at the that time. THE COURT: You have described for me, have you not, the practice that you followed in the business with respect to calculating the amount of payment on account that should be made to any particular subcontractor? THE WITNESS: Absolutely. You check the unit prices, you see the amount of linear feet of electrical wiring he does, you see the amount of fixtures that hé would put in, you see the amount 'of work on intercoms, if he worked on alarm systems, you calculate the amount of volume of work that he had performed and there — you have unit prices for each of these items, and you would multiply it out and you wodld come up to a figure and then you would come up with the gross amount of work that he performed, ten you deduct retainage, and then approve X amount; That’s the normal procedure. Tr. 100-101. .. 28. The cross-examination of Crevani by counsel for Aetna made it plain that with respect to such payments to subcontractors “on account,”, Crevani was unable (in the absence of any supporting vouchers or invoices) to recall at trial the precise amount of labor performed or materials supplied by the subcontractor in question at the time of the payment. The following testimony with respect to two payments Aniero made to Promo Pro, Inc., Aniero’s principal subcontractor (see ¶¶ 29-30, infra), is typical:, Q. [by counsel for Aetna, on cross-examination]: I turn your attention to Exhibit 482, a check from Aniero Concrete to Promo Pro dated June 24, 1994, for $16,000. Is this another one of those payments which you’ve described as payment on account, sir? A. Yes, it is. Q. And do you not know the total number of man-hours that Promo Pro had expended on the project as of the date of this payment, dated June 24,1994? A. At that time, they exceeded the number- — the hours and the labor and the materials exceeded the amount of money I paid them. Q. But you can’t testify as to the total number of man-hours expended on the project by Promo Pro as of the date of this payment, correct? A. As we sit here, as of the date of the payment I could, but not as we sit here today. Q. Nor could you testify as to the total quantity of carpentry work performed by Promo Pro on the project as of the date of this payment; isn’t that correct? A. I could at that date but not at this date. Q. And isn’t it further true that you cannot testify as to the total quantity of demolition work performed by Promo Pro on the project as of the date of this payment, June 24,1994? A. Not today. * * * * * * Q. Let’s take a look at Aniero Exhibit 496, which is a check to Promo Pro dated September 22, 1994 in the sum of $115,000. Do you see that check? A. Yes, I do. Q. Was this another payment made to Promo Pro on account? A. Yes, it was. Q. As you sit here today, do you know the total quantity of carpentry work which Promo Pro performed on the project as [of] the date of this check which is dated September 22,1994? A. As I stated before, I don’t know today, but when I wrote this check I knew definitely this payment was less than the value of the work that he had already performed. Q. And do you know the total quantity of demolition work which Promo Pro had performed on the project as of the date of this check? A. Same answer. Q. You don’t know. A. As I sit here today. But at the time of the cheek I did. Tr. 658, 682-3. Crevani gave comparable testimony with respect to all payments on account to subcontractors where Aniero’s files at the time of trial did not contain detailed invoices, vouchers or payrolls referring to the payments. 29. Notwithstanding Crevani’s inability at the trial, in the absence of supporting documents, to describe in detail the number of hours of work performed or materials supplied by a particular subcontractor at the time of a payment on account by Aniero to that subcontractor, I accept as credible Crevani’s testimony concerning Aniero’s payments on account to subcontractors and the procedures by which the amounts of those payments were calculated. Specifically, I accept Crev'ani’s testimony that at the time of such a payment to a subcontractor, the value of the work performed or materials furnished by the subcontractor equaled or exceeded the amount of the on account payment. The reasons why I accept that testimony are stated more fully in Part II.D.l., infra. 30. It follows that I find that Aniero’s payments on account to its subcontractors establish for quantum meruit purposes the fair and reasonable value of the work performed and the materials furnished by the subcontractors in question at the time Aniero made the payments. The amounts of Aniero’s payments to subcontractors, which Aniero includes in its quantum me-ruit claim against Aetna,, are proved with respect to each payment to each subcontractor by the original, endorsed checks drawn on Aniero’s account, which were received in evidence on Aniero’s case in chief. 31 The pattern of payments on account by Aniero to its subcontractors described in the preceding paragraphs was altered somewhat by its payments to the subcontractor to which Aniero paid by far the largest amount: Promo Pro Ltd; Promo Pro, which had the most manpower of any of the subcontractors, performed demolition work, rough and finished carpentry work, renovation of the auditorium, cleaning work, and other tasks at the Project. In addition, the principal of Promo Pro, one Lakis Papadopoulos, assisted Aniero in settling disputes with other subcontractors, responded to emergencies arising at the Project, and eventually took over the window installation work at this very large school building. 32. While originally Aniero had contemplated entering into a lump sum contract with Promo Pro for the carpentry and miscellaneous work, Promo Pro’s expanding responsibilities led to an agreement that Aniero would pay Promo Pro on a time and material basis for the work Promo Pro performed at the Project. 33. Ultimately the amounts Aniero paid to Promo Pro for labor and materials Promo Pro supplied to the Project totaled $1,387,590.79. The nature of these payments varied over time. At the beginning of Promo Pro’s involvement, in May 1994, Aniero made an “on account” advance payment of $200,000 to cover Promo Pro’s mobilization on the Project, and the purchase of materials and special machinery to fabricate woodwork for the auditorium. There was a particular reason why important subcontractors such a Promo Pro had to be paid in advance by Aniero to obtain materials from third-party vendors. Cre-vani testified, and I find, that “a lot of people were owed money, a lot of vendors were owed money from the previous contractor,” the defaulted Carlin, so that the Project had acquired an unfavorable “stigma,” with the result that “everybody, all the vendors, were very reluctant to do business in reference to that Project,” so that “all the major subs, including Promo Pro and everybody else, had difficulty because they needed money up front to buy materials.” Tr. 206. 34.During June and July, Aniero made additional “on account” payments to Promo Pro with respect to -labor and materials Promo Pro supplied to the Project. During August, September, October, November and December, most of the payments Aniero made to Promo, Pro were for payroll, that is, to cover the wages of Promo Pro employees working on the Project. Ordinarily, Crevani testified, during the course of. a job a subcontractor (such as Promo Pro) .-pays its own. employees their wages and then bills, the general contractor (here Aniero) for labor, and materials. The general contractor, in turn, includes those charges in one of'its periodic payment requisitions addressed to. the building owner, then the general contractor “would pay that sub.” Tr. 254. However, that orderly procedure could not be followed on this Project because, as Crevani testified and I find, Aniero encountered delays in receiving payments from Aetna (“it took us four months to get our first requisition,” Tr. 254), with the result that Aniero had to undertake -to pay its subcontractors’ ongoing payrolls “in a lot of cases,” including that of Promo Pro. Tr. 255. The checks which Aniero wrote to Promo Pro for payroll purposes, which are in evidence, were endorsed by Promo Pro for deposit into its payroll account. 35. Frustrated by the delays Aniero had encountered in receiving payments from Aetna on its requisitions, Aniero ceased work on the Project and left the job site on December 22, 1994. A number of Aniero’s subcontractors pressed claims against Aniero for additional amounts the subcontractors contended they were owed. Those subcontractors included Alpha Omega Restoration Corp. (“Alpha”), Total Construction Co., Inc. (“Total”), Exeter Architectural Products Corp. (“Exeter”), and U.S. Flag Security Systems (“Flag”). Aniero settled these claims, but in order to fund the settlements found it necessary to borrow the amounts from General Accident Insurance Company of America (“General Accident”), Aniero’s bonding company for the Project. Specifically, Aniero borrowed $235,000 from General Accident to settle Alpha’s claims; $95,000 to settle Total’s claims; $18,964.15 to settle Exeter’s claims; and $13,000 to settle Flag’s claims. Each loan was evidenced by an interest-bearing promissory note given by Aniero to General Accident, secured by a collateral assignment of partnership interests executed by Aniero and Crevani personally. See. e.g., PX 51 (the promissory note covering the $235,000 Aniero borrowed from General Accident to settle Alpha’s claims). Subsequently Anie-ro entered into a settlement with CGU Insurance Company, General Accident’s successor in interest, pursuant to which Aniero repaid these loans, which totaled $361,964.15. 36. One subcontractor with whom Aniero engaged in litigation was Degmor, Inc., the asbestos removal subcontractor at the Project. Aniero made “on account” payments to Degmor, in the manner previously described, which total $135,000. But Degmor claimed that it was owed more for the work it performed on the Project, and has sued Aniero and General Accident in a New York state court, demanding $300,000. Aniero asserted counterclaims. The action was pending at the time of the trial of the instant case. Crevani had offered his opposite number at Degmor an additional $100,000 to settle the case, but Degmor rejected the offer at the time. Crevani testified at the trial that by his estimate, the value of the work performed by Degmor for which it had not been paid was $100,000. While this Opinion was in preparation, counsel for Aniero advised the Court that the state court case was settled by payment of an additional $150,000 by Aniero to Degmor. Counsel asked the Court to reopen the record to receive proof of that settlement. Aniero’s position now is that it is entitled to include in its quantum meruit claim against Aetna the $135,000 previously paid to Degmor and the additional $150,000 called for by the settlement. Counsel for Aetna objected to reopening the record for that purpose. I reopened the record and have received a transcript of the state court hearing at which the settlement amount was memorialized, but reserving decision with respect to its recoverability as part of Aniero’s claim against Aetna. That question is discussed in Part II.H., infra. 37.In one instance, Aniero recovered money from a subcontractor. Aniero’s electrical subcontractor on the Project was Lazer Electrical Corp. (“Lazer”), with whom Aniero had a less than harmonious relationship. Laser was not satisfied with the $728,000 Aniero paid it for work at the Project. Apparently Aniero’s contract with Lazer contained an arbitration clause, and Lazer commenced an arbitration proceeding against Aniero, seeking an award of additional payments. Aniero filed a counterclaim in the arbitration proceeding, contending that as the result of payments for the same work by SCA and Aniero, Lazer had been overpaid. The arbitration resulted in an award directing Lazer to pay Aniero $238,000. Lazer did not pay the award. Aniero sued Lazer in a New York state court to confirm the award and enter judgment upon it.- Lazer opposed that action and lost, but refused to pay the resulting judgment. Aniero sought to execute on its judgment by levying against monies SCA owed Lazer for work performed at the Project after Aniero left it. That action prompted SCA to start a state court interpleader action.' Aniero prevailed in that action.’ Ultimately Lazer paid Aniero the sum of $238,317.67’ in respect of this matter. No fee-shifting provisions applied to the case, so Aniero had to bear, its share of the costs for the arbitration proceeding in the amount of $8,800; attorney’s fees incurred for the arbitration and first civil action against Lazer in the amount of $99,846.90; and attorney’s fees and costs incurred for the SCA interpleader action in the amount of $22,989.03. These fees and costs served to reduce. Aniero’s net recovery on its arbitration award against Lazer to $106,681.74. 38. After Aniero left the Project on December 22, 1994, its forces withdrew to Aniero’s headquarters in Hacksensack. Berdel, Aniero’s Project field superintendent and an employee of ,S2 Management, Ltd., and Jennings, Aniero’s Project manager and an employee of R.J.W. Architecture, P.C., while no longer at the job site, continued to perform services for Aniero at the Hackensack office. Crevani testified that Berdel and Jennings “set up the computers from the [job site] office trailer in Aniero’s Hackensack office in order to analyze subcontractors’ claims and close out the Project.” Aniero’s Main Post-Trial Brief Brief at 43. Crevani negotiated lower rates of compensation to S2 Management for Berdel’s services and to R.J.W. Architecture for Jennings’s services after these two individuals left the job site and began to work out of the Hacksensack office. For that later work, Aniero paid S2 Management $45,397.24 for Berdel’s services and R.J.W. Architecture $193,038.44 for Jennings’s services. 39. In addition to making on account payments to certain subcontractors to help them’ meet their payrolls, Aniero of course had its own payroll to meet. The parties stipulated to the' amounts of Aniero’s payroll costs for Aniero employees other than Crevani (including Crevani Jr.) and for Crevani himself. See Court Ex. 3. During the period April 12, 1994 through December 22, 1994, payments to other Aniero employees and the payroll tax obligations Aniero incurred in consequence totaled $350,056.78. Court Ex. 3 at ¶ 1. During the period May 12, 1994 through December 22, 1994, Crévani’s salary payments and related employer tax obligations totaled $142,617.12. Id. at ¶ 2. These stipulated amounts total $492,673.90, which Aniero includes in its quantum meruit claim against Aetna; that amount reflects some relatively minor allocations'Aniero made to allow for the minimal amount of non-Project related work, testified to by Crevani, that was going on at the time. The stipulation is a limited one; it states that “Aetna does not concede the value, appropriateness or allocation of the amounts set forth in paragraphs 1 and 2 as Aniero’s payroll costs for the Morris High School project.” Id. at ¶ 4. 40. It is also worth noting that the amounts of Aniero’s payments to 39 subcontractors were stipulated to by the parties. ■ Those subcontractors are listed in Appendix A to Aniero’s Main Post-Trial Brief at 3-4. 41. Aniero’s payments as described in these Findings, either in particular or more generally, total $7,957,589.95, which Aniero claims as actual job costs in its quantum meruit claim. See Appendix A to Aniero’s Main Post>-Trial Brief at 5. Based upon that cost total, Aniero claims an additional 15%, or $1,193,638.49, for “overhead and profit.” Aniero’s proof in support of that percentage consists principally of Crevani’s personal expectation. He testified on direct examination: Q. Mr. Crevani, is it customary for Aniero in a project where the work was being performed on a cost-plus basis to assess or include an amount for overhead and profit? A. Yes. it is. Q. Would you tell the court on a job of this nature, extent and magnitude of the Morris High School project what Aniero would expect to receive for overhead and profit and why? A. Yes. Aniero would expect to receive 15 percent overhead and profit in a job of that magnitude. Tr. 573. Responding to a question by the Court, “15 percent of what?”, Crevani said: “15 percent of your actual costs.” Id. Cre-vani then expanded somewhat on this concept: THE COURT: Let me withdraw my question and ask it a different way. Of the 15 percent, Mr. Crevani, what portion is overhead and what portion is profit? A. When we calculate overhead and profit, it’s not an exact percentage for each item. It could vary based on the percentage of work or the quantity of work that you have at the time. Because basically you have like a fixed overhead with our yard and our office, and if you have a tremendous amount of work going, then you would allocate your overhead and it would be a less percentage. If you don’t have that much work going on, then of course the percentage of the overhead is going to be a little bit more, and so that would reduce the profit. So based on that, of course the more — it’s still 15 percent total in its entirety, but it will fluctuate. Sometimes it will be 10 percent for profit, 5 percent for overhead. Sometimes it may be 9 percent and 6 percent. It will fluctuate. But the total aggregate of both would be 15 percent. Tr. 574., Aetna’s principal contention on this aspect of the case is that this proof is insufficient in law to sustain any allowance for overhead and profit. 42. Appendix A to Aniero’s Main Post-Trial Brief sets forth the calculations of its quantum meruit claim against Aetna. Adding the overhead and profit claim of $1,193,638.49 to the total' job costs of $7,957,589.95 gives a total gross claim of $9,151,228.44, against which Aniero credited the $6,781,069.00 received from Aetna and the stipulated $25,000 reduction, giving a sub-total of $2,345,159.44. To this amount Aniero added $1,195,566.97 for 9% prejudgment interest from December 22, 1994 to August 12, 2000 (the date of the judgment in Aniero’s favor against Lazer), which gives a further sub-total of $3,540,726.41. Aniero then credited Aetna with $106,681.74, representing Aniero’s net recovery from Lazer, which gives yet another sub-total of $3,434,044.67, to which Aniero added $473,575.58 for 9% pre-judgment interest from August 13, 2000 to December 18, 2002, giving yet another sub-total of $3,907,620.25, to which Aniero added $100,000 to reflect Crevani’s evaluation of the Degmor subcontractor claim, at that time still pending in the state court. Thus Aniero’s total claim against Aetna, as set forth its brief, is $4,007,620.25, an amount which, Aniero calculates, would yield $551.95 per diem interest until the entry of judgment. Those figures are subject to adjustment if Aniero is entitled, as it contends, to increase the cost of Deg-mor’s services from the $100,000 Crevani estimated at trial as the value of Degmor’s uncompensated work to the $150,000 Anie-ro paid to settle Degmor’s claim. Aetna’s position is that it overpaid Anie-ro, and in consequence owes Aniero nothing in quantum meruit. II. DISCUSSION A. The Nature of a Quantum Meruit Claim As I have held in prior opinions in this case, Aniero did not have an enforceable contract with the SCA or Aetna covering the construction work Aniero performed on the Morris High" School Project. Accordingly Aniero’s claim against Aetna sounds in quantum meruit. Claims for unjust enrichment or quantum meruit “are non-contractual, equitable remedies that are inapplicable if there is an enforceable contract governing the subject matter.” R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 60 (2d Cir.1997) (citation omitted). “Quantum meruit is an equitable remedy.” McNamee, Lochner, Titus & Williams, P.C. v. Higher Education Assistance Foundation, 50 F.3d 120, 125 n. 1 (2d Cir.1995) (citing New York cases). “Quantum meruit is an equitable remedy that is awarded when the circumstances are such that equity and good conscience require the defendant to make restitution.” Tappe v. Alliance Capital Management L.P., 177 F.Supp 2d 176, 186 n. 10 (S.D.N.Y.2001) (internal quotation marks and citations omitted). “Recovery under the quantum meruit theory is derived from principles of equity and fairness and is allowed where there is substantial performance but not full completion of the contract.” 66 Am.Jur. Restitution and Implied Contracts, § 93. Accordingly, in evaluating the rights and obligations of Aniero and Aetna, I must apply those principles of fairness that traditionally inform the decisions of a Chancellor in Equity. B. Quantum Meruit Claims in the Construction Industry Numerous cases decided. by courts in this Circuit or by New York state courts consider claims in quantum meruit asserted in the context of building construction projects. Certain guiding principles may be derived from that body of case law. Under a quantum meruit claim, a building contractor may recover its actual job costs for work, labor and services performed and material furnished, plus an allowance for overhead and profit. The claimant bears the burden of proving its actual job costs. To sustain a judgment there must be a definite and logical connection between what is proven and the damages sought to be recovered, which cannot be speculative or conjectural. Although overhead and profit may sometimes be established as a percentage above direct costs, courts may require specific evidence of overhead and profit. In the present case, Aniero must show that the reasonable value of its work (including any allowance for. overhead and profit justified by the evidence) exceeds by a sufficiently quantifiable amount'the payments it has received from Aetna. C. Summary of the Parties’ Contentions Aniero claims “actual job costs” of $7,957,589.95, and 15% of that figure, or $1,193,638.49, for overhead and profit. From the resulting total of $9,151,228.44, Aniero deducts payments received from Aetna in the stipulated amounts of $6,781,069 and $25,000, resulting in a net claim of $2,345,159.44. Aniero also claims prejudgment interest at 9% on that amount, credits Aetna with $ 106,681.74 representing Aniero’s net recovery on its claim against a subcontractor for overpayment, and adds a claim of $100,000' arising out of then-pending litigation with another subcontractor (now increased to $150,000, the amount Aniero paid to settle the case). Aetna contends that Aniero is entitled to no recovery. It argues principally that Aniero has failed to prove the value of the subcontractors’ work for which Aniero paid; that Aetna is entitled to various credits (or reductions) against Aniero’s quantum meruit claim; that Aniero has not proved an entitlement to allowances for overhead and profit; and that Aniero should not be awarded prejudgment interest. For the most part, this Opinion discusses those contentions in that order. D. Aniero’s Claimed Actual Job Costs 1. The Nature and Quality of Aniero’s Proof with Respect to Payments to Subcontractors As noted, a major component of Aniero’s quantum meruit claim against Aetna is a total for “job costs” of $7,957,589.95. Most of that amount represents payments Anie-ro made to subcontractors who performed work at or furnished materials to the Project. Aniero’s proof on this aspect of the case is derived almost entirely from the testimony of Stephen Crevani, Sr. and the exhibits received in evidence during that testimony. After the trial was concluded and post-trial briefs and reply briefs exchanged, the Court scheduled closing arguments (or summations) by counsel. In advance of those arguments, and in preparation for them, I entered and sent to counsel a Memorandum, reported at Aniero Concrete Company, Inc. v. New York City Construction Authority, 2003 WL 21018842 (S.D.N.Y. May 5, 2003) (the “May 5 Memorandum”). In that Memorandum I observed: During its performance as the general contractor at the Morris High School project during the period March-December 22, 1994, Aniero did relatively little work itself. Most of the work was performed by subcontractors retained by Aniero. For the most part, plaintiffs proof of the “actual job costs” underlying its claim consists of checks it drew to the order of the sub-contractors, denominated “payments on account.”.... But there is an almost complete absence of contemporaneous explaining, detailing, itemizing, or otherwise supporting the work, labor and services performed or material furnished by the sub-contractors to whom plaintiff made these payments “on account.” 2003 WL 21018842, at *1. Having read Aetna’s post-trial briefs, I then said this: Defendant contends that this paucity of documentation constitutes a lack of proof which defeats plaintiffs quantum meruit claim for any amount greater than what it has been previously paid. Defendant’s briefs appear to argue in the alternative: first, contending that this lack of documentation combined with Crevani’s lack of personal knowledge necessarily bars plaintiffs claim; and alternatively, that the same shortcomings render his testimony unworthy of belief and devoid of probative weight. The first contention I am asked to accept as a matter of law; the alternative contention, attacking Crevani’s credibility and the value' of his testimony, is. addressed to me as the finder of the facts. Id. (footnote omitted). The May 5 Memorandum cited and analyzed a number of New York cases, cited by the parties or unearthed by the Court’s research, and stated these preliminary views; As for the first of defendant’s seeming contentions, the governing New York law does not appear to include a per se rule that the absence of supporting documentation is fatal to a quantum meruit claim.... Given this line of New York cases, I am presently inclined to the view that such deficiencies or gaps as appear in plaintiffs documentary evidence do not preclude its quantum me-ruit claim as a matter of law. Rather, they form a legitimate basis for defendant’s challenge to the credibility of Cre-vani as a witness and the weight of his testimony. Id. at *2, *4. The May 5 Memorandum “invite[d] further argument from counsel on the point,” id.-at % During the closing argument of Aetna’s able chief counsel, Mr. Lepelstat, I think it is fair to say that (while not formally abandoning the point) he no longer pressed the contention that a lack of supporting documentation precluded Aniero’s quantum mendt claim as a matter of law. Counsel focused instead upon Crevani’s credibility as a witness, beginning his argument by quoting from Justice Field’s opinion in Quock Ting v. United States, 140 U.S. 417, 420-21, 11 S.Ct. 851, 35 L.Ed. 501 (1891): Undoubtedly, as a general rule, positive testimony as to a particular fact, uncon-tradicted by anyone, should control the decision of the court; but that rule admits of many exceptions. There may be such an inherent improbability in the statements of a witness as to induce the court or jury to disregard his evidence, even in the absence of any direct conflicting testimony. He may be contradicted by the facts he states as completely as by direct adverse testimony; and there may be so many omissions in his account of particular transactions, or of his own conduct, as to discredit his whole story. His manner, too, of testifying may give rise to doubts of his sincerity, and create the impression that he is giving a wrong coloring to material facts. All these things may properly be considered in determining the weight which should be given to his statements, although there was no adverse verbal testimony adduced. In the May 5 Memorandum I described comparable considerations, although in language which does not approach the elegance of Justice Field’s: Assuming without presently deciding that inadequate documentation does not preclude plaintiffs quantum mendt claim as .a matter of law, a core question for,the factfinder is whether this sort of testimony, given by this witness [Crevani], is (a) credible and (b) if credible, of sufficient probative weight to sustain plaintiffs burden of proof with respect to the actual' job costs for which it seeks to hold defendant responsible. In making those evaluations, I will presumably apply familiar criteria: the witness’s interest in the outcome; whether the witness’s stated powers of recollection appear to be candid or suspiciously selective; whether his testimony is corroborated or contradicted by independent evidence in the record, testimonial or documentary; whether what the witness says is inherently plausible or implausible. 2003 WL 21018842, at *5. Before considering the credibility of Crevani’s testimony, I will now transform the inclination expressed in the May 5 Memorandum into a holding. I hold that under New York law, gaps in or even a total absence of supporting documentation do not preclude a quantum meruit construction claim as a matter of law. To the extent that Aetna still argues to the contrary, its argument is rejected. The cases supporting the Court’s holding are reviewed in detail in the May 5 Memorandum, which I adopt herein by reference and need not reiterate. It is sufficient for present purposes to quote again the words of the New York Court of Appeals in D’Angelo v. State, 39 N.Y.2d 781, 782-83, 385 N.Y.S.2d 284, 350 N.E.2d 615 (1976): We reject the State’s contention that claims under public construction contracts must be proved by written business records which would be subject to audit by the State. We know of no statute, rule or decisional law which requires proof in such form.... [T]o the extent that oral testimony is credited by the trier of the facts in the absence of business records, and the claim is thus allowed, we know of no predicate on which the State can base a claim of insufficiency as a matter of law. In this regard there is no principled distinction between a construction claim against a public body, as in D’Angelo, and a claim against a private entity such as Aetna, as in the case at bar. A number of New York cases cited and discussed in the May 5 Memorandum involve quantum me-ruit construction claims against private interests; they all support the holding which I now announce. Accordingly the case turns principally upon the credibility of Crevani’s testimony. Counsel for Aetna argued that Crevani’s testimony failed to meet any of the criteria of credibility articulated in Quock Ting. In counsel’s submission, Cre-vani’s testimony was inherently improbable; contradicted by facts in evidence; undermined by Crevani’s lack of personal knowledge of the value of subcontractors’ work, particularly with respect to the value of the work performed by Promo Pro, the largest subcontractor on the Project, a deficiency complicated by Aniero’s failure to call any witnesses from Promo Pro; and tainted by Crevani’s suspiciously selective preservation and loss of pertinent documents. These themes were stated at the outset of counsel for Aetna’s closing argument, see Tr.A. 38-42, further developed during the argument, and are of course set forth at length in Aetna’s post-trial briefs. Contrary to these assertions, I found Crevani to be a credible and persuasive witness. Crevani as a witness is, of course, financially interested in the outcome of the trial: none more so. But parties to commercial cases invariably stand to gain or lose financially, depending on the outcome, and so that factor can never be sufficient, standing alone, to determine credibility. The plausibility or implausibility of the witness’s testimony is a more reliable touchstone. Aetna contends that Crevani’s testimony is inherently improbable. In fact, the opposite is true, at least with regard to the amounts of the job costs Aniero includes in its quantum me-ruit claim against Aetna. The core of Crevani’s testimony on this aspect of the case is that each time Aniero made a payment “on account” to a subcontractor, the monetary value of that subcontractor’s work performed on or materials supplied to the Project as of the date of payment was equal to or greater than the amount of the payment. That value, Cre-vani also testified, was not fixed arbitrarily by him within the sheltered confines of his Hackensack office; the determination to make a particular payment on account to a particular subcontractor was preceded by inspections and evaluations of the work or materials at the job site by Crevani, Ber-del, and Jennings, who were there every day, and discussed among themselves (sometimes with participation of Crevani Jr.) the amount that should at that time be paid on account to that subcontractor This is an inherently plausible narrative of events. Its plausibility lies principally in the likelihood that Amero, a small company of limited resources that had to borrow from its bonding company to fund settlements of claims by sub-contractors for additional amounts, would make sure that its on account payments to sub-contractors did not exceed the value of the work the subcontractors had actually performed or the materials they had actually provided to the Project. The core contention for Aetna must be that Amero consistently, repeatedly, profligately and foolishly overpaid its subcontractors: showering the subcontractors with payments “on account” that vastly exceeded the value of the work performed or materials supplied by the subcontractors at. the times Amero made the payments. It is this view of evénts that is inherently implausible. It cannot be squared with the economic realities and practices of the heavy construction business, as revealed by this trial record; nor does Aetna’s view comport with common sense. Crevani impresses one as hardheaded, not softhearted. I say this neither in praise or in condemnation; it is simply a reflection of the industry in which he labors. On a related point, I cannot accept Aetna’s contention that Crevani lacks personal knowledge of the value of the subcontractors’ performances. In his closing argument, in attempted support of that contention, counsel for Aetna focused upon Aniero’s payments to Promo Pro. Counsel stated: “First, I would like to note that Mr. Crevani has admitted that he does not have knowledge of the value of the work performed by Promo Pro, Aniero’s largest subcontractor on the Project.” Tr. A. 39. Endeavoring to demonstrate that admission, counsel read from Crevani’s cross-examination, Tr. 645: Q. By the way, you wouldn’t know the value of the work performed by Promo Pro as of 4/22/94, would you? A. Without looking at all kinds of documentation, no. Q. You have no personal knowledge of that, do you? A. Do I have personal knowledge right now? Q. Yes. A. Without looking at stuff, I don’t remember eight years ago, no.” TR. A. 39-40. But Crevani did not admit to the lack of knowledge that Aetna’s argument implies. Even in the testimony just quoted, Crevani limited his admission by asking: “Do I have personal knowledge right now?” (emphasis added). Thus he draws a sensible distinction between the knowledge he had at the time of trial, eight years after the events, and the knowledge he had at the time Amero made payments on account to Promo Pro (and other subcontractors). That distinction was explicitly stated elsewhere in Creva-ni’s cross-examination; see, e.g., his testimony quoted in Findings of Fact ¶ 28, supra, and quoted again in part for the sake of this Discussion: Q. As you sit here today, do you know the total amount of carpentry work which Promo Pro performed on the project as [of] the date of this check which is dated September 22,1994? A. As I stated before, I don’t know today, but when I wrote this check I knew definitely that this payment was less than the'value of the work that he had already performed. Q. And do you know the total; quantity of demolition work which Promo Pro had performed on the project as of the date of this check? A.. Same answer. Q. You don’t know. A. As I sit here today. But at the time of the check I did. (emphasis added). Crevani never departed or retreated from this basic assertion, which I find to be entirely credible. As noted, this testimony is inherently plausible. Moreover, Crevani’s demeanor during a number of days’ testimony impressed me favorably. Accordingly I find that the amount of each payment on'account Aniero made to a subcontractor reflected the collective contemporaneous judgment of persons with the requisite knowledge that the amount was equal to or less than the value of the subcontractor’s work or materials as of the date of the payment. I further find that the nature and quality of Aniero’s proof at trial are sufficient to show that the values of the work and materials furnished by the subcontractors listed on pages 1-5 of Appendix A to Aniero’s Main Posh-Trial Brief were, at the least, equal to the amounts paid to those subcontractors, as listed in the Appendix. It follows that Aniero may recover those amounts from Aetna as parts of its quantum meruit claim, unless other evidence in the record bars or reduces recovery. Aetna contends that such evidence exists, and advances a number of arguments in support of that proposition. I consider those arguments in turn. 2. Spoliation of Evidence and Failure to Call Witnesses Aetna argues that Aniero “failed to preserve critical documentation” related to its claims, and “failed to proffer witnesses with knowledge of the actual value of the alleged work supplied to the Project.” Aetna’s Main Posh-Trial Brief at 59. I am urged to draw “an adverse inference against plaintiff Aniero to the extent it shall be presumed that such missing- documents and witnesses would have been unfavorable to Aniero’s claim herein.” Id. In the alternative (and in escalation of the suggested sanction), Aetna asks- the Court to “enter judgmént as a matter’ of law in favor of Aetna and against Aniero with respect to the issues for which such documents pertain” [sic]. Id. Thé asserted failure to preserve documents focuses upon “supporting documentation with respect to [Aniero’s] claim in connection with the purported work, labor, services or materials supplied by” the leading subcontractors, including Promo Pro. Id. at 62. There is no substance to Aetna’s argument insofar as it is based on Aniero’s failure to call witnesses other than Creva-ni. As the discussion in Part II.D.l., supra, demonstrates, Crevani’s testimony, if believed (and I do believe it) is sufficient in law to sustain Aniero’s quantum meruit claim against Aetna to recover amounts Aniero paid to subcontractors. Aetna’s criticism of Aniero for failing to offer more supporting documents as trial exhibits constitutes, as the briefs for Aetna make explicit, a charge that Aniero wrongfully committed spoliation of evidence. Spoliation is “the destruction or significant alteration of evidence or the failure to preserve the property for another’s use as evidence in pending or reasonably foreseeable litigation.” West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999) (emphasis added). Spoliation is sanctionable conduct; and “[t]he sanction should be designed to: (1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party. ” Id. (internal quotation marks and citations omitted) (emphasis added). The gravamen of Aetna’s spoliation charge is that Aniero failed to preserve relevant documentary evidence. Since a principal purpose of the spoliation doctrine is to punish a party in litigation for prejudicing the opposing party by destroying or failing to preserve evidence useful to that other party, it is not surprising that most spoliation cases arise out of failures to comply with legitimate pre-trial discovery demands. Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99 (2d Cir.2002), upon which Aetna primarily relies, is typical. It was a breach of contract case where the defendant sought an adverse-inference jury instruction because of plaintiffs “failure to produce certain emails in time for trial.” Id. at 101. The district court refused to give the adverse inference instruction. The Second Circuit, on an appeal by defendant from a judgment in plaintiffs favor, remanded the case for further consideration by the district court on the question of sanctions. The court of appeals said at the outset that “where, as here, the nature of the alleged breach of a discovery obligation is the non-production of evidence, the District Court has broad discretion in fashioning an appropriate sanction,” id., and went on to hold that when an adverse inference instruction is sought on the basis that the evidence was not produced in time for trial, the party seeking the instruction