The contractor allegedly left defective work and unpaid subcontractors behind
A surety is chasing nearly $7 million from a contractor that allegedly walked off a New Jersey public works job, leaving unpaid subcontractors behind.
Berkley Insurance Company filed suit on December 23, 2025, in the US District Court for the District of New Jersey against Tekcon Construction, Inc. and two individual indemnitors, Eric Dziadyk and Ida Dziadyk. The case offers an example of what can go wrong when a bonded contractor abandons a project mid-stream and the surety is left holding the bag.
At the center of the dispute is a renovation project for the Essex County Parks Department Administration Building in Newark. Tekcon, a general contractor serving commercial, government, and residential markets, secured performance and payment bonds from Berkley for that project and several others. In exchange, Tekcon and the Dziadyks signed a General Indemnity Agreement in February 2022, promising to reimburse Berkley for any losses tied to those bonds.
That agreement gave Berkley sweeping rights. If things went south, Berkley could demand cash collateral on short notice, take a security interest in Tekcon's contracts and equipment, and make the final call on whether to pay, settle, or fight any claims. The indemnitors agreed to cover everything from legal fees to investigation costs.
Things did go south. According to Berkley, Tekcon issued a Notice of Withdrawal from the Essex County project on November 29, 2024. The County promptly declared Tekcon in default and called on Berkley to step in. Berkley investigated, then entered into a takeover agreement with Essex County and hired Tsivico Enterprises, Inc. to finish the work. Along the way, Berkley says the replacement contractor discovered defective work that Tekcon had left behind.
The fallout did not stop there. Berkley claims twenty-seven subcontractors and suppliers have since filed payment bond claims totaling more than $2.2 million. Berkley says it has already paid out roughly $1.09 million to claimants and faces about $5.25 million in exposure on the performance bond side. All told, Berkley pegs its anticipated losses, costs, and expenses at approximately $6,918,417.86.
Berkley is now asking the court to force Tekcon and the Dziadyks to post that amount as collateral, to indemnify Berkley for all its losses, and to hand over their financial books and records. The indemnitors, Berkley says, have ignored its demands and failed to meet their contractual obligations.
No court has ruled on the merits, and the claims remain unproven. But for surety professionals watching the construction space, the case is a reminder of the risks that come with bonding contractors on public projects and the importance of robust indemnity protections when things fall apart.