New York State Court of Claims

New York State Court of Claims

CONCORD v. THE STATE OF NEW YORK, #2000-014-532, Claim No. 95091, Motion Nos. M-61781, M-62231


Synopsis


In a claim for breach of a public improvement contract, the defendant's motion for summary judgment is denied. The defendant has waived any defense based upon the claimant's failure to provide notice of a dispute involving extra work, because it was not raised in the Answer. The defendant's motion to amend the Answer is denied.

Case Information

UID:
2000-014-532
Claimant(s):
CONCORD CONSTRUCTION CO.
Claimant short name:
CONCORD
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
95091
Motion number(s):
M-61781, M-62231
Cross-motion number(s):

Judge:
S. Michael Nadel
Claimant's attorney:
Flannagan, Cooke & French, LLPBy: Joseph J. Cooke
Defendant's attorney:
Eliot Spitzer, Attorney GeneralBy: Eidin Beirne, Assistant Attorney General
Third-party defendant's attorney:

Signature date:
October 26, 2000
City:
New York
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision


The following papers were read on the defendant's motion for summary judgment dismissing the claim [Motion No. M-61781], and on the defendant's motion seeking permission to amend its Answer [Motion No. M-62231]: Notice of Motion [Motion No. M-61781], Affidavit and Exhibits annexed, Memorandum of Law; Affidavit of counsel in Opposition and Exhibits annexed, Affidavit in Opposition and Exhibits annexed, Memorandum of Law; Notice of Motion [Motion No. M-62231, Affirmation, Affidavit and Exhibits annexed, Reply Memorandum of Law; Affidavit in Opposition. Filed Papers: Claim, Answer.


The Claim alleges the breach of a public improvement contract.

The defendant, with the Court's permission (CPLR 3212[a]), has moved for summary judgment dismissing the claim on the following grounds:

(1) The claim for damages for underpayment for a quantity of material is barred by §109-01 of the contract, which states that "actual quantities of work performed . . . as determined by measurements of the Engineer . . . [are] final, conclusive and binding" on the claimant.

(2) The claim for damages for delay is barred by Article 13 of the contract, which states: "The Contractor agrees to make no claim for extra additional costs attributable to any delays, inefficiencies, or interferences in the performance of this contract occasioned by any act or omission to act by the State or any of its representatives . . . ."

(3) The claim for damages for extra work is barred by the claimant's failure to comply with the provisions of sections 105-14 and 109-05 of the contract which require the contractor to promptly provide written notice and documentation of any such claim.

Subsequent to the service and filing of the claimant's opposition to the motion, the defendant, by Notice of Motion, moved to amend its Answer (CPLR 3025[b]) to assert the affirmative defense that "Claimant failed to furnish notice of disputed work and further failed to furnish records of alleged dispute and/or extra work" as required by the contract, and that "By reason of such failure Claimant has failed to satisfy a condition precedent to claim and/or has waived its claim herein."

Underpayment

With respect to the claim concerning underpayment for material, it is the claimant's contention that there was a palpable mistake in the Engineer's estimate (see, e.g. Yonkers Contracting Co. v New York State Thruway Authority, 25 NY2d 1), since, according to the deposition testimony of Mr. Barnes (Exhibit B to Claimant's Affidavit in Opposition), the quantities were measured on a theoretical, rather than an actual, basis. Although Mr. Steen, the defendant's Engineer, in his Affidavit annexed to the defendant's motion to amend its Answer, asserts that the measurements were made in accordance with the terms of the contract, upon the record presented a factual issue remains unresolved, precluding summary judgment on this portion of the claim.

Damages for Delay

In support of the claim for damages resulting from delay, the claimant has submitted the affidavit of Mr. Hrbek, who was the claimant's construction manager, in which he asserts that the delay was caused by the issuance of orders by Mr. Steen, the defendant's Engineer for the project, which required the claimant to engage in additional work so as to satisfy what Mr. Hrbek characterizes as Mr. Steen's aesthetic concerns. Mr. Hrbek further alleges that when he informed Mr. Steen that his orders required additional work, Mr. Steen stated that "the Project would be done his way or our existing requisitions would not be approved."

It is the claimant's contention that this conduct amounts to one of the recognized circumstances which can overcome the no damages for delay clause in the contract. Claimant asserts that at the very least there is question of fact as to whether Mr. Steen's conduct rises to the level of "gross negligence, active interference or bad faith . . . [which] would preclude the granting of the State's present motion."

The Court of Appeals has stated that while such a clause "will prevent recovery of damages resulting from a broad range of reasonable and unreasonable conduct" it will "not excuse or prevent the recovery of damages resulting from the contractee's grossly negligent or willful conduct, i.e., conduct which ‘smacks of intentional wrongdoing' [Kalisch-Jarcho, Inc. v City of New York, 58 NY2d 377, 385]." Corinno Civetta Construction Corp. v City of New York, 67 NY2d 297, 305.[1]

By this standard, the claimant's assertions regarding Mr. Steen's aesthetic concerns do not amount to the kind of conduct which would overcome the no damages for delay clause. The allegation that the defendant's Engineer made threats to the claimant that he would not approve existing requisitions unless the work was done his way, however, does raise a question of fact as to whether he engaged in bad faith or willful and intentional conduct. "[T]he effect of the exculpatory clause [can] be overcome only if the qualitative level of misconduct by the contractee was the equivalent of an intentional wrong [citation omitted]." Id., at 310. The existence of this factual issue precludes summary judgment on this portion of the claim.

Extra Work

Finally, it is the claimant's position that the defendant has waived any defense based upon the claimant's failure to provide notice of a dispute involving extra work, because it was not raised in the Answer. The only authority the defendant points to in its perfunctory opposition to this contention is that "[w]aiver is not one of the enumerated affirmative defenses required by CPLR §3018(b)." The absence of meaningful discussion of this issue by the defendant, and its subsequent application to amend the Answer, suggests that the defendant may not disagree with the claimant's position.

In any event, sections 105-14 and 109-05 of the contract, which require the contractor to promptly provide written notice and documentation of any claim under the contract, are conditions precedent to recovery. See, A.H.A. General Construction, Inc. v New York City Housing Authority, 92 NY2d 20. Since the claim herein does not allege performance of these contractual conditions precedent, "the defendant must deny compliance with the condition precedent specifically and with particularity (CPLR 3015[a]), and the defendant's failure to assert a specific denial constitutes a waiver of that defense (see, Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 218." CNY Mechanical Associates, Inc. v Fidelity & Guaranty Insurance Company, 212 AD2d 989, 990. See, Siegel, NY Prac §215, at 337 (3d ed).

Thus, consideration of the defendant's motion for summary judgment dismissing the claim for extra work is dependent upon permitting the defendant to amend its Answer.

"If there is no prejudice to the other side, leave to amend must be freely given." Siegel, NY Prac §237, at 378 (3d ed). The prejudice necessary to defeat amendment of a pleading is prejudice resulting from the delay in pleading the matter. Here, the defendant's motion was made after the claim had been scheduled for trial on two occasions. In each instance the trial was adjourned due to the unanticipated unavailability of a witness. The trial is now scheduled to commence on December 5, 2000. Moreover, the Court's permission for the defendant to move for summary judgment was given after discussions with counsel during which counsel for the claimant took the position that the defense of failure of the claimant to provide notice of disputed work had been waived by the failure to assert it in the Answer, to which counsel for the defendant, as noted in the claimant's Affidavit in Opposition,[2] responded that it was the defendant's position that inclusion of the defense in the Answer was not required.

It is the defendant's contention that the defense has merit, based upon the assertion that the claimant did not provide any written notice of disputed work, or any documentation in support of any such claim. Upon the entire record before the Court, it does not appear that the claimant complied with the pertinent provisions of the contract. But it is the claimant's contention that depending upon other circumstances, strict compliance with the notification and documentation provisions is not necessary. See, e.g., Amadeus, Inc. v State of New York, 36 AD2d 873, 874 appeal denied 29 NY2d 634 ["in cases where the State is apprised of the contractor's claim that extra work beyond the contract was being performed, the State has been precluded from insisting upon strict compliance with the notice provisions."]. It is the claimant's further contention that such circumstances exist in connection with this claim, but that proof of such at trial is dependent upon extensive discovery, including the possible deposition of other employees of the defendant, which did not take place because the defendant did not assert the defense.

The logic of the claimant's argument is compelling. Under the circumstances, amendment, at this time, of the defendant's Answer to assert the defense, without the possibility of necessary discovery, would result in prejudice to the claimant. The defendant's motion to amend its Answer must, therefore, be denied.

In accordance with the foregoing, the defendant's motion for summary judgment dismissing the claim is denied; the defendant's motion seeking permission to amend its Answer is denied.


October 26, 2000
New York, New York

HON. S. MICHAEL NADEL
Judge of the Court of Claims




[1]"Generally, even with such a clause, damages may be recovered for: (1) delays caused by the contractee's bad faith or its willful, malicious, or grossly negligent conduct, (2) uncontemplated delays, (3) delays so unreasonable that they constitute an intentional abandonment of the contract by the contractee, and (4) delays resulting from the contractee's breach of a fundamental obligation of the contract." Corinno Civetta Construction Corp. v City of New York, 67 NY2d 297, 309.
[2]The Court has considered the Affidavit in Opposition to the motion to amend the Answer, despite its lateness, based upon counsel's explanation, set forth in his letter dated September 14, 2000. The Court has also considered the letter dated September 13, 2000 from counsel for the defendant.