New York State Court of Claims

New York State Court of Claims

IT CORPORATION v. THE STATE OF NEW YORK, #2001-015-155, Claim No. 101163, Motion Nos. M-62882, CM-63149


Synopsis


Claim seeking to recover additional costs incurred in connection with remediation of Allegheny County landfill dismissed based on collateral estoppel stemming from Appellate Division, Fourth Department's decision that claimant had not complied with contract provision requiring written notice of site condition variations and submission of change order. Motion to amend claim rendered moot dismissal.

Case Information

UID:
2001-015-155
Claimant(s):
IT CORPORATION The caption of this action was previously amended sua sponte by order of the Court dated November 23, 1999 to reflect the only properly named defendant.
Claimant short name:
IT CORPORATION
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :
The caption of this action was previously amended sua sponte by order of the Court dated November 23, 1999 to reflect the only properly named defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
101163
Motion number(s):
M-62882
Cross-motion number(s):
CM-63149
Judge:
FRANCIS T. COLLINS
Claimant's attorney:
Saperston & Day, P.C.By: Frank T. Gaglione, Esquire and Michael C. Driscoll, Esquire
Defendant's attorney:
Honorable Eliot Spitzer, Attorney GeneralBy: C. Michael Reger, Esquire
Third-party defendant's attorney:

Signature date:
June 8, 2001
City:
Saratoga Springs
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Defendant's motion for leave to amend its answer pursuant to CPLR 3025 (b) to assert two new defenses: (1) that the claim is barred by the collateral estoppel effect of a related Supreme Court action and (2) the claimant's failure to comply with the terms and conditions of the contract; particularly those concerning notice of changed conditions is granted. Defendant's further motion to dismiss the claim based upon the proposed defenses as well as the second, third and seventh defenses contained in the original answer is also granted. Claimant's cross-motion pursuant to Rule 3025 (b) for leave to amend its claim to assert new claims for (1) breach of contract for defendant's failure to pay outstanding change orders; (2) breach of contract for defendant's failure to pay unpaid unit price items; (3) to recover pursuant to the contract for unit price revaluations; and (4) to state its claims with greater particularity is denied.

The claim as originally filed seeks to recover money damages on causes of action sounding in breach of contract, quantum meruit for additional work, labor and materials; breach of implied warranty and the Department of Environmental Conservation's (DEC's) failure to supervise the work of its agent, Ecology and Environmental Engineering, P.C. (E & E).

The claim stems from a contract awarded to the claimant to remediate the Wellsville/Andover Landfill in Allegany County, New York. In 1991 DEC hired E & E to investigate the site for the project. E & E was to determine the location and size of landfill areas at the site, the quantities of clean and contaminated soils covering the refuse; the amount of available soil at the landfill; the gradation of and the presence of rock among the available clean soils; plan for excavation, stabilization and consolidation of refuse; the backfilling of certain areas and design a cover and cap for the consolidated refuse. E & E took four years to investigate, evaluate and design the project and the final designs were submitted to DEC for review and final approval. Claimant as a potential bidder requested bid documents from DEC on October 25, 1995 and attended a mandatory on-site pre-bid meeting held for all interested contractors on October 31, 1995. The meeting, which was attended by twenty two potential bidders, lasted approximately two to three hours and involved a visual inspection of the site. The attendees were given an opportunity to ask questions related to the project but did not engage in boring, digging or other invasive inspection methods. Two addenda to the bid documents were issued by DEC/E & E on November 21, 1995. Claimant submitted its bid in the amount of $6,176,913.13 on November 29, 1995, received notice that it was the apparent low bidder on December 1, 1995 and received a fully executed and approved contract for the project (Contract No. D003438) from DEC on March 12, 1996.

The scope of the project as designed included the installation of a leachate collection piping system under the south/south central areas of the existing landfill, consolidation of wastes from the northeast and northwest fill areas of the site to the south and south central areas, and the installation of an impermeable cover over the two southern areas. The northern fill areas were to be partially backfilled and graded following waste removal to the southern areas. After completion of these items, various site restoration activities were to be performed to accomplish the proper closing of the landfill. The design provided for reuse of on-site soils after removal of contaminants, the separation or gradation of soil and stones by size and the crushing of oversized rock. These soils were to be used first in final cap construction with any other use requiring approval in writing by E & E as the project engineer. The design required the contractor to further investigate existing cover soils of all four fill areas during the initial stages of the project for submission of a soil balance plan showing the intended reuse of the existing cover soils.

Claimant conducted its investigation of existing cover soils in the Spring of 1996 and submitted its final soil balance plan to E & E and DEC on July 3, 1996. That plan, developed by claimant, indicated a shortage of available soils required to fully construct all necessary project items including the partial backfilling of the northern areas and the construction of the permanent cap over the southern areas. In consideration of the soil shortage E & E, during the first season of construction, eliminated the partial backfill of the northern area to avoid borrowing a substantial amount of soil from the borrow area for northern backfill purposes.

The contract documents clearly disclosed that the quality and quantities of existing soil which could be reused as set forth in the bid documents were estimates only and that bidders were required to investigate site conditions including soil and rock descriptions, water levels and water conditions and the location and concentrations of leachate.

Article 13 of Section III of the Bid Documents entitled "Subsurface and Technical Information" provides:
The soil and rock descriptions shown are as determined by a visual inspection of the samples from the various explorations unless otherwise noted. The observed water levels and/or water conditions indicated thereon are as recorded at the time of exploration. These levels and/or conditions may vary considerably, according to the prevailing climate, rainfall and other factors, including the passage of time.

Similarly, data concerning leachate were obtained with reasonable care and recorded in good faith. The location and concentrations of leachate may vary considerably according to the prevailing climate, rainfall and other factors, including the passage of time. Bidders may rely upon accuracy of the subsurface technical data as to location where, and at the point in time when, data were obtained; but not upon non-technical data, interpretations or opinions contained therein or for the completeness thereof.

When reports showing data obtained by investigations and tests at the site by DEPARTMENT, ENGINEER or the Design Engineer are included with the Bidding Documents, or made available to Bidders as set forth in the Bidding Documents, it is expressly understood and agreed that technical data, but not any non-technical data, interpretations or opinions contained in such reports, are incorporated by reference into the Contract Documents. Bidders may rely upon the accuracy of all such technical data contained in such reports as to the location where and the point in time when such technical data were obtained, unless the Bidding Documents limit any other bases upon which such technical data may be relied upon. It is further expressly understood and agreed that the use of any technical data contained in such reports is subject to all of the conditions and limitations set forth in the Bidding Documents.

Subsurface and technical information is made available to Bidders in good faith so that they may be aware of the information utilized for design and estimating purposes. DEPARTMENT makes no representations or warranties, express or implied, as to the completeness of this information or data, nor is such disclosure intended as a substitute for personal investigations, interpretations, and judgments of the Bidder.
Similarly, Article 15 Section III of the Bid Documents entitled "Examination of Bidding Documents and Site" in relevant part, provides:
DEPARTMENT, Design Engineer and ENGINEER do not assume any responsibility for any conclusions or interpretations made by any Bidder based on the information made available by the Bidding Documents. Nor does DEPARTMENT or ENGINEER assume any responsibility for any understanding reached or presentation made concerning conditions which can affect the cost, schedule, progress, furnishing and performance of the Work prior to execution of the Contract, unless that understanding or representation is expressly stated in the Bidding Documents.

In an itemized contract, the estimate of quantities of work to be done and materials to be furnished is approximate and is given only as a basis of calculation upon which the award of the contract is to be made. DEPARTMENT does not assume any responsibility that the quantities estimated will be the actual quantities required; CONTRACTOR may not claim misunderstanding or deception because of such estimates of quantities or of the character of the work, location, or other condition pertaining thereto. DEPARTMENT may increase or diminish any or all of the quantities of work mentioned above or omit any of them, as deemed necessary.
Paragraph 3.4 of the General Conditions of the contract also places responsibility for determining subsurface conditions upon the contractor in these terms:
3.4 EXPLORATIONS AND REPORTS: Reference is made to the Supplementary Bidding Information and Requirements for identification of those reports of exploration and tests of conditions at the site that have been utilized by DESIGN ENGINEER in preparation of the Contract Documents; and for identification of those drawings of physical conditions in or relating to existing surface structures (except Underground Facilities referred to in paragraphs 3.6 and 3.7) which are at or contiguous to the site that have been utilized by DESIGN ENGINEER in preparation of the Contract Documents. CONTRACTOR may rely upon the accuracy of the technical data contained in such reports, as to the location where and at the point in time when data was obtained, but not upon non-technical data interpretations or opinions contained therein or for the completeness thereof for CONTRACTOR's purposes. Except as indicated in the Bidding Information and Requirements Section and in paragraphs 3.11 and 3.12, CONTRACTOR shall have full responsibility with respect to subsurface conditions which CONTRACTOR could reasonably expect or foresee by reason of the technical data and CONTRACTOR's inspection of the site, and with respect to physical conditions in or relating to such surface structures.
Pursuant to paragraph 3.8 of the contract, upon discovering conditions which differed materially from the contract documents or technical data the contractor was required to notify DEC and E & E in writing. Specifically that paragraph states:
3.8 If CONTRACTOR believes that any subsurface or physical condition uncovered or revealed at the site renders materially inaccurate any information in the Contract Documents or technical data on which CONTRACTOR was entitled to rely as provided in paragraph 3.4 or 3.6, CONTRACTOR shall, immediately after becoming aware thereof and before performing any Work in connection therewith (except in an emergency as permitted by paragraph 5.22), notify DEPARTMENT and ENGINEER in writing about the inaccuracy or difference to allow DEPARTMENT and ENGINEER to make any necessary changes to minimize the cost of the Work.
Notice pursuant to paragraph 3.8 was to be followed by the submission of a proposed change order within 15 days related in the following language found in paragraph 3.12 of the contract:
3.12 No claim by CONTRACTOR under paragraph 3.11 of the General Conditions will be allowed unless (1) CONTRACTOR has given the notice required in paragraph 3.8 of the General Conditions, and (2) within fifteen days thereafter, CONTRACTOR has submitted to DEPARTMENT a written Proposed Change Order substantiating in detail CONTRACTOR's proposed adjustments in accordance with the requirements of Articles 9, 10 and 11 of the General Conditions, and the Standard Specifications.
Adjustment of the contract price (or contract time) for such differing site conditions is controlled by paragraph 3.11 which provides:
3:11 POSSIBLE CONTRACT ADJUSTMENT: An increase or decrease in the cost of, or the time required to perform any part of the Work, whether or not affected by such differing conditions, and a corresponding adjustment in Contract Price or Contract Time in accordance with Articles 9, 10 and 11 of the General Conditions, or any combination thereof, may be allowable to the extent that they are attributable to any such inaccuracy or difference which CONTRACTOR could not reasonably have been expected to anticipate or be aware of. If DEPARTMENT and CONTRACTOR are unable to agree as to the adjustment in Contract Price or Contract Time, or if ENGINEER concludes that there is not a material error in the Contract documents, or that the uncovered or revealed condition could reasonably have been anticipated by CONTRACTOR, and CONTRACTOR disagrees, a claim may be made therefor as provided in Articles 9, 10 and 11 of the General Conditions.
Finally, paragraph 9.3 of Article 9 of the General Conditions provides:
9.3 Additional work performed without authorization of a Proposed Change Order will not entitle CONTRACTOR to an increase in the Contract Price or an extension in the Contract Time, except in the case of emergency work as provided in paragraph 5.22 of the General Conditions and except in the case of uncovering Work as provided in paragraph 12.9 and 12.10 of the General Conditions.
The defendant alleges on the motion that claimant failed to comply with paragraphs 3.8 and 3.12 of the contract. Defendant, in fact, alleges that despite IT's numerous claims of material differences claimant submitted only one written notice to DEC and E & E in the form of a letter dated October 18, 1996 from Dan Holzman, project manager for IT, and that such letter complained solely of one specific condition, i.e., the irregular bottom profile of the northwest refuse cell. Despite language contained therein which suggested "other changes" and advised of the submission of IT's "analysis of them in the near future, " IT made no written submission as required by paragraph 3.8 with regard to such "other changes." In fact, even the October 18, 1996 letter was not followed by the submission of a proposed change order as required by paragraph 3.12 with regard to the irregular bottom profile.

Defendant further alleges that despite a DEC reminder to IT in the fall of 1996 that additional costs needed to be part of a formal claim by the contractor the claimant submitted but a single request for equitable adjustment on March 28, 1997 in the amount of $1,280,532.67. Together with subsequent addenda to the request, the total sum claimed by IT amounted to $2,794,140.32.

According to the affidavit in support of Michael J. Cruden, P.E., DEC's Project Manager for the remediation of the Wellsville/Andover site, by the time IT shut down its work for the winter in 1996 IT had completed all required excavation and exploration of the site. The only tasks remaining for completion in 1997 were the construction of the permanent soil cap over the geomembrane covering the southern waste area and completion of site restoration features.

The instant claim seeks recovery for differing site conditions including rock and perched water discovered during installation of the leachate collection system; oversized materials in the existing fill; substantially less contaminated cover soil than anticipated; varying degrees of thickness of existing cover soil; extremely wet refuse in the northern areas and unforeseen depths and locations of refuse cells in the northwest landfill (i.e., 70 separate smaller waste cells rather than one large cell). These conditions, Cruden asserts, were undoubtedly discovered by the claimant during the 1996 construction season but claimant failed to provide written notice of such variations to DEC/E & E and failed to submit proposed change orders within 15 days thereafter seeking additional compensation for work related to these conditions. The only exception being the October 18, 1996 letter of Dan Holzman (Exhibit J) discussed above which concerned the irregular bottom profile of the northwest area. Even if the Court were to treat that letter as satisfactory written notice of that particular condition, recovery under the contract would still be precluded since claimant did not prepare or submit a proposed change order within 15 days of the date of that written notice.

Claimant's Project Manager, Dan Holzman, in his affidavit in opposition to defendant's motion and in support of IT's motion, at paragraph 24 admitted the following:
Almost from the beginning, IT encountered vastly different quantities and site conditions than those represented in the bid documents. IT found, among other things, a reduced quantity of cover soil, scattered and isolated areas of contaminated cover soil, refuse located beyond the defined limits of the landfill, extremely variable and oversize gradations of existing cover soil for the final cover and barrier protection layer; and extremely irregular and significant undulations of the bottom surface of the northwest landfill. Most notably, rather than one (1) single cell in the northwest area, there were seventy (70) separate waste cells.
Nowhere in his affidavit did Holzman refute the allegations of DEC's Project Manager as to when these alleged changes or variations of quantity and quality were discovered. Nor does IT refute the defendant's contentions that specific written notifications were not given or, if given, were not followed by cost submissions within 15 days thereafter. In addition, IT has not denied that it continued and completed the work despite the discovery of changed conditions. Clearly, the purpose of requiring written notice and timely cost submissions is to allow the Engineer and /or DEC to timely investigate the alleged changes or variations and to determine whether the remediation proposed by the contractor is both practical and cost effective prior to implementation by the contractor (see para 3.8 of the General Conditions quoted above).

In opposition to the defendant's motion and in support of the cross-motion claimant now alleges that it provided numerous written notices to DEC/E & E in the form of project meeting minutes and, furthermore, that such notices were not required to recover for unit price items which exceeded estimates. Claimant argues that while written notice is required, the contract does not specify the form of the notice and seeks to persuade the Court to accept the minutes of meetings held during the contract period as sufficient to satisfy the written notice requirement of the contract. Claimant further argues that with regard to items not directly related to unit prices such as equipment costs, surveying costs and excess consolidation costs it could not have stopped its work to perform extensive and time consuming cost projections without incurring possible liquidated damages for delays, and additional expenses to complete the project on time and that such significant changes might even have resulted in DEC terminating the contract. Claimant does not allege that proposed change orders were ever submitted in conformity with Article 3.12 of the contract.

After completion of the project IT attempted to recover its losses by means of the contractual dispute resolution procedures which required that disputes first be submitted to H. Richard Koelling, P.E. Director of Bureau of Construction Services. IT did so on March 28, 1997 and its request for equitable adjustment was denied on March 20, 1998. IT appealed that determination to the Assistant Director of DEC's Division of Environment Remediation on March 24, 1998. IT's appeal was denied on February 2, 1999. Thereafter IT filed a final appeal with the Contract Review Committee which held a fact finding hearing at which IT and E & E presented documentation and arguments in support and in opposition to IT's request for equitable adjustment. That appeal was denied on July 14, 1999.

On March 11, 1999, during the pendency of the contract dispute resolution procedure, IT commenced an action in Supreme Court, Erie County against E & E. The instant claim was filed in the Court of Claims on September 30, 1999. The first three causes of action asserted against E & E in the Supreme Court action were negligence, misrepresentation and breach of contract (brought by IT as an alleged third party beneficiary); the fourth cause of action alleged that E & E intentionally interfered with the contract between IT and DEC. E & E as defendant in that action moved to dismiss all four causes of action on a variety of grounds. Supreme Court dismissed the first three causes of action stating in relevant part:
A second basis for dismissal of the first three causes of action asserted by the defendant are the express and multiple disclaimers throughout the information submitted to bidders and in the final contract. These admonitions advised bidders that the engineering studies should not be relied upon, except on a very limited basis, and encouraged bidders to conduct their own investigation of the site. In addition, the plaintiff filed a waiver of any misunderstanding as to the location of the work and all terms and conditions of bidding documents (Exhibit D of Defendant's Motion).

At the heart of plaintiff's first three causes of action are claimed losses allegedly resulting from reliance on the defendant's site studies. Plaintiff had weeks to review the bidding documents and investigate the site. They had months of opportunity to review contract documents prior to signing the contract. The Court finds no basis to not enforce the plain language of these documents and dismiss these causes of action. (see IDF Construction Corporation, supra, at pp. 672-673, and Warren Brothers v N.Y.S. Thruway Authority, 34 AD2d 97, aff'd. 34 NY2nd 770).

Additionally, the Court notes that no sufficient basis has been shown that plaintiff was an intended third-party beneficiary of the contract between the State and the defendant. As one of any number of potential bidders, plaintiff was at best, a mere incidental beneficiary of the contract between the State and the Defendant. (Pile Foundation Construction v Berger, Lehman Associates, 253 AD 484, 676 NYS 2nd 664, 2nd Dept., 1998).
That Court, however, refused to dismiss the intentional interference with contract cause of action. An appeal was perfected to the Appellate Division, Fourth Department which issued a memorandum decision (IT Corp. v Ecology & Envtl. Eng'g, 275 AD2d 958) on September 29, 2000 affirming the Supreme Court's dismissal of the first three causes of action but modifying the lower court's decision and order by also dismissing the remaining fourth cause of action. The language of the Fourth Department's decision modifying the Supreme Court's decision is critical to this Court's consideration of that portion of the defendant's motion which seeks dismissal of the instant claim on the grounds that it is barred by the doctrine of collateral estoppel. That decision, in relevant part, provides:
Supreme Court properly granted that part of defendant's motion seeking dismissal of the first three causes of action based on a defense 'founded upon documentary evidence' (CPLR 3211 [a] [1]). The disclaimers and site inspection clauses set forth in the bidding documents and plaintiff's contract place the burden wholly upon plaintiff to investigate the site and to discover potential problems relating to it (see, IFD Constr. Corp. v Corddry Carpenter Dietz & Zack, 253 AD2d 89, 93-94; Savin Bros. v State of New York, 62 AD2d 511, 515-516, affd 47 NY2d 934). The complaint, affidavit and affirmation submitted by plaintiff in opposition to defendant's motion do not allege that defendant acted fraudulently or in bad faith, that there was insufficient time to inspect the site or that an inspection would have been fruitless (see generally, 89 NY Jur 2d, Public Works and Contracts, § 74). Nor is there any allegation that the technical data contained in the Limited Site Data report prepared by defendant is inaccurate, 'as to the location where and at the point in time when the data was obtained'. We therefore conclude that 'the documentary evidence submitted [by defendant] conclusively establishes a defense to the asserted claims as a matter of law' (Leon v Martinez, 84 NY2d 83, 88). * * *

Finally, we conclude that the court erred in failing to grant that part of the defendant's motion seeking dismissal of the fourth cause of action pursuant to CPLR 3211 (a) (1). An essential element of that cause of action is an actual breach of contract by the DEC intentionally procured by defendant without justification (see, Lama Holding Co. v Smith Barney, 88 NY2d 413, 424). The critical allegation here is that '[defendant] blamed [plaintiff] for its own mistakes and convinced [the DEC] to reject [plaintiff's] final request for an equitable adjustment. Thus, [defendant] induced [the DEC] to breach the remediation contract'. The documentary evidence submitted by defendant belies that allegation. That evidence establishes conclusively that the DEC rejected plaintiff's final request for an equitable adjustment because plaintiff submitted that request without first complying with the notice provision of the contract. The DEC's rejection of plaintiff's request on that ground cannot constitute a breach of contract. * **[1]

The decision of Justice NeMoyer in the Supreme Court action and that of the Appellate Division, Fourth Department, quoted above specifically addressed the contract disclaimer provisions, site inspection and notice of changed conditions clauses set forth in the bidding documents and contract involved in the instant claim. Both the Supreme Court and the Appellate Division found, as a matter of law, that the contractual provisions placed the burden wholly on IT to investigate the site to discover potential problems.

Furthermore, in modifying the lower Court's decision and dismissing IT's fourth cause of action based upon E & E's alleged intentional interference with IT's contract with DEC the Appellate Division found that claimant failed to comply with the contract's written notice provisions. Such a finding precludes reconsideration of that issue by this Court.

It is well settled that successful invocation of the doctrine of collateral estoppel is dependent upon a finding that (1) there exists at bar an identity of issue, (2) which was necessarily determined in the prior action, and which is dispositive of the present case, and (3) the party against whom the estoppel is asserted has had a full and fair opportunity to litigate the issue sought to be precluded in the subsequent action (Schwartz & Public Admin of County of Bronx, 24 NY2d 65, 71 (as cited in) Kret v Brookdale Hospital, 93 AD2d 449, 456-457, affd 61 NY2d 861).

It appears to the Court that all four elements have been satisfied in this case. Clearly issue identity with regard to contract disclaimer language and IT's duty to investigate actual site conditions rather than relying upon representations and estimates contained in the bid documents are the same in this case as they were in the Supreme Court action. So too, claimant's obligation under the contract to provide written notice of material variances in site conditions along with the obligation to submit proposed change orders arising therefrom as a precondition to a claim are identical in this action. (See, A.H.A. Gen. Constr. v New York City Hous. Auth., 92 NY2d 20, 920; Tug Hill Constr. v County of Broome, 270 AD2d 755). The Appellate Division's determination that IT failed to comply with the notice provision of the contract and that DEC's rejection of IT's request for equitable adjustment on that basis cannot constitute a breach of contract applies with equal force to the claim before this Court and is dispositive of the causes of action for breach of contract and for an equitable adjustment of the contract price despite claimant's new allegations that the minutes of project meetings should be deemed to satisfy the contract's provisions requiring written notice of varying conditions. It further appears that claimant had a full and fair opportunity to litigate these issues in both the lower court and the appellate court. Collateral estoppel applies to bar re-litigation of these decided issues and precludes claimant's recovery on its causes of action sounding in breach of contract, equitable adjustment for extra and additional work, breach of implied warranty, misrepresentation, and claimant's "Fifth" cause of action which on its face fails to state a cognizable cause of action and appears to be merely a recapitulation of prior allegations.

The result would be unchanged even in the absence of preclusion resulting from the prior litigation in Supreme Court. A review of the proof submitted on this motion clearly reveals that even assuming, arguendo, materially different site conditions and claimant's justified reliance upon representations made in the bid documents, the claimant failed to comply with the contractual notice provisions governing changed site conditions. All of the claimant's causes of action, including those for unit price item revaluation and for misrepresentation, are inextricably tied to the alleged material variations in actual site conditions compared to the bid document estimates. An examination of paragraph "54" of the claim supports this finding and subjects such claims to the written notice and cost submission requirements set forth in paragraphs 3.8 through 3.13 of the contract. The claimant's assertion that the project meeting minutes constituted the written notice contemplated and plainly required under the contract is rejected. Furthermore, the claimant has failed to come forward with any proof that proposed change orders were submitted as required. Finally, the contract language is unambiguous in requiring written notice prior to performing work related to changed subsurface or physical conditions. The claimant's failure to (1) provide written notice of alleged materially changed site conditions (2) submit proposed change orders regarding work related to such conditions and (3) defer performance of the work to enable the involvement of the department in addressing the matter has been clearly demonstrated by the defendant. As the claimant has failed to submit proof establishing facts sufficient to create triable issues, summary judgment in favor of the defendant is warranted (Home Town Muffler v Cole Muffler, 202 AD2d 764).

Defendant initially moved to amend the answer to assert affirmative defenses of disclaimer and collateral estoppel. Should leave to amend the answer be granted, the defendant then moves for summary judgment dismissing the claim on the basis of the new defenses and those set forth in the second, third and seventh affirmative defenses asserted in the defendant's initial answer. The second affirmative defense alleged claimant's failure to comply with the contractual prerequisites to this claim under paragraphs 3.8 and 3.12 of the General Conditions of IT's contract with DEC. The third affirmative defense alleged that the claim asserted here was waived by claimant's failure to comply with the contractual prerequisites to this claim under paragraphs 3.8 and 3.12 of the General Conditions of IT's contract with DEC. The seventh affirmative defense is based upon documentary evidence and alleges that by its terms and conditions Article 11 of the parties' agreement bars a claim for extra costs attributable to delays, interferences or inefficiencies in the performance of the work.

Pursuant to Rule 3025 (b) "[a] party may amend his pleading or supplement it by setting forth additional or subsequent transactions or occurrences at any time by leave of court or by stipulation of all parties. Leave shall be freely given upon such terms as may be just including the granting of costs and continuances."

Defendant's motion was made prior to conducting any depositions and shortly after the Appellate Division, Fourth Department, issued its decision dismissing IT's complaint against E & E in its entirety on the basis of the same contract disclaimer provisions at issue here and upon the claimant's failure to comply with the contract's notice and cost submission provisions. Absent a showing of surprise or prejudice it is appropriate under these circumstances to grant the defendant leave to amend the defendant's answer to assert the requested affirmative defenses of disclaimer and collateral estoppel and upon such amended answer to grant summary judgment dismissing the claim (see, Goldstein v St. John's Episcopal Hosp., 267 AD2d 426; Fischer v Broady, 118 AD2d 827). Such relief is appropriate where claimant has not raised a triable issue of fact in regard to such defenses. As noted by the Appellate Division Second Department in Campbell v LaForgia Oil Co., 81 AD2d 824, "if the affirmative defense of collateral estoppel should ultimately prove successful, plaintiff will have unnecessarily expended time and expense in preparing for trial. . . ." Here, the judicial determinations made by the Supreme Court and by the Appellate Division on IT's appeal preclude reconsideration of those issues and support the defendant's motion for summary judgment dismissing the claim which is hereby granted.

The dismissal of the claim renders moot the claimant's cross-motion to amend the claim (see, King v New York City Hous. Auth., 235 AD2d 307; see also Lighting Horizons v Kahn & Co., 120 AD2d 648; Smalley v State of New York, Ct Cl, March 1, 2001 [Claim No. 100876] Fitzpatrick, J., unreported). Even viewing the proposed amended claim liberally, in light of the preclusive effect of collateral estoppel and the findings made herein, the absence of merit of the proposed amended claim is "free from doubt" (Non-Linear Trading Co. v Braddis Assocs., 243 AD2d 107, 117, citing Daniels v Empire-Orr, Inc., 151 AD2d 370, 371).


June 8, 2001
Saratoga Springs, New York

HON. FRANCIS T. COLLINS
Judge of the Court of Claims


The Court considered the following papers:
  1. Notice of motion dated December 6, 2000;
  2. Affidavit of C. Michael Reger sworn to December 6, 2000 with exhibits;
  3. Record on Appeal, "IT Corp. v Ecology & Environmental Engineering, P.C.," Appellate Division, Fourth Department [Exhibit G].
  4. Affidavit of Michael J. Cruden sworn to December 6, 2000 with exhibits;
  5. Notice of cross-motion dated February 27, 2001;
  6. Affidavit of Frank T. Gaglione sworn to February 28, 2001 with exhibits;
  7. Affidavit of Dan P. Holzman, unsworn with exhibits;
  8. Reply affidavit of C. Michael Reger sworn to March 15, 2001 with exhibits;
  9. Reply affidavit of Michael J. Cruden sworn to March 15, 2001, with exhibits;
  10. Reply affidavit of Dan P. Holzman, sworn to March 21, 2001, with exhibits;
  11. [Sur] reply affidavit of Michael J. Cruden sworn to March 29, 2001.

[1]Claimant moved for leave to appeal to the Court of Appeals. The motion was denied on January 16, 2001 (see, 96 NY2d 702).