New York State Court of Claims

New York State Court of Claims

BABCOCK v. THE STATE OF NEW YORK, #2003-019-571, Claim No. 92446, Motion No. M-67485


Case Information

Claimant short name:
Footnote (claimant name) :

Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
Motion number(s):
Cross-motion number(s):

Claimant's attorney:
Defendant's attorney:
HON. ELIOT SPITZER, ATTORNEY GENERALBY: Cornelia Mogor, Assistant Attorney General, of counsel
Third-party defendant's attorney:

Signature date:
November 14, 2003

Official citation:

Appellate results:

See also (multicaptioned case)


Claimant moves for an order setting aside, amending, and correcting a portion of this court's prior Decision pursuant to CPLR 4404 (b). The State of New York (hereinafter "State") opposes the motion.

The history of this case need not be repeated here since it is set forth in detail in this court's prior Decision dated July 16, 2003 and filed September 19, 2003. (Babcock Enterprises, Ltd. v State of New York, Ct Cl, September 19, 2003, Lebous, J., Claim No. 92446). In said Decision, this court awarded claimant a total damage award of $219,904.09 in this construction contract claim calculated as follows:

Step #1: $2,137,964 (total job cost)

- 1,780,304
(amount previously paid)

$ 357,660 (uncompensated damages)

Step #2: $ 357,660 (uncompensated damages)

+ 71,532
(20% overhead & profit on $357,660)

$ 429,192 (total cost damages)

Step #3: 50% of total cost damages per Decision

$ 429,192 x 50% = $214,596.00

Step #4: $ 214,596.00 (50% of total cost damages per Decision)

+ 4,500.00 (return of liquidated damages)
+ 808.09 (return of engineering charges)

$ 219,904.09 (total damage award)

Thereafter, a Judgment was entered on September 26, 2003 in the amount of $415,172.60, with the total damage award increased to reflect the addition of interest.

By way of this motion, claimant argues that this court improperly applied the total cost formula as enunciated in Whitmyer Bros. v State of New York, 47 NY2d 960. More specifically, claimant sets forth that the Court of Appeals expressly approved a methodology based upon the "[a]ctual job cost plus allowance for...overhead and profit minus the amounts thus far paid for the work performed...." (Whitmyer Bros., 47 NY2d at 962; emphases added). Claimant argues that this court improperly altered the sequence of the total cost formula to actual job cost minus work paid plus overhead and profit. Stated another way, claimant argues that this court should have based the overhead and profit calculation on the actual job cost, not the actual job cost minus work paid. Using claimant's calculation would result in an additional award to claimant of $178,030.50 as follows:

Step #1: $2,137,964 (total job cost)

+ 427,593 (20% overhead & profit on $2,137,964)


Step #2: $2,565,557 (total job cost plus overhead & profit)

- 1,780,304
(amount previously paid)

$ 785,253 (uncompensated damages)

Step #3: 50% of total cost damages per Decision

$ 785,253 x 50% = $392,626.50

Step #4: $ 392,626.50 (50% of total cost damages per Decision)

+ 4,500.00 (return of liquidated damages)
+ 808.09 (return of engineering charges)

$ 397,934.59 (total damage award)

It is well-settled that relief pursuant to CPLR 4404 (b) is addressed to the discretion of the court. (Carney v Carney, 236 AD2d 574, 575). Claimant argues that this court's own language indicated a reliance on the formula enunciated in Whitmyer which can only mean a strict application of said formula. (Affidavit of Laurence I. Fox, Esq., ¶ 3). In opposition, the State contends that using claimant's calculations would amount to a double recovery with respect to overhead and profit in violation of Section 109-05 of the Standard Specifications as incorporated into the Contract. The court agrees with the State for the reasons set forth below.

While the court cited Whitmyer for the use of the total cost concept, it also attempted to recognize the terms of the parties' Contract which expressly limited a 20% overhead and profit award to new contract items only, namely Section 109-05. More specifically, this court expressly addressed claimant's attempt to apply 20% overhead and profit to the entire cost by stating the following "[t]he Court finds that Claimant improperly applied that profit and overhead allowance to all costs across the board although Section 109-05 permits a 20% allowance on new contract items only."[1] (Decision, p 130). In other words, the court applied the Whitmyer formula to the parties own Contract specifications. The court agrees with the State's argument that if 20% overhead and profit were awarded based on the total job cost, then claimant would be receiving two overhead and profit awards for original contract items. For example, assume claimant had already received payment on an item that included a 7% overhead and profit allowance, claimant's methodology would then award an additional 20% on that item, for a total award of 28.4% overhead and profit, a result clearly not envisioned by Section 109-05.[2] Under these circumstances, the court attempted to weigh the formula set forth in Whitmyer with damages as permitted by the parties' own Contract terms to produce a fair estimate of actual damages.[3] (Berley Inds. v City of New York, 45 NY2d 683; Novak & Co. v Facilities Dev. Corp., 116 AD2d 891, 893 [allowance for profit based on such excess direct costs]; Gray Inc. v State of New York, 251 AD2d 728, 730 [profit and overhead based on similar figures under the contract]; Manshul Constr. Corp. v Dormitory Auth. of State of N.Y., 79 AD2d 383, 390-391 [overhead and profit based on excess direct costs]). The court also notes that Whitmyer included awards to both the subcontractor and contractor. In a decision ultimately affirmed by the Court of Appeals, the Appellate Division awarded the subcontractor 15% overhead and profit on the entire direct job cost, while finding that the contractor, Whitmyer, would be receiving "an unwarranted windfall" if awarded "[a]n additional 5% on the difference between the direct job cost plus [the subcontractor's] overhead and profit minus the amounts thus far paid to [the subcontractor]...." (Whitmyer Bros. v State of New York, 63 AD2d 103, 108-109, affd 47 NY2d 960). In any event, this court refuses to award claimant its requested relief, since to do so would provide claimant better contract terms at this juncture than claimant bargained for itself in the first instance.

Accordingly, in light of the foregoing, it is ordered that claimant's motion to set aside, amend, and correct that portion of this court's prior Decision relating to total cost damages, made pursuant to CPLR 4404 (b), Motion No. M-67485, is DENIED.

November 14, 2003
Binghamton, New York

Judge of the Court of Claims

The Court considered the following papers in connection with this motion:
  1. DECISION, September 19, 2003, Lebous, J., Claim No. 92446.
  2. Notice of Motion No. M-67485, dated October 1, 2003, and filed October 2, 2003.
  3. Affidavit of Laurence I. Fox, Esq., in support of motion, sworn to October 1, 2003.
  4. Affirmation of Cornelia Mogor, AAG, in opposition to motion, dated October 8, 2003, and filed October 9, 2003.
  5. Reply affidavit of Laurence I. Fox, Esq., in support of motion, sworn to and filed October 14, 2003.

[1]Section 109-05 of the Standard Specifications states, in part, as follows:

2. Force Account Charges.

a. Contractor Charges. Where there are no applicable unit prices for extra work ordered and agreed prices cannot be readily established or substantiated, the Contractor shall be paid the actual and reasonable cost of the following:
(6) Profit and Overhead. Profit and overhead cost shall be computed at 20 percent of the following:
(a) Total Direct Labor Cost (actual hours worked multiplied by the basic hourly wage rate) plus supplemental benefits payments, payroll taxes, insurance payments and other labor related fringe benefit payments as defined in (2) and (3) above, but not including the overtime additive payments. Profit and overhead shall not be paid on the premium portion of overtime.

[2]In other words, such calculation would permit the compounding of overhead and profit, allowing 20% overhead and profit on a sum that already includes 7% overhead and profit.

[3]Parenthetically, the court notes that the foregoing analysis was undertaken despite the limitations of claimant's own pleadings, namely a catchall single cause of action for delay based exclusively on the total cost theory of damages. Despite such limitations, this court itemized damages after finding that "[a]lthough the allegations of delay were broadly sketched in the Claim's single cause of action, they were clarified somewhat in Claimant's Verified Bill of Particulars, and during the course of trial it became evident that the causes of action were several." (Decision, p 14). As outlined hereinabove, after deducting what had already been paid by the State, the court determined that an allowance for profit and overhead would be applied to the difference only since an application of overhead and profit to the total cost of the project would have produced a result that went against the court's reasoning for itemizing specific areas of project work. In other words, while not awarding quantum meruit damages, since that was not pled, the court made what arguably could be described as a hybrid award based upon delay occasioned by negligence in design and planning in two specific areas of the project that impacted the remaining items of the project.