LaCORTE v. STATE OF NEW YORK, #2004-015-395, Claim No. 105031, Motion No.
Court granted Summary Judgment dismissing contract claim for delay damages due
to contractor's failure to comply with notice and documentation provisions of
LaCORTE COMPANIES, INC.
Footnote (claimant name)
STATE OF NEW YORK
Footnote (defendant name)
FRANCIS T. COLLINS
Harris Beach LLPMark J. McCarthy, Esquire
Honorable Eliot Spitzer, Attorney General
EsquireAssistant Attorney General
April 20, 2004
See also (multicaptioned
Defendant's motion for summary judgment pursuant to CPLR 3212 seeking an order
dismissing the claim upon the fourth affirmative defense contained in the
amended answer is granted. On August 5, 1998, LaCorte entered into a contract
(Contract No. D40424-E) with the New York State Office of General Services (OGS)
to perform electrical work at the Health Facility Regional Medical Building at
Fishkill Correctional Facility in Beacon, New York.
The instant claim seeks to recover approximately $850,000.00 in additional
costs of construction, extended overhead, supervisory expenses and other costs
plus interest allegedly due as a result of the defendant's breach of the
contract. Specifically, claimant alleges that the State impeded the claimant's
work involving the installation of overhead electrical conduit, light fixtures
and in-wall electrical box assemblies. The claim alleges that the State failed
to provide timely access to portions of the construction site; failed to
coordinate the work of prime contractors on the project; required claimant to
perform its operations in a manner neither called for nor anticipated in the
contract plans and specifications; required claimant to incur unanticipated
extra and additional work; and imposed restrictions on the claimant's operations
which were not authorized in the contract documents. Claimant alleges that the
above described circumstances resulted in claimant suffering inefficiencies and
delays in completing the contract and required the performance of extra and
additional work for which claimant seeks compensation.
By the instant motion the defendant seeks dismissal of the claim based upon the
fourth affirmative defense raised in defendant's amended answer. That
affirmative defense specifically states:
AS A FOURTH AFFIRMATIVE DEFENSE, THE STATE OF NEW YORK ALLEGES:
TWELFTH: Claimant has failed to provide the Notice of Claim required by
Article 17A.3 of the General Conditions of the agreement between the parties for
anticipated claims for delays of the work for the contract involved in this
claim, and has therefore waived its claim for any compensation for delay,
inefficiency, or extra or additional costs pursuant to the terms of Article
17A.4 of the General Conditions of the agreement between the parties.
Sections 17A.3 and 17A.4 cited in the fourth affirmative defense provide as
17A.3 The Contractor shall provide "notice of claim" of an anticipated claim
for delay to the Contracting Officer by personal service or certified mail no
more than fifteen days after the Contractor knew or ought to have known of the
facts which form the basis of the claim. The Contracting Officer shall
acknowledge receipt of the Contractor's notice, in writing, within five days.
The Contractor agrees that the State shall have no liability for any damages
which accrue more than fifteen days prior to the delivery or mailing of the
required notice. The notice shall at a minimum provide a description of any
operations that were, are being, or will be delayed, the date(s) and reasons for
the delay, and, to the extent known, the information required by Section 17A.6
below. In no case, shall oral notice to the Director's Representative or
contracting officer constitute notice under this provision or be deemed to
constitute a waiver of the written notice requirement.
17A.4 Failure by the Contractor to adequately progress the completion of the
work will be considered in determining the causes of delay. For any claim
asserted under this Article, the Contractor shall keep detailed written records
of the costs and shall make them available to the Contracting Officer at any
time for the purposes of audit and review. Failure by the Contractor to provide
the required written notice or to maintain and furnish records of the costs of
such claims to the Contracting Officer shall constitute a waiver of the
Other sections of the general conditions germane to this motion include the
2.5 The term "Contracting Officer" means the Director of Contract
Administration of the Design and Construction Group of the Office of General
Services or his representative designated in writing.
2.8 The term "Director" means the Director of Construction of the Design
and Construction Group of the Office of General Services who will have general
direction and supervision of the Work.
17A.1 For the purposes of this contract, the term delay includes delay,
disruption, interference, inefficiencies, impedance, hindrance and
17A.2 The Contractor agrees to make claim only for additional costs from
causes listed below, attributable to delay in the performance of this contract,
occasioned by any act or omission to act by the State or any of its
representatives. The Contractor also agrees that delay from any other cause
shall be compensated for solely by an extension of time to complete the
performance of the work.
17A.2.1 The failure of the State to take reasonable measures to coordinate
and progress the work.
17A.2.2 Extended delays attributable to the State in the review or issuance
of orders-on-contract or field orders, in shop drawing reviews and approvals or
as a result of the cumulative impact of multiple orders on contract, which
constitute a qualitative change to the project work and which have a verifiable
impact on project costs.
17A.2.3 The unavailability of the site for such an extended period of time
which the Director determines to significantly affect the scheduled completion
of the contract.
17A.2.4 The issuance by the Director of a stop work order relative to a
substantial portion of work for a period exceeding thirty days.
* * *
17A.7.3 Failure to timely comply with any of the requirements of Article
17A for the submission of any claim for delay may constitute grounds for denial
of such claim.
In support of the motion the defendant submitted, inter alia, the affidavit of
Robert E. Kainz, the Director of Contract Administration for the Office of
General Services. Mr. Kainz states that he was the Contracting Officer as that
term is defined in § 2.5 of the general conditions of the contract and that
he did not designate in writing anyone to act on his behalf with regard to the
instant contract. He further alleges that although OGS let this electrical
contract in August 1998 with required completion in February 2000, the first and
only notice of claimant's claim for delay damages to OGS was the submission of
something called "preliminary claim documents" received by OGS in January 2001,
more than ten months subsequent to the stated contract completion date.
In the preliminary claim documents LaCorte contended that the project's prime
masonry contractor (The Losco Group) interfered with or delayed claimant's work
by slow masonry production and further alleged that OGS failed to supervise the
masonry contractor or coordinate the work of the separate prime
Mr. Kainz alleges that the written notice of claim required by section 17A.3
"enables OGS contract administration to assess the cause(s) and potential cost
of project delay during the course of construction when the cause(s) can be
evaluated and project cost, in terms of both time and money, can be mitigated."
He further alleges that in cases where, as here, OGS has hired a construction
manager the required written notice of claim when served upon the Contracting
Officer would bring up for review any allegation that the construction manager
was failing to coordinate the work of multiple prime contractors. Without
strict compliance with the notice requirement the State would be denied the
opportunity to assess and correct the causes of the delay. The affiant avers
that letters written by LaCorte to the construction manager's field
representative (Norman Brooks), which were not copied to the Contracting
Officer or to anyone else at OGS, do not satisfy the contract's written notice
Furthermore, he alleges that the preliminary claim documents served upon an OGS
official other than the Contracting Officer some ten months subsequent to the
completion of the project were served well beyond the 15 day period for service
set forth in § 17A.3. Those documents he maintains demonstrate that
claimant knew early in the project that it was incurring delay damages but
failed to bring the matter to the attention of OGS by timely service of a notice
of claim. According to Mr. Kainz claimant's failure in this regard constituted
a waiver of its claim for delay damages as provided by § 17A.4 of the
general conditions of the contract including those involving the in-wall masonry
boxes, hanger and conduit installation, lighting fixtures installation, wage
escalation, site and home office overhead and professional costs.
Claimant opposed the summary judgment motion solely by an affidavit of counsel
who fails to assert direct knowledge of the underlying facts. In his affidavit
counsel states at paragraph 3 that "the issue before the Court is strictly one
of law as the parties are in agreement with respect to the factual circumstances
surrounding this claim". Counsel goes on to state in paragraph 4 that the
claimant encountered significant difficulty in performing its work "from the
earliest stages of its contract performance" and that the construction manager
retained by the defendant was informed of all such difficulties. Claimant's
counsel alleges without evidentiary support in paragraph 5 that representatives
of OGS were aware of problems at the job site and "were well able to apprise
themselves of any information which they deemed necessary with respect to
problems on the site". Finally, in paragraph 6 counsel contends that OGS was
"fully apprised through the course of the contract performance that the Claimant
was experiencing damages" and cites as support for this contention a letter
dated January 2, 2001 presenting claimant's preliminary claim documents to the
director of the OGS Design and Construction Group.
Counsel argues that by conducting an audit of claimant's project costs and in
failing to take any action with regard to the January, 2001 submission of
preliminary claim documents by the claimant the defendant has waived the right
to "exercise its discretion pursuant to Article 17A.7.3".
In his reply affidavit defense counsel asserts that the audit to which
claimant's attorney refers was performed at the request of the Attorney General
in response to the filing of the instant action and does not constitute an audit
for contract administration purposes as provided in article 17A of the
contract's general conditions. He further asserts that the conduct of an audit
of any nature does not excuse claimant's non-compliance with the required
contractual notice provision. Moreover, defense counsel refutes his
adversary's claim of waiver based on the allegation that the State took no
action with regard to claimant's January 2, 2001 submission of "preliminary
contract documents". In doing so, counsel points to the language in paragraph
5 of the verified claim which states:
5. The claim herein accrued on or about August 20, 2001, when Mr. Donald J.
Bishop, Esq., OGS Assistant Counsel, had a telephone conversation with Joel L.
Lindy, Esq. of Harris Beach, LLP in which Mr. Bishop informed Mr. Lindy that OGS
was denying any payment on the administrative claim submitted by LaCorte to OGS
on or about January 19, 2001.
Article 17A of the general conditions of the subject contract makes clear that
claims for delay include "delay, disruption, interference, inefficiencies,
impedance, hindrance and acceleration" and that such claims are permitted only
for the causes specifically listed in sections 17A.2.1 through 17A.2.4. The
claimant seeks to predicate recovery upon section 17A.2.1 which covers the
State's alleged failure to take reasonable measures to coordinate and progress
the work. Claimant's opposition to the motion, however, falls far short of
demonstrating by proof in admissible form that OGS was aware of alleged delays
attributable to the construction manager's failure to coordinate the work of the
various contractors on the project, particularly the prime masonry contractor,
let alone that the defendant was aware the claimant intended to institute a
claim for damages arising from the delays. Clearly, the affirmation of
claimant's attorney who is without direct knowledge of the facts is insufficient
to raise a material issue of fact in this regard and is therefore insufficient
to defeat the defendant's motion for summary judgment (GTF Mktg. v Colonial
Aluminum Sales, 66 NY2d 965; Zuckerman v City of New York, 49 NY2d
Through its submissions, including the affidavit of Robert E. Kainz, the movant
has established both that specific notice to the Contracting Officer was
required and that no such notice was received. Claimant does not argue that
notice conforming in form and manner to the requirements of the contract was
provided. Rather, claimant argues that notice was provided the defendant's
construction manager or, alternatively, that the defendant could have apprised
itself of problems at the site and thereby have become aware of the delays for
which claimant now seeks redress. The sole notice to the State evident on this
record is the January, 2001 submission of claimant's preliminary claim documents
which, the Court notes, appear to have been served not personally or by
certified mail but by "UPS Overnight Mail" (see, Defendant's Exhibit
The plain language of the contract at issue here provided with regard to delay
damages (i) the contractor shall provide a notice of claim for anticipated
delays (ii) to the Contracting Officer, a defined term (iii) by personal
service or certified mail (iv) not more than fifteen days after the facts
underlying the claim became or should have become known and (v) that the notice
shall provide certain prescribed information concerning the underlying claim.
Failure to provide the required written notice is deemed to constitute a waiver
of the claim and, in any event, the contract provides that the State shall have
no liability for damages accruing more than 15 days prior to delivery or mailing
of the notice.
Applying the required construction to the notice and documentation provisions
of the contract the Court concludes that the defendant has established its
prima facie entitlement to judgment as a matter of law (A.H.A. Gen.
Constr. v New York City Hous. Auth., 92 NY2d 20, 33-34; Bat-Jac Contr. v
New York City Hous. Auth., 1 AD3d 128; see also Morelli Masons,
Inc. v Peter Scalamandre & Sons, 294 AD2d 113). Nothing in the
claimant's submissions raises a triable issue of fact regarding claimant's
compliance with the applicable notice requirements or any unsupported allegation
of waiver by the State. As a result, the defendant's motion for summary
judgment is granted and the claim is dismissed.
The trial previously scheduled to begin April 26, 2004 is hereby
April 20, 2004
Springs, New York
HON. FRANCIS T. COLLINS
Judge of the Court of
The Court considered the following papers:
Notice of motion dated February 6, 2004;
Affidavit of C. Michael Reger sworn to February 6, 2004 with exhibits;
Affidavit of Robert E. Kainz, sworn to February 5, 2004 with exhibits;
Affidavit of Mark J, McCarthy sworn to February 20, 2004;
Affidavit of C. Michael Reger sworn to February 25, 2004 with exhibit;
Affidavit of Shrihari N. Mangalmurti sworn to February 25, 2004.