New York State Court of Claims

New York State Court of Claims

ECOR SOLUTIONS v. STATE OF NEW YORK, #2004-015-428, Claim No. 106556, Motion Nos. M-68289, CM-68595


Synopsis


State's motion for summary judgment denied in case involving contract to remediate superfund site since questions of fact exist as to whether State waived notification and documentation provisions of contract. Claimant's cross-motion for summary judgment on issue of wrongful termination denied. claimant's support of its claim of ill will, bad faith and financial advantage was conclusory and speculative.

Case Information

UID:
2004-015-428
Claimant(s):
ECOR SOLUTIONS, INC. f/k/a ERM C & O SERVICES, INC.
Claimant short name:
ECOR SOLUTIONS
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
106556
Motion number(s):
M-68289
Cross-motion number(s):
CM-68595
Judge:
FRANCIS T. COLLINS
Claimant's attorney:
Ernstrom & Dreste, LLP By: John W. Dreste, Esquire
Defendant's attorney:
Honorable Eliot Spitzer, Attorney General
By: Eidin Beirne, EsquireAssistant Attorney General
Third-party defendant's attorney:

Signature date:
October 29, 2004
City:
Saratoga Springs
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

In the late 1980's and early 1990's The New York State Department of Environmental Conservation (DEC) initiated a study and investigation of the project site, the former American Valve Manufacturing (AVM) foundry and manufacturing plant at Coxsackie, Greene County, New York which had been identified under New York State's Superfund program as containing various hazardous wastes. In 1992 the State hired Malcolm Pirnie, Inc. (MPI) as DEC's design consultant and construction manager for remediation of the site. MPI completed its studies and investigation eight years later and issued a final engineering report in August 2000.

The project was let for bid on September 5, 2000 and required that bids be submitted on October 17, 2000 approximately five weeks after the bids were solicited. Among other things the proposal and ultimately the contract required the consolidation of contaminated foundry sand in a designated capped landfill, asbestos abatement, building demolition, excavation and treatment of soils contaminated with volatile organic compounds (VOC) using a low temperature thermal desorption (LTTD) process, removal of abandoned utilities, treatment of site groundwater and the installation of monitoring wells.

ERM C & O Services, Inc., [1] was the successful bidder on the project for the agreed contract price of $3,497,942.70. The contract provided that time was of the essence and that substantial completion was to occur within 320 days and final completion within 365 days of the date established in the notice to proceed. That date was fixed in the notice as February 5, 2001 thereby requiring substantial completion by December 24, 2001 and final completion on or before February 5, 2002.

Throughout the project numerous differences between actual site conditions and those set forth in the bidding documents were discovered including the discovery of contaminated foundry sand beneath the concrete pad under one of the buildings to be demolished, elevated moisture content in the contaminated soils and larger quantities of VOC contaminated soils. Claimant alleges that these differences not only increased ECOR's costs on the project but were responsible for time delays requiring an extension of the designated completion deadlines. It further alleges that its attempts to obtain additional compensation and a time extension for completion were rebuffed by the defendant's representatives who insisted that the issue of additional compensation would be addressed upon completion of the relevant portion of the work and that an extension of the completion date was generally addressed at the end of the job.

By letter dated March 25, 2002 (Claimant's Exhibit 48) claimant was notified that DEC intended to terminate ECOR for cause in accordance with Article 14 of the General Conditions unless ECOR met the following three enumerated conditions within ten days of the date of the letter:
1. ECOR Solutions, Inc. must demonstrate to the Department's satisfaction that sufficient financial resources are available to ECOR to enable the work of the referenced contract to be completed in accordance with ECOR's current project schedule.

2. ECOR Solutions, Inc. must provide financial assurances to the Department, in writing, to document the discharging of past and current project-related obligations of ECOR without delay.

3. ECOR Solutions, Inc. must provide a comprehensive construction schedule showing material delivery, manpower, equipment, etc. necessary to complete the project.
The letter informed ECOR that it served "as a written confirmation of a breach of Contract" by ECOR but did not otherwise specify the nature of the breach. It did, however, warn ECOR that should any additional liens, notices of overdue bills or other notifications suggesting lack of payment by ECOR to its employees, suppliers, vendors, or subcontractors be brought to the attention of DEC within the designated ten day period the termination process would be initiated immediately.

By letter dated March 27, 2002 (Claimant's Exhibit 49) John W. Dreste, counsel for ECOR, sought clarification of the contractual bases for termination and expressed the impossibility of ECOR effecting a cure of the alleged breach without being able to determine what, if any, breach occurred.

Without reference to Mr. Dreste's letter, on April 1, 2002 (Claimant's Exhibit 52) DEC issued a written confirmation of breach and seven day written notice of termination to both ECOR and its surety. That letter advised of DEC's intent to terminate ECOR with cause in accord with Article 14 of the contract and to invoke the performance bond based upon the following:
1) ECOR has disregarded Laws and Regulations.

2) ECOR has disregarded the authority of the Engineer.

3) ECOR has violated provisions of the Contract Documents.

4) ECOR has failed to perform the work in accordance with the Contract Documents.

5) ECOR has failed to adhere to the progress schedule.

6) ECOR has violated permit conditions.

7) ECOR has failed to comply with Health and Safety conditions required by the Contract Documents or Law.

Claimant's counsel, by Todd R. Braggins, responded to DEC's April 1, 2002 letter by correspondence dated April 4, 2002 (Claimant's Exhibit 54) again expressing the position that claimant was ready, willing and able to proceed with the work under the contract noting the seven day cure period referenced in Sub-Article 14.3 and seeking additional information regarding the alleged breaches listed in DEC's April 1, 2002 letter so that ECOR could undertake corrective measures.

By letter dated April 12, 2002 (Claimant's Exhibit 55) DEC terminated ECOR for cause effective on the close of business April 10, 2002 stating that DEC would have ECOR's surety, American Guarantee and Liability Insurance Company complete the remaining work.

ECOR filed its claim with the Clerk of the Court on August 27, 2002 and personally served a copy of the claim upon the Attorney General's Rochester Regional Office on August 26, 2002. The claim asserts the following six separately denominated claims: (1) wrongful termination, (2) breach of contract, (3) equitable payment upon termination, (4) recision and/or reformation of contract, (5) extension of time, (6) interest. The claim seeks damages in the amount of $7,095,008.08 plus interest.

The State filed an amended verified answer on October 10, 2002[2] asserting a counterclaim for $1,607,000.00 plus interest as liquidated damages for ECOR's failure to complete the project within the allotted time. The claimant filed a reply on November 12, 2002. The defendant now moves for summary judgment dismissing the claim and claimant cross-moves for summary judgment on the issue of liability.

At the outset it should be noted that the State's notice of motion in blanket fashion seeks "summary judgment dismissing the Claim." The affidavits in support of the motion contain no "Wherefore" clauses limiting the relief sought to any of the six specifically enumerated causes of action set forth in the claim. Defense counsel's memorandum of law is addressed, however, only to causes of action 2 through 6 (see heading of Point 1). The fact that defendant's motion is not addressed to claimant's first cause of action sounding in wrongful termination is specifically conceded at page 3 of the defendant's reply memorandum of law dated July 26, 2004. Defense counsel states that the question of whether or not claimant was wrongfully terminated is "clearly one of fact" and that defendant's motion therefore intentionally omitted any discussion of that cause of action.

Both defendant's and claimant's notices of motion fail to specify the grounds upon which the relief is requested. As the Court recently noted in the case of I.T.R.I. Masonry Corp. v State of New York, Ct Cl, September 16, 2004 [Claim No. 106692, Motion No. M-68691, UID # 2004-015-425] Collins, J., unreported[3]:
Although CPLR 2214 (a) provides in part that "[a] notice of motion shall specify . . . the relief demanded and the grounds therefor" claimant has neither objected to defendant's omission to state a ground for relief nor alleged prejudice. Accordingly the Court has decided to disregard defendant's failure to state the grounds for relief "as a technical deficiency in the interests of justice and expediency" (Matter of LiMandri, 171 AD2d 747; CPLR 2001; see also HCE Assoc. v 3000 Watermill Lane Realty Corp., 173 AD2d 774).

Here neither party has objected nor has either alleged any prejudice. The Court will therefore overlook the deficiencies.

The rules applicable to the determination of a motion for summary judgment were clearly stated by the Court of Appeals in Alvarez v Prospect Hosp., 68 NY2d 320, 324:
As we have stated frequently, the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (Winegrad v New York Univ. Med. Center, 64 NY2d 851, 853; Zuckerman v City of New York, 49 NY2d 557, 562; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404). Failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers (Winegrad v New York Univ. Med. Center, supra, at p 853). Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (Zuckerman v City of New York, supra, at p 562).
The proponent of a summary judgment motion may only meet its initial burden through the submission of evidentiary proof in admissible form (Rifenburgh v Wilczek, 294 AD2d 653).

It has further been held that in considering a motion for summary judgment by a defendant "the issue is not whether plaintiffs can ultimately establish liability, but, rather, whether there exists a substantial issue of fact in the case on the issue of liability which requires a plenary trial. (see e.g., Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065; Rotuba Extruders v Ceppos, 46 NY2d 223, 231)" (Barr v County of Albany, 50 NY2d 247, 253). Furthermore, "[t]he court's function on a motion for summary judgment is not to resolve issues of fact or to determine matters of credibility but merely to determine whether such issues exist (see Barr v County of Albany, 50 NY2d 247; Rebecchi v Whitmore, 172 AD2d 600, 601; Daliendo v Johnson, 147 AD2d 312, 317)" (Roth v Barreto, 289 AD2d 557, 558).

In support of its motion to dismiss causes of action 2 through 6 the defendant offered inter alia the affidavit of James Ludlam, a licensed professional engineer employed by the New York State Department of Environmental Conservation who is familiar with the State's Inactive Hazardous Waste Disposal Site Remedial Program (State Superfund Program). The facts presented therein were not disputed by claimant and provide an overview of the general circumstances giving rise to the contract at issue.

Mr. Ludlam described in general terms the process by which DEC identifies, characterizes, investigates and remediates sites containing consequential amounts of hazardous wastes which includes material generated from certain industrial processes or materials which are flammable, explosive, corrosive or toxic. He explained how once a site is characterized (i.e., identified by the general presence and type(s) of contamination) and listed in the State's Registry a remedial investigation is conducted usually by a consultant engineer under contract with DEC. The remedial investigation explores the site to determine the nature and extent of contaminants, their source(s) and pathways for migration and the site's environmental media. The data and knowledge gained from the investigation is used to identify and evaluate alternatives for remedial action.

A feasibility study follows the remedial investigation and includes DEC's goals for the site and the identification/evaluation of remedial alternatives. The remedial investigation and feasibility study lead to the development of a remedial action plan and a record of decision in which DEC identifies the selected remedy and explains the rationale for its decision.

According to Ludlam, implementation of the remedy usually involves two phases (1) remedial design which generates details and plans for the work to be conducted and (2) remedial action.

Mr. Ludlam alleged that the first step of the remedial design is the final engineering report which establishes the general scope and character of the planned remediation. The submission and acceptance of the final engineering report is followed by the development of plans and specifications (the final design) which become the bidding documents for the remedial action (construction) phase.

The affiant described remedial action as involving the installation of monitoring systems and/or implementation of institutional controls. Remedial action often involves removing or treating contaminated soil, pumping and treating contaminated groundwater, demolition and removal of structures and facilities and the construction and capping of landfill(s) containing waste material. When the remedial action at the site is completed the site is reclassified and/or delisted.

Mr. Ludlam then described the subject site (AVM) as the site of a foundry engaged in the manufacture of valves and pipe fittings over an eighty year period (1904 - 1986). He further related that sand used in the manufacturing process became contaminated with toxic levels of lead and other heavy metals (foundry sand). That sand and other industrial wastes were dumped on the site throughout AVM's operating history. In addition, industrial solvents such as tetrachloromethane and trichloromethane, known as volatile organic compounds (VOCS) were used as cleaning agents and deposited in the facility's degreasing pit, holding areas, connecting trenches and sanitary sewers. He alleges that over time the VOCS leached from their containment structures and migrated throughout the site mixing with the site's native soils and groundwater.

After AVM went out of business in 1986 DEC attempted but failed to engage the owner in a remedial investigation of the site. Ultimately a referral was made which enabled the State to proceed using the State Superfund. The State's acquisition of the site was without benefit of a detailed study or inventory of contaminants on and around the site.

Thereafter, DEC hired Malcolm Pirnie, Inc. (MPI) to provide engineering services which included preparation of the remedial investigation and site feasibility study (RI/FS) reports and remedial design and construction management activities. MPI produced two separate RI/FS reports for the site which was divided into two units denominated "operable unit 1 and 2"[4].

The contract at issue, which was to remove and/or mitigate hazardous wastes at the site, was the final step in the remediation process. MPI prepared the contract documents and was designated therein as the "project engineer."

Ludlam asserts that during the RI/FS and development of the project plans and specifications he reviewed and approved MPI's investigation and studies and processed and approved MPI's payment applications. During the remedial action phase he coordinated the State's efforts to inform and solicit comment from the public regarding activities at and around the site.

According to the affiant the project's design required the excavation and collection of foundry sand into a single landfill to be covered with a geomembrane cap. VOC contaminated soils were to be excavated and treated on site by (low temperature) thermal desorption, a process involving the heating of soil to convert the VOCs into a gaseous state. The contaminants were then separately captured and removed. The contract required the treated soils to be replaced on site in the general areas from which they were excavated.

Additionally, the project required the abatement of asbestos located in the foundry and the demolition of that building, the removal of underground utilities and storage tanks, abandonment and modification of monitoring wells and the installation of new wells, treatment of on-site ground water and installation of sewer facilities.

The State also submitted the affidavit of Robert C. Knizek, a licensed professional engineer employed by DEC who served as Chief of the Eastern Field Services Section of DEC's Bureau of Construction Services during the period 2001-2002. In that capacity his duties included construction management of several remediation projects including the AVM site through an engineering staff of five people. With regard to the subject site Knizek's duties included the supervision of all phases of the construction contract execution including the review of final plans and specifications before bidding, preparation of advertisements for bids, presiding over the pre-bid meeting, attendance at job progress meetings, approval of change orders before final execution by the State, reviewing and approving payments to the contractor and initially reviewing disputes filed by the contractor.

This affiant alleged that the project was released for bids on September 5, 2000 and that a pre-bid meeting was held at the site on September 27, 2000 to address questions posed by prospective bidders and to permit bidders to inspect the site. Several potential bidders including ERM C & O Services, Inc. attended the pre-bid meeting. The minutes of that meeting including questions posed by potential bidders and answers provided by DEC and MPI were incorporated into the contract as Addendum No. 1. Subsequently posed questions to MPI and answers provided were incorporated into the contract as Addendum No. 2.

ERM C & O Services Inc. submitted the lowest of eleven bids in the sum of $3,497,942.70 and was notified of the bid's acceptance by notice of award dated November 2, 2000. The contract was approved by the State Comptroller on January 9, 2001 and a notice to proceed was issued on February 5, 2001, the date from which substantial completion and final completion of the project were measured.

Knizek admitted that the project involved the disturbance, excavation, removal, disposal and/or replacement of soils, materials, structures and utilities which to a large extent were beneath the surface and not visually observable. He went on to say, however, that there were various means by which a potential bidder could obtain additional information regarding subsurface conditions including borings, geoprobes and test pits. These routine extraction and testing methods, according to the affiant, also furnish information regarding the water content of subsurface soils at the location where and time when the material is extracted.

He alleged that prior to letting of the contract 80 soil borings were taken inside and outside the building at the AVM site. The data obtained from those borings were incorporated into the bid documents as Appendix A. He alleged further that the borings formed the basis of the landfill cross-section contained within the contract plans.

The affiant pointed to Section III Article 13 of the contract to support the proposition that the boring data provided information limited only to the location and time the borings were taken and that the State made no representations or warranties as to the completeness of the data or information supplied. He also referred to Section III Article 15 which imposed upon bidders the responsibility of obtaining any additional information they might require. Moreover, bidders were advised of the availability of the RI/FS for both operable units (see Article 5, Section IV, Bidding Information and Requirements and Addendum No. 1, [pre-bid meeting minutes]).

Knizek asserted that claimant was afforded an opportunity to conduct tests or investigations of the site following the September 27, 2001 pre-bid meeting and again on October 4, 2001. Although claimant was present at the site on both dates it performed no tests and conducted no investigations. With regard to the building itself Knizek alleged that while borings had been taken within the building footprint to identify subsurface materials the State had not investigated the size or condition of the foundation footings and grade beams underlying the structure's walls and the slab on which it was constructed. In Addendum No. 2 in answer to bidder's question #25 the State advised that the approximate thickness of the foundation was one foot and that there were no other data regarding the size of foundations or slabs. Knizek alleges that the State anticipated that the contractor would estimate the size and extent of these components by viewing the building and applying basic engineering concepts.

Knizek alleged that with regard to the extent and location of foundry sand 43 borings were performed inside the building, test pits were dug outside and 35 surface samples were taken both inside and outside the buildings during the investigative phase of the project. Results of this testing were made available to bidders in Appendices B, D and E of the contract documents. Additionally Plan Sheet 13 showed the location of the aforementioned surface samples and several of the samples discussed in Appendix D showed the presence of sand. Plan Sheet 4, a cross-section of the site and building, showed foundry sand to be removed. He alleged that contrary to claimant's assertion that no foundry sand was anticipated beneath the building, question/answer #48 set forth in Addendum No. 2 specifically advised bidders to assume that the concrete pads and foundations had been in contact with hazardous wastes, including foundry sand.

On the subject of unit pricing Knizek asserted that the plans, specifications and supplemental information included estimates of quantities expressed in units such as square feet, cubic yards, tons, etc. Bidders were required to provide a price per unit in their bids. The witness explained that unit pricing was utilized so that if anticipated quantities were exceeded DEC could estimate how much the contract price might increase by multiplying the additional quantities by the agreed unit price. The instant contract, however, also contained a provision whereby a contract unit price could be adjusted should actual quantities encountered exceed those anticipated in the contract by 115% resulting in a cost increase of $30,000 or 5% of the contract price (General Conditions). Any such adjustment was dependent upon the contractor providing adequate documentation of the alleged additional expense.

Knizek further alleged that Section XI-01050 of the contract required the contractor to assist MPI in locating boring locations and test pits and cites this requirement as proof that the contract anticipated that borings and pits would be used to determine the actual location and extent of subsurface materials.

Knizek categorically denied any mutual mistake on the part of the State as to quantities of either foundry sand or VOC contaminated soils as alleged in the claim, stating that the use of estimated quantities surrounded by cautions in the pre-bid documents along with contract provisions providing for increases and decreases in unit prices should have alerted responsible bidders to be cautions when estimating costs relative to subsurface materials.

Mr. Knizek further alleged that the claimant was required by the contract to give prompt written notice of any subsurface conditions deviating from the plans and specifications (General Conditions, Articles 3.7 and 3.8); to furnish prompt written documentation regarding the contractor's costs associated with the alleged deviation (General Conditions, Article 3.12) and that if the matter was not resolved to the contractor's satisfaction it must then pursue the contract's dispute resolution procedure (General Conditions Article 15). According to this affiant the notice and documentation provisions alert DEC to the possibility of greater expense and afford DEC the opportunity to develop means to control costs. Knizek alleged that at a pre-construction meeting held on January 18, 2001 he reminded those present including several of claimant's representatives of the notice and dispute resolution provisions and stressed the necessity of compliance with such provisions.

The affiant also addressed the contract's anti-assignment clause (Section VIII, Appendix A, para 2) which refers to State Finance Law § 138 which, in turn, prohibits the assignment of contracts without the State's prior written approval. He alleged that at no time during its performance under the contract did ERM request DEC's written consent to assign its interest in the contract to ECOR Solutions, Inc. and no such consent was given by DEC. Additionally, he asserted that despite having advised a representative of ERM that it should formally notify DEC of its alleged corporate name change no such written notification was ever provided.

With regard to delay damages Knizek asserted that claimant agreed pursuant to Article 11 of the parties' agreement to make no claim for consequential damages attributable to delays, interferences or inefficiencies caused by any act or omission on the part of the State.

Mr. Knizek alleged that the General Conditions of the contract specified that time is of the essence (Article 10.12.4) and that time extensions could be effected solely by an executed change order (General Conditions, Article 10.2 and 10.12) and only if the contractor substantiated the extent of the increase within 15 days of discovery of the event necessitating the proposed time extension. According to the affiant a time extension would only be granted upon a demonstration by the contractor, through an analysis of an approved progress schedule, that the delay arose from unforeseen causes beyond the contractor's control (General Conditions, Article 10.12.3). He further alleged that the contractor's failure to comply with the time requirements for delivery of written proposed change orders or claims constituted a waiver of any request or claim for an extension of time[5].

Knizek does not dispute that during the work claimant's representatives verbally discussed the claimant's concerns regarding its ability to complete the contract within the time specified. He denies, however, that a time extension request was discussed at a November 16, 2001 meeting despite claimant's letter of December 17, 2001 requesting that the minutes of the November 16 meeting be amended to include such a reference. In fact, Knizek alleges that ECOR did not request a time extension in writing until February 22, 2002 in an unnumbered change order request. That request, he asserted, came 8 months subsequent to claimant's alleged encountering of additional quantities of foundry sand and over 4 months after claimant became aware that estimated VOC contaminated soil quantities were being exceeded. Moreover, he alleged that the required analysis of the project schedule in support of its claimed need for a time extension was not submitted until after claimant's termination in April 2002.

The third affidavit in support of defendant's motion is by Michael Mason, a licensed professional engineer employed by DEC who served as project manager and senior DEC representative at the AVM site. His duties included attendance at job meetings, receipt and review of correspondence from claimant and MPI, monitoring the performance of contract work and review, approval and/or adjustment of change orders and claimant's payment applications.

Mason related information regarding the September 27, 2000 pre-bid meeting attended by claimant's representatives and noted that claimant neither requested permission to perform any pre-bid inspections or testing of the site nor conducted such tests.

The affiant discussed several of the contract's provisions including those related to dispute resolution (General Conditions, Article 15), the requirement that all notices and claims be in writing (General Conditions, Article 16) and no damages for delay ( Article 11 of the Agreement). He also made reference to a contract provision requiring the contractor to report at once and in writing any error or discrepancy in the contract documents before proceeding with the work and that any work undertaken before interpretation/clarification by the engineer was performed at claimant's own risk (General Conditions, Article 2.3). Moreover, claimant agreed to make no claim with regard to alleged errors or inadequacies without written notification and without submitting within 15 days thereafter a written proposed change order (General Conditions, Article 3.8 and 3.12). Claimant was required to substantiate the amount and extent of any proposed adjusted price (General Conditions, Article 3.10, 3.11 and Article 9).

With regard to errors or inconsistencies related to site conditions, the affiant asserts that claimant's failure to provide prompt written notice of such errors or inconsistencies might invalidate a request for a price increase or time extension. When an "event" gives rise to a claim or dispute claimant was required to give written notice thereof within 15 days and provide written data to support its claim within 45 days (General Conditions, Article 8.10). Claimant's failure to provide timely written proposed change orders or notices of claim would constitute a waiver of any claim for a time extension (General Conditions, Article 10.13).

Mason alleged further that the pre-bid documents incorporated into the contract as Appendix A relating to well borings/well point logs and numerous standard construction contract provisions made clear to claimant that subsurface and technical information provided was intended to inform readers of information used in the project design and advised that the State made no warranty as to the completeness of such information. Claimant was warned that the information provided was not a substitute for its own personal investigation and claimant agreed that it had full responsibility for such subsurface conditions as could reasonably be foreseen (General Conditions, Section VIII, Article 3.4).

Similar provisions are alleged to be found in the supplemental specifications at sections XI-01010 and XI -02014.

Mason asserts that pursuant to section V, Article 1 (a) of the contract bid form and acknowledgment claimant declared that it had carefully examined the bidding documents and inspected the actual location of the work and that by bidding claimant waived any right to plead any misunderstanding regarding the terms and conditions.

The affiant pointed to various provisions of the contract which permitted changes including those pertaining to increases in the contract work and which set forth a procedure to effect such changes. In addition he referred to the language of Section III, Article 15 of the contract which cautioned bidders that in an itemized contract quantity estimates were approximate and provided only as a basis of calculation for the awarding of the contract. He alleged that General Conditions, Article 11.2.2 specifically provided that the estimated quantities of unit price work were not guaranteed and were used solely to allow DEC to compare bids and determine the contract price (he further referred to Supplementary Specifications, Sections XII-01025 and XI-01050).

Regarding VOC contaminated soils Mason alleged that in response to contractors' written question #32 (Addendum No. 2) DEC informed bidders that quantities of such soils found offsite would be treated as a variance in quantity as provided for elsewhere. The contractor was advised that it would need to determine the limits of foundry sand by excavating test pits [see Section XI-02220, Part 3.3 (A)].

Mason then addressed specific allegations contained in the instant claim which the defendant now seeks to have dismissed. He addressed the alleged material inaccuracies and misrepresentations by category beginning with foundry sand. Claimant, he asserts, alleges three categories of additional foundry sand; namely (1) sand under the building to be demolished (2) on-site sand found outside the areas depicted on the contract plans, and (3) sand found outside the project limits. Mason alleges that the data from seven of the test borings made by MPI during the RI/FS and design phases of the project and made available to bidders as Appendix A indicate the presence of sand beneath the building. He further alleges that a visual inspection of the building slab in the area of the crushing pit revealed the presence of foundry sand and that borings taken outside the building showed the presence of foundry sands throughout the site. The affiant alleges that claimant engaged in the excavation of test pits on June 28, July 3 and July 7, 2001 as provided under Section XI-02220, Part 3.3 to determine the limits of foundry sands. The affiant further points to the affidavit of claimant's site manager, Ralph G. Schaar submitted in ECOR's action against MPI in Federal District Court [Defendant's Exhibit 6] in which Mr. Schaar related that as early as mid-June 2001 "[i]t was beginning to be apparent that far more foundry sand was present than represented in the Contract Documents". Despite this alleged early knowledge of differing quantities of foundry sand the affiant asserts that the State received no written notice of claimant's intention to seek compensation on a time and materials basis, no daily calculation of quantities of foundry sand removed were provided, no substantiation of labor, materials or equipment was furnished to the State or its representative, and no proposed change order was submitted until May 24, 2002 (i.e., change order request #2, attached to the claim as Exhibit G).

In addition Mason alleges that claimant also seeks compensation for the removal of additional quantities of foundry sand located outside the site which were remediated during the period from August 13, 2001 to September 25, 2001. The affiant states that although time and material records were maintained by claimant for this work claimant failed to submit a proposed change order until January 3, 2002 when it submitted an unsigned proposed change order entitled "Change Order - Notice of Differing Site Conditions" (Defendant's Exhibit 7).

Claimant also seeks to recover damages for unanticipated foundry sand in the driveway of the facility which was outside the foundry sand areas designated on the plans. Mason alleges that while claimant removed foundry sand and backfilled that area on March 21 - 22, 2002 claimant failed to provide written notification of any error or plan discrepancy or of a changed condition prior to commencement of said work and submitted no proposed change order for the work until May 24, 2002.

Mason further alleges that claimant commenced work on building decontamination and demolition on June 27, 2001 and completed most but not all such work by mid-November 2001. Although written notice of alleged changed conditions was furnished on October 2, 2002 regarding the presence of foundry sand under the building slab, no proposed change order addressed to the unusual composition of the slab itself and unanticipated foundation footings and grade beams was submitted until February 25, 2002 [sic].

With regard to claimant's claim for damages related to quantities of VOC contaminated soil in excess of contract estimates Mason alleges that claimant provided notice of an alleged discrepancy on November 15, 2001 for one area of the site only even though claimant was aware of the discrepancy as early as October 3, 2001 (see Bill of Particulars, Exhibit 5). According to Mr. Mason a proposed change order was not submitted for even that specific area until May 24, 2002. It is further alleged that no written notice was given concerning discrepancies in the quantity of VOC contaminated soils in other areas of the site until claimant submitted a proposed change order on January 4, 2002.

Claimant also seeks recovery for damages incurred by the extension of its groundwater treatment system from a planned 87 calendar days to 140 calendar days allegedly due to "unforeseen conditions" ceasing on the date of claimant's termination (April 10, 2002). Mason alleges that claimant failed to provide written notice of any alleged changed conditions or of any related delay and further failed to submit a proposed change order related to groundwater treatment until May 24, 2002 (change order request #13).

The affiant alleges a similar delay in claimant's submission of a proposed change order related to the removal and disposal of an underground sludge containment structure not depicted in the contract documents. Mason alleges that the structure was discovered on October 29, 2001 and that the structure and its contents were removed by January 23, 2002 but no proposed change order was submitted regarding this work until May 24, 2002.

Mason asserts that claimant commenced its low temperature thermal desorption of VOC contaminated soils on October 12, 2001 but provided no written notice of alleged changes in conditions relating to the soil's elevated moisture content until claimant submitted proposed change order #7 on May 25, 2002[6].

According to the contract documents payment for quantities of VOC contaminated soils above the estimated quantity was to be made on the basis of weight of such treated soils. That weight was to be determined by means of a belt scale attached to the thermal desorption unit. Claimant alleges that the State breached its contract with claimant by requiring claimant to perform two separate scale accuracy tests. Mason alleges, however, that the contract (specifically Section XI: 13100: 1.3D) required the contractor to furnish scale calibration tickets weekly to demonstrate the scale's proper operation to the satisfaction of the engineer.

Mason alleges that if the scale testing required by DEC was a changed condition or was an item of dispute claimant gave no written notice related to the January 15, 2002 and February 5, 2002 scale tests until claimant submitted a proposed change order #15 on May 24, 2002.

Claimant submitted a proposed change order #14 on May 24, 2002 alleging a changed condition with regard to the State directing claimant to install and operate a continuous emissions monitoring system. Mason alleges in his affidavit that claimant was required by Section XI-13100 of the contract specifications to provide continuous emissions monitoring equipment and that the State's directions were therefore not outside the scope of the contract. Even if it were, Mason asserts that no timely written notice of the changed condition was provided.

Mason makes similar allegations of claimant's failure to provide written notice of claims for (1) winterization expenses except for a May 29, 2002[7] proposed change order and (2) additional sampling at "Area 11" in a proposed change order submitted on May 24, 2002 and (3) construction of soil treatment and stockpile area pads which began June 28, 2001 and ended in early August 2001 but was included in a proposed change order dated May 24, 2002.

Finally, with regard to the discovery and removal of a water line containing asbestos, Mason alleges that although claimant provided written notice of such differing condition on June 25, 2001 and submitted a proposed change order on July 31, 2001 it failed to supply the required substantiation of labor, material and equipment to support the additional costs until August 21, 2001 after substantial completion of the work.

In response to the proof offered by the defendant claimant asserts that summary judgment is inappropriate in that questions of fact exist with regard to defendant's waiver of the contract's notice and documentation provisions. Claimant also argues that the motion is premature in that additional discovery is required to fully develop the record.

Without citing particular factors from the voluminous submissions, the Court is satisfied that the claimant has marshaled the minimum level of proof required to establish the existence of material issues of fact precluding a grant of summary judgment. In particular, questions exist concerning the State's awareness of extra work performed by the claimant and whether the defendant waived its right to insist upon strict compliance with the notice and documentation requirements of the contract (see G. DeVincentis & Son Constr. v City of Oneonta, 304 AD2d 1006; Amadeus v State of New York, 36 AD2d 873). Resolution of these issues is largely dependent upon issues of credibility which are not amenable to summary determination (S.J. Capelin Assocs v Globe Mfg. Corp., 34 NY2d 338). In addition, summary judgment is at this time inappropriate given the need for further discovery. While significant disclosure has already taken place, claimant alleges that the deposition of James Ludlam and the continuation of the depositions of Robert Knizek and Michael Mason were scheduled to be conducted at the time the defendant served the instant motion. In addition, claimant states that it intends to depose representatives of Malcolm Pirnie, Inc. and another DEC employee, Meta Murray. Under these circumstances and in light of the complex and inter-personal nature of the issues to be decided the defendant's motion must be denied (Friot v Wal-Mart Stores, 240 AD2d 890; Carter v Maskell, 192 AD2d 898).

With regard to the cross-motion, the claimant has failed to establish that the contract was wrongfully terminated as a matter of law. First, the record fails to establish the actual basis for claimant's dismissal. The April 1, 2002 notice of termination does not particularize the basis for termination and employs the broadest of language in describing the grounds for the action taken. On its motion, claimant provides only conclusory and speculative assertions to support its claim of bad faith, ill will and financial advantage as factors influencing the decision of DEC to terminate its services. While the defendant does little or nothing in opposing the cross-motion to provide detail or insight into the reasons underlying its actions it is claimant's initial burden to establish its right to judgment as a matter of law and the proof submitted in support of the cross-motion is entirely inadequate for this purpose.

Accordingly, the defendant's motion and the claimant's cross-motion are denied.



October 29, 2004
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 April 1, 2004;
  2. Affidavit of James Ludlam sworn to March 22, 2004, with exhibits;
  3. Affidavit of Robert C. Knizek sworn to April 1, 2004, with exhibits;
  4. Affidavit of Michael Mason sworn to March 31, 2004, with exhibits;
  5. Notice of cross-motion dated June 7, 2004;
  6. Affidavit of John W. Dreste sworn to June 7, 2004 with exhibits;
  7. Affidavit of Arnon E. Garonzik sworn to June 4, 2004 with exhibits;
  8. Affidavit of Andris H. Ledins sworn to June 4, 2004 with exhibits;
  9. Affidavit of Ralph G. Schaar sworn to May 18, 2004 with exhibits;
  10. Affidavit of Michael Mason sworn to July 27, 2004 with exhibits;
  11. Affidavit of Arnon E. Garonzik sworn to August 3, 2004 with exhibits;
  12. Affidavit of John W. Dreste sworn to August 3, 2004 with exhibits;

The Court read on the moion:

  1. Defendant's memorandum of law dated April 1, 2004;
  2. Claimant's memorandum of law dated June 8, 2004 with exhibits;
  3. Defendant's reply memorandum of law dated July 26, 2004;
  4. Claimant's reply memorandum of law dated August 3, 2004 with exhibits.

[1]The claimant alleges that the contractor ERM C & O Services, Inc. changed its corporate name to ECOR Solutions, Inc. by amendment of its corporate charter in 2001.
[2]The State's original verified answer was filed October 3, 2002 and was superceded by the later filed amended pleading.
[3]Unreported decisions from the Court of Claims are available via the internet at
[4]Operable unit 1 involved remediation of foundry sand at various locations throughout the site while operable unit 2 involved remediation of the building complex and chemically contaminated soils (see, Knizek affidavit, paragraph 6).
[5]See General Conditions , Article 10.13.
[6]This appears to be a typographical error since the document attached to the claim is dated May 24, 2002.
[7]See previous footnote.