New York State Court of Claims

New York State Court of Claims

RAPID v. THE STATE OF NEW YORK, #2006-033-559, Claim No. 105069


Synopsis



Case Information

UID:
2006-033-559
Claimant(s):
RAPID DEMOLITION COMPANY, INC.
Claimant short name:
RAPID
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
105069
Motion number(s):

Cross-motion number(s):

Judge:
James J. Lack
Claimant’s attorney:
Chris Georgoulis & Associates, PLLC
By: Chris Georgoulis, Esq. andJennifer Redmond, Esq.
Defendant’s attorney:
Eliot Spitzer, New York State Attorney GeneralBy: Eidin Beirne, Assistant Attorney General
Third-party defendant’s attorney:

Signature date:
July 24, 2006
City:
Hauppauge
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision
Rapid Demolition Company, Inc. (hereinafter “claimant”) alleges the State of New York (hereinafter “State”) breached a contract causing damages to claimant in the amount of $1,459,564.30 plus interest. On May 25, 1999, the parties entered into contract number D257962 known as the “Removal of the Wantagh State Parkway Bridge over Sloop Channel and Bikeway Resurfacing” in the Town of Hempstead, New York. A plenary trial was held beginning on October 12, 2004 and concluding February 23, 2005.
Claimant’s damages relate to two areas in the performance of the contract.
[1]
First, claimant alleges damages due to its bridge deck removal. Claimant argues that it was given the wrong information as to the depth of the bridge deck. The second area for which claimant seeks damages is the repair and relocation of utility lines.
Claimant acquired a bid solicitation package from defendant in January or February 1999. In March 1999, claimant received Addendum No. 1 (claimant’s Exhibits 10, 11 and 13), which added the utility work relocation. The let date for the contract was April 8, 1999. Joseph Najjar, the president of claimant corporation, stated that he received Addendum No. 1, dated April 8, 1999, prior to the letting of the contract.
[2]
Bridge Deck Removal
The contract divided the bridge into two components: the superstructure and substructure. Both components were to be demolished and removed. However, it is the demolition and removal of the superstructure which forms the basis for this claim. The superstructure was supported by girders resting on top of concrete piles and consisted primarily of concrete slabs, a concrete overlay and fixtures (e.g. guide rails and light posts).
According to the contract drawings, the depth of the concrete slabs and overlay was approximately three inches. During the trial, claimant introduced portions of deposition transcripts into evidence. One of the depositions was of Byron Alford, a construction supervisor for the New York State Department of Transportation. According to Alford, the State was aware of a problem with claimant’s demolition and removal plan of the superstructure in late 1999. The problem was due to the fact that the actual thickness of the superstructure was six inches, not the three inches set forth in the State’s contract plan. Defendant’s engineer-in-charge of the project testified that he was first aware of the actual deck thickness being different from the contract drawings on April 18, 2000, when measurements were taken by the parties together. The measurements were noted and countersigned by defendant (claimant’s Exhibit 45) and reported by Scott Franzese to the engineer-in-charge.
[3]

Najjar testified that the change in the deck thickness changed the plans for disposal of the deck. Originally, the plan was to cut the deck into pieces, secure it by use of a cable and crane, and then lower it to a barge on the water. The barge would then transport the pieces of the superstructure into deeper water to be added to a reef as part of a Coast Guard program to improve the reef. According to the deposition testimony of Byron Alford, defendant was aware claimant intended on using this method of disposing of the bridge superstructure. Claimant’s backup plan to this method of removal was to have the deck portion of the superstructure transported to a recycling facility on the south shore of Long Island. The recycling facility was going to use the deck surface for its mulching operations. The costs associated with these methods were minimal according to Najjar. There were no disposal fees associated with either method. The only cost would have been the equipment to move the deck.
When claimant attempted to start picking up the deck, the crane operator indicated that the deck was too heavy. The deck was put down on the remaining area of the bridge, which was not acceptable because this area was now considered unstable. Claimant’s attempt to move the deck with a bulldozer was unsuccessful. Claimant’s attempt to stabilize the crane by adding 300 tons of counterweight was also unsuccessful. Therefore, claimant needed to break up the deck and truck it away. Due to the deck being broken up, it was no longer acceptable for the intended use by the recycling facility.
There was extensive testimony concerning the methodology of calculating the damages attributable to additional costs of the deck removal. The costs were broken down into the following areas: labor, supervisory, equipment, material, additional home office, employee vehicle compensation, trucking, disposal, consulting, and subcontractor.
[4]
The total additional cost for the deck removal, according to claimant, was $976,790.92 plus interest. The individual costs were determined by finding the overall actual cost and reducing it by the budgeted amount for the original demolition and removal plans. Each of the individual totals also included money for overhead and profit. The totals were also, where necessary, reduced by payments made by defendant for the removal of the crane.
Labor costs were $287,752.05. In the original plan, claimant would have incurred labor costs only through its subcontractors. In the actual demolition, claimant incurred labor costs and had to pay Complete Diving, a subcontractor, its labor costs as well.
Claimant indicated that an additional supervisor was necessary to oversee the project and the original supervisor had to expend more time on this aspect of the job. Claimant attributes $57,967.00 to additional supervisor costs.
The equipment cost, according to claimant, is $186,767.43. Material cost for materials not needed in the original plan amounted to $41,741.40.
The next cost calculated was for the additional home office expense. This was determined by the value of the work performed after the scheduled completion date of the utility work and deducting profit and overhead from that amount. Claimant calculated this expense to be $61,832.15. Claimant also paid for the use of two of its employees’ personal vehicles during the removal of the bridge deck overlay at a cost of $6,180.00.
Claimant did not anticipate any trucking costs in its two original plans. Claimant deducted the cost of one of the trucks because it was included in the equipment cost. This cost was $120,907.81. Claimant also did not anticipate disposal costs because of the original plans. After adjustments, this cost was $91,890.30.
After the original plan was no longer workable, claimant hired a new consultant to revise the demolition plans at a cost of $6,480.44. Additional payments were made to the subcontractors who did the cutting of the deck and provided the tug boats and barges to move the crane. After adjustments, this expense was calculated to be $115,641.74.
Defendant disputes its obligation to pay for the additional costs for the demolition and disposal of the bridge. Defendant’s basis to dispute the payment is that claimant failed to notify defendant of any extra work, differing conditions or other problems with the work on the superstructure pursuant to the notification requirements of the contract. Defendant argues that despite claimant being aware of the difference in the deck depth as early as January 2000 (claimant’s Exhibit 20 - Hirani demolition plan), claimant failed to notify defendant of any problem. According to the testimony of defendant’s engineer in charge, Mr. Vijayendran, the April 18, 2000, joint measurement did not take place. In addition, claimant failed to submit or maintain daily time and material records as required by the contract. Defendant did not approve the final demolition plans of the superstructure. Claimant changed the plans because of the difference in the depth of the deck and did not notify defendant of the change in plans.
One of the disagreements between the parties is the notification provisions of the contract. Claimant’s position is that the less stringent means of notification of Addendum No. 1 apply. Defendant argues that Addendum No. 1 does not amend this contract in particular, rather it is a general addendum to the general specifications of DOT which are then modified by specific contracts. The introduction states “Addendum No. 1 to the Standard Specifications of January 2, 1995 (Metric) was adopted April 8, 1999.” Further, §101-10 defines a contract agreement as the “agreement covering the performance of the work . . . in conformance with the requirements of the contract documents.” Contract documents are defined in §101-12 and include “the advertisement for proposals; the proposal; the Contractor’s bid; the agreement; the Standard Specifications; the plans; the Base Line data; any addenda and/or amendments to the specifications and all provisions required by law to be inserted in the contract whether actually inserted or not.”
The Court finds that by defendant’s own definition, the Standard Specifications adopted April 8, 1999, were part of the contract between the parties at issue.
The Standard Specifications impose upon a contractor strict provisions concerning recordkeeping when a dispute arises (see §§105-14; 109-05; and 109-16). It is clear from the testimony that claimant did not keep the records concerning the disputed work as directed to by the Standard Specifications. As noted above, claimant hired a consultant to assemble the hours and costs of the disputed work. The Court finds claimant failed to meet the recordkeeping provisions required by the contract documents.
However, claimant is not precluded from recovery of his costs. Subsequent to the demolition work being done, claimant submitted invoices for increased payments due to its change in plans. According to the testimony of the parties, there was communication concerning whether defendant would be responsible for the payments. On or about September 22, 2000, defendant responded to an August 10, 2000, communication from claimant concerning the bridge superstructure. The letter was from Craig Siracusa, the Regional Director of the New York State Department of Transportation for the Long Island Region. §105-14 of the Standard Specifications gives the Regional Director the ability to settle disputed issues with contractors. The letter spells out each objection to claimant concerning claimant’s deficiencies in recordkeeping and notification. The letter also indicates that the difference in the deck thickness would have been available to claimant if the supplemental information, not just the contract documents, had been reviewed. Recognizing all of these deficiencies, the Regional Director then stated the New York State Department of Transportation is “willing to consider any additional demolition costs due to the increased overlay thickness. . . Only actual verifiable cost increases will be considered.”
Based upon this evidence, the Court finds defendant waived the notice and recordkeeping requirements it now seeks to enforce. The Court also recognizes that defendant waived the requirement with the following caveat: that it would only recognize actual costs. The Court interprets this to exclude profit and overhead.
Based upon the testimony of the increased costs of the demolition of the superstructure,
[5]
the Court awards the following: labor costs - $239,830.00
[6]
; supervisory costs - $47,998.00; equipment costs - $155,640.00(R); material costs - $34,780.50
[7]
; employee vehicle costs - $4,385.00
[8]
; trucking costs - $96,726.25; disposal fees - $73,512.00(R); consulting fees - $5,184.00(R)
[9]
; and, subcontractor costs - $114,193.00(R)
1[0]
.
1[1]
The total sum of the additional costs awarded by the Court is $772,248.75.
Utility Relocation
The Court turns its attention to that portion of the claim for damages attributable to utility relocation. As part of the project, claimant was required to relocate three utility lines - gas, telephone and electric. This was to be done under Sloop Channel. It is the relocation of the electric line which is the part of this claim against defendant.
To accomplish the relocation, claimant, through a subcontractor, had to drill and place a 26-inch-diameter outer casing under the channel. This casing contained five inner conduits each with a six-inch-diameter. The placement of the outer casing and the five inner conduits was uneventful. The pulling of the cables through the inner conduits encountered problems. Ultimately, the cause of the jamming of the cables being pulled through the conduits was attributed to hydrostatic pressure caused by water in the outer casing which compressed the inner casings. The Court finds no credibility to the testimony of Emmanuel Lilimpakis concerning “frakking”. The testimony was clearly designed to attempt to attribute the problems of the water in the conduit to defendant’s contract documents.
The documents (claimant’s Exhibit 10) do not tell claimant how he is to perform the procedure or what material to use for the outer casing. This aspect of the job is left to claimant and his subcontractors. Therefore, the Court finds the specification to a performance specification - one that requires a result but does not direct the methods and/or materials (Fruin-Colnon Corp. v Niagara Frontier Transp. Auth., 180 AD2d 222). The risk of non-performance is placed on the contractor (Fruin-Colnon).
At issue is the question of whether the contract document called for a watertight seal.
1[2]
After listening to the testimony of the parties and the actual attempts to seal the conduits prior to attempting to pull the cables, shows that the parties understood the word “sealed” to mean watertight. It would defy all common sense to not have a conduit containing electrical lines to be sealed against water.
Thus, the Court finds claimant has failed to prove defendant breached the contract in relation to the utility relocation. Claimant agreed to relocate the utilities. The risk of doing so was borne by claimant. Therefore, defendant cannot be held responsible for additional costs.
Based upon the foregoing, the Court finds for claimant as to the demolition of the superstructure as previously detailed and awards claimant damages in the amount of $772,248.75 together with interest from the last payment date of on or about July 31, 2000 to January 31, 2001, and from October 16, 2001 to the date of Decision herein and thereafter to the date of payment. Pursuant to Court of Claims Act §11-a, the Court also awards claimant the sum of $50.00. As to the breach of contract action for the utility relocation, the Court finds in favor of defendant. Claimant has failed to prove that aspect of the case. All motions not specifically ruled on are denied. Let judgment be entered accordingly.


July 24, 2006
Hauppauge, New York

HON. JAMES J. LACK
Judge of the Court of Claims




[1].Prior to trial, claimant discontinued the cause of action relating to the relocation of the crane.
[2].
Claimant’s position is that Addendum No. 1 contained revisions to the general conditions of the contract and replaced the original specifications. Defendant argues that Addendum No. 1 is a general addendum to its standard specifications and formed no part of the contract.
[3].
Franzese was the New York State Department of Transportation employee who measured the deck thickness with claimant and countersigned claimant’s Exhibit 45. The reporting of the measurement to the engineer-in-charge was read into evidence by claimant from Franzese’s deposition transcript.
[4].
The additional costs were determined by Bethay Consultants who were hired by claimant to compile the costs for this claim.
[5].
The testimony included costs before upward and downward adjustments for profit, overhead and credits owed.
[6].
Claimant’s actual additional labor costs before adjustments for profit and overhead was $309,710.00. Deducted from this amount were credits for labor paid to the bonding company. The original amounts of the credits were $31,960.00 for Rapid’s labor costs and $51,939.95 for Complete Diving’s labor costs. Both of these numbers included profit and overhead. The Court only deducted that portion of the credit which was attributable to actual costs, as it would be inequitable to deduct profit and overhead from actual cost incurred. The Court arrived at the new credits by deducting the 20% allowed for profit and overhead in the contract. The Court arrived at a credit for Rapid’s labor of $26,600.00(R) and Complete Diving’s labor of $43,280.00(R). For ease of calculations, the Court has rounded some numbers.
[7].
According to claimant’s Exhibit 40, this is the actual costs of the invoices before adding profit and overhead.
[8].
This value reflects the actual cost of the vehicles (claimant’s Exhibit 40) less a credit of $765.00 which was paid as part of another claim by claimant.
[9].
See claimant’s Exhibit 40 for the actual cost.
1[0].
See claimant’s Exhibit 40 for the actual cost.
[1]1.
The Court attributed no value to the home office expense as this is part of claimant’s overhead.
1[2].
Each of the parties moved for summary judgment prior to trial (M-66396 and CM-66663) before Judge Francis Collins. Judge Collins found that the meaning of the word “sealed” in a note to one of the exhibits would rely upon extrinsic proof to be adduced at trial.