New York State Court of Claims

New York State Court of Claims
LIDDELL BROTHERS v. THE STATE OF NEW YORK, # 2010-015-196, Claim No. 116380, Motion No. M-78764

Synopsis

Defendant's motion for summary judgment was denied since it failed to establish that the claim was one for delay damages or extra work which required compliance with the notice and recordkeeping provisions of the contract. Leave to renew was granted with respect to whether the State was obligated by contract or otherwise to compensate claimant for the alleged unanticipated increase in the cost of copper materials.

Case information

UID: 2010-015-196
Claimant(s): LIDDELL BROTHERS, INC.
Claimant short name: LIDDELL BROTHERS
Footnote (claimant name) :
Defendant(s): THE STATE OF NEW YORK
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 116380
Motion number(s): M-78764
Cross-motion number(s):
Judge: FRANCIS T. COLLINS
Claimant's attorney: Darrell W. Harp, Esquire
Defendant's attorney: Honorable Andrew M. Cuomo, Attorney General
By: Frederick H. McGown, III, Esquire
Assistant Attorney General
Third-party defendant's attorney:
Signature date: December 1, 2010
City: Saratoga Springs
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

Defendant moves for summary judgment dismissing the claim pursuant to CPLR 3212.

Claimant, Liddell Brothers, Inc., and the State of New York, acting by and through the Department of Transportation, entered into a contract on May 1, 2004 for the upgrade of the Intelligent Transportation System (ITS) on the Northern State Parkway in Nassau and Suffolk Counties. Claimant alleges a cause of action for breach of contract for the failure to compensate it for unanticipated increases in the cost of copper cable, a material which was necessary for the performance of the work (first cause of action), and seeks interest on the amounts due following final acceptance of the contract work as provided for by State Finance Law 179-f (second and third causes of action). In response to the instant motion, claimant's counsel has agreed to withdraw the second and third causes of action asserted in the claim alleging a violation of the State Finance Law (Affirmation of Darrell W. Harp, Esq. dated September 7, 2010, 7).

With respect to the breach of contract cause of action, defendant contends the claimant's failure to comply with the notice and record-keeping provisions of the contract require dismissal of the claim. It argues in this regard that the claim "is nothing more than a thinly disguised delay claim which seeks to make the State liable for the increased costs incurred by the claimant when the contract was not completed in the time originally contemplated by the parties" (Affirmation of Frederick H. McGown, III, dated September 3, 2010, 10). Claimant opposes the motion on the ground that the claim seeks compensation for the unanticipated increase in the cost of copper wire, not for costs associated with a time-related dispute to which the notice and record-keeping provisions of the contract apply.

Section 105-14 (A) of the contract establishes the process and procedures to be followed "[w]henever the Contractor believes that it is or will be entitled to additional compensation for time related disputes . . ." The term "time related dispute" is defined in 105-14 (A) (1) (b) as "any dispute arising from any event not within the Contractor's control, performance, action, force, or factor which affects the scheduled time of performance depicted in the Contractor's most recent Department approved progress schedule . . ." (emphasis added). With regard to notice and recordkeeping requirements applicable to such disputes, 105-14 (A) (2) provides as follows:

2. Strict compliance with the notice provisions of this Section and compliance with the recordkeeping provisions of this section and 109-05, Extra, Force Account Work, Dispute Compensation and Recordkeeping, shall be an essential condition precedent under the contract provisions to any recovery of time related damages by the Contractor whether it be under the contract provisions, court actions and proceedings or otherwise" (defendant's Exhibit E, Contract's Standard Specifications, 105-14 [A]).

As set forth above, a "time related dispute" arises from events not within the contractor's control "which affects the scheduled time of performance". Although three extensions of time were granted at claimant's request during the course of the project (defendant's Exhibits S, T, U) no allegation is made nor evidence submitted to suggest that the increase in the cost of copper occurred during the periods covered in the contract extensions. More importantly, the affidavit of Byron Alford submitted in support of the instant motion indicates that "none of the reasons for the extensions involved any of the copper items that are the subject of this claim" (defendant's Exhibit J, affidavit of Byron Alford, 9). Thus, defendant failed to establish, as was its burden, that the notice and record-keeping provisions pertaining to time-related disputes are applicable herein (see defendant's Exhibit E, Contract's Standard Specifications, 105-14 (A) and 109-05 incorporated by reference therein).

In light of this determination, defendant's reliance on 109-05 (D) (1) (b) entitled "Time Related Dispute Compensation" is misplaced. While this section permits recovery for "escalated costs for materials", its application is expressly limited to time-related dispute damages. Defendant failed to establish, however, that the instant claim arises from a time-related dispute, i.e., that it resulted from an event outside the contractor's control which affected the scheduled time of performance ( 105-14 [A]).

The defendant also contends that the claim seeks compensation for "extra work", thereby requiring compliance with the notice and record-keeping provisions of 105-14 (C). "Extra Work" is defined as "[a]n item of work not provided for in the contract as awarded but found essential to the satisfactory completion of the contract within its intended scope" (defendant's Exhibit E, Contract's Standard Specifications, 101-02; see also 105-14 [C]; 109-05). Here, claimant alleges, inter alia, that the contract required copper materials and that between the time of its bid and the performance of the work there were substantial unanticipated increases in the prices of these materials (defendant's Exhibit A, Claim, 15 and 17). In light of the above, and upon review of the motion record, the Court finds the defendant has failed to adequately support its contention that the claim is one for extra work thereby requiring compliance with the notice and record-keeping provisions of the contract. Accordingly, defendant failed to meet its burden of establishing its prima facie entitlement to judgment dismissing the first cause of action as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

Although defendant briefly alludes to the absence of a contract provision for the unanticipated price increase of copper materials, it does not move for summary judgment on this ground (see Affirmation of Frederick H. McGown, III, dated September 3, 2010, p. 3, 7). Instead, defendant's argument appears to be limited to the contention that the instant claim is "nothing more than a thinly disguised delay claim" (id. at 10) or extra work claim, which was waived upon claimant's failure to comply with the notice and record-keeping provisions of the contract. While the defendant failed to establish its entitlement to summary judgment on this ground, the Court makes no determination with respect to the more central issue of whether the defendant is obligated, by contract or otherwise, to compensate claimant for unanticipated increases in the price of materials. Inasmuch as this ground for summary judgment was not adequately set forth in either the notice of motion or supporting papers (see CPLR 2214 [a]; 3212 [b]), the Court grants defendant leave to renew its summary judgment motion on this ground should it see fit to do so.

Based on the foregoing, defendant's motion for summary judgment dismissing the first cause of action asserted in the claim is denied, with leave to renew. Defendant's motion for summary judgment dismissing the second and third causes of action asserted in the claim is granted, without opposition, and these causes of action are dismissed.

December 1, 2010

Saratoga Springs, New York

FRANCIS T. COLLINS

Judge of the Court of Claims

The Court considered the following papers:

  1. Notice of motion dated September 3, 2010;
  2. Affirmation of Frederick H. McGown, III dated September 3, 2010 with exhibits;
  3. Affirmation of Darrell W. Harp dated September 7, 2010 with exhibits;
  4. Affirmation of Frederick H. McGown dated September 14, 2010;
  5. Affidavit of Byron Alford sworn to September 14, 2010.