New York State Court of Claims

New York State Court of Claims
RIFENBURG v. THE STATE OF NEW YORK, # 2010-031-020, Claim No. 111868, Motion No. M-76844


Case information

UID: 2010-031-020
Claimant short name: RIFENBURG
Footnote (claimant name) :
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 111868
Motion number(s): M-76844
Cross-motion number(s):
Claimant's attorney: FOX & KOWALEWSKI, LLP
Defendant's attorney: HON. ANDREW M. CUOMO
New York State Attorney General
Assistant Attorney General
Third-party defendant's attorney:
Signature date: June 7, 2010
City: Rochester
Official citation: 90 AD3d 1498 (4th Dept 2011)
Appellate results: Cross appeal is unanimously dismissed and the order is modified on the law by granting those parts of the motion for summary judgment dismissing the third and fourth causes of action and as modified the order is affirmed without costs.
See also (multicaptioned case)


The following papers, numbered 1 to 11, were read on motion by Defendant for summary judgment:

1) Notice of Motion, filed June 19, 2009;

2) Affidavit of C. Michael Reger, Esq., sworn to November 14, 2008, with exhibits;

3) Affidavit of Arthur J. Andrews, sworn to November 13, 2008;

4) Affidavit of Jeffrey R. Marko, sworn to November 12, 2008;

5) Defendant's Memorandum of Law, dated November 14, 2008, with attachments;

6) Affidavit in Opposition of Kenneth Barth, sworn to August 7, 2009, with attached exhibits;

7) Affidavit in Opposition of Laurence I. Fox, Esq., sworn to August 10, 2009, with exhibits;

8) Claimant's Memorandum of Law, dated August 12, 2009;

9) Reply Affidavit of Jeffrey R. Marko, sworn to September 9, 2009, with attached exhibits;

10) Defendant's Reply Memorandum of Law, dated September 9, 2009;

11) Claimant's Sur Reply Memorandum of Law, dated September 15, 2009.

I have before me Defendant's motion for dismissal of the claim. I heard oral argument on this matter on November 18, 2009.

On June 24, 1999, the New York State Comptroller approved contract No. D257950 (the "Contract") between Claimant and the New York State Department of Transportation ("DOT").(1) Pursuant to the Contract, Claimant was to perform 11.4 kilometers of asphalt concrete reconstruction and the replacement of two bridges on Route 332 between New York State Thruway exit 44 in Farmington and the north city line of Canandaigua. The contract price was $26,328,545.91. In its claim, filed on January 20, 2006, Rifenburg Construction, Inc. ("Claimant" or "Rifenburg") alleges seven separate causes of action for breach of contract which relate to damages Claimant allegedly incurred for extra work, unpaid work, "over-runs", "under-runs," and interest on an allegedly late final payment. Claimant seeks a total of $937,575.20.

Defendant asserts that each cause of action, and accordingly the claim in its entirety, should be dismissed. Although specific arguments will be addressed below, in general terms, Defendant argues that each cause of action asserted by Claimant must be dismissed for one or both of two reasons: 1) the cause of action itself lacks merit, and 2) Claimant failed to provide proper notice of the alleged cause of action to Defendant as required by the Contract.

In opposing Defendant's motion, Claimant argues the merits of each cause of action and also alleges that Defendant's failures in preparing and administering the Contract and the work on the project resulted in such a confusing assortment of additions, subtractions and other changes to the contract that it could not have given Defendant notice of the disputed items earlier than it did.

First Cause of Action

In its first cause of action, Claimant seeks $6,741.80 relating to concrete structures for the deck and approach slabs of the two bridges (item 18557.0196M and item 18557.2096). Claimant alleges that it was underpaid for the actual work performed. Defendant argues that Claimant was properly paid according to the contract ( 557-4 of the DOT Standard Specifications). Additionally, pursuant to 105-14.C of Addendum No. 1 to the DOT Standard Specifications, Claimant was to provide Defendant with written notice of any charges for extra work or cost over-runs within ten days of performing such work. Defendant asserts that all of the work related to these two items was completed on or before July 12, 2001. Claimant waited until March 6, 2002, approximately eight months after the work in question was completed, to provide such notice.

Second Cause of Action

Claimant alleges that it incurred $510,532.63 in damages for three "under-run" items. Those items were Select Granular Fill (Item 203.07), Trench and Culvert Excavation (Item 206.02) and Silt Fence (Item 209.08). As explained in paragraph 27 of the Affidavit in Opposition of Kenneth Barth, Claimant's project manager:

"In unit price bidding, such as required for [DOT] contracts including this one, the only payment vehicle for recouping a contractor's fixed expenses, general administrative costs, overhead expenses, bonding and insurance expenses and for producing a profit is by allocating those costs to the unit price of the various described items of work which get 'extended' over the estimated quantities for each item to arrive at the total bid amount. If the actual quantity of work paid for dramatically under runs, as in this case, the vehicle to recoup the contractor's fixed expense, etc. for that work is diminished even though the expense is still incurred."

Defendant defines an "under-run" item as "a 'major' item of contract work that, when completed, goes below 75% of the original contract quantity" (Andrews Aff., par. 10). Defendant acknowledges that adjustments for under-runs can be recovered, but only when specific contract provisions, including timely notice to DOT, are followed. Defendant argues that Claimant failed to comply with these provisions.

Defendant asserts that the "under-run" claims all relate to work that was performed in 2000 and paid to Claimant on February 21, 2001. According to Defendant, Claimant first asked for pricing adjustments related to these items on October 31, 2001 (Ex. K). The request was denied by the Engineer in Charge (Andrews) on November 5, 2001 as untimely (Ex. L). Defendant asserts that Claimant failed to provide notice of the "under-runs" to Defendant as required.

Third Cause of Action

Claimant seeks $239,874.43 for "over-runs" on "Basic Maintenance and Protection of Traffic." Once again, Defendant argues that the contract provisions permitting such an adjustment were not met. First, such an adjustment (relating to a "lump sum" contract item, such as this) can only be made when the "over-run" is greater than 25%. Defendant asserts that this threshold was not met, as the "over-run" was only 11.8%. Additionally, even if the 25% threshold had been met, Claimant was required by the contract documents to either: 1) come to an agreed-upon adjustment in price with Defendant; or 2) submit contemporaneous "force account records" (labor, material and equipment cost records) to justify the adjustment. Neither of these occurred.

Fourth Cause of Action

Claimant seeks $104,249.69 for "over-runs" on Survey and Stakeout work. As with the Third cause of action above, this was a lump sum contract item. As with the Third cause of action, Defendant asserts that the over-run from this item was less than 25% and, therefore, was not a significant change as defined by the Contract. Further, Defendant argues that Claimant failed to provide both timely notice and the contemporaneous "force account" information necessary to sustain such a claim.

Fifth Cause of Action

Claimant seeks $39,599.88 for sidewalk construction that it alleges was not within the scope of their work but which Defendant asked them to do towards the end of the project. Defendant argues that sidewalk work was covered by the contract and that any additional sidewalk work did not increase the contract work by more than 25%, so it could not be renegotiated as a significant change.

Sixth Cause of Action

This cause of action is for $1,404.02 relating to DOT's request that Rifenberg place a small amount of topsoil to close off an existing driveway. As with the Fifth cause of action, Claimant alleges that this was not within the scope of the contract and Defendant argues that it was. Again, Defendant also argues that this additional placement of topsoil did not increase the contract work by more than 25%, so it could not be renegotiated as a significant change.

Seventh Cause of Action

Claimant alleges that the final payment under the contract was late and seeks $35,172.75 in interest thereon. Defendant, while conceding that the project work was accepted by the State on November 24, 2003, asserts that the contract called for Claimant to submit certain documents before final payment was required and that these documents were not submitted until October 6, 2005. Accordingly, Defendant asserts that final payment on December 22, 2005 was not late.


Clearly, Defendant has met its initial burden in support of this motion. With each cause of action, Claimant alleges that changes in the amount of work performed, or materials used, required a modification of the terms of payment under the Contract. However, both parties agree that with regard to such changes, Section 109-16 A.(3)(iv) and (vii) of the DOT Standard Specifications, provides:



* * *

(3) Significant changes in the character of the work.

* * *

(iv) The term "significant change" shall be construed to apply only to the following circumstances:

* * *

(b) When the quantity of a major item of work, as defined elsewhere in the contract, goes above 125 percent, or below 75 percent of the original contract quantity . . .

(c) The term "major item" of work shall mean any item for which the original bid price multiplied by the original bid quantity exceeds $50,000, or 2% of the total contract price, whichever is less.

* * *

(vii) With respect to the aforesaid significant changes involving an increase or decrease in a major item (above), the Contractor or the State, as the case may be, must make written notification to the other party of the "significant change" in quantity of a major item if that party wishes to adjust the contract price or time of performance. Such notice shall be given within 10 days of knowledge of the change. Knowledge of a significant change in quantity could result from: receipt of a written change order (approved or unapproved) or a letter indicating a change in the contract work, review of plan details and estimates, review of work completed or progress quantities, or a combination of the above.

(viii) Timely issuance of a notice shall be a necessary requirement for consideration of contract adjustment as provided in this section."

Defendant has submitted proof in admissible form that tends to demonstrate that Claimant reasonably should have known about the work, materials and damages alleged in each cause of action, long before it provided notice of such to Defendant.

Claimant argues, however, that any failure to provide timely notice to Defendant was the result of Defendant's own actions and negligence. Claimant correctly points out that, although not part of the "Contract Documents," the DOT's Contract Administration Manual ("CAM") defines the responsibilities of DOT employees and requires that Defendant provide Claimant with notice of any over-runs or under-runs. It is undisputed that Defendant failed to comply with these requirements. Further, Claimant argues that this failure, in conjunction with the poorly prepared contract documents, continual changes in the project and confusing payment practices on the part of the State, made it impossible for Claimant to provide notice of its disputes any earlier than it did.

I find that, although Defendant has correctly demonstrated that the causes of action asserted by Claimant required proper notice to Defendant, Claimant has demonstrated the existence of factual issues concerning when and how Claimant's duty to notify Defendant of its claims under the Contract were triggered.

Accordingly, upon the foregoing it is

ORDERED, that Defendant's motion for summary judgment is denied.

June 7, 2010

Rochester, New York


Judge of the Court of Claims

1. Unless otherwise indicated, the term "Contract" shall mean the Contract Documents as defined in  101-12 of the Applicable Standard Specifications, Exhibit E.