New York State Court of Claims

New York State Court of Claims
SCALAMANDRE v. THE STATE OF NEW YORK, # 2010-032-026, Claim No. 111020, Motion No. M-77604, Cross-Motion No. CM-77617

Synopsis

Case information

UID: 2010-032-026
Claimant(s): PETER SCALAMANDRE & SONS, INC.
Claimant short name: SCALAMANDRE
Footnote (claimant name) :
Defendant(s): THE STATE OF NEW YORK
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 111020
Motion number(s): M-77604
Cross-motion number(s): CM-77617
Judge: JUDITH A. HARD
Claimant's attorney: Darrell W. Harp, Esq.
Defendant's attorney: Hon. Andrew M. Cuomo, NYS Attorney General
By: Cornelia Mogor, Assistant Attorney General, Of Counsel
Third-party defendant's attorney:
Signature date: July 13, 2010
City: Albany
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

The parties have each moved this Court for an order granting summary judgment on the issue of liability. The underlying claim alleges lost profits arising out of a breach of contract. For the reasons set forth below, this Court denies claimant's motion for summary judgment and grants defendant's motion seeking dismissal of the claim.

FACTS

The claim arises from a contract entered into in March 2000, between claimant and the New York State Department of Transportation (DOT). The contract collectively contained four documents: the agreement, the proposal, the standard specifications and the plans, and required that claimant complete certain work on the Robert Moses Causeway located in the Town of Islip, Suffolk County by November 30, 2001, for a contract price of $4,407,259.20. The required work included the installation of scour monitors, deck spall repair, replacement of three bridge deck sections, minor steel repairs, waterproofing and overlaying bridge decks. The bridge deck consisted of individual spans separated by steel finger joints. Prior to waterproofing and the new overlay, steel plates needed to be welded to each finger joint so that the new overlay would provide a smooth riding surface.

The plans provided by DOT to claimant called for the use of circular plug welds on the steel plates of the joints. The plans also required that all welding procedures comply with the New York State Steel Construction Manual. Pursuant to the contract, in March 2001, claimant submitted shop drawings to DOT for approval, including the details of the welding procedure utilizing the plug welds. DOT's engineers reviewed claimant's welding procedure and determined that, although the plug welds conformed with the plans, they did not comply with the New York State Steel Construction Manual, which allows only boat welds for this type of procedure. Additionally, DOT determined that the plug welds could lead to cracking at the root of the joint.

On April 24, 2001, DOT approved an alternative procedure and advised claimant. On May 1, 2001, claimant notified DOT that this revised welding procedure would entail additional costs and DOT requested that claimant submit a proposal for the additional costs. Claimant's proposal, however, did not utilize the approved procedure (it provided for plug welds rather than boat welds) so it was disapproved by DOT engineers on or about June 12, 2001. On June 15, 2001, DOT requested a cost proposal from claimant to perform the revised welding. By letter dated July 17, 2001, claimant submitted its proposal in the amount of $415,297.89. Said proposal was deemed by DOT to be too time consuming and too late in the construction season to complete the modified welding procedure and remaining bridge deck work prior to the contract completion date of November 30, 2001. Accordingly, DOT proposed an alternative method of completing the project which eliminated the welding and related work and, in September 2001, requested that claimant submit a bid for the performance of this alternative method. Claimant did not submit a bid for the same. Thereafter, DOT notified claimant that it deleted the overlay and welding portion from the contract. Ultimately, DOT included the revised bridge work in a later contract, in which claimant did not submit a bid.

As a result of the foregoing, claimant commenced the pending action, which alleges that DOT misdesigned the welding plugs and, in redesigning the project to correct the misdesign, eliminated substantial portions of the work to be performed by claimant, resulting in lost profits in the sum of $480,502.34. After joinder of issue and completion of discovery, claimant moved for summary judgment and defendant cross moved for dismissal of the claim. This Court denied both motions and claimant appealed. The Appellate Division, Third Department, affirmed the decision of this Court (see Peter Scalamandre & Sons, Inc. v State of New York, 65 AD3d 774 [3d Dept 2009]). In its decision, the Appellate Division Third Department addressed the fact that although defendant had not filed a cross appeal, the Court could search the record and grant summary judgment in favor of the non-appealing party. However, it determined that it could not grant summary judgment dismissing the claim in the present case because defendant had not tendered any proof establishing that the omission of the welding work from the contract was "reasonably necessary for the public interest," which resulted in a question of fact regarding whether defendant's decision was arbitrary and capricious and, in turn, whether Article 5 of the contract (alterations and omission clause) is applicable to the instant dispute.

Defendant now moves this Court for summary judgment dismissing the claim. Claimant opposes the motion and moves this Court for an order granting it summary judgment on the issue of liability. Defendant opposes claimant's motion. As the parties' respective positions on both motions are similar, the Court will address them collectively.

MOTIONS FOR SUMMARY JUDGMENT

The only issue to be determined on the pending motions is whether defendant's elimination of the welding and related work was reasonably necessary for the public interest. However, the Court will first address claimant's argument that the Appellate Division Third Department's Memorandum and Order limits this Court's consideration of the pending motions to "Defendant's stated reason at the time the welding work was omitted from the contract was that, as specified, the work could not be completed prior to the November 2001 deadline." Claimant argues that because DOT's entire defense through the appeal process was based upon paragraph 14 of Mr. Alford's Affidavit dated January 16, 2008, wherein he stated that claimant's proposal was too time consuming and too late in the construction season to complete the modified welding procedure and the remaining bridge deck work prior to the contract completion date of November 30, 2001, that defendant cannot now raise the issues of "cost" and "inconvenience" to explain why it omitted the welding terms of the contract.

Defendant disagrees, stating that in the prior cross-motions, the denial of claimant's motion was affirmed on the law and the facts, and that the defendant's cross motion was denied and affirmed due to an existing question of fact because the facts submitted in favor of said cross-motions were not sufficiently detailed to support the granting of defendant's motion for summary judgment. Defendant argues that under these circumstances, it is now free to explain more fully its decision to delete the contract items in support of the current motion for summary judgment just as it would be at a trial on that point. The Court agrees.

While subsequent motions for summary judgment are to be discouraged (see Gadley v U.S. Sugar Co., Inc., 259 AD2d 1041 [4th Dept 1999]), it has been stated that they should be considered where they are "substantively valid and [when] the granting of the motion will further the ends of justice while eliminating an unnecessary burden on the resources of the courts" (Detko v McDonald's Rests. of NY, 198 AD2d 208, 209 [2d Dept 1993]). Moreover, nothing in the Memorandum and Order limits or prohibits defendant from further explaining its position with respect to the omission of the welding work. Additionally, the issues of cost and inconvenience raised by defendant are actually an elaboration of the main argument, specifically, that the revised welding work was too time consuming, rather than entirely new arguments.

With respect to the issue of liability, claimant argues that DOT's actions were arbitrary or capricious because DOT did not and could not, under the actual conditions, have determined that it was reasonably necessary for the public interest to omit welding work from the contract because the work could not be completed by the November 2001 deadline. Claimant argues that DOT simply proceeded with its own alternative procedure and ignored claimant's ability to easily perform the revised welding work within the specified time, and that because of the same, it cannot now rely on Article 5 of the parties' contract which allows defendant to alter or omit any portion of the work as reasonably necessary for the public interest.

In support of its position, claimant submits the affidavit of Thomas Hayes, claimant's project superintendent. In his Affidavit, Mr. Hayes states that he could find no records reflecting that claimant said it could not or would not be able to do complete the project on time, or any records showing that DOT had rejected or disapproved the revised welding procedures because it would be too time consuming and would not allow the project to be completed by November 30, 2001, as provided in the contract. In addition, claimant argues that it found no documents or records about the "costs" of the revised welding work and/or about the revised welding work causing an "inconvenience to the traveling public" that defendant raises in its current motion.

Mr. Hayes states that for the original plug welding procedures, it would have taken an eight person crew working six production hours per day, 12 working days to complete, and that for the revised welding procedures, it would have taken a 12 person crew working six production hours per day, 15 working days to complete. Mr. Hayes states that despite the fact that the revised welding would have taken only three extra days and had extremely little time effect on claimant's completion of the project on time, DOT never gave approval or disapproval of the proposal submitted on July 17, 2001, and that if it had, claimant could have completed the work in 2001. However, Mr. Hayes does not provide any documentation confirming that the revised welding would have taken only three additional days or that defendant was ever made aware that it would take only three additional days.

Defendant argues that its decision to omit the welding work from the contract was reasonably necessary in the public interest, in order to minimize costs and inconvenience to the traveling public. In support of its position, defendant submits the Affidavit of Byron Alford, the Regional Construction Engineer with Region 10 of DOT. At the time of the subject occurrence, Mr. Alford was a Construction Supervisor for DOT and responsible for the administration of the contract for the Rehabilitation of the Robert Moses Causeway Bridge over Fire Island Inlet. In support of his position, Mr. Alford annexes a copy of handwritten notes from claimant's subcontractor submitted on July 17, 2001, which states that it would take an additional eight weeks to complete the revised welding work. According to defendant, the increase in time would have inconvenienced the traveling public because their only access to the Robert Moses State Park on Fire Island from Long Island was the Fire Island Bridge, on which the work was to occur. He stated that the revised welding work would have extended into the peak summer traffic, whereas the alternate method suggested by DOT could have been completed in the off-season and had much less impact on the traveling public. In addition, there are restrictions on traffic lane closures in the summer and various work restrictions in the winter which would make the additional welding work impossible to complete by November 30, 2001.

Defendant argues that it was reasonable for DOT to seek ways of accomplishing the work that reduced the time and cost, as well as the inconvenience to the traveling public, and that there was nothing arbitrary or capricious about its decision. The Court agrees.

ANALYSIS

Summary judgment is a drastic remedy which should not be granted unless it is clear that there are no triable issues of fact (Andre v Pomeroy, 35 NY2d 361, 364 [1974]). The Court's function in a motion for summary judgment is not to resolve issues of fact, but to determine whether issues of fact exist (Barr v County of Albany, 50 NY2d 247 [1980]). The proponent of a motion for summary judgment must make a prima facie entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (Alvarez v Prospect Hosp., 68 NY2d 320 [1986]). Failure to make such a showing requires denial of a summary judgment motion, regardless of the sufficiency of the opposing party's papers (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]). Once this showing has been made, the burden shifts to the opponent of the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material issues of fact which require a trial of the action (Alvarez, 68 NY2d 320; Winegrad, 64 NY2d 851; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). The evidence must be viewed in the light most favorable to the opponent of the motion, and that party should be given every favorable inference (see McKinnon v Bell Sec., 268 AD2d 220 [1st Dept 2000]).

In the present case, Article 5 of the parties' contract provides, in relevant part, as follows:

The State reserves the right, at any time during the progress of the work, to alter the plans or omit any portion of the work as it may deem reasonably necessary for the public interest; making allowances for additions and deductions with compensation made in accordance with the Standard Specifications, for this work without constituting grounds for any claim by the contractor for allowance for damages or for loss of anticipated profits.

In interpreting omission clauses such as the above, it has been stated that they protect the contractor from arbitrary, capricious or unreasonable action by the State (see Kinser Const. Co. v State of New York, 204 NY 381 [1912]).

The proof submitted shows that based upon the documentation presented to defendant, the revised welding and related work would add approximately eight weeks to the contract duration, and that it would cost more and greater inconvenience the traveling public. The Court concludes that the omission of the welding work was reasonably necessary for the public interest and that defendant's determination to omit the welding work was not arbitrary and capricious. Accordingly, Article 5 of the parties' contract applies in the instant dispute and claimant, therefore, does not have any cause of action against the State for lost profits (see Bero Construction Corp. v State of New York, Claim No. 65063 (Ct Cl, 1986, NeMoyer, J.).

In light of the foregoing, claimant's motion for summary judgment is denied. Defendant's motion for summary judgment is granted and Claim No. 111020 is dismissed.

July 13, 2010

Albany, New York

JUDITH A. HARD

Judge of the Court of Claims

Papers Considered:

1. Notice of Motion for Summary Judgment, Affirmation of Cornelia Mogor, AAG,

dated, December 18, 2009, and Affidavit of Byron Alford, sworn to December 18,

2009, with Exhibits, Memorandum of Law dated December 18, 2009;

2. Motion for Summary Judgment, Affidavit of Thomas Hayes, sworn to December 10,

2009, Memorandum of Law, dated December 16, 2009 with Attachments;

3. Affirmation of Darrell W. Harp, Esq., dated January 15, 2010, with Attachment;

Affidavit of Thomas Hayes, sworn to on January 11, 2010, and Claimant's Answer Memorandum of Law, dated January 26, 2010, all submitted in Opposition to

Defendant's Motion for Summary Judgment and in Support of Claimant's Summary

Judgment Motion;

4. Affidavit in Opposition, sworn to by Byron Alford on February 11, 2010, with

Exhibits, and Defendant's Memorandum of Law, dated February 11, 2010;

5. Reply Affirmation of Cornelia Mogor, dated February 16, 2010, Reply Affidavit of

Byron Alford, sworn to February 16, 2010, with Exhibit, and Defendant's Reply

Memorandum of Law, dated February 16, 2010;

6. Claimant's Sur-Reply Memorandum of Law, dated February 15, 2010.