Schindler El. Corp. v Yonkers Tully Pegno Cos.
Annotate this CaseDecided on March 15, 2006
Supreme Court, Westchester County
Schindler Elevator Corporation, Plaintiff,
against
Yonkers Tully Pegno Companies - a Joint Venture, Yonkers Contracting Co., Inc., Tully Construction Co., Inc., and A. J. Pegno Construction Corp., Defendants,
9240/04
PECKAR & ABRAMSON, P.C.
Attorneys for Defendants
546 Fifth Avenue 17th Floor
New York, New York 10036
EDWARD WEISSMAN, ESQ.
Attorneys for Plaintiff
60 East 42nd Street, 47th Floor
New York, New York 10165
Kenneth W. Rudolph, J.
Upon the foregoing papers, it is ORDERED that this motion by defendants for an order, pursuant to CPLR 3212, granting defendants summary judgment dismissing plaintiff's complaint, is decided as follows.
Defendants', Yonkers Tully Pegno Companies - a Joint Venture, Yonkers Contracting Company, Inc., Tully Construction Co., Inc. and A.J. Pegno Construction Corp. ("YTP") was a general contractor on the Downtown Path Restoration Program-Phase 1, New York and New Jersey, Contract No. PCP-100.000, ("project"). On June 26, 2002, YTP and the plaintiff, Schindler Elevator Corporation ("Schindler") entered into a subcontract agreement ("subcontract"), pursuant to which Schindler agreed to manufacture and install elevators and escalators for the project. Schindler's complaint seeks to recover $535,000 for additional services alleged to have been performed by Schindler as extra work under its subcontract. Schindler's complaint alleges three causes of action: unjust enrichment, declaratory judgment and reformation of the subcontract, each essentially claiming that Schindler is entitled to said $535,000. for work performed. YTP's answer alleges denials and multiple affirmative defenses, including allegations that Schindler's claim is barred in that the parties dispute was resolved by an amendment to the subject subcontract pursuant to which Schindler's claim has been paid in full and Schindler's claims are barred by an accord and satisfaction.
It is well established that summary judgment is a drastic remedy and should only be granted if there are no material and triable issues of fact. Sillman v. Twentieth Century Fox [*2]Film Corp., 3 NY2d 395. In evaluating a motion for summary judgment, a court should not determine credibility but whether there exists such issues. S. J. Capelin Assoc. v. Globe Manufacturing Corp., 34 NY2d 338. When reviewing a motion the papers must be scrutinized carefully in the light most favorable to the party opposing the motion. Robinson v. Strong Memorial Hosp., 98 AD2d 976. The party moving for summary judgment has the burden initially of coming forward with admissible evidence to support the motion so as to warrant the Court's directing judgment in movant's favor as a matter of law; the burden then shifts to the opposing party to demonstrate, by admissible evidence, the existence of a factual issue requiring a trial of the action. See, Friends of Animals, Inc. v. Associated Fur Manufacturers, Inc., 46 NY2d 1065, 1067. Alvarez v. City of New York, 68 NY2d 320; Zuckerman v. City of New York, 49 NY2d 557.
Defendants' motion is supported by the affidavit of James Strobel ("Strobel") their project director with primary responsibility for the project. Strobel avers initially that the plaintiff's claim essentially seeks to recover monies for alleged extra work performed including exterior cladding for its elevators. In August of 2002, project owner, the Port Authority Trans-Hudson Corporation, The Port Authority of New York & New Jersey ("Port Authority"), issued an additional drawing noting a new arrangement of the escalators to be installed by Schindler at the project. In January, 2003, the Port Authority issued drawing A13. 1 to YTP. Said drawing was a revision of the prior drawings indicating certain cladding work to be performed by YTP. Upon receipt of said drawings, YTP forwarded them to Schindler.
On or about March 4, 2003, the Port Authority issued Work Order WT-28L to YTP. By letter dated March 4, 2003, YTP forwarded Work Order WT-28L to Schindler and requested that Schindler notify YTP of any cost or schedule impacts as a result thereof. Too, on or about March 8, 2003 the Port Authority issued Work Order WT-28M to YTP. By letter dated March 8, 2003, YTP forwarded Work Order WT-28M to Schindler and requested that Schindler notify YTP of any cost or schedule impacts as a result thereof. Too, on or about March 23, 2003, the Port Authority issued Work Order WT-28N to YTP. By letter dated March 23, 2003, YTP forwarded Work Order WT-28N to Schindler and requested that Schindler notify YTP of any cost or schedule impacts as a result thereof.
Strobel cites Article 6.1 of the subcontract requiring the subcontractor, Schindler to give YTP a written notice of any condition claimed to be grounds for an increase in the subcontract price, failure to do so being a waiver releasing YTP from such claims. Strobel further cites the general contract incorporating the subcontract, in particular 1.2: the strict requirements for giving written notice of claims for extra or additional compensation and the waiver of such claims for failure to give written notice as a condition precedent to such claims.
In June of 2003, the Port Authority and YTP converted the terms of the contract [*3]from a time and material contract to a total project lump sum contract. In order to determine the total project lump sum amount to be submitted to the Port Authority by letter dated June 7, 2003, YTP requested a summary of all additional costs associated with the changed drawings/specifications from its subcontractors, including Schindler, and requested that said information be provided by June 13, 2003, stating that no requests for additional costs would be accepted after this date. YTP received no notification from Schindler of any extra work relating to the Schindler cladding claim. YTP included no sums in its total project lump sum contract conversion with the Port Authority for this work claim. On September 8 2003, Schindler notified YTP of the Schindler cladding claim by submitting Request for Change Order ("RFCO No. 4") seeking $535,000 to furnish and install custom cladding and decking, in accordance with Work Order WT-28 for the escalators at the project.
Although YTP had no obligation to do so, YTP attempted to pass through and obtain payment from the Port Authority for the Schindler cladding claim. Accordingly, by letter dated September 9, 2003, YTP forwarded Schindler's RFCO No. 4 to the Port Authority as Change Order Request No. A115 ("C.O.R. No. A115"). The Port Authority denied C.O.R. No. A115 upon the basis that this work was already part of the contract documents and did not constitute extra work. Strobel contends that to the extent that the Schindler cladding claim does in fact constitute extra work of any dollar value, YTP has been severely prejudiced because it has no ability to recover payment from the owner due to the Schindler's own failure to comply with the contractual notice requirements of the subcontract.
In or about February of 2006 a meeting was held between YTP and Schindler regarding all of Schindler's outstanding claims for extra work. As a result of said meeting the parties agreed upon the cost of the extra work and, by way of Amendment No. 4 to the Subcontract dated March 30, 2004, Schindler accepted the amount of $327,241. in full and final settlement of Schindler's Requests For Change Orders 1 through 16. Schindler's RFCO No. 4, YTP's C.O.R. No,. A115, was expressly included in Amendment No. 4 to the Subcontract. In accordance with Amendment No. 4, YTP tendered payment to Schindler in the amount of $327,241 by way of check No. 16054, dated April 13, 2004. Schindler's RFCO No. 4, in the sum of $535,000.00, which is the subject matter of this action, was expressly included and extinguished by the terms of Amendment No. 4, which was agreed upon and accepted by Schindler and YTP.
YTP contends it is not disputed that Schindler failed to follow the strict notice provisions of the subcontract and offers no justification for its untimely filed claim for additional cladding and decking work. Schindler's execution of Amendment 4 to the subcontract is an accord and satisfaction extinguishing the cladding claim.
In opposition, Schindler submits the affidavit of Charles Gutowski ("Gutowski") its strategic project manager - New York region describing Strobel's version of the facts as half a story. Gutowski accuses YTP of mishandling their role as general contractor of the project [*4]and seeking to cover up their misdeeds to deprive Schindler of payments due.
Gutowski avers that due to overall delays at the project there was no immediate need to provide YTP with a notice of additional costs associated with the drawing as modified to allow for substantially more decking and cladding; YTP did not press Schindler for this information. On September 9, 2003, and after carefully pricing the change order request, Schindler advised YTP that Schindler would require $535,000. to furnish and install custom cladding and decking. YTP forwarded the request to the Port Authority, which rejected the claim not because it was untimely, but because the work was required in accord with Schindler's bid. While $91,000. was nominally allocated originally by Schindler and YTP for cladding and decking, the modified drawings differed substantially from the original drawings as to cladding and decking to the sum of $535,000. in addition to the $91,000. Schindler proceeded with its work assuming the cladding and dealing issues would be addressed in a fair and professional manner.
Gutowski attended a meeting on January 16, 2004 among Schindler, YTP and the Port Authority; YTPoffered $396,000 in full satisfaction of Schindler's $535,000. claim for decking and cladding which was unacceptable to Schindler. The same parties met again on February 26, 2004 to settle all other claims of Schindler; Gutowski contends that the issues of decking and cladding: Item No. 4, were not on the table and were to be addressed at another time as set forth in Gutowski's referenced notes of the meeting. As a result of the meeting, Schindler was to be paid $327,000. for change orders 1 through 3 and 5 through 16.
Gutowski avers at paragraph 17 of his affidavit: ..."17. Unfortunately, whether through inadvertent error or intentional, the Waiver and Release prepared by defendants and forwarded to me by defendants, referenced all of the change notices, 1 through 16. Exhibit "F". I did not catch the error. As a result, in error, I executed the Waiver and Release and Schindler was subsequently paid $327,241.00 in full satisfaction of its claims, including decking and cladding, which was clearly understood to be off the table. ... " Gutkowski contends that Schindler's million dollar plus claim has been unfairly compromised and not resolved as intended or agreed to by the parties. When the $327,241 check came in, Gutkowski had no reason to believe that it was an incorrect amount because it was relatively close to the amount agreed to, supra, not including decking and cladding.
Gutowski argues that YTP s letter of September 9, 2003 recognizes YTP's understanding that Schindler would be due additional monies for the decking and cladding required by the revised plans. YTP should not be able to take advantage of their own error in not originally planning for proper decking and cladding and for sending a waiver and release, including decking and cladding, when the parties had agreed the issue was tabled for further discussion. Gutowski describes himself as victimized by YTP after his being in the construction field for almost four decades. The disputed facts surrounding the waiver and release preclude [*5]summary judgment in defendant's favor.
The Court notes that the record before the Court does not reveal that prior to the commencement of this action, Schindler confronted YTP with the error in Amendment 4 to the subcontract. Amendment 4 provides in pertinent part: "This Amendment represents a lump sum agreed to settlement amount and hereby satisfies YTP's responsibility for Schindler's RFCO's 01 through 16, inclusive, per the agreement reached on February 26, 2004. Gutowski signed Amendment 04 dated March 30, 2004, approving and accepting the amendment on behalf of Schindler.
In the absence of fraud, duress or some other wrongful act by a party to a contract, a signer of an agreement is deemed to be conclusively barred by its terms whether or not he or she read it. Maines Paper and Food Service, Inc. V. Ebrahim Adel, 256 AD2d 760, 761, citing, inter alia, Gillman v. Chase Manhattan Bank, 73 NY2d 1, 11. "A familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing." W.W.W. Associates, inc. v. Giancontieri, 77 NY2d 157, 162.
The Court finds that YTP has met its initial evidentiary burden of establishing its right to summary judgment herein.In this commercial situation, assuming arguendo that Schindler gave proper notice and/or that the parties negotiations rendered notice academic, the operative document herein: the March 30, 2004 amendment to the subcontract between Schindler and YTP resolves by a lump sum payment, Schindler's change orders 1 through 16 including change order 4, Schindler's essential claim herein. Schindler has proffered no legal authority contra to the foregoing finding and Gutowski's affidavit raises no issues on any of Schindler's complaint's causes of action for a trier of the facts.
YTP's motion for summary judgment is granted; Schindler's complaint is dismissed.
The foregoing constitutes the Decision and Order of this Court.
Dated: March 15, 2006
White Plains, New York
E N T E R,
HON. KENNETH W. RUDOLPH
Justice of the Supreme Court
TO:
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