Eaton Elec., Inc. v Dormitory Auth. of State of N.Y.

[*1] Eaton Elec., Inc. v Dormitory Auth. of State of N.Y. 2008 NY Slip Op 52391(U) [21 Misc 3d 1135(A)] Decided on November 25, 2008 Supreme Court, Kings County Demarest, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through December 8, 2008; it will not be published in the printed Official Reports.

Decided on November 25, 2008
Supreme Court, Kings County

Eaton Electric, Inc., Plaintiff,

against

Dormitory Authority of the State of New York, Defendant.



20626/05



Attorney for Plaintiff:

Peter L. Agovino, Esq.

Agovino & Asselta, LLP

170 Old Country Road, Suite 608

Mineola, NY 11501

Attorney for Defendant (Dormitory Authority):

Frederick R. Rohn, Esq.

Holland & Knight, LLP

195 Broadway, 24th Floor

New York, NY 10007

Attorney for Third Party Defendant (Plato): Chris Georgoulis, Esq.

Georgoulis & Associates, PLLC

45 Broadway, 14th Floor

New York, NY 10006

Carolyn E. Demarest, J.

In this action by plaintiff Eaton Electric, Inc.(Eaton) against defendant/third-party plaintiff Dormitory Authority of the State of New York (DASNY) alleging breach of a construction contract and seeking damages, DASNY moves for summary judgment dismissing Eaton's second, third, and fourth causes of action on the grounds that they are barred by a no-damage-for-delay clause in the contract, Eaton's alleged failure to comply with notice and dispute provisions of the contract, and/or Eaton's execution of change orders, and because Eaton's total cost claim allegedly includes claims for costs that are allegedly barred as a matter of law. Third-party defendant Plato General Construction Corp./Emco Tech Construction Corp. Joint Venture (Plato/Emco) moves for an order, pursuant to CPLR 3211 (a) (7), dismissing DASNY's third-party complaint as against it in its entirety on the alleged basis that it fails to state a cause of action for which relief can be granted. Eaton similarly cross-moves for an order, pursuant to CPLR 3211 (a) (1) and (7), dismissing DASNY's third-party complaint against Plato on the alleged ground that it fails to state a cause of action for which relief can be granted. Eaton's cross motion seeks, in the alternative, an order, pursuant to CPLR 1007, dismissing DASNY's third-party complaint as a result of DASNY's alleged failure to serve the third-party complaint on it, or, alternatively, vacating DASNY's jury demand, pursuant to CPLR 4102 (a), on the alleged basis that DASNY waived a jury trial in this action.

DASNY acts as the owner of City University of New York construction projects, and, in early 1999, it received bids for the construction of a project involving the near gut renovation and construction of a substantial new addition expanding the library at Brooklyn College. Eaton was the successful bidder for the electrical work, and DASNY, as the owner, entered into a contract dated May 10, 1999 (the Contract) with Eaton, as the contractor, to perform the electrical work on the project for a total sum of $8,933,000.

Prior to Eaton's entry into the Contract with DASNY, DASNY had entered into a contract with Turner Construction Company (Turner) on December 29, 1998, under which Turner agreed to act as the construction manager for the construction phase of the project. On May 20, 1999, DASNY also entered into a separate prime contract with Plato/Emco for the general construction work that was similar in form to the prime contract with Eaton. As required by General Municipal Law § 101, the Wicks Law, DASNY also entered into separate prime contracts with Almar Plumbing & Heating Corp. for the project's plumbing work and with Precision Mechanical, Inc. for the project's heating, ventilating, and air conditioning (HVAC) work.

Construction of the project began in 1999. The Contract between Eaton and DASNY provided that Eaton was required to complete the project no later than March 10, 2001. The bid packages for each trade had contained the drawings and specifications that were to be used to perform and lay out the work of that contract, as well as reference and coordination drawings for the other trades that were to be used for coordination of the project. It is undisputed that virtually all of the drawings and specifications issued by DASNY contained substantial errors, conflicts, [*2]and discrepancies, which rendered them unusable for the construction of the project and required substantial corrections, redesigns, and modifications. Eaton asserts that these errors resulted from insufficient investigation and preparation by DASNY. Eaton claims that as a result of the massive design errors and omissions, DASNY radically altered the Contract work by making isolated, uncoordinated changes for every trade. Eaton states that many of these revisions consisted of unauthorized changes on shop drawing submissions, which often created additional conflicts that required further changes, leading to more delays and disruptions.

Eaton claims that by reason of the suspensions, delays, and disruptions that resulted from DASNY's continuous design revisions, it could not perform its sequence of electrical work set forth in the original Contract schedule. Eaton asserts that the constant lack of design information and design changes caused material and cardinal changes to its planned performance and severely impacted its work by more than doubling the duration of the electrical work, as well as the costs of its performance.

Eaton further asserts that DASNY and its design consultants ignored the obligations that they had under the Contract to provide a complete coordinated design for the project, to timely correct erroneous drawings and specifications, and to timely provide missing design and construction details. According to Eaton, the entire project was severely impacted by the substantial and pervasive errors and omissions, DASNY's failure to timely provide necessary design corrections and construction details, and DASNY's disregard of its contractual obligations to coordinate and schedule the Contract work. There were numerous change orders (valued at $2 million for the electrical work on the project) as well as 123 requests for information (RFIs) by Eaton.

Eaton also claims that DASNY demanded that it increase its workers and work hours and insisted that it accelerate its electrical work, even though it knew at the time of its demand that it did not have complete and adequate designs for the project or a properly coordinated project schedule. In addition, DASNY took beneficial occupancy of the project prior to the completion of Eaton's Contract work, which, according to Eaton, thereby further impeded and obstructed its work.

As a result of the design and scheduling problems, Eaton's Contract work was extended more than 40 months beyond the original 22-month Contract period. Eaton claims that it incurred substantial increased costs for labor, materials, equipment, and supervision due to these problems.

By verified Statement of Claim dated July 30, 2004, Eaton submitted a claim to DASNY. This Statement of Claim sought payment of a claimed unpaid balance of the Contract price, as adjusted by the change orders, in the amount of $452,810, and $12,467,605.59 in damages for "additional costs of labor, materials and vendors, as well as for additional job supervision, overhead and related project costs."

On July 5, 2005, Eaton commenced this action against DASNY, seeking recovery of the matters covered by its July 30, 2004 Statement of Claim. Eaton's first cause of action seeks the alleged unpaid balance of $452,810. Eaton's second, third, and fourth causes of action all seek damages in the sum of $13,000,000 for the additional costs of labor, materials, and vendors, and additional job supervision, overhead, and related costs described in Eaton's July 30, 2004 Statement of Claim based upon allegations that DASNY breached the Contract with it. DASNY [*3]interposed an answer, asserting defenses. On January 30, 2007, DASNY commenced a third-party action against Plato/Emco, alleging that Plato/ Emco breached its contract with it, and seeking contribution and indemnification from Plato/Emco in the amount of any judgment recovered by Eaton as against it.

In support of its instant motion, DASNY argues that Eaton's second, third, and fourth causes of action are barred, as a matter of law, by the no-damage-for delay clause set forth in Section 11.02 of the General Conditions of the Contract, which provided:

"Section 11.02 - Claims for Delay

No claims for increased costs, charges, expenses or damages of any kind shall be made by the Contractor against the Owner for any delays or hindrances from any cause whatsoever; provided that the Owner, in the Owner's discretion, may compensate the Contractor for any said delays by extending the time for completion of the Work as specified in the Contract."

Generally, clauses in construction contracts which bar contractors from recovering damages for delay in the performance of the contract are valid and enforceable (see Corinno Civetta Constr. Corp. v City of New York, 67 NY2d 297, 309 [1986]; Kalisch-Jarcho v City of New York, 58 NY2d 377, 384 [1983]). However, the Court of Appeals, in Corinno Civetta Constr. Corp. (67 NY2d at 309), has expressly held that there are exceptions to this general rule, and such a no-damage-for-delay clause which purports to preclude damages for all delays resulting from any cause whatsoever will not be read literally. Thus, pursuant to the established exceptions, set forth in Corinno Civetta Constr. Corp.(67NY2d at 309), despite the inclusion in a construction contract of a clause which exculpates an owner from liability to a contractor for damages resulting from delays in the performance of the contractor's work, such a no-damage-for-delay clause may not be invoked to bar the recovery of damages for "(1) delays caused by the [owner's] bad faith or its willful, malicious, or grossly negligent conduct, (2) uncontemplated delays, (3) delays so unreasonable that they constitute an intentional abandonment of the contract by the [owner], and (4) delays resulting from the [owner's] breach of a fundamental obligation of the contract" (see also Trocom Constr.Corp. v City of New York, 51 AD3d 533, 535 [2008]; Trataros Constr., Inc. v New York City Hous. Auth., 34 AD3d 451, 453 [2006]; Eldor Contr. Corp. v County of Nassau, 6 AD3d 654, 655 [2004]; Bovis Lend Lease LMB v GCT Venture, 6 AD3d 228, 229 [2004];Tougher Indus. v Northern Westchester Joint Water Works, 304 AD2d 822, 822 [2003]; Abax Inc. v New York City Hous. Auth., 282 AD2d 372, 373 [2001]; Clifford R. Gray, Inc. v City School Dist. of Albany, 277 AD2d 843, 844 [2000]; Clark-Fitzpatrick, Inc. v Long Island R.R. Co., 198 AD2d 254, 255 [1993]; J. J. Flannery, Inc. v Kerby Saunders, Inc., 173 AD2d 415, 415 [1991]; Castagna & Son v Board of Educ. of City of NY [New Dorp High School], 173 AD2d 405, 406 [1991]; Spearin, Preston & Burrows v City of New York, 160 AD2d 263, 264 [1990]; J. R. Stevenson Corp. v County of Westchester, 113 AD2d 918, 922 [1985]; Dal Constr. Corp. v City of New York, 108 AD2d 892, 893 [1985]).

As enunciated in Corinno Civetta Constr. Corp.(67 NY2d at 309), "exculpatory clauses will not bar claims resulting from delays caused by the [owner] if the delays or their causes were not within the contemplation of the parties at the time they entered into the contract." Therefore, "even broadly worded exculpatory clauses . . . are generally held to encompass only those delays which are reasonably foreseeable, arise from the contractor's work during performance, or which [*4]are mentioned in the contract" (Id. at 310; see also Eldor Contr. Corp., 6 AD3d at 655; Abax Inc., 282 AD2d at 373; Clifford R. Gray, Inc., 277 AD2d at 845; Castagna & Son, 173 AD2d at 406; Commercial Elec. Contrs., Inc. v Pavarini Constr. Co., Inc., 5 Misc 3d 1002 [A], 2004 NY Slip Op 51155 [U],*5 [2004]).

Here, Eaton claims that its delay claims are predicated upon uncontemplated delays. Specifically, as discussed above, Eaton asserts that the plans and specifications for the project were incomplete and contained numerous errors and discrepancies, and that DASNYfailed to provide a complete and coordinated design for the project. Eaton further asserts that DASNY prepared and furnished misleading plans, drawings, and specifications that failed to accurately indicate the conditions of the Contract work, and failed to provide adequate designs for critical elements of the project. Eaton claims that DASNY disrupted and interfered with its work by failing to correct the numerous design deficiencies,access problems, and conflicts, by failing to timely furnish it with missing design and construction details, by making excessive revisions and changes, and by causing numerous work stoppages and suspensions. Eaton contends that these delays were not reasonably foreseeable and were not contemplated at the time of its entry into the Contract with DASNY.

DASNY does not offer any evidence to refute Eaton's assertions regarding the causes of these delays, but, rather, argues that these delays were contemplated. To support this argument, DASNY, relying upon T.J.D. Constr. Co. v City of New York (295 AD2d 180, 180 [2002]), contends that delaysdue to design errors and their subsequent correction are deemed contemplated in a public construction contract. DASNY's reliance upon T.J.D. Constr. Co. (295 AD2d at 180), however, is misplaced since in that case, the delay caused by the defendant's testing and correction of equipment design defects was held to be contemplated due to the contract provisions calling for the work to be done in two stages and for successful testing between the stages. Here, in contrast, there were no similar contract provisions, dividing the project in two stages or calling for such testing.

DASNY also argues that the no-damage-for-delay clause (i.e., Section 11.02 of the General Conditions of the Contract) indicates that the parties contemplated delays on the project. The no-damage-for-delay clause itself, however, cannot suffice to establish that Eaton contemplated that the delays at issue might occur. The inquiry to be made under Corinno Civetta Constr. Corp. (67 NY2d at 309-310) is whether the delays were contemplated despite the presence of the no-damage-for-delay clause.

DASNY further argues that the Contract contemplated possible problems with coordination and provided for coordination meetings to resolve coordination issues pursuant to Sections 01040.01 (D) (1) and 01040.05 (A) of the Supplemental General Requirements of the Contract. These Sections, however, simply provide for special procedures for coordination and coordination meetings, and do not address the issue of coordination problems raised by disjointed work and errors in design. Thus, these Sections do not establish that the coordination problems encountered on this project were contemplated.

DASNY contends that delays in processing changes do not support a delay claim where there is a no-damage-for-delay clause and provisions in the Contract to correct the plans by issuing change orders. Eaton, however (as discussed above), does not simply claim a delay in processing change orders, but cardinal changes and errors in the designs and construction details [*5](see Bovis Lend Lease LMB, 6 AD3d at 229).

DASNY also contends that the mere length of the delay does not make it uncontemplated. Eaton, though, does not merely rely upon the length of the delay (which was substantial), but upon, among other things, the design changes and lack of coordination allegedly encountered by it throughout the project (see id.).

DASNY further argues that the possibility of interference from other contractors was also contemplated by the parties pursuant to Section 13.01 (D), (E), and (F) of the General Conditions of the Contract, which addressed DASNY's lack of responsibility for the performance of the other contractors. This argument is unavailing since Eaton claims that it does not seek damages caused by the other contractors, but, rather, damages for delay caused by DASNY.

DASNY additionally argues that the need for extensions of time was contemplated in Section 9.01 (G) of the General Conditions of the Contract, which provided that the time for completion could be extended by change order approved by it. This argument is without moment since this Section does not show that the cause of the delay encountered by Eaton and the alleged damages sustained by it were contemplated.

DASNY also contends that the need for extra work and alterations, additions to, or deductions from the Contract work was contemplated in Section 8.01 (A) of the General Conditions of the Contract. This Section, however, pertains to "Extra Work," not delay damages. Indeed, this Section makes no mention of any type of delay, and actually states that the Contract price (i.e., the Contract consideration) will be "adjusted" to reflect any change.

Thus, DASNY has pointed to no specific provision of the Contract or evidentiary proof demonstrating, as a matter of law, that the extent of the delay at issue was within the contemplation of the parties (see Corinno Civetta Constr. Corp., 67 NY2d at 319; compare Universal / MMEC, Ltd. v Dormitory Auth. of State of NY, 50 AD3d 352, 353 [2008]). The court does, however, find that Eaton has submitted evidentiary facts sufficiently indicative of delays beyond the contemplation of the contracting parties to raise a triable issue of fact as to the enforceability of the no-damage-for-delay clause (see Corinno Civetta Constr. Corp., 67 NY2d at 319; Eldor Contr. Corp., 6 AD3d at 655; Bovis Lend Lease LMB, 6 AD3d at 229; Abax Inc., 282 AD2d at 373; J.J. Flannery, Inc., 173 AD2d at 415; Castagna & Son, 173 AD2d at 406; Dal Constr. Corp., 108 AD2d at 893).

Moreover, Eaton also asserts that there was a breach of a fundamental obligation that the Contract expressly imposed upon DASNY (see Corinno Civetta Constr. Corp., 67 NY2d at 313; Castagna & Son, 173 AD2d at 406). Specifically, Eaton argues that its delay claims are predicated on a willful failure by DASNY to perform its fundamental affirmative contractual obligations to coordinate, schedule, and progress the work. Section 01311.01 of the General Requirements of the Contract provided:

"A Critical Path Method (. . . CPM) shall be provided by the Owner or Owner's Representative and shall be used to schedule the progress of the work. All Work shall be done in accordance with the Project CPM Schedule. . ."

Section 01311.06 of the General Requirements of the Contract required DASNY to conduct progress meetings to review the progress and status of the Contract work and to review schedules for future work. In addition, Section 01311.07 of the General Requirements of the [*6]Contract required DASNY to prepare and compile updates to the project CPM schedule to show how changes or delays would affect the scheduled completion of the work. Eaton asserts that DASNY disregarded its coordination and scheduling obligations under the Contract, and failed to provide the essential comprehensive CPM schedules and updates, which were required by these Sections of the General Requirements of the Contract and which were needed by it to timely perform its obligations under the Contract.

Eaton also points out that (as noted above) the Contract provided that the contractor shall complete the project "no later than March 10, 2001," and Section 9.01 (B) of the General Conditions of the Contract made this time for completion of the work "an essential condition of the Contract." Section 01311.01 of the Supplemental General Requirements of the Contract provided that it "[r]ecognizes that the Project Schedule is of highly critical importance to the Owner," and that "[a]ll aspects of construction are to reflect a time of essence' constructions strategy." Eaton asserts that DASNY's failure to fulfill its fundamental contractual obligations to coordinate, schedule, and progress the Contract work, together with its disruptions and work stoppages, thus, constituted a pervasive and ongoing breach of the Contract.

DASNY argues that Eaton cannot bring a claim for poor planning and scheduling because such a claim amounts, at worst, to a claim of inept administration by it. This argument is rejected. Eaton's claims do not amount to a claim of mere inept administration on the part of DASNY, but allege specific breaches of DASNY's contractual obligations under the Contract (compare T.J.D. Constr. Co., 295 AD2d at 180). Based upon all of the above, there are material and triable factual issues raised as to whether the alleged delay damages sustained by Eaton resulted from DASNY's breach of a fundamental obligation of the Contract (see Castagna & Son, 173 AD2d at 406).

Furthermore, while DASNY argues that Eaton's allegations regarding the designs and specifications do not demonstrate the bad faith or gross negligence necessary in order to invoke the exception to the no-damage-for-delay clause based upon such bad faith or gross negligent conduct, Eaton disputes this. Thomas J. Comins (Comins), Eaton's project manager, in his sworn affidavit, attests that he has learned from DASNY's pre-trial discovery disclosures that DASNY knew prior to the Contract award that HVAC ducts had not been properly designed or coordinated with the other trades, and that DASNY took no steps to rectify those critical deficiencies. Comins also points out that, as evidenced by a memorandum dated October 27, 1998, 18 days after DASNY's issuance of the original project drawings, DASNY was aware that the original mechanical and plumbing drawings issued to prospective bidders had not been coordinated with the telecommunications work. Comins further specifies that DASNY obstructed Eaton's work by prematurely occupying the library after October 28, 2002, even though substantial portions of the Contract work remained to be performed by Eaton, hindering and obstructing its Contract work.

In addition, Comins asserts that DASNY chose to ignore serious design deficiencies and adverse working deficiencies that had been created by its design errors and omissions, and that DASNY directed Eaton and other contractors to proceed with their work without proper plans and specifications and without an acceptable project CPM schedule. Thus, the court finds that a triable issue of fact also exists as this issue and the applicability of this exception under Corinno Civetta Constr. Corp. (67 NY2d at 309) (see Williams & Sons Erectors, Inc. v South Carolina [*7]Steel Corp., 983 F2d 1176, 1184 [2d Cir 1993]; Trocom Constr. Corp., 51 AD3d at 535; Castagna & Son, 173 AD2d at 406; Spearin, Preston & Burrows, 160 AD2d at 264; Dal Constr. Corp., 108 AD2d at 893).

Consequently, the court finds that DASNY has failed to make a sufficient factual showing to establish, as a matter of law, whether the delays which actually occurred were initially contemplated by the parties as potential events on the construction project and with respect to the applicability of the other exceptions established under Corinno Livetta Constr.Corp. (67 NY2d at 309) (compare Commercial Elec. Contrs., Inc. v Pavarini Constr. Co., Inc., 50 AD3d 316, 317 [2008]; Metropolitan Steel Indus., Inc. v Perini Corp., 23 AD3d 205, 206 [2005]; Grace Indus., Inc. v New York City Dept. of Transp., 22 AD3d 262, 262 [2005]; T.J.D. Constr. Co., 295 AD2d at 180). Rather, material triable factual issues exist concerning the applicability of these exceptions (see Trocom Constr. Corp., 51 AD3d at 535; Trataros Constr., Inc., 34 AD3d at 453; Eldor Contr. Corp., 6 AD3d at 655; Bovis Lend Lease LMB, 6 AD3d at 229; Tougher Indus., 304 AD2d at 822; Abax Inc., 282 AD2d at 373; Clifford R. Gray, Inc., 277 AD2d at 844; Clark-Fitzpatrick, Inc., 198 AD2d at 255; J.J. Flannery, Inc., 173 AD2d at 415; Castagna & Son, 173 AD2d at 406; Spearin, Preston & Burrows, 160 AD2d at 264; J.R. Stevenson Corp., 113 AD2d at 922; Dal Constr. Corp.,108 AD2d at 893).

DASNY, as a further ground in support of its motion, argues that Eaton's complaint must be dismissed as barred by Eaton's failure to comply with notice and dispute provisions contained in the Contract, i.e., Sections 9.01, 11.01, and 11.03 of the General Conditions of the Contract. Section 9.01, entitled "Time of Completion," of the General Conditions of the Contract, in subsection (F), provided that "time is of the essence for each and every portion of the Work," and that the Contractor shall not be charged with liquidated damages, under certain conditions, "if the Owner determines that the Contractor is without fault." It required that "[t]he Contractor . . . within ten (10) days from the beginning of any such delay, notify the Owner, in writing, of the causes of the delay." Section 11.01, entitled "Claims for Extra Work," under "Article 11-Disputes," of the General Conditions of the Contract, provided:

"A.If the Contractor claims that any Work which the Contractor has been ordered to perform will be Extra Work or that any action or omission of the Owner is contrary to the terms and provisions of the Contract and will require the Contractor to perform Extra Work the Contractor shall:

. . .

2. File with the Owner within fifteen (15) working days after being ordered to perform the Work claimed by the Contractor to be Extra Work or within fifteen (15) working days after commencing performance of the Work, whichever date shall be earlier, or within fifteen (15) working days after the said action or omission on the part of the Owner occurred, a written notice of the basis of the Contractor's claim, including estimated cost and request for a determination, thereof."

Section 11.03, entitled "Finality of Decisions," of the General Conditions of the Contract, provided:

"A.Any decision or determination of the Consultant, Owner or the Owner's [*8]Representative shall be final, binding and conclusive on the Contractor unless the Contractor shall, within ten (10) working days after said decision, make and deliver to the Owner a verified written statement of the Contractor's contention that said decision is contrary to a provision of the Contract. The Owner shall determine the validity of the Contractor's contention. Pending the decision of the Owner, the Contractor shall proceed in accordance with the original decision.

B.Wherever it is required in the Contract that an application must be made to the Owner or a determination made by the Owner, the decision of the Owner on said application or the determination of the Owner under the Contract shall be final, conclusive and binding upon the Contractor unless the Contractor, within ten (10) working days after receiving notice of the Owner's decision or determination, files a written statement with the Owner that the Contractor reserves the Contractor's rights in connection with the matters covered by said decision or determination."

Eaton claims that it complied with Section 9.01 of the General Conditions of the Contract by its letter dated February 1, 2001, which was delivered to DASNY more than 30 days prior to the original Contract completion date. This letter formally notified DASNY that pursuant to article 9 of the General Conditions of the Contract, Eaton's Contract work remained delayed because of delays associated with the precedent work of other contractors, which were beyond its control.

DASNY contends that this letter was untimely because it was sent long after the complained-of delays. A contract, however, must be read "as a whole to put the words and phrases in proper focus" (Harrison & Burrowes, Bridge Constructors, Inc. v State of New York, 42 AD3d 779, 780 [2007]). Thus, Section 9.01 (F) of the General Conditions of the Contract must be read in context with the scheduling and reporting requirements of Section 01311 of the General Requirements of the Contract, which provided that DASNY/Turner was to provide Eaton with a project CPM schedule, updates, and schedule reports that were to reflect the progress and current status of the Contract work. Eaton's obligation under Section 01311.06 (D) of the General Requirements of the Contract was to furnish "progress data" for its work in the form required by . . . Turner."

It is undisputed that Eaton fully complied with the reporting requirements of Section 01311 of the General Requirements of the Contract and the procedures established by Turner for the project. Specifically, Eaton continuously submitted written daily reports to Turner, describing the work being performed by it and the delays and interferences that were affecting its work. Eaton also submitted progress data at weekly job meetings, which included information as to what was delaying or affecting the status of its work. In addition, beginning in April 2001, Eaton submitted two-week look-ahead schedules, which contained comments as to the delays and interferences affecting its work. After January 2002, when all work performed on the project was controlled and directed by Turner through daily verbal directives, written letters of direction, and weekly meeting minutes, Eaton submitted letters to Turner concerning the delays it was encountering. Over the course of the project, Eaton also submitted RFIs that notified Turner of the missing data or conflicts that were affecting the progress of its work. Thus, based upon [*9]Eaton's daily reports, weekly meetings, submissions, two-week look-ahead schedules, RFIs, as well as its February 1, 2001 formal notice of delay, DASNY was fully apprised of the delays and interferences that were being encountered by Eaton on the project (see Trataros Constr.,Inc., 34 AD3d at 453; Abax, Inc. v Lehrer McGovern Bovis, Inc., 8 AD3d 92, 93 [2004]; G. De Vincentis & Son Constr., 304 AD2d at 1008; Clifford R. Gray, Inc., 272 AD2d at 846).

DASNY, however, argues that the communications by Eaton pursuant to its scheduling requirements were insufficient because it did not provide it with notice that it was requested to make a determination as to whether Eaton had no fault regarding a particular delay. Such argument is unavailing since Section 9.01 (F) of the General Conditions of the Contract only required written notice of the causes of "delay in completion of the Work."

DASNY also contends that Section 11.03 (A) and (B) of the General Conditions of the Contract apply to applications and determinations under Section 9.01 (F) of the General Conditions of the Contract. DASNY asserts that Eaton never delivered a verified written statement within 10 days of the causes of delay, as required under Section 11.03 (A), nor did it file a written statement under Section 11.03 (B). Eaton, in response, contends that Section 11.03 of the General Condition of the Contract does not apply to its delay claims because the errors and omissions that underlie its claims occurred before the Contract was executed, when DASNY allegedly prepared and issued grossly defective and misleading plans and specifications to it, and did not arise from any final decision or determination rendered by DASNY, Turner, or any consultant.

DASNY points out that a letter from Turner, dated February 7, 2001, to Eaton, in response to Eaton's February 1, 2001 letter, stated that the claims in Eaton's February 1, 2001 letter regarding project delays/time extension and price increase was reviewed by DASNY and that it was barred by Section 11.02 of the General Conditions of the Contract, which barred damages for delay. DASNY asserts that Eaton did not thereafter submit a timely verified written statement as required under Section 11.03 of the General Conditions of the Contract. However, no decision was rendered by DASNY regarding whether Eaton was without fault pursuant to Section 9.01 of the General Conditions of the Contract. Turner's February 7, 2001 letter only refers Eaton to Section 11.02 of the General Conditions of the Contract, but does not state that it is a determination as to this claim by Eaton. Furthermore, where claims have been "the subject of sufficient correspondence to make them well known to the contract manager, complete technical compliance with . . . notice of claim requirements [is] not necessary" (Abax, Inc., 8 AD3d at 93; see also Whitmyer Bros., Inc. v State of New York, 63 AD2d 103, 107 [1978], affd 47 NY2d 960 [1979]).

Moreover, Comins attests, in his affidavit, that he and other representatives of Eaton were repeatedly told by Robert Kilar (Kilar), and Joseph Dunning (Dunning) (Turner's project managers), and other Turner personnel that Eaton's delay claims would be reviewed and verified upon the completion of the project. In addition, James Gray (Gray), the managing director of construction for DASNY, at his deposition, conceded that he had told a representative of Plato/Emco that DASNY would meet with Plato/Emco at the end of the job to review the time delays and costs associated with those delays (Gray's Dep. Transcript at 157).

Thus, triable issues of fact are raised as to whether DASNY and Turner waived compliance with notice provisions by allegedly repeatingly telling Eaton that DASNY would [*10]compensate it for its increased costs to complete its work when the project was finished (see G. De Vincentis & Son Constr., 304 AD2d at 1008). While DASNY argues that Turner had no actual or apparent authority to waive Eaton's compliance with the notice provisions of the Contract or to approve payments for delay and extra work, Sections 9 and 10 of Appendix A of the DASNY/Turner contract gave Turner the authority to process change orders, and to analyze and evaluate all claims for Contract time extensions and cost adjustments. Moreover, Section 1010.07 (A) of the Supplemental General Requirements of the Contract explicitly provided thatTurner "has been designated as the Owner's Representative for this project." Consequently, triable issues of fact are raised with respect to Turner's authority (see Id. at 1008-1009).

While DASNY also relies upon Section 11.01, under "Article 11- Disputes," of the General Conditions of the Contract, and entitled "Claims for Extra Work," this Section does not refer to a claim for delay, but, rather, covers extra work that was "done pursuant to a written order" of DASNY. The Contract defined "Extra Work" as "[a]ny work in addition to the Work initially required to be performed by the Contractor pursuant to the Contract." Thus, this Section covers claims for disputed "extra work," i.e., work that DASNY contended was required by the Contract, but which Eaton regarded as "Extra Work" that was not required under the Contract. Delay claims are dealt with separately under Section 11.02, entitled "Claims for Delay," under the General Conditions of the Contract. Consequently, Section 11.01 is restricted to claims for disputed "Extra Work" and has no application to claims for delay, to which Section 11.02 applies (see Gemma Constr. Co. v City of New York, 246 AD2d 451, 456 [1998]).

DASNY disputes that Eaton's claim is only a delay claim and states that it can be characterized as falling within the definition of "Extra Work" under the Contract. DASNY relies upon the fact that there were numerous revisions and changes to the Contract work, as reflected in change orders.

Eaton, however, states that the change orders issued to it were for the direct costs associated with changes ordered by DASNY, which were essentially the costs of performing additional work that was beyond the scope of the original plans and specifications. Eaton states that it was fully reimbursed for the costs of performing the extra work, and that it does not seek additional compensation for this work.Eaton claims that it, instead, seeks reimbursement for the increased costs and damages that it incurred in performing its original Contract work. Specifically, Eaton asserts that the increased costs and damages which it seeks are impact costs that are attributable to delays, disruptions, and suspensions arising from DASNY's defective plans and specifications, and to DASNY's failure to provide a comprehensive coordinated design, needed corrections, the required project CPM schedule, and CPM scheduling reports and updates. While a contractor may be required to perform additional work on account of a delay, that expense does not necessarily constitute "Extra Work" as that term is defined in the contract (see Gemma Constr. Co.,246 AD2d at 453). Rather, delay damages and extra work damages are separate items of damages, particularly where, as here, the Contract provided separate provisions addressing Claims for Extra Work (Section 11.01) and Claims for Delay (Section 11.02) (see Id. at 453-454).

DASNY's reliance upon Heckler Elec. Co. v City of New York (186 Misc 2d 77, 81 [2000]), in arguing that Eaton's claim is barred by its lack of compliance with Section 11.01 of the General Conditions of the Contract, is misplaced. In Heckler Elec. Co. (186 Misc 2d at 78 n [*11]1 [emphasis added]), the notice provision explicitly applied to claims for "compensation for any damage sustained by reason of any act, neglect, fault or default of the City," thereby encompassing both claims for extra work and claims for delay. Here, in contrast, the notice provision of Section 11.01 of the General Conditions of the Contract specifically relates only to "Claims for Extra Work" and does not encompass claims for delay, which are separately and exclusively covered by Section 11.02 of the General Conditions of the Contract.

Fahs Rolston Paving Corp. v County of Chemung (43 AD3d 1192, 1193-1195 [2007]), Huff Enters. v Triborough Bridge & Tunnel Auth. (191 AD2d 314, 315 [1993]), and CAB Assoc. v Dormitory Auth. of State of New York (2007 NY Slip Op 34075 [U], *2 [Sup Ct, Nassau County 2007]), upon which DASNY also relies, are similarly distinguishable from the case at bar. In Fahs Rolston Paving Corp. (43 AD3d at 1193-1194), the contractor sought to recover additional compensation for extra work, but failed to comply with a standard notice provision that was specifically applicable to claims for extra work. In Huff Enters. (191 AD2d at 315), the contractor failed to comply with a notice provision that expressly required notice of "any condition which is causing or may cause delay." That notice provision also provided that failure to comply with the requirement would constitute "a waiver . . . of any and all claims for damages for delay arising therefrom (id.). Finally, in CAB Assoc. (2007 NYSlip Op 34075 [U], *2), the claims at issue were for extra work, which were covered by the standard disputed work notice requirements of the contract. In any event, even if Eaton's delay claims were construed as encompassed under "Extra Work," as discussed above, a triable issue of fact is raised as to whether DASNY, by its representatives, waived compliance with Section 11.01 of the General Conditions of the Contract (see G. De Vincentis & Son Constr., 304 AD2d at 1008).

DASNY as a further ground for dismissal of Eaton's complaint as against it, argues that Eaton's claims are barred by releases in its favor contained in change orders for approximately $2,000,000, which were executed by Eaton for changes to its work and other adjustments in the Contract price. Each change order contained a release by Eaton of claims arising out of the change referenced in that change order. As noted above, however, Eaton claims that it was fully reimbursed for the direct costs associated with the change orders, that it does not seek additional compensation for any extra work or change covered by a change order issued by DASNY, and that it only seeks delay damages. Thus, the releases contained in these change orders, which do not relate to the delay damages, have no bearing upon the delay claims now asserted by Eaton.

DASNY argues that Eaton is bound by the release contained in Change Order Eaton X-20, which relates to certain delay damages already paid by DASNY to Eaton. Change Order Eaton X-20, dated May 8, 2002, was a preliminary time extension that changed the original Contract completion date from March 10, 2001 to July 3, 2001, and reimbursed Eaton for "additional general condition field and home office costs due to extending the project's schedule by 115 days from March 11th, 2001 to July 3rd, 2001 due to various field conditions that directly and indirectly affected [Eaton]." Change Order Eaton X-20 contained a general release, releasing and discharging DASNY from any claims against it "arising out of this change."

Comins, in his sworn affidavit, however, explains that at the time of the execution of Change Order Eaton X-20, it was understood by everyone that completion of the project would extend beyond 2002, and that Eaton would continue to incur substantial increased costs as a result of the delays and disruptions it was encountering. In fact, by letter dated February 7, 2002, [*12]prior to the execution of Change Order Eaton X-20, Comins confirmed to Eugene Leung (Leung) (DASNY's project manager) and Dunning (who, as noted above, was Turner's project manager) that "in addition to the General Conditions' costs that DASNY [and] T[urner] have agreed to pay thr[ough] July 4, 2001, Eaton is, and will continue to incur, [certain listed] costs as a result of the work disruptions and suspensions being encountered on this project." The February 7, 2002 letter lists these additional costs as extra mobilizations necessitated by the sporadic, piecemeal, and scattered completion of precedent work, material and labor escalation, overall loss of productivity, additional general conditions and overhead costs after July 4, 2001, and increased costs to maintain temporary power and light for work areas on the entire project. The February 7, 2002 letter also specifically advised Leung and Dunning that Eaton requests "full compensation for th[ese] costs and expenditures," that Eaton was "currently in the process of tabulating these costs," and that "[a] final billing will be submitted upon completion of this project."

As noted above, the release in Change Order Eaton X-20 was limited to claims "arising out of this change" and, by its terms, did not encompass all of the additional costs incurred by Eaton, including the general conditions and overhead costs after July 4, 2001, as set forth in Comin's February 7, 2002 letter. In this regard, it is noted that Eaton's work was extended more than 36 months beyond the July 3, 2001 adjusted Contract completion date.

Additionally, Comins attests that at the time of the execution of Change Order Eaton X-20, Dunning informed him and Eaton that DASNY was issuing a preliminary time extension and that the full impact of the actual delays and interferences that were being encountered on the project would be addressed upon the completion of the Contract work. DASNY argues that Eaton cannot rely on any alleged statement made by Dunning because he was a Turner employee. DASNY contends that Dunning, thus, had no authority to waive Eaton's compliance with the Contract. This argument is rejected since, as discussed above, the Contract designated Turner as DASNY's representative for the project, thereby raising factual issues with respect to waiver (see G. De Vincentis & Son Constr., 304 AD2d at 1008- 1009).

DASNY further argues that Eaton's complaint must be dismissed because it calculates its claimed damages on a total cost basis, so there is no way to distinguish between aspects of its claim that are not barred by lack of notice, change orders, and the no-damage-for-delay clause. Such argument is rejected. DASNY has not shown that Eaton is incapable of proving its delay damages. The extent to which Eaton's claims are permissible will be determined at trial (see Dal Constr. Corp., 108 AD2d at 893-894). Delay damages are customarily calculated and proven on a quantum meruit total cost basis (see Clifford R. Gray, Inc., 251 AD2d at 729-730). Eaton is not required to prove its claimed damages, at this juncture, in opposition to DASNY's motion for partial summary judgment. Eaton may prove its claimed damages, and its connection to the alleged breaches of the Contract by DASNY, at trial (see generally Eldor Contr. Corp., 6 AD3d at 655, Clifford R. Gray, Inc., 277 AD2d at 847; Dal Constr. Corp., 108 AD2d at 893-894). Thus, DASNY's motion for summary judgment dismissing Eaton's second, third, and fourth causes of action as against it must be denied in its entirety.

In turning to Plato/Emco's motion and Eaton's cross motion to dismiss DASNY's third-party complaint as against Plato/Emco, the court notes that CPLR 1007 provides that a third-party action may be brought by a defendant against "a person not a party [to the action] who is or may be liable to that defendant for all or part of the plaintiff's claim against that defendant." [*13]Eaton and Plato/Emco argue that DASNY'S third-party action against Plato/Emco cannot be maintained because Plato/Emco cannot be held liable to DASNY in this action for any damages caused by DASNY to Eaton. They rely upon Section 13.01 (D) of the General Conditions of the Contract, which provided:

"D. Should the Contractor sustain any damage through any act or omission of any other contractor having a contract with the Owner or through any act or omission of any Subcontractor of said other contractor, the Contractor shall have no claim against the Owner for said damage."

Plato/Emco and Eaton contend that by the very terms of Section 13.01 (D) of the General Conditions of the Contract, Eaton cannot obtain damages in this action that are attributable to acts or omissions by Plato/Emco. Eaton and Plato/Emco assert that Eaton can only recover damages from DASNY in this action that are directly attributable to DASNY's contract breaches, and that Eaton is expressly barred from seeking or recovering any damages caused by Plato/Emco. Eaton and Plato/Emco argue that DASNY, therefore, cannot seek indemnification for damages that legally cannot be recovered by Eaton under the terms of the Contract, and that DASNY's third-party complaint should be dismissed, pursuant to CPLR 3211 (a) (7), since it fails to state a cause of action or, pursuant to CPLR 3211 (a) (1), based upon the documentary evidence, i.e., the Contract, which, in Section 13.01 (D) of the General Conditions of the Contract, bars a recovery against DASNY for any damages caused by Plato/Emco.

Section 13.01 (E) of the General Conditions of Plato/Emco's contract with DASNY (the Plato/Emco Contract) (which is identical to Section 13.01 (E) of the Contract between Eaton and DASNY), however, provided:

"E. Should any other contractor having or which shall have a contract with the Owner sustain damage through any act or omission of the Contractor or through any act or omission of a Subcontractor, the Contractor shall reimburse said other contractor for all said damages and shall indemnify and hold the Owner harmless from all said claims."

The Plato/Emco Contract further provided, in Section 9.01 (H) of the General Conditions of the Contract (which is also identical to Section 9.01 (H) of Eaton's Contract with DASNY), that in addition to liability to DASNY for liquidated delay damages, Plato/Emco "shall be liable to the Owner [i.e., DASNY] for whatever actual damages the Owner may incur as a result of any actions or inactions of the Contractor or its Subcontractors," expressly including "liabilities to other Contractors working on the project" and "job extension costs."

Thus, the Plato/Emco Contract, in Section 13.01 (E) and Section 9.01 (H) of the General Conditions of the Contract, expressly provided that DASNY has rights to recover on account of "any claims" by other contractors, such as Eaton, sustained through any act or omission of Plato/Emco or any Plato/Emco subcontractor, and on account of "liabilities to other Contractors" (such as Eaton) and "job extension costs" as a result of any actions or inactions by Plato/Emco or its subcontractors.

"It is a cardinal rule of construction that a court should not adopt an interpretation' which will operate to leave a provision of a contract . . . without force and effect'"(Corhill Corp. v S.D. Plants, Inc., 9 NY2d 595, 599 [1961], quoting Muzak Corp. v Hotel Taft Corp., 1 NY2d 42, 46 [1956]; see also Acme Supply Co., Ltd. v City of New York, 39 AD3d 331, 332 [2007]). Rather, [*14]"[a]n interpretation that give effect to all the terms of an agreement is preferable to one that ignores or accords them an unreasonable interpretation" (Ruttenberg v Davidge Data Sys. Corp., 215 AD2d 191, 196 [1995]).

Here, if the court were to accept the strict, narrow construction of Section 13.01 (D) of the General Conditions of the Contract urged by Eaton and Plato/Emco, this would have the effect of rendering Sections 13.01 (E) and 9.01 (H) of the General Conditions of the Plato/Emco contract meaningless and without force and effect. Thus, the court declines to accept such an interpretation of Section 13.01 (D), which would violate a cardinal rule of construction (see Spaulding v Benenati, 57 NY2d 418, 425 [1982]; Laba v Carey, 29 NY2d 302, 308 [1971]; Corhill Corp., 9 NY2d at 599; Matter of Wallace v 600 Partners Co., 205 AD2d 202, 206 [1994], affd 86 NY2d 543 [1995]).

As previously discussed, Eaton's complaint seeks delay damages against DASNY. DASNY's third-party complaint against Plato/Emco alleges that Plato/Emco interfered with and hindered Eaton, and that this conduct by Plato/Emco was in breach of the Plato/Emco Contract. Consequently, if the causes of the delays alleged by Eaton are found to have been concurrently caused by both DASNY and Plato/Emco, DASNY would have a contractual right to indemnification from Plato/Emco. Dismissal of DASNY's third-party action for indemnification, pursuant to CPLR 3211 (a) (1) or (7), therefore, cannot be granted.

Eaton further contends that DASNY's third-party action against Plato/Emco should be dismissed based upon DASNY's failure to comply with CPLR 1007, which provides that "[t]he defendant shall also serve a copy of [the] third-party complaint upon the plaintiff's attorney simultaneously upon issuance for service of the third-party complaint on the third-party defendant." Eaton's attorney, Peter L. Agovino, Esq. asserts that DASNY did not serve a copy of the third-party summons and complaint upon Eaton. Eaton contends that this is a jurisdictional defect, which requires the dismissal of the third-party complaint against Plato/Emco.

In response to Peter L. Agovino, Esq.'s assertion, Theodore L. Hecht, Esq., an attorney for DASNY, attests that on January 30, 2007, he personally served a copy of the third-party summons and complaint on Eaton's counsel, Peter L. Agovino, Esq. when he was in his law firm's office on another matter. Mr. Hecht, Esq. has submitted a letter dated January 30, 2007 to Mr. Agovino, Esq., indicating hand-delivery of the third-party summons and complaint upon Mr. Agovino, Esq. Mr. Agovino, Esq., in reply, denies that Mr. Hecht, Esq. gave him a copy of the third-party complaint when he met him on that date.

Despite this factual dispute between the attorneys, it is noted that while CPLR 1007 requires the defendant to serve a copy of the third-party complaint on the original plaintiff's attorney at the same time that the impleader papers are delivered to the process server for service on the third-party defendant, this requirement is not jurisdictional. Rather, it is in accordance with CPLR 2103 (e), which requires that copies of papers be served upon all other parties who have appeared in the action. Jurisdiction is obtained over the third-party defendant upon the service upon it by a statutorily proper method and where a valid basis of personal jurisdiction exists (see CPLR art 3).

Here, jurisdiction was obtained over Plato/Emco upon the filing and service of the third-party summons and complaint upon it. It is undisputed that Plato/Emco served and filed an answer to the third-party complaint, which was dated February 20, 2007, and DASNY served and [*15]filed its reply to Plato/Emco's counterclaims dated March 8, 2007. Thus, even assuming that Eaton was not served with a copy of the third-party summons and complaint against Plato/Emco, this was not a jurisdictional defect, but a mere procedural irregularity which, pursuant to CPLR 2001, may be disregarded if a substantial right of a party is not prejudiced (see generally Jackson v Long Is. Light. Co., 59 AD2d 523, 524 [1977]; Wings & Wheels Express v Sisak,73 Misc 2d 846, 849 [1973]).

No substantial right of Eaton was prejudiced by the alleged lack of service upon it since Eaton was well aware of the third-party action against Plato/Emco. The affidavit of service for DASNY's reply to Plato/Emco's third-party answer reflects that it was served upon Eaton's counsel, Mr. Agovino, Esq. Additionally, in court conferences subsequent to January 30, 2007, the caption used for conference orders was amended to reflect the third-party action, without any objection by Mr. Agovino, Esq. that Eaton was not served with a copy of the third-party summons and complaint. Indeed, on April 5, 2007, counsel for all parties executed a stipulation, which included the caption covering the third-party action, and it was signed on behalf of Eaton by Mr. Agovino, Esq. Thus, even assuming the truth of Mr. Agovino, Esq.'s claim of lack of service upon Eaton of the third-party summons and complaint, this procedural defect may be disregarded pursuant to CPLR 2001, and such lack of service would not warrant dismissal of the third-party complaint.

Eaton alternatively seeks the vacatur of DASNY's demand for a jury trial of the third-party action, which was made by DASNY in a note of issue which it unsuccessfully attempted to file on March 28, 2008, after a note of issue dated February 5, 2008 (which requested a trial without a jury) had already been filed by Eaton. DASNY's note of issue was rejected by the Kings County Clerk's Office on the basis that DASNY would need an order of severance in order to file a note of issue for the third-party action separate and apart from the main action. DASNY asserts that its note of issue was the only correct note of issue that had been served in this case because Eaton's note of issue did not contain the caption for the third-party action against Plato/Emco.

DASNY's argument is unavailing. Eaton's failure to include the caption of the third-party action in its note of issue is an inconsequential technical defect (see CPLR 2001). There can be only one note of issue in the absence of severance of the third-party action (see CPLR 3402, 4102 [c]), and DASNY was aware of the existence of its own third-party action. Plato/Emco does not deny that it was served with Eaton's note of issue. In fact, Plato/Emco also argues that DASNY waived its right to a jury trial of the third-party action.

Pursuant to CPLR 4102 (a), "any party served with a note of issue not containing a demand for trial by jury may demand a trial by jury by serving upon each party a demand for a trial by jury and filing such demand in the office where the note of issue was filed within fifteen days after service of the note of issue." CPLR 4102 (a) explicitly provides that where the party fails to serve a demand for a trial by jury, "the right to trial by jury shall be deemed waived by all parties."

In the case at bar, DASNY waived its right to demand a trial by jury by not serving and filing a demand for a jury trial within 15 days after service of Eaton's note of issue (see CPLR 4102 [a]). While, pursuant to CPLR 4102 (e), the court may relieve a party from the effect of failing to comply with CPLR 4102 (a), here, such relief is not warranted since DASNY has failed [*16]to make any factual showing that its failure to timely file a jury demand was the result of inadvertence or other excusable default (see Fischer v RWSP Realty, LLC, 53 AD3d 595, 597 [2008]; Sumba v Sampaio, 44 AD3d 648, 648 [2007]; Hyatte v G.B.W. Glenwood Dental Adm'rs, Inc., 8 AD3d 233, 233 [2004]; Skelly v Sachem Cent. School Dist., 309 AD2d 917, 918 [2003]).

Accordingly, DASNY's motion for summary judgment dismissing Eaton's second, third, and fourth causes of action is denied in its entirety. Plato/Emco's motion to dismiss DASNY's third-party complaint as against it is denied. Eaton's cross motion is denied insofar as it seeks to dismiss DASNY's third-party complaint as against Plato/Emco, and is granted insofar as it seeks an order vacating any purported jury demand by DASNY.

This constitutes the decision and order of the court.

E N T E R,

J. S. C