Peter Scalamandre & Sons, Inc. v FC 80 Dekalb Assoc.
Annotate this CaseDecided on June 11, 2013
Supreme Court, Kings County
Peter Scalamandre & Sons, Inc., Plaintiff(s),
against
FC 80 Dekalb Associates, et ano., Defendants.
10153/10
Plaintiff Attorney: Bernard Kobroff, Esq., Goetz Fitzpatrick, LLP, One Penn Plaza, Suite 4401, New York, NY 10119
Defendant Attorney: Alexander Ferrini, III, Esq., 200 Park Avenue South, Suite 915, New York, NY 10003
David I. Schmidt, J.
Upon the foregoing papers, plaintiff Peter Scalamandre & Sons, Inc. moves for an order, pursuant to CPLR 3212 (e)(1), granting plaintiff partial summary judgment on its second and forth causes of action asserted in the second amended complaint, for the sum of $639,110.40, and severing the remaining causes of action for trial. Defendants FC 80 DeKalb Associates, LLC (DeKalb) and Berkley Regional Insurance Company (Berkley) cross-move for an order 1) pursuant to CPLR 3211(a)(1) and CPLR 3212, dismissing the second and third causes of action in plaintiff's second amended complaint, 2) pursuant to CPLR 3212, granting defendants partial summary judgment against plaintiff's forth cause of action because, as a matter of law, plaintiff's mechanic's lien must be reduced as a consequence of the dismissal of the second and third causes of action and 3) pursuant to Lien Law § 12-a, amending plaintiff's mechanic's lien to reduce the claimed amount to $1,362,801.43.
Plaintiff commenced this action to recover sums allegedly owed by DeKalb under a construction contract. Under the subject contract, entered into on or about May 13, 2008, plaintiff agreed to furnish labor, materials and equipment and perform concrete superstructure work in the construction of DeKalb's building at 80 DeKalb Avenue in [*2]Brooklyn. According to the "Scope of Work" provisions incorporated into the contract, the concrete was to be reinforced with 9 pounds (lbs.) of reinforcement steel (rebars) per square foot (sf), which equated to 3,000,000 lbs of rebars (9 lbs. x 330,000 sf) for the entire structure. The unit price for setting the rebars, including material and labor, was established at $1.92 per pound. Plaintiff agreed to perform the concrete superstructure work for the price of $27,100,000.00.
According to plaintiff, following the commencement of its work on the project it became apparent that the building, as designed, would require a substantial quantity of rebars in excess of the 3,000,000 lbs. called for in the Scope of Work provisions. Plaintiff expressed its concerns over the amount of rebars required through e-mail correspondence with DeKalb's program manager, J Advisory Company, LLC (Jcompanies), DeKalb's structural engineer, Cantor Seinuk Group, Inc. (Cantor), and plaintiff's steel detailer, Barker Steel. According to a report issued on January 16, 2009 by City Rebar Detailing, Inc, a firm retained by plaintiff to assist with the rebar issue, a total of 4,128,049 lbs. of rebars (exclusive of waste) was required. On April 6, 2009, Cantor provided plaintiff and JCompanies with its rebar calculation "takeoff" indicating that the 3,332,870 lbs. of rebars were required. Plaintiff maintains that 4,489,122 lbs. of rebars were purchased and incorporated into the finalized concrete superstructure.
On April 23, 2010, plaintiff commenced the instant action against DeKalb to recover the sum of $3,494,555.00, representing the fair and reasonable value of extra and additional work it performed in conjunction with the project. In addition to compensation for the installation of rebars in excess of the contract's Scope of Work, plaintiff sought additional compensation for expenditures related to the provision of a concrete site safety representative (required by a New York City law which went into effect on September 2008), the supplying of a concrete hoist pad and loading dock ramp, the supplying of temporary heat for work performed in winter months, the supplying of dowels, which was excluded from the contract price, the supplying of a foundation for a tower crane, which was excluded from the contract price, performance of saw cutting between curtain wall inserts and the purchase of blue stone. Plaintiff further sought to recover damages in the amount of $4,631,161.00 for DeKalb's alleged interrupting, delaying and disrupting of plaintiff's work on the project, causing plaintiff to lose productivity and forcing plaintiff to expend additional sums for labor, supervision, equipment and materials, acceleration and overhead.
On June 29, 2010, plaintiff filed a mechanic's lien against the property in the amount of $3,494,555.00. On July 21, 2010, plaintiff filed an amended complaint which added a cause of action for foreclosure of its mechanic's lien against DeKalb and Berkley, the surety which provided a bond discharging the lien. In its second amended complaint, plaintiff adds a cause of action to recover the "retainage"— the remaining sums under the contract price held by DeKalb in the sum of $1,362,801.43. In their answer to the second amended complaint, defendants set forth various affirmative defenses which include [*3]waiver. Defendants interpose counterclaims against plaintiff seeking $5,342,141.00 in damages allegedly incurred by plaintiff's delay in completing the work and $294,413.84 expended by DeKalb to correct defective work by plaintiff.
Defendants' Cross Motion
Before addressing plaintiff's motion for partial summary judgment on its second cause of action, the court must determine defendants' cross motion seeking dismissal of plaintiff's second and third causes of action for additional payment and impact costs. Defendants argue that plaintiff failed to comply with the contract's notice provisions for asserting such claims and, as a consequence, waived its claims. Additionally, defendants refer to a "mechanic's lien waiver" executed by plaintiff on July 6, 2010, which acknowledged the receipt of a $38,600.00 payment (the "Balance Due") from DeKalb. The waiver contained the following provision:
"In consideration of the amounts and sums previously received, and the payment of the Balance Due, the below named Contractor or Supplier hereby waives, releases and relinquishes any and all claims, rights or causes of action in equity or law whatsoever arising out of, through or under mentioned Contract and the performance of work pursuant thereto and including the date hereof."
Defendants maintain that by executing the waiver, plaintiff represented that it had no further claims for additional compensation based on the work it performed.
Article 8 of the contract's General Conditions, entitled "CONTRACTOR'S CLAIMS," contains the following provisions:
8.1.1 The Contractor shall give written notice to the Owner of any claim against the Owner or the Project arising out of this Agreement or otherwise in connection with the Project, including any claim for an increase in the Contract Price, an Extension in the Contractor's time to perform, damages for breach of contract, or compensation for the value of construction or services outside the scope of this Agreement.
8.1.2(a) Claims for additional compensation or an extension of time for work ordered pursuant to Article 4 shall be made as provided in Article 4.
8.1.2(b) The Contractor shall give written notice of other claims for additional compensation for construction or services claimed to be outside the scope of this Agreement before the Contractor begins performance of the construction or services in question. The contractor shall give written notice of claims for an extension of time for delay under §6.3 within ten (10) days after the incident causing such delay. The Contractor shall give written notice of any other claim within twenty (20) days after the Contractor has knowledge, or should have had knowledge, of the circumstances giving rise to the claim.
8.1.2(c)Failure by the Contractor to give written notice of a claim within the [*4]time specified shall constitute a waiver by the Contractor of such claim. The written notice of claim shall contain the Contractor's best good faith estimate of the cost or delays involved in the claim. As promptly as possible thereafter, but not later than thirty (30) days after the notice of claim, the Contractor shall submit to the Owner a detailed statement of claim quantifying the specific dollar amount or extension of time sought and specifying the precise basis of the claim. Contractor's failure to submit such detailed statement shall constitute a waiver by Contractor of such claim.
Section 13.1 of the General Conditions, entitled "Method of Notice," provides the following:
All notices shall be in writing and shall be personally delivered and forwarded by overnight carrier or by registered or certified mail, return receipt requested, postage paid, addressed as follows:
To the Owner:
FC 80 DeKalb Associates, LLC
c/o Forest City Ratner Companies
One MetroTech Center North, 11th Floor
Brooklyn, New York, 11201
Attn: Robert Sanna
Copies to:
David L Berliner, Esq.
Forest City Ratner Companies
One MetroTech Center North
Brooklyn, NY 11201
Where a written contract is complete, clear, and unambiguous on its face, it must be enforced according to the plain meaning of its terms (see Greenfield v Philles Records, 98 NY2d 562, 569 [2002]; Westchester County Corr. Officers Benevolent Assn., Inc. v County of Westchester, 99 AD3d 998 [2012]; Dysal, Inc. v Hub Props. Trust, 92 AD3d 826, 827 [2012]). "[W]hen interpreting a contract, the court should arrive at a construction which will give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized" (G3-Purves St., LLC v Thomson Purves, LLC, 101 AD3d 37, 40 [2012] [internal quotation marks omitted]).
A plain reading of the aforesaid provisions makes clear that claims for additional compensation or delays based on "changes in the work" are to be addressed under the provisions of Article 4. Plaintiff's claims herein are based on changes in the work which [*5]would be handled pursuant to Article 4. There is nothing in Article 8 which indicates that the failure to give proper notice with regard to claims for "changes in the work" are subject to waiver. The provisions regarding notice for which the waiver explicitly applies is for "other claims for additional compensation for construction or services claimed to be outside the scope of this Agreement." (Emphasis added). Therefore, even if there were no official change orders directing the additional work, plaintiff is not precluded by from asserting its claims by the waiver provisions in Article 8 since the additional compensation is sought for changes in work, not for "other claims" outside the scope of the contract. With respect to the particular classification of plaintiff's claims, written notice under Article 8 is not a "condition [ ] precedent to suit or recovery" (A.H.A. Gen. Constr. v New York City Hous. Auth., 92 NY2d 20, 30—31, [1998]).
Further, "[u]nder New York law, oral directions to perform extra work may modify or eliminate contract provisions requiring written authorization. . . A provision in the contract which requires that there be written authorization for extra work can be waived" (Tridee Assocs. v New York City School Constr. Auth., 292 AD2d 444, 445 [2002][citations omitted]). Under section 5.7 of the General Conditions, plaintiff was required to perform work "in accordance with the shop drawings, samples, mock-ups and product data approved by the Owner and the Architect or design consultant(s), as returned to the Contractor for construction and in accordance with the Contract Documents." Since the record contains no clear picture of the parties' course of conduct through the building process with regard to approval of work changes ensuing from the shop drawings, this court cannot conclude as a matter of law that written authorizations or change orders were always required before plaintiff was to proceed with the work, or that plaintiff should not have expected any additional compensation for changes in work required by the shop drawings without complying with a formal notice procedure.
Accordingly, defendant is not entitled to dismissal of plaintiff's second and third causes of action on the ground that it did not provide notice pursuant to Article 8 of the General Conditions.
Plaintiff's execution of the mechanic's lien waiver, which contains language purporting to release DeKalb from making any further payments, cannot be considered to be a true waiver of its claims for additional compensation related to changes in work. Under section 7.1.3 of the General Conditions plaintiff was required to provide the mechanic's lien waiver as part of the application process for monthly progress payments. This section states, in part:
The Contractor shall submit, on AIA G702/703 or other forms approved by the Owner, monthly applications for progress payments not later than the time specified in Article 3 of the Contract for Construction or such other time as Owner may establish in accordance with the requirements of its Lender. Each application shall include material invoices, evidence of equipment purchases, rentals and other details of cost as the Owner and PM shall require. Contractor must also submit with its payment applications all documentation required under Exhibit E to this Agreement: the Equal Employment Opportunity/ Affirmative Action/ Community Labor/ economic Development Requirements. . .With each application, the Contractor shall submit written consent of any surety or guarantor, if required. The Owner and PM will require the Contractor to furnish written releases and waivers of the right to file a mechanic's lien from the Contractor and all Subcontractors with respect to all Work for which payment has been made. [*6]
The provision further provides that each application "shall also include an affidavit or affirmation by the Contractor setting forth the following (to the extent not previously provided):
(g) The Application includes a list of all open claims of the Contractor, accrued or existing as of the date of the application, against the Owner and the Project relating to the Agreement and to the Work."
As part of the application, plaintiff submitted a list of pending change orders, which includes claims for "Winter Heat," "Rebar Qunatity, "Site Safety Representative," Concrete Loading Dock/Hoist Pad," "Install Dowels, Tower Crane Foundation" and Supply Blue," the claims which plaintiff asserts constitute its second and third causes of action. In light of this documentation, it is clear that plaintiff was actively seeking to be compensated for additional work and was not waiving any entitlement to further payment. This court therefore cannot take at face value the boilerplate release language in the mechanic's lien waiver, which for all intents and purposes was simply a "receipt" given to DeKalb evidencing a $38,000.00 periodic payment (see Penava Mech. Corp. v Afgo Mech. Servs., Inc., 71 AD3d 493 [2010]).
As a result, defendants' cross motion for summary judgment dismissing the second and third causes of action is denied. As a consequence, those parts of defendants' cross motion for reduction in the amount of plaintiff's mechanic's lien and amendment of the lien are denied.
Plaintiff's Motion
Plaintiff seeks partial summary judgment on its second cause of action to the extent of $639.110.40, the sum representing the contractual price for the quantity of rebars used in the project as determined in the April 6, 2009 "takeoff" by Cantor. According to plaintiff, "since DeKalb has conceded through. . .Cantor that the total quantity of rebars required by the Contract to be installed is at least 3,332,870 lbs., it is undisputed that at least 332,870 additional pounds of rebars were required by Cantor's revised drawings."
Under section 4.6.1 of the General Conditions, "[t]he Contractor shall be compensated for a change in the scope of the Work in accordance with the following procedures, which are listed in their order of priority:
(a) By any applicable lump sum, unit price, time and material or cost plus basis already specified in the Agreement."
Section 4.6.3 of the General Conditions provides that "[a]ny unit prices specified in the Contract shall apply to additional or deleted work." Applying the unit price of $1.92 per pound to the excess amount of rebars determined in the Cantor takeoff results in the sum of $639,110.40.
The proponent of a summary judgment motion must make a prima facie showing of 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, 324 [1986]). Failure to make such prima facie showing requires a denial of the motion regardless of the sufficiency of the opposing papers (id.) The proof submitted to the court should be scrutinized carefully in the light most favorable to the party opposing the motion (see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]). Here, plaintiff presents no evidence that DeKalb explicitly or implicitly conceded the accuracy of the Cantor takeoff, or proof that a statement or determination by Cantor may be imputed to DeKalb. Moreover, the Cantor "takeoff" submitted by plaintiff consists only of [*7]a spreadsheet which is not in admissible form. There is no affidavit from the individual(s) who prepared the takeoff or who can otherwise aver that the amounts in the takeoff are accurate.
As a result, plaintiff's motion for partial summary judgment is denied.
The foregoing constitutes the decision and order of the court.
E N T E R,
J. S. C.
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