Opinion
6:17-CV-06365 EAW
2022-07-22
The PIKE COMPANY, INC., Plaintiff, v. UNIVERSAL CONCRETE PRODUCTS, INC., Defendant. Marist College, Plaintiff-Intervenor, v. Universal Concrete Products, Inc., Defendant.
Chad W. Flansburg, Mark J. Moretti, Phillips Lytle LLP, Rochester, NY, David J. McNamara, Jacob S. Sonner, Jeffrey D. Coren, Erin C. Borek, Phillips Lytle LLP, Buffalo, NY, for Plaintiff. David J. McNamara, Jacob S. Sonner, Jeffrey D. Coren, Erin C. Borek, Phillips Lytle LLP, Buffalo, NY, Mark J. Moretti, Phillips Lytle LLP, Rochester, NY, for Plaintiff-Intervenor. David B. Ermine, Pro Hac Vice, McNelly Law Group, Havertown, PA, Kelly Ann Geary, Theodore M. Baum, Siddharth Bahl, McElroy Deutsch Mulvaney & Carpenter, LLP, Rochester, NY, for Defendant.
Chad W. Flansburg, Mark J. Moretti, Phillips Lytle LLP, Rochester, NY, David J. McNamara, Jacob S. Sonner, Jeffrey D. Coren, Erin C. Borek, Phillips Lytle LLP, Buffalo, NY, for Plaintiff.
David J. McNamara, Jacob S. Sonner, Jeffrey D. Coren, Erin C. Borek, Phillips Lytle LLP, Buffalo, NY, Mark J. Moretti, Phillips Lytle LLP, Rochester, NY, for Plaintiff-Intervenor.
David B. Ermine, Pro Hac Vice, McNelly Law Group, Havertown, PA, Kelly Ann Geary, Theodore M. Baum, Siddharth Bahl, McElroy Deutsch Mulvaney & Carpenter, LLP, Rochester, NY, for Defendant.
DECISION AND ORDER
ELIZABETH A. WOLFORD, Chief Judge
INTRODUCTION
Plaintiff The Pike Company, Inc. (hereinafter, "Pike") brought this action against Defendant Universal Concrete Products, Inc. (hereinafter, "UCP") on May 4, 2017, alleging claims for breach of contract and unjust enrichment, stemming from work UCP performed as a subcontractor on the campus at Marist College, located in Poughkeepsie, New York, on which Pike served as the contractor. (See Dkt. 1; Dkt. 1-1). Pike initially filed its case in Monroe County Supreme Court, but the matter was subsequently removed to federal court by UCP on June 9, 2017, based on diversity jurisdiction pursuant to 28 U.S.C. § 1332. (Dkt. 1).
Pike filed an amended complaint on June 30, 2017. (Dkt. 7). Plaintiff-Intervenor Marist College (hereinafter, "Marist") filed an intervenor complaint against UCP on January 11, 2018, requesting declaratory relief to establish that Marist has no contractual or equitable relationship with UCP. (Dkt. 26). UCP filed its answer with counterclaims, including for breach of contract, to Pike's complaint on February 1, 2018. (Dkt. 29). UCP filed its answer with counterclaims, including for breach of contract and a third-party beneficiary claim, to Marist's intervenor complaint on February 1, 2018. (Dkt. 30). Pike and Marist responded to UCP's counterclaims on February 26, 2018, and on March 5, 2018, respectively. (Dkt. 35; Dkt. 36).
The matter proceeded to trial on July 11, 2022. (Dkt. 149). Presently before the Court is a motion by UCP, seeking to preclude Pike from introducing as a defense evidence of the failure of a condition precedent in the contract, since it was not adequately pleaded in Pike's amended complaint or reply to UCP's counterclaims. (See Dkt. 153; see also Dkt. 157). Pike opposes the relief and alternatively argues that it should be granted leave to amend its reply and it should be able to pursue the argument as part of its breach of contract claim. (Dkt. 155; see also Dkt. 160). Pike also argues that even if precluded from relying on Articles 5.5.1 and 5.5.2 of the Master Subcontract Agreement ("MSA"), it nonetheless may rely on Article 5.2 (Dkt. 166), and UCP disagrees with that argument (Dkt. 162).
In advance of trial, the parties stipulated that only the following claims would be tried before the jury: Pike's First, Second, and Third Causes of Action against UCP for breach of contract; UCP's Counterclaim against Pike for breach of contract; and UCP's Counterclaims against Marist for breach of contract and alternatively that it is a third-party beneficiary to the contract between Pike and Marist. (Dkt. 146). During the trial, Pike withdrew its First and Second Causes of Action for breach of contract asserted against UCP. Thereafter, on July 21, 2022, the parties communicated to the Court that UCP agreed to discontinue with prejudice its claims against Marist.
As further explained below, UCP's motion is granted to the extent that Pike is precluded from relying on the conditions precedent set forth at Articles 5.5.1 and 5.2.2 of the MSA. However, Pike is not precluded from arguing that certain Change Order Requests submitted by UCP were properly rejected by Pike or from relying on Article 5.2 of the MSA in that regard.
DISCUSSION
UCP first raised Pike's failure to plead with particularity a condition precedent defense at the end of the trial day on July 13, 2022, based on testimony Pike had introduced that day at trial. The conditions precedent at issue are Articles 5.5.1 and 5.2.2 of the MSA which state as follows:
5.5.1 Claims Relating to Owner . The Subcontractor agrees to initiate all claims for which the Owner is or may be liable in the manner and within the time limits provided in the Subcontract Documents for like claims by the Contractor upon the Owner and in sufficient time for the Contractor to initiate such claims against the Owner in accordance with the Subcontract Documents. Compliance with these requirements shall be a condition precedent to Subcontractor pursuing such claims and the Subcontractor's failure to comply with these requirements shall constitute a waiver of any claim for which the Owner is or may be liable.
5.5.2 Claims Relating to Contractor . The Subcontractor shall give the Contractor written notice of all claims not included in subparagraph 5.5.1 within three (3) days of the Subcontractor's knowledge of the facts giving rise to the event for which claim is made. Compliance with this written notice requirement shall be a condition precedent to Subcontractor pursuing such claims and the Subcontractor's failure to comply with these requirements shall constitute a waiver of any claim hereunder. Subcontractor shall submit written documentation of its claim, including appropriate supporting documentation, within twenty-one (21) days after giving notice, unless the parties agree upon a longer period of time. The Contractor shall respond in writing denying or approving, in whole or in part, the Subcontractor's claim no later than fourteen (14) days after receipt of the Subcontractor's documentation of claim. The Contractor's failure to respond shall be deemed a denial of the Subcontractor's claim. All unresolved claims, disputes, and other matters in question between the Contractor and the Subcontractor not relating to claims included in subparagraph 5.5.1 shall be resolved as provided in Article 11.
(See Dkt. 29-1 at 13-14; see also Plaintiff's Exhibit ("Plaintiff's Exh.") 12 (emphasis added)). The MSA's language makes it clear that those provisions contain conditions precedent, and no party disputes that point.
Pike initially argued in court on July 13, 2022, when the issue was raised by UCP, that it was not required to specifically plead noncompliance with a condition precedent because the condition precedent was reflected in the terms of the parties’ agreement (as opposed to arising from outside the agreement). However, in its subsequent briefing on the issue, Pike acknowledged that Rule 9(c) of the Federal Rules of Civil Procedure creates a heightened pleading standard for defenses asserted based on the failure to comply with a condition precedent arising from the terms of the parties’ agreement (see Dkt. 155 at 2-3), but argued that it had satisfied the pleading requirements of Rule 9(c) (id. at 3). In the alternative, Pike requested leave to amend its reply to UCP's counterclaims to plead with particularity failure to comply with a condition precedent. (Id. at 3-4). Pike also argued that it was entitled to rely on Articles 5.5.1 and 5.2.2 in connection with its own claim for breach of contract against UCP. (Id. at 2).
I. Pike Has Failed to Plead Failure of a Condition Precedent as an Affirmative Defense to UCP's Counterclaim for Breach of Contract
The Court turns first to Pike's argument that it has alleged with particularity an affirmative defense for the failure of a condition precedent. Rule 9(c) of the Federal Rules of Civil Procedure provides:
(c) Conditions Precedent. In pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed. But when denying that a condition precedent has occurred or been performed, a party must do so with particularity.
See Fed. R. Civ. P. 9(c). Accordingly, the law is clear that while a plaintiff's allegations that a condition precedent occurred can be pleaded generally, Dervan v. Gordian Grp. LLC , No. 16-CV-1694 (AJN), 2017 WL 819494, at *6 (S.D.N.Y. Feb. 28, 2017) ("the occurrence or performance of a condition precedent—to the extent that it need be pled as a required element of a given claim—must be plausibly alleged in accordance with Rule 8(a)"), a defendant's defense based on a condition precedent must be pleaded with particularity under Rule 9(c), Jeda Capial-56, LLC v. Lowe's Home Ctrs., Inc. , No. 5:12-cv-419 (LEK/DEP), 2013 WL 5464647, at *5 & n.4 (N.D.N.Y. Sept. 30, 2013) (explaining that "[i]n pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed," but that "when denying that a condition precedent has occurred or been performed, a party must do so with particularity."). Accordingly, while UCP in its counterclaim may plead generally its compliance with the terms of the contract (see, e.g. , Dkt. 29 at ¶¶ 141, 147 (alleging that "[a]t all times relevant hereto, Universal fulfilled all of its material obligations as required under the terms of the purchase order agreements and the Subcontract," and "Universal has fully performed all of its obligations under the terms of the agreements")), if Pike intended to contest these allegations, including because UCP failed to satisfy a condition precedent, it was required to do so with particularity.
Pike has fallen far short of pleading with particularity the defense of a condition precedent based on Articles 5.5.2 and 5.5.1 of the MSA. Pike argues that its second affirmative defense, which provides that "the counterclaims are barred as a result of a material breach by Universal of Universal's contract with Pike," satisfies Rule 9(c). (See Dkt. 155 at 3). Pike's argument in this respect strains the bounds of credulity. Nowhere in its reply to UCP's counterclaims does Pike specifically identify the applicable conditions precedent, or explain how they failed to occur. In fact, the words "condition precedent" do not appear anywhere in Pike's reply to UCP's counterclaims. See Greenshields v. Fed. Ins. Co. , No. 6:20-cv-1297, 2020 WL 9172954, at *4 (M.D. Fla. Oct. 2, 2020) ; see also Gottlieb & Gottlieb, P.A. v. Crants , No. 8:14-cv-895-T-33MAP, 2015 WL 7759462, at *4 (M.D. Fla. Dec. 2, 2015) (where defense "generally avers some condition precedent failed to occur," but did not plead "what the condition precedent is or how it failed to occur," Rule 9(c) is not satisfied), aff'd , 657 F. App'x 920 (11th Cir. 2016) ; cf. Five Star Dev. Resort Cmtys. LLC v. iStar RC Paradise Valley LLC , No. 09 Civ. 2085(LTS), 2012 WL 1003557, at *3 (S.D.N.Y. Mar. 26, 2012) (finding conditions precedent pleaded with particularity where "Paragraph 170 spans seven pages of the Answer, listing multiple conditions precedent that iStar alleges were unmet. iStar's allegations are sufficiently particular, as they indicate each of the conditions precedent that iStar alleges were not met, and sufficiently detailed, as they are supported by allegations indicating how the conditions were not met").
Therefore, because its reply to UCP's counterclaims failed to include an affirmative defense of condition precedent in accordance with Rule 9(c), Pike is precluded from raising in response to UCP's breach of contract counterclaim the defense of condition precedent based on Articles 5.5.1 and 5.5.2 in the MSA. In fact, even if Pike had been more particular and alleged generally that certain conditions precedent had not been met, that would likely have been insufficient to comply with Rule 9(c). See, e.g., Am. Top English v. Lexicon Mktg., Inc. , No. 03 C 7021, 2004 WL 2271838, at *11 (N.D. Ill. Oct. 4, 2004) (striking affirmative defense for failure to perform condition precedent as not pleaded with particularity where affirmative defense stated only that "counterclaim-plaintiff has failed to perform conditions precedent and is thus not entitled to bring this lawsuit."); see also U.S. E.E.O.C. v. Route 22 Sports Bar, Inc. , No. 5:21-CV-7, 2021 WL 2557087, at *8 (N.D. W. Va. June 22, 2021) ("While framed as affirmative defenses, in both these instances defendants are merely denying plaintiff satisfied all conditions precedent to litigation. As such, the denials are subject to the particularity requirement of Rule 9(c), which these general denials do not satisfy."); E.E.O.C. v. United Parcel Serv. , No. 15-CV-4141 (MKB)(CLP), 2017 WL 2829513, at *14 (E.D.N.Y. June 29, 2017) (in employment discrimination case, citing Rule 9(c), and striking affirmative defense for failure to satisfy condition precedent where "Defendant has failed to articulate which, if any, administrative procedures Plaintiff failed to complete before bringing suit").
Finally, Pike seems to argue that the particularity requirements of Rule 9(c) somehow are diminished if the affirmative defense is asserted in response to a counterclaim asserted in response to a breach of contract action, if the defense is apparent from the other pleadings. Not only does Pike cite no case law in support of that position, but as discussed below, Pike's breach of contract action does not sufficiently allege failure to comply with the applicable conditions precedent, nor did UCP's breach of contract counterclaim specifically allege that it had complied with the applicable conditions precedent. Therefore, a general denial does not serve to comply with Rule 9(c) ’s requirements. Cf. Allis-Chalmers Mfg. Co. v. Malan Constr. Corp. , 30 N.Y.2d 225, 233, 331 N.Y.S.2d 636, 282 N.E.2d 600 (1972) (because plaintiff specifically alleged compliance with conditions precedent as part of the allegations in complaint, the CPLR's requirement that denial of conditions precedent be made specifically and with particularity did not apply).
Accordingly, because Pike was required to plead the conditions precedent with particularity as an affirmative defense to UCP's counterclaim for breach of contract, and its general denial of UCP's allegation that it complied with all material terms of the subcontract is insufficient, Pike is precluded from relying on Articles 5.5.1 and 5.5.2 in the MSA as a defense to UCP's counterclaim for breach of contract.
II. Pike's Motion for Leave to Amend is Denied as Untimely
"A district court has broad discretion in determining whether to grant leave to amend[.]" Gurary v. Winehouse , 235 F.3d 792, 801 (2d Cir. 2000). Two provisions of the Federal Rules of Civil Procedure guide the Court's analysis of a motion for leave to amend where the deadline for such motions, as set forth in a scheduling order, has passed. The first is Rule 15(a)(2), which provides that once the time for leave to amend as of right has expired, "a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). The second is Rule 16(b)(4), which provides that a "schedule may be modified only for good cause and with the judge's consent." Fed. R. Civ. P. 16(b)(4). "Where, as here, a scheduling order governs amendments to the complaint, ... the lenient standard under Rule 15(a), which provides leave to amend shall be freely given, must be balanced against the requirement under Rule 16(b) that the Court's scheduling order shall not be modified except upon a showing of good cause." Holmes v. Grubman , 568 F.3d 329, 334-35 (2d Cir. 2009) (quotations and citations omitted).
"In determining whether a movant has satisfied the ‘good cause’ standard under Rule 16(b), ‘the primary consideration is whether the moving party can demonstrate diligence.’ " Charter Commc'ns, Inc. v. Local Union No. 3, Int'l Bhd. of Elec. Workers, AFL-CIO , 338 F. Supp. 3d 242, 254 (S.D.N.Y. 2018) (quoting Kassner v. 2nd Avenue Delicatessen Inc. , 496 F.3d 229, 244 (2d Cir. 2007) ). However, diligence is "not ... the only consideration. The district court, in the exercise of its discretion under Rule 16(b), also may consider other relevant factors including, in particular, whether allowing the amendment of the pleading at this stage of the litigation will prejudice defendants." Kassner , 496 F.3d at 244.
Here, the deadline to amend pleadings expired over four years ago, on March 15, 2018, as set forth in the Scheduling Order entered at Docket 40. Pike never requested to amend the pleadings to assert this defense of condition precedent until its filing at Docket 155, submitted on July 15, 2022, in the middle of trial and in response to UCP raising the issue. Also, Pike never raised the defense in its opposition papers submitted to UCP's motion seeking summary judgment in its favor on the breach of contract counterclaim. (See Dkt. 79). Pike has not even attempted to establish the good cause standard of Rule 16, it has failed to establish diligence in seeking the amendment, and UCP would be prejudiced in having to face this newly raised affirmative defense at this late stage of the litigation. Pike's isolated references in its filing at Docket 155 that UCP's untimely submission of Change Order Requests was addressed by the parties in discovery is unpersuasive and fails to convince the Court that UCP was put on notice that conditions precedent would be a defense asserted by Pike. Moreover, as noted above, because the deadline for any amendments have expired, Pike was required to meet the good cause standard of Rule 16, and it has wholly failed to do so. See , e.g. , Bode & Grenier, LLP v. Knight , 808 F.3d 852, 859-60 (D.C. Cir. 2015) (affirming district court's denial of the defendants’ motion, made "days before trial," to amend their answer to add two affirmative defenses, including failure of a condition precedent).
This is particularly true where there is nothing to suggest the timeliness issue that was referenced was related to failure to comply with the conditions precedent of Articles 5.5.1 or 5.5.2, as opposed to some other timeliness issue (such as the requirements set forth at Article 5.2, as discussed below).
In its filing at Docket 155, Pike cites to Rule 15(b) in support of its motion to amend. (Dkt. 155 at 4). Rule 15(b) of the Federal Rules of Civil Procedure provides:
If, at trial, a party objects that evidence is not within the issues raised in the pleadings, the court may permit the pleadings to be amended. The court should freely permit an amendment when doing so will aid in presenting the merits and the objecting party fails to satisfy the court that the evidence would prejudice that party's action or defense on the merits. The court may grant a continuance to enable the objecting party to meet the evidence.
See Fed. R. Civ. P. 15(b)(1). "The purpose of Rule 15(b) is to allow the pleadings to conform to issues actually tried, not to extend the pleadings to introduce issues inferentially suggested by incidental evidence in the record." Grand Light & Supply Co., Inc. v. Honeywell, Inc. , 771 F.2d 672, 680 (2d Cir. 1985) (citation omitted).
The Court does not find Rule 15(b) controlling in this instance because, "[i]n deciding whether to allow amendment under Rule 15(b), the essential questions are whether the issues were litigated by the parties’ express or implied consent and whether the defendant would be prejudiced by the implied amendment, i.e., whether the defendant had a fair opportunity to defend...." Myers v. Moore , 326 F.R.D. 50, 61 (S.D.N.Y. 2018) (alterations and citation omitted). In other words, as to the first consideration, " Rule 15(b) permits amendment only when the unpleaded issues are litigated with the express or implied consent of the parties." Id. (alterations and citation omitted). Here, the issue of the condition precedent—i.e. , UCP's non-compliance with Articles 5.5.1 and 5.5.2 of the MSA—has not been litigated by the parties’ express or implied consent. Rather, as explained above, at the end of the trial day on July 13, 2022, UCP timely objected to Pike's raising a condition precedent defense as it was not pleaded under Rule 9(c). Accordingly, Rule 15(b) does not apply, and the Court need not "reach the issue of prejudice," since UCP "has not consented to litigate the unpled issue." Id.
However, even if the Court was required to reach the issue of prejudice, it concludes that UCP has sufficiently established that it would be prejudiced by allowing the defense to be asserted at this late juncture. The isolated references to the untimeliness of UCP's Change Orders in some of the documents produced in discovery are simply insufficient to put UCP on notice that the conditions precedent in Articles 5.5.1 and 5.5.2 would be relied upon by Pike to defend against UCP's counterclaims, and allowing the defense to be asserted mid-trial would not be fair to UCP.
Accordingly, it is far too late in the litigation to permit Pike to amend its reply to UCP's counterclaims, and Pike's request in this respect is therefore denied.
III. Pike may not Rely on the Conditions Precedent Provisions in Support of its Breach of Contract Claim
Pike contends that, even if it is not permitted to assert the conditions precedent as a defense, it may rely on Articles 5.5.1 and 5.5.2 of the MSA in support of its breach of contract claim against UCP. (See Dkt. 155 at 2 ("Pike intends to prove at trial that it properly rejected several of UCP's Change Order Requests because, among other reasons, the Change Order Requests were untimely under Section 5.5.2 of the MSA. This fact supports Pike's claim for damages because it establishes the amount that remained due to UCP under its subcontract—which amount Pike lawfully withheld from UCP pursuant to its rights under the MSA—and therefore the amount of Pike's damages beyond the subcontract amount.")). For the reasons explained below, the Court concludes that Pike may not rely on Articles 5.5.1 and 5.5.2 in support of any breach of the contract by UCP.
As an initial matter, in its direct case, Pike introduced virtually no evidence that Articles 5.5.1 and 5.5.2 of the MSA support its claim for breach of contract against UCP. For example, Pike did not introduce any evidence specific to when UCP became aware or had knowledge of the facts giving rise to the event for which the claim was made, which by the express language of Article 5.5.2 triggered the condition precedent of written notice. The absence of any such evidence in the trial record confirms that Pike's primary reliance on the conditions precedent contained in Articles 5.5.1 and 5.5.2 is intended to form the basis for its defense to UCP's counterclaim—not its own breach of contract claim against UCP—and any argument to the contrary is merely a backdoor effort to place this precluded evidence before the jury.
The particularity requirements of Rule 9 do not apply to Pike's breach of contract claim against UCP. However, even under the lower standard of Rule 8, Pike's breach of contract action does not sufficiently allege that UCP failed to comply with the conditions precedent conditions of Articles 5.5.1 or 5.5.2 of the MSA. Those allegations are not contained anywhere in the amended complaint or its attachments. The third cause of action is the relevant claim, and it contains various allegations as to how UCP allegedly breached the contract, from failing to satisfy the precondition to litigation of mediation to failing to timely submit for approval shop drawings. (See, e.g. , Dkt. 7 at ¶¶ 39-40 (alleging that UCP breached the contract by "refusing to go through with mediation," as well as failing to: "perform its work on the Project in a timely and workmanlike manner"; "timely submit for approval shop drawings submissions for the work on the Project"; "make all necessary deliveries to timely complete its work on the Project"; "supply sufficient properly skilled workers, materials and/or equipment for its work on the Project"; "prosecute its work on the Project with promptness and diligence"; and "correct work that was found to be not in conformance with the subcontract")). But nowhere is it alleged that UCP failed to timely submit Change Order Requests, or any other written notice of claim, and therefore did not comply with the conditions precedent of the MSA. Pike unpersuasively argues that its reference in one of the attachments to the amended complaint—the letter dated February 9, 2017—that the contract balance due to UCP of $984,610 did not take into account rejected Change Order Requests, placed UCP on notice that failure to comply with Articles 5.5.1 or 5.5.2 in its Change Order Requests was part of Pike's breach of contract claim. (See Dkt. 160 at 1). It is not at all apparent from the February 9, 2017, letter that Pike's position as to the contract balance due to UCP was based on the untimely submission of Change Order Requests (as opposed to, for instance, some other issue with the Change Order Requests or an entirely separate issue unrelated to the Change Orders). At argument before the Court on these issues on July 18, 2022, Pike further cited to a spreadsheet it produced during discovery and admitted at trial, documenting several Change Orders submitted by UCP and rejected by Pike. (See Plaintiff's Exh. 137). Of the 31 Change Orders referenced in the spreadsheet, the reasons for rejecting 12 of them include (but are not necessarily limited to) the lack of a timely submission. Pike cites to this evidence in support of the notion that UCP should not be surprised, and is not prejudiced by, Pike's reliance on Article 5.5.2 of the MSA. Pike's citation to this evidence would have been relevant at the motion for summary judgment stage, see, e.g., Odyssey Reins. Co. v. Cal-Regent Ins. Servs. Corp. , 123 F. Supp. 3d 343, 354-55 (D. Conn. 2015) ("Where defendants failed to deny with particularity in their pleadings the performance of conditions precedent, and raised particular failures of performance for the first time at summary judgment, courts in this Circuit have allowed defendants to amend their pleadings."), or at some other time prior to trial, in support of a motion to amend. However, as discussed above, Pike never moved to amend its pleading until mid-trial, following its direct case. Indeed, Pike could have, when preparing its proof for trial, identified Article 5.5.2 as a basis for its breach of contract claim and moved to amend at that time. Likewise, Pike could have included a jury instruction on the condition precedent issue, which would have given UCP notice that Pike intended to rely on Article 5.5.2. However, Pike took no such actions.
Pike further argues that its pleadings place the contract in issue, and that the "Claims" provisions of the MSA, which include Article 5.5.2, contain standard terms on which parties to a construction contract regularly rely and which courts enforce. (See Dkt. 160 at 1). While that may be the case generally, in the context of Pike's case against UCP, these arguments fly in the face of notice pleading which, as explained above, require that a party alleging a breach of contract identify the provisions it contends were breached. Pike's argument in this respect is also not consistent with its breach of contract claim as it is currently pled which, as explained above, lists several specific ways by which UCP allegedly breached its contract with Pike. (See Dkt. 7 at ¶¶ 39-40). While Pike specifically identifies several provisions of the contract allegedly breached by UCP, none of these provisions include or reference Article 5.5.2 of the MSA, or allege more generally UCP's failure to comply with a condition precedent to the contract.
It is true that failure to comply with a condition precedent can be pleaded generally. But the amended complaint and its attachments do not do that. Whether certain Change Order Requests were properly rejected by Pike may be a material issue in dispute, but whether they were properly rejected because UCP did not timely submit those requests in accordance with Articles 5.5.1 or 5.5.2—a condition precedent pursuant to the express terms of the subcontract—has not been sufficiently pleaded by Pike. See Negrete v. Citibank, N.A. , 187 F. Supp. 3d 454, 468 (S.D.N.Y. 2016) ("A breach of contract claim will be dismissed ... as being too vague and indefinite, where the plaintiff fails to allege, in nonconclusory fashion, the essential terms of the parties’ purported contract, including the specific provisions of the contract upon which liability is predicated." (citation omitted)), aff'd , 759 F. App'x 42 (2d Cir. 2019) ; Spinelli v. Nat'l Football League , 96 F. Supp. 3d 81, 131 (S.D.N.Y. 2015) ("New York law and the Twombly–Iqbal standards of federal pleading require a complaint to identify, in non-conclusory fashion, the specific terms of the contract that a defendant has breached. Otherwise, the complaint must be dismissed."); M&T Bank Corp. v. LaSalle Bank Nat. Ass'n , 852 F. Supp. 2d 324, 334 (W.D.N.Y. 2012) ("[a] claim or counterclaim based on breach of contract must identify the specific contractual provision(s) allegedly breached").
Accordingly, because Pike has failed to plead UCP's failure to comply with the conditions precedent of Articles 5.5.1 and 5.5.2 in its amended complaint, it may not rely on those conditions precedent in support of its breach of contract claim against UCP.
IV. Article 5.2 of the MSA
The Court lastly turns to an argument raised by Pike on July 18, 2022, relating to Article 5.2 of the MSA. That provision states:
Impact of Changes . The Subcontractor shall review each modification issued by the Owner and advise the Contractor in writing within three (3) business days of notice of the modification as to the impact, if any, on the Subcontract Work, including any adjustment in Subcontractor's time for performance or the Subcontract Price. Subcontractor's failure to do so will result in a waiver of claim for an adjustment in the Subcontract Price or an extension of time for the impact of the modification issued by the Owner.
(See Dkt. 29-1 at 13; Plaintiff's Exh. 12). Pike argues that Article 5.2 of the MSA, unlike Articles 5.5.1 and 5.5.2, is not a condition precedent, and therefore Pike should be permitted to argue that certain Change Order Requests submitted by UCP were properly rejected by Pike pursuant to that provision. (Dkt. 166). In response, UCP argues that Article 5.2, like Articles 5.5.1 and 5.5.2, is a condition precedent, and therefore Pike cannot rely on Article 5.2 because Pike did not adequately plead UCP's noncompliance with that provision. (Dkt. 162). Notably, Pike did raise the concept of waiver in its affirmative defenses to UCP's counterclaims. (See Dkt. 35 at ¶ 15).
"Under New York law ... a condition precedent is ‘an act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises.’ " Bank of N.Y. Mellon Trust Co., N.A. v. Morgan Stanley Mortg. Cap., Inc. , 821 F.3d 297, 305 (2d Cir. 2016) (quoting Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 690, 636 N.Y.S.2d 734, 660 N.E.2d 415 (1995) ). "Conditions precedent are not readily assumed. While specific, talismanic words are not required, the law nevertheless demands that conditions precedent be ‘expressed in unmistakable language.’ " Id. (citations omitted). "Conditions [precedent] are not favored under New York law, and in the absence of unambiguous language, a condition [precedent] will not be read into the agreement." Ginett v. Computer Task Grp., Inc. , 962 F.2d 1085, 1099-100 (2d Cir. 1992). "Thus, in determining whether a particular agreement makes an event a condition precedent, courts will interpret doubtful language as embodying a promise ... rather than an express condition." Int'l Bus. Machines Corp. v. United Microelecs. Corp. , 764 F. App'x 9, 12 (2d Cir. 2019) (alterations, quotations, and citations omitted). "While New York courts have construed some triggering events as conditions precedent, they have done so only when the trigger is necessary to a party's ability to perform the obligation at issue." Bank of N.Y. Mellon Trust Co., N.A. , 821 F.3d at 307.
In Bank of N.Y. Mellon Trust Co. , the court addressed a "request to cure" provision in a Mortgage Loan Purchase Agreement ("MLPA") which the district court had construed as a condition precedent. The court reversed, and noted several considerations, including that the MLPA "[did] not caption or otherwise label the request-for-cure provision as a ‘condition precedent’ to Section 5 remedies, as one might expect sophisticated parties to do if that were their intent," which was significant "because the sophisticated drafters elsewhere employed precisely such language to establish undoubted conditions precedent." Id. at 305-06. Further, the court considered that the MLPA did not "employ any recognized ‘linguistic conventions’ of condition—such as ‘if,’ ‘on condition that,’ ‘provided that,’ ‘in the event that,’ and ‘subject to,’—to make plain that [defendant's] remedy obligations do not arise unless and until the Servicer requests cure." Id. at 305 ; see also Thomas & Betts Corp. v. Trinity Meyer Util. Structures, LLC , No. 20-2904 (L), 20-3109 (XAP), 2021 WL 4302739, at *3 (2d Cir. Sept. 22, 2021) (explaining that "a court must look to both the placement of the conditional language and the context in which it is used in order to determine whether the parties intended to impose conditions precedent," and rejecting district court's reliance on the words "subject to" as creating a condition precedent, explaining the "[t]he words ‘subject to’ in Section 6.2 cannot be said to be ‘unmistakable language’ creating a condition precedent where they do not match ‘unmistakable language’ in another section of the same contract, where the creation of conditions precedent is actually explicit").
UCP contends that in New York insurance matters, compliance with notice requirements is a condition precedent to an insurer's liability under a policy, and the same principle should be applied to the present case. (See Dkt. 162 at 2 (citing F.N. Burt Co. v. Aetna Cas. & Sur. Co. , No. 91-CV-303A, 1994 U.S. Dist. LEXIS 21288 (W.D.N.Y. Aug. 2, 1994), adopted , 1995 U.S. Dist. LEXIS 21861 (W.D.N.Y. Mar. 14, 1995), and Otis E. Serv., Inc. v. Raytheon Eng'rs & Constructors, Inc. , 15 F. Supp. 2d 318 (W.D.N.Y. 1998) )). The Court is not persuaded by UCP's argument that this principle in the insurance agreement context should be extended here, and UCP has not cited any case law to support that proposition. Moreover, the Court does not believe that the case law relied upon by UCP supports the finding that the language in Article 5.2 is a condition precedent. Cf. Otis E. Serv., Inc. , 15 F. Supp. 2d at 323 (the provision at issue provided that payment would not be made by the contractor "until" the contractor received a Subcontractor's Release and Certificate; no such language is contained in Article 5.2).
Applying that reasoning here, the Court concludes that Article 5.2 of the MSA does not create a condition precedent. Unlike the "unmistakable language" employed in Articles 5.5.1 and 5.5.2 of the MSA—which specifically state that the requirements imposed by the articles are "conditions precedent" to bringing a claim under the contract (see, e.g. , Article 5.2.2 ("Compliance with this written notice requirement shall be a condition precedent to Subcontractor pursuing such claims and the Subcontractor's failure to comply with these requirements shall constitute a waiver of any claim hereunder."))—Article 5.2 does not use the language "condition precedent." Further, Article 5.2 does not employ any other language that would typically suggest that the parties intended to impose a condition precedent, including "conditional language" such as "if," "on the condition that," "provided that," or "in the event that."
As explained above, a condition precedent is an action or event that must occur before a duty to perform a promise in the agreement arises. The "waiver" referenced by Article 5.2 of the MSA is simply the result or impact of UCP's failure to submit to Pike, within three days, written notice of the impact of any modification. In light of the lack of unmistakable language in Article 5.2 demonstrating that the parties intended to impose a condition precedent—and recognizing that other sections of the contract employ such language—coupled with the fact that conditions precedent will not be read into the agreement, the Court concludes that Article 5.2 does not impose a condition precedent to performance. Accordingly, Pike has preserved its right to argue that it rejected certain Change Order Requests submitted by UCP because they were waived pursuant to the provisions of Article 5.2.
CONCLUSION
For the foregoing reasons, Pike is precluded from relying on the conditions precedent set forth at Articles 5.5.1 and 5.2.2 of the MSA. However, Pike is not precluded from arguing that certain Change Order Requests submitted by UCP were properly rejected by Pike or from relying on Article 5.2 of the MSA in that regard.
SO ORDERED.