Summary
In Amadeus, Inc. v State of New York (36 A.D.2d 873, 874), relied on by Special Term, the action was for extras under a direct construction contract between the parties.
Summary of this case from Data Electric Co. v. Nab Construction Corp.Opinion
April 27, 1971
Cross appeals from a judgment in favor of claimant entered December 4, 1967 upon a decision of the Court of Claims. On June 21, 1960 claimant and the State entered into a contract for the construction of water and sewage treatment plants at the Lake Welch Recreational Area, Harriman State Park, Rockland County, New York. The contract was a lump sum contract in the amount of $253,521, and the completion date was on or before December 23, 1960. Following four extensions of time for the completion of the contract, the State, on June 29, 1962, canceled the contract, and the work was completed by another construction company at a cost of $744.78. At the time of cancellation the State withheld a retained percentage of $16,876.05. On June 29, 1964 a claim was filed alleging three causes of action. The first cause of action sought recovery of the balance of the contract price, and alleged that the State breached the contract by improperly and unlawfully canceling the same. The second cause of action alleged: that the State breached the contract by requiring and directing claimant to perform certain items of work which were beyond the requirements of the contract and were extra and additional to the contract; that the extra and additional work was performed under protest; that, by reason of the extra and additional work, claimant was prevented from completing the work under the contract; that, by reason of the extra and additional work, claimant was compelled to expend additional sums for labor, materials, supervision, overhead, and other services; and that the reasonable value of the extra and additional work was the sum of $453,719.95. The third cause of action was pleaded as an alternative to the first and second causes of action, and sought to recover the reasonable value of the work performed by claimant prior to the cancellation of the contract and alleged that such reasonable value was the sum of $707,240.95 of which $236,644.95 had been paid, leaving a balance due of $470,596. The State counterclaimed for liquidated damages in the amount of $3,000 by reason of delay and the sum of $744.78 for completion of the contract. The Court of Claims awarded claimant the sum of $16,131.27 being the amount of the retained percentage, less $744.78 the amount expended by the State to complete the contract on the first cause of action. On the second cause of action the court awarded claimant the sum of $1,522.08, allocating $1,124.98 to item 10 of the claim concerning the extra height of the water tank; $218.38 to item 12 of the claim concerning the furnishing of detailed drawings for forming and supporting the water reservoir structure and chlorine trough; and $178.72 to item 30 which involved the removal and replacement of a raw water pump motor. The second cause of action was dismissed as to the other items claimed. Claimant's third cause of action was dismissed as was the State' counterclaim for liquidated damages. Interest was awarded claimant from June 29, 1962 to December 29, 1962 and from June 29, 1964 to December 4, 1967, the date of entry of the judgment amounting to $2,775.50. Claimant appeals from the dismissal by the court of its remaining claims under the second cause of action; the denial of interest on the award for the entire period from December 29, 1962 to June 29, 1964, and from the dismissal of the third cause of action. The State cross-appeals from the award made and from the dismissal of its counterclaim for liquidated damages. The period of computation of interest adopted by the Court of Claims was proper. The claim having been filed more than six months after the accrual of the claim, no interest could be allowed by the court for the period between the expiration of six months from the time of the accrual and the date of the filing of the claim. (Court of Claims Act, § 19, subd. 1.) The State's counterclaim for liquidated damages was properly dismissed. The record does not substantiate the State's contention that the delay in completion after May 1, 1962 was caused exclusively by claimant's manner of progressing the work, and not by any act or omission of the State. Both parties on this appeal have apparently accepted the trial court's decision on the first cause of action. Judgment on the first cause of action awarding claimant $16,131.27 was proper. In the second cause of action claimant has alleged 62 items for which it seeks additional compensation. The State contends that such items were not extra or additional work, but were included in the contract; that any delays involving extra cost were caused by the claimant; and that if claimant believed the work performed on these items was extra work, it did not comply with the contract provisions for notice of protest. The trial court found that it was the intention of the parties to include the provisions of the Public Work Specifications and the State Architect's Specifications not in conflict with the contract proper to be within the contract documents. Although the trial court determined that "No requirements concerning notice of protest was stated" in the contract proper, the provisions of the Public Works Specifications and State Architect's Specifications would provide for written notice from the contractor where extra work is involved. Paragraph 132 of article 29 of the State Architect's Specifications provides "If the contractor believes that any instructions, by drawing or otherwise, involves extra cost under his contract, he shall give the State Architect written notice thereof and await instructions before proceeding to execute such work." The Public Works Specifications provide under the title "Disputed Work" that if the contractor believes that any work ordered to be done is extra work. "The contractor shall promptly notify the superintendent in writing of his contention thereto." Clearly, the contract in its entirety requires claimant to protest in writing any work which it believes is beyond the requirements of the written contract. However, in cases where the State is apprised of the contractor's claim that extra work beyond the contract was being performed, the State has been precluded from insisting upon strict compliance with the notice provisions. Here the trial court found that by reason of the correspondence between the parties, there was no doubt that the contractor considered that its actions constituted extra work and that the State, therefore, received notice. The evidence produced indicates a departure from the contract by both parties which was sufficient to make the question of waiver a fair question of fact for the trial court. In the case of Joseph F. Egan, Inc. v. City of New York ( 17 N.Y.2d 90) the question was presented as to whether or not the contractor's claim for extra work was waived. The court stated (p. 96) as follows: "Thus it is clear that the plaintiff proceeded to do what it considered extra work without complying with the contract. Conceding this failure, the question nonetheless remains whether the defendant's conduct precludes it from interposing the contract to bar a recovery. The Appellate Division majority held that notwithstanding the jury's verdict recovery was barred as a matter of law. We disagree. In our opinion, enough evidence was produced to make the questions of waiver and estoppel fair questions of fact for the jury. No rule of law precludes such a waiver ( Abells v. City of Syracuse, 7 App. Div. 501; Rinehart Dennis Co. v. City of New York, 263 N.Y. 120, 126; A. J. Cianciulli Inc. v. Town of Greenburgh, 8 A.D.2d 963, affd. 9 N.Y.2d 812)." In La Rose v. Backer ( 11 A.D.2d 314, affd. 11 N.Y.2d 760) this court held that recovery might be had for extra work orally directed outside the scope of the contract notwithstanding the provision that a claim for extra work must be supported by written authorization. (Cf. McKay Constr. Co. v. Board of Educ., 33 A.D.2d 862.) In our opinion the trial court properly determined that written notice of protest and other provisions of the contract were waived. Consideration must, therefore, be given as to whether the disputed items of the claim are items required to be performed within the contract or additional items outside the contract, and thus extra work involving extra cost which the claimant should be entitled to recover. Reviewing the evidence on the various items of the claim, it is readily apparent that all of the items except items 10, 11, 13, 16, 22, 23, 25, 28, 41, and item XV-C-1 were within the contract requirements, and did not constitute additional work for which claimant was entitled to additional compensation. While many of the items claimed involved additional work not contemplated by claimant, the work was clearly required to be performed by the contract and within the contract price. Some of the items, while not specifically covered by the contract were, however, actually contemplated by the contract which gave supervisory jurisdiction to the engineer and were to be performed "as directed by the engineer". There are also items where claimant requested changes for his own benefit, and now seeks to be reimbursed by reason of such requested changes. Claimant's claims, by reason of delay, are without merit. The major part of the delays were clearly on the part of claimant. These delays arose by reason of claimant's failure in the first instance to make a reasonable preliminary investigation of the site prior to making its bid, the subsequent finding of rock immediately on commencement of work which required blasting work over a period of three months, and by reason of the failure of claimant to have an adequate number of workmen on the job. While the State may have been responsible for some of the delay, much of the delay occasioned by the State was insignificant. Further, if claimant had complied with the contract relative to the submission of drawings and other matters required to be submitted, much of the delay attributed to the State would probably have been avoided. Claimant was not entitled to any recovery based upon delay. Items 10, 11, 13, 16, 22, 23, 25, 28, 41, and XV-C-1 of the claim, in our opinion constituted work not actually embraced within the contract. This work, having been performed, and the State having accepted the benefits thereof, claimant is entitled to recover the value of such work. Further, as to some of the items, the State offered no defense or rebuttal to claimant's proof. As to these items the parties have stipulated the amount of damages with the exception of item 16. As to item 16 claimant alleges damages of $6,130. An audit made by the State, which forms the basis of the stipulation on the other items, sets the value of this item at $1,298.91. The evidence of claimant on the value of this item is far from convincing and in our view the audit figure should be adhered to. Claimant is, therefore, entitled to recover as the value of all the items the sum of $6,932.51. The Court of Claims awarded damages to claimant for item 12 pertaining to drawings for construction forms. The State Architect's Specifications, however, required shop drawings "as requested" by the State. This item was, therefore, within the contract requirements and is, therefore, not compensable. The court also permitted recovery as to item 30 pertaining to the resetting of a water pump motor. The evidence establishes that the removal of this motor was not ordered by the State. The State did advise claimant that it should take measures to protect the motor from water damage. The evidence does not, however, establish that it was necessary to remove and reset the motor to prevent damage. Such action was taken on claimant's own initiative and is also not compensable. The judgment of the Court of Claims should be modified by denying recovery on items 12 and 30, and increasing the award for item 10 to the sum of $1,919.37, and awarding damages on items 11, 13, 22, 23, 25, 28, 41, and XV-C-1 according to the amounts stipulated and awarding damages of $1,298.91 on item 16. Judgment modified, on the law and the facts, so as to increase the award to $23,063.78, with appropriate interest and, as so modified, affirmed, without costs. Herlihy, P.J., Reynolds, Staley, Jr., Sweeney and Simons, JJ., concur. [ 55 Misc.2d 27.]