Opinion
No. 177222012.
02-19-2015
AMCC CORP., Plaintiff, v. The NEW YORK CITY SCHOOL CONSTRUCTION AUTHORITY, Defendants.
Opinion
Defendant, New York City School Construction Authority (SCA) moves, inter alia, for an order dismissing that portion of the first cause of action seeking damages for extra work paid by the SCA in the aggregate amount of $167,446.95, pursuant to CPLR 3211(a)(1),(5), and (7).
Plaintiff AMCC Corp. (AMCC) commenced the instant action by filing a summons with notice on August 23, 2012. Plaintiff thereafter served its complaint following a demand from the SCA. In its first cause of action, plaintiff alleges that on or about June 6, 2001, it entered into a contract with the SCA as a general contractor to furnish certain work, labor, services and materials for the construction of a new three story public school, known as P.S. 270, located in Queens, New York, for a base price of $42,840,000.00. AMCC alleges that it performed certain work pursuant to change orders, as well as additional and/or extra work at the request of the SCA; that the agreed upon price, and fair and reasonable value for said change order work was $2,273,335.25; that the agreed upon price, and fair and reasonable value for the additional and/or extra work was $5,062,747.71; and that the contract price was adjusted to the sum of $50,176,082.96.
AMCC alleges that it performed all of the work, labor and services and furnished all materials and equipment as required, and that the SCA only paid it an aggregate sum of $45,110,974.83. On November 24, 2003, AMCC served the SCA with a verified Notice of Claim, dated, November 21, 2003, regarding the additional work and delay claims that are itemized in its Schedule A. The verified Notice of Claim and Schedule A were attached to and incorporated into the complaint. Plaintiff alleges that 30 days have elapsed since said notice of claim was presented; that the SCA has neglected or refused to make an adjustment or payment; and therefore it is due the sum of $5,065,108.13, plus interest.
In its second cause of action AMCC seeks to recover the same sum of $5,065,108.13, plus interest, for work, labor, services and materials it furnished at the special instance and request of the SCA on a quantum meruit theory.
Plaintiff, in its wherefore clause, also seeks to recover disbursements, costs and reasonable attorney's fees on the first and second causes of action.
In this pre-answer motion to dismiss, defendant SCA states that according to the Notice of Claim's Schedule A, the total amount sought for extra work and delays exceeds the amount sought in the within complaint. Defendant seeks to dismiss that portion of the first cause of action which seeks damages for extra work paid by the SCA in the aggregate amount of $167,446.95, on the grounds that said claim has been paid; that portion of the first cause of action which seeks damages for extra work in the aggregate amount of $644,363.26, and all of the claims for delay damages. The SCA also seeks to dismiss the second cause of action sounding in quantum meruit, on the grounds that this claim is not actionable.
It is well established that on a motion to dismiss pursuant to CPLR 3211(a)(7), “the court must afford the pleadings a liberal construction, accept the allegations of the complaint as true and provide plaintiff the benefit of every possible favorable inference” (AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co., 5 NY3d 582, 591 [2005] ; see Goshen v. Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 326 [2002] ; Leon v. Martinez, 84 N.Y.2d 83, 87–88 [1994] ). The court's “sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law, a motion for dismissal will fail” (Polonetsky v. Better Homes Depot, Inc., 97 N.Y.2d 46, 54 [2001], quoting Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275 [1977] ; see also Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 414 [2001] ; Leon v. Martinez, 84 N.Y.2d at 87–88 ; Tom Winter Assoc., Inc. v. Sawyer, 72 AD3d 803 [2d Dept 2010] ; Uzzle v. Nunzie Court Homeowners Assn. Inc., 70 AD3d 928 [2nd Dept 2010] ; Feldman v. Finkelstein & Partners, LLP, 76 AD3d 703 [2nd Dept 2010] ). The facts pleaded are to be presumed to be true and are to be accorded every favorable inference, although bare legal conclusions as well as factual claims flatly contradicted by the record are not entitled to any such consideration (see Morone v. Morone, 50 N.Y.2d 481 [1980] ; Gertler v. Goodgold, 107 A.D.2d 481 [1st Dept 1985], affirmed 66 N.Y.2d 946 [1985] ).
During the course of the subject project, plaintiff submitted a total of 63 proposed change orders (PCs) to the SCA. As of the substantial completion date of August 27, 2003, 51 of these PCs were unresolved and were set forth in the Notice of Claim filed with the SCA on November 24, 2003. Thereafter, numerous PCs were resolved through the issuance of change orders.
At issue in this action are 20 PCs identified by plaintiff as PC numbers 1(3 separate items are listed under this number), 12, 30, 32, 47, 58, 65, 98, 104, 113, 118 (two separate items are limited under this number), 128, 132, 165, 166, 171 and 191.
At this juncture, the SCA seeks to dismiss the following PCs as untimely, pursuant to Public Authority Law § 1744(2): PC numbers 1 (all three items), 32, 98, 104, and 132 for extra work totaling $400,629.21, and PC number 30 for the acceleration of the work, totaling $3,364,393.72.
That branch of the defendant's motion which seeks to dismiss plaintiff's claim for extra work with respect to 15 PC numbers 011, 041, 146, 145, 129, 172, 176, 083, 085, 123, 124, 128, 148, 150 and 156, totaling $167,446.95, on the grounds of payment, is granted, as it is undisputed that since it filed its Notice of Claim plaintiff has been paid for these items and no longer seeks to recover damages with respect to these PCs.
That branch of the defendant's motion which seeks to dismiss plaintiff's claim with respect to PC number 49, totaling $76,288.00, is granted, as plaintiff states that said PC is no longer at issue.
Public Authorities Law § 1744(2) requires that an action “relating to the design, construction, reconstruction, improvement, rehabilitation, repair, furnishing or equipping of educational facilities” may be maintained against the SCA only if a notice of claim is presented “within three months after the accrual of such claim.”
Public Authority Law § 1744(3) provides that “[t]he notice of claim presented pursuant to subdivision two of this section must set forth in detail with respect to such claim; (I) the amount of the claim;(ii) a specific and detailed description of the grounds for the claim, relating the dollar amount claimed to the event purportedly giving rise to the claim and indicating how the dollar amount is arrived at; and (iii) the date of the event allegedly underlying the claim.”
A timely notice of claim is a condition precedent to suit, and AMCC has the obligation to plead and prove that its notice of claim was served within three months after the accrual of its claim (Public Authority Law § 1744 ; C.S.A. Construction Corp. v. New York City School Construction Authority, 5 NY3d 189, 192 [2005] ; Parochial Bus Systems, Inc. v. Board of Education, 60 N.Y.2d 539, 547 [1983] ; Popular Construction, Inc. v. New York City School Construction Authority, 268 A.D.2d 467 [2000] ). “It is well settled that a contractor's claim accrues when its damages are ascertainable (see Matter of Board of Educ. of Enlarged Ogdensburg City School Dist. [Wager Constr. Corp.], 37 N.Y.2d 283 [1975] ). Although the determination of the date on which damages are ascertainable may vary based on the facts and circumstances of each particular case, it generally has been recognized that damages are ascertainable once the work is substantially completed or a detailed invoice of the work performed is submitted' (New York City School Constr. Auth. v. Kallen & Lemelson, 290 A.D.2d 497[2002] [internal quotation marks and citations omitted] ).” (C.S.A. Contruction Corp. v. New York City School Construction Authority., 5 NY3d at 192 ).
Plaintiff executed a certificate of substantial completion for the subject contract declaring that substantial completion was achieved on August 27, 2003. With respect to the claims for extra work identified as PC numbers, 001(three separate items are listed under this number), 32, 049, 098, 104, and 132, as well as PC number 30, for the acceleration of the work, it is undisputed that all of these PCs were submitted to the SCA prior to the date of substantial completion.
This court rejects the plaintiff's assertion that the PCs it submitted to the SCA did not constitute detailed invoices. All of the PCs challenged by the SCA contain a detail of costs, invoices from the subcontractors, and/or drawings associated with each change order. In addition, the delay claim AMCC submitted to SCA on September 11, 2002 included a detailed breakdown of purported increased costs incurred by AMCC. Plaintiff's assertions, that the PCs were merely proposals is rejected, as the PCs were clearly claims for detailed extra work, which in some cases it was directed to perform, and detailed claims for delay breakdowns in support of its requests for payment. This court finds that plaintiff's claims with respect to PC numbers 001 (all three items), 32, 049, 098, 104, 132, as well as PC number 30 accrued when they were submitted to the SCA (see C.S.A. Contruction Corp. v. New York City School Construction Authority., 5 NY3d at 193 ; Kafka Constr. Inc. v. New York City School Construction Authority, 39 Misc.3d 1219[A] ).
The tolling agreement entered into by the parties on August 18, 2004, and subsequently extended to August 2012 only extended the time for AMCC to commence legal proceedings and/or serve notices of claim, and did not serve to revive any stale claims. In addition, estoppel is generally not available against a municipal defendant with regard to the exercise of its governmental functions (Palm v. Tuckahoe Union Free School Dist., 95 AD3d 1087, 1090 [2d Dept 2012], and AMCC does not allege that the SCA improperly engaged in any conduct which lulled plaintiff into sleeping on its rights to its detriment (see generally, Conquest Cleaning Corp. v. New York City School Construction Authority, 279 A.D.2d 546 [2d Dept 2001] ). The fact that the SCA and AMCC negotiated changes orders with respect to seven other PCs that are not at issue here, and for which no Notice of Claim was ever filed, does not constitute a waiver of the statutory notice of claim provision. Nor does the negotiation of those 7 PCs constitute an admission by the SCA that the plaintiff was not required to comply with the provisions of Section 1744.
Plaintiff submitted a delay claim to the SCA on September 11, 2002 in the amount of $3,737,501.42, and it is undisputed that the SCA issued a unilateral change order in the dated October 15, 2002, in the amount of $1,488,228.00, which was issued to AMCC on or about November 20, 2002. As a portion of the delay claim has been paid, that branch of the defendant's motion which seeks to dismiss a portion of said claim is granted to the extent that the plaintiff's claim for damages for delay costs is reduced by said sum.
Plaintiff disputes the denial of the remainder of this claim. Plaintiff's claim that its Notice of Dispute, submitted on December 17, 2002, satisfies the provisions of Public Authorities Law § 1744(2), is rejected. Pursuant to Section 1744, a claim accrues when the damages are ascertainable, and not when a claim for is rejected (see C.S.A. Contruction Corp. v. New York City School Construction Authority., 5 NY3d at 194–195 ; Kafka Constr. Inc. v. New York City School Construction Authority, 39 Misc.3d 1219[A], supra ). Here, plaintiff's delay damages were clearly ascertainable on September 11, 2002, as the documentary evidence submitted in support of the December 17, 2002 Notice of Dispute is identical to the information provided to the SCA on September 11, 2002. The Notice of Claim therefore is untimely as to the delay damages of $2,249,213.42.
To the extent that plaintiff seeks to recover additional delay damages with respect to the unilateral change order, the court finds that AMCC failed to file a detailed Notice of Claim, as required by Public Authorities Law § 1744(3). Plaintiff, in its opposing papers, has annexed documents that were raised in, or annexed to the complaint, including a claim dated August 13, 2003 for $4,333,735.56 in delay damages; a Notice of Claim dated August 18, 2003 for $2,845,507.56 in delay damages; and a PC dated October 3, 2003 for $5,439,798.59 in delay damages, which plaintiff asserts is incorporated into the Notice of Claim annexed to the complaint dated November 24, 2003. The November 24, 2003 Notice of Claim identifies PC 30 as having an an amount of $5,439,798.59, acknowledges a unilateral change order in the amount of $1,488,228.00, dated October 15, 2002, and states in the Remarks column “RECOVERY SCHEDULE AMCC DOES NOT ACCEPT SCA Unilateral; Job to Date to 9/9/03, nod 19 issued for SCA TEMP OFFICE”. Said Notice of Claim, however, is insufficient as it fails to provide a description of the grounds for this additional delay, the dates thereof, and does not demonstrate how the dollar amount for this additional delay was arrived at.
As plaintiff was required to file its Notice of Claim within three months after each of disputed PCs were submitted to the SCA, the Notice of Claim with respect to said PCs numbers 1 (all three items), 32, 98, 104, and 132 for extra work totaling $400,629.21, is untimely (see C.S.A. Construction Corp. v. New York City School Construction Authority, 5 NY3d at 193 ; see also Kafka Constr. Inc v. New York City Sch. Constr. Auth, 39 Misc.3d 1219[A] ).
Therefore, those branches of the defendant's motion which seeks to dismiss plaintiff's claims with respect to PC number 30 for the acceleration of the work, totaling $3,364,393.72, and the unpaid portion of the delay claim totaling $2,249,213.42, is granted.
To the extent that plaintiff seeks to recover damages for additional overhead costs in the amount of $428,857.02 claimed under PC number 166 in the Notice of Claim, defendant asserts that plaintiff failed to submit a notice of delay to the SCA, pursuant to Article 8.02 of the General Conditions of the contract. See Blue Water Envtl., Inc. v. Incorporated Vil. of Bayville, NY, 44 AD3d at 810 ).
Plaintiff does not deny that it failed to provide the SCA with the contractually required two-day notice. Rather, plaintiff merely asserts that said failure does not preclude it from seeking money damages for the delay costs represented by PC number 166. The court finds that plaintiff admittedly failed to comply with the contract's notification provision, and that the complaint fails to set forth any facts which would demonstrate that the delays were uncontemplated, so unreasonable that they constitute an intentional abandonment of the contract by the SCA, or resulted from the SCA's breach of a fundamental obligation of the contract. That branch of defendant's motion which seeks to dismiss plaintiff's claim for delay damages with respect to PC number 166, in the amount of 428,857.02, is granted.
Finally, the existence of a valid contract between SCA and AMCC bars the latter's attempt to recover on a quantum meruit basis. (see Clark–Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382 [1987] ; HGCD Retail Services, LLC v. 44–45 Broadway Really, 37 AD3d 43[1st Dept 2006] ; Singer Asset Finance Co., LLC v. Melvin, 33 AD3d 355 [1st Dept 2006] ; Melissakis v. Proto Constr. & Dev. Corp., 294 A.D.2d 342, 343[2d Dept 2002] ; Aviv Constr., Inc. v. Antiquarium, Ltd., 259 A.D.2d 445 [1st Dept 1999] ) “A contractor cannot bring quantum meruit claim for extra payments beyond the original contract price where there exists contract governing how payment for extra work will be determined ...” (Aviv Constr., Inc. v. Antiquarium, Ltd., 259 A.D.2d at 446 ). Therefore, that branch of the defendant's motion which seeks to dismiss the second cause of action to recover in quantum meruit, is granted.
Accordingly, defendant's motion is granted in its entirety for the reasons stated above.