Opinion
Index No. 653968/2021 Motion Seq. No. 001
01-22-2024
CORBEX INC., Plaintiff, v. NEW YORK CITY HOUSING AUTHORITY, Defendant.
Unpublished Opinion
PRESENT: HON. VERNA L. SAUNDERS, JSC JUSTICE
DECISION + ORDER ON MOTION
HON. VERNA L. SAUNDERS, JSC
The following e-filed documents, listed by NYSCEF document number (Motion 001) 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21,22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44 were read on this motion to/for DISMISSAL .
Defendant New York City Housing Authority moves for dismissal of the complaint pursuant to CPLR 3211(a)(1) and (a)(7).
This is an action sounding in breach of contract. Defendant is a city agency which owns and manages various housing projects throughout New York City. The subject housing project is the Sonia Sotomayer Houses, located in the Bronx. The action involves the cellar abatement and restoration of this project. Plaintiff was one of the bidders for the abatement work. Bidders were instructed to submit their bids after reading the contract documents provided by defendant. Plaintiff submitted its bid at the end of 2016. Plaintiff entered into a contract with defendant on April 5, 2017, with a bid amount of $6,996,315.81.
By notice to proceed dated June 9, 2017, defendant notified plaintiff to commence the work and that said work should be completed in 450 days, or by September 12, 2018. Plaintiff was required to provide all materials, labor, tools, and relative services for the execution of the contract. The work included the provision of concrete slabs and piping, and tank insulation work in the cellars. The work was substantially completed on May 29, 2019.
In its complaint, plaintiff alleges that it brought an extra work claim to defendant that defendant refused to pay. Plaintiff claimed that it had to pour double the concrete in the cellar and crawl spaces, something it had not anticipated at the start of the work. Plaintiff contends that its charge was legitimate under the circumstances, and it was entitled to compensation from defendant. According to plaintiff, defendant's refusal to compensate was a breach of its contract with plaintiff. Plaintiff commences this action, with claims for breach of contract and unjust enrichment.
Defendant moves for a pre-answer dismissal of the complaint based on documentary evidence and failure to state a cause of action. Defendant seeks the dismissal of the unjust enrichment cause of action, arguing that the existence of a written agreement precludes plaintiff from suing for quasi-contractual relief.
Defendant also seeks to dismiss the breach of contract claim on the ground that it did not breach its contract with plaintiff. Defendant cites Article 111, section 33 of the contract, entitled Special Conditions, which requires plaintiff, in the course of its work, to file a notice of claim to defendant within twenty (20) days after the claim to secure compensation for additional work. Defendant contends that the filing of this notice is a condition precedent to any claim for compensation. On February 11, 2021, plaintiff served a notice of claim on defendant concerning the extra use of concrete. This notice was denied by defendant as untimely, since work on the cellars was substantially completed on May 29, 2019, well beyond the 20-day period. On April 29, 2021, an amended notice of claim was sent, with the amount requested for compensation by plaintiff increased. Defendant also denied the notice on the same ground.
Defendant argues that the notice of claim was justly denied pursuant to section 33 of the contract, with which plaintiff failed to comply. Defendant also argues that plaintiff failed to notify defendant of the cost of performance in its extra labor prior to the service of the first notice of claim. Defendant states that it never authorized the extra work performed by plaintiff. While defendant acknowledges the event of extra work not anticipated at the start of the performance, it argues that plaintiff is not entitled to any additional compensation in this case.
In opposition, plaintiff argues that defendant has failed to disclose events preceding the rejection of the notices of claim. Plaintiff states that on August 6, 2018, plaintiff discussed with defendant a need to pour more concrete in the cellar areas than was anticipated and the extra cost to be expended by plaintiff. Plaintiff states that defendant and its managing agent, non-party Atane Engineers ("Atane"), agreed to authorize the use of extra concrete and to subsequently compensate plaintiff. Plaintiff contends that it proceeded to pour the extra concrete at the housing project, completing the task in December 2018. Plaintiff argues that throughout the period, it corresponded with defendant, through its agent,Atane. Plaintiff argues that during that period, it was under the impression that defendant would eventually compensate it for the additional work. In December 2020, plaintiff had a conference call with Atane over the expenses for the extra work.
Plaintiff contends that defendant reneged on its agreement to compensate when it rejected plaintiffs notice of claim. Plaintiff further argues that the motion to dismiss must be denied since there is evidence of bad faith and unfair conduct, of which defendant should be estopped.
In reply, defendant argues that the notice of claim was properly rejected for untimeliness. Though acknowledging the August 6, 2018 meeting, defendant argues that notice of the need for extra work did not constitute an agreement to compensate. Defendant refers to a No Waiver/ No Estoppel provision in the contract, in which oral conduct would not amount to a waiver or estoppel by defendant. Defendant argues that there is an assumption that plaintiff, as a party to the contract, was aware of the aforesaid provisions of the contract prior to executing the contract and thus, accepting the provisions.
Additionally, defendant argues that plaintiffs notice of claim remains untimely as the claim occurred when the cost of extra work was ascertainable, or at least when the work was completed. Defendant asserts that it is not disputed that this work was completed in 2018 and the notice was served in 2021.
The motion to dismiss on the ground that the action is barred by documentary evidence may be appropriately granted only when the evidence entirely rejects plaintiffs factual allegations and conclusively establishes a defense as a matter of law (see Goshen v Mutual Life Ins. Co. of N. Y., 98 N.Y.2d 314, 324 [2002]). On a motion to dismiss for failure to state a cause of action, the court is concerned with whether the pleading states a cause of action, rather than the ultimate determination of the facts. The motion must be denied if from the pleadings' four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law (see Sheila C. v Povich, 11 A.D.3d 120, 121 [1st Dept 2004]).
In its opposition papers, plaintiff fails to address that branch of the motion seeking dismissal of the unjust enrichment cause of action. The court shall grant the motion to dismiss this cause of action.
The documentary evidence submitted by defendant consists of the contract between the parties, the two notices of claims served by plaintiff, and defendant's rejection of same. Section 33, regarding extra work by plaintiff during the course of performance, is unambiguous about the timeliness of the notice of claim.
The subject contract states:
"If the Contractor (plaintiff) claims that any instructions of the Authority (defendant), by drawings or otherwise, involve Extra Work entailing extra costs, or claims compensation for any damages sustained by reason of any act or omission of the Authority, or any other person, or for any other reason whatsoever, the Contractor shall, within twenty (20) days after such claim shall has arisen, file with the Authority within notice of intention to make a claim for such extra cost or damages, stating in such notice the nature and amount of the extra cost or damages sustained and the basis of the claim against the Authority..." (NYSCEF Doc. No. 8, Contract for Cellar Abatement and Restoration (Contract), § 33 (a), p 00049).
It is customary to enforce such provisions strictly (see A.H.A. Gen. Constr. v New York City Hous. Auth., 92 N.Y.2d 20, 30-31 [1998]). The evidence of the notices of claim refer to the extra use of concrete in the cellars. The second notice, deemed an amended one, only provides an increased cost: $4,424,628.05, as opposed to the previous cost of $916,000.00.
Plaintiff opposes the motion on the ground of waiver/estoppel principles. Plaintiff refers to equitable estoppel as applicable in this case, while also acknowledging that it is rarely used against a public agency like defendant. Plaintiff asserts that at the August 6, 2018 meeting with defendant, the parties discussed plaintiffs need to conduct extra work regarding the use of concrete. Plaintiff states that defendant and its agent Atane, agreed to the extra work and that defendant would appropriately compensate plaintiff. Plaintiff does not offer any written memorandum of what was orally discussed. Plaintiff does submit correspondence and e-mails made by plaintiff to Atane with respect to the work and the assessment of costs. Plaintiff also refers to a meeting between the parties in June 2020, which resulted in an oral agreement to accept $360,000.00 as a settlement of the proposed claim. However, plaintiff claims that a memorandum confirming the agreement was not signed by defendant.
Plaintiff argues that defendant reneged on its agreement to compensate plaintiff in February 2021, when it rejected plaintiffs notice of claim. Thus, plaintiff seeks the denial of defendant's motion, as evidence exists to raise questions of fact as to defendant's good faith and fair dealing concerning extra work compensation.
In reply, defendant refers to the No Estoppel/ No Waiver provision, Article III, section 57 of the contract, which provides:
(a) The Authority shall not be precluded or estopped by any acceptance, certificate or payment, final or otherwise, made by any of its officers, agents or employees, from showing the true amount and character of the work performed or that such acceptance, certificate or payment is incorrect or improperly made, and to recover on such account any monies paid in excess of those the Contractor is entitled to or any damage it may have sustained by reason of the Contractor's failure to comply with the Contract.
(b) No act done or permitted to be done by any member, officer, agent or employee of the Authority at any time shall be deemed to be a waiver of any provision of the Contract, excepting only a resolution of the members of the Authority providing expressly for such waiver." (NYSCEF Doc. No. 8, Contract, § 57, p 00061)
Plaintiff argues that despite the language of the contract, there are circumstances when a party to a contract must be held accountable for unfairly depriving the other party of something to which it is rightfully entitled. Plaintiff contends that estoppel applies where it relied on defendant's conduct to its detriment.
After examining the evidence submitted, the motion to dismiss is granted. Despite plaintiffs claims, there is insufficient proof that defendant, while involved in the August 6, 2018, meeting with plaintiff, agreed to compensate plaintiff on his extra work or waived section 33 with respect to the timeliness of a notice of claim. The correspondence submitted by the parties, specifically the notices of claim submitted by plaintiff, does not mention any oral assurances allegedly made by defendant. Plaintiffs own evidence establishes that defendant failed to execute a written agreement to pay compensation for the extra work. Furthermore, the contract expressly limits the possibility of waiver or estoppel. Thus, the court grant defendant's motion to dismiss the complaint based on documentary evidence. Accordingly, it is hereby
ORDERED that defendant's motion is granted and the complaint is hereby dismissed; and it is further
ORDERED that, within twenty (20) days after this decision and order is uploaded to NYSCEF, counsel for defendant shall serve a copy of this decision and order with notice of entry upon plaintiff.
This constitutes the decision and order of this court.