Opinion
803777-2013
07-15-2019
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, asserting claims in its own right, and as the assignee and real party in interest of the claims of Dipizio Construction Company, Inc., Plaintiff-Petitioner, v. ERIE CANAL HARBOR DEVELOPMENT CORPORATION, Defendant-Respondent.
Plaintiff-Petitioner was represented by Benjamin D. Lentz, Esq. Defendant-Respondent was represented by Andrew P. Devine, Esq. and William J. Brennan, Esq.
Plaintiff-Petitioner was represented by Benjamin D. Lentz, Esq.
Defendant-Respondent was represented by Andrew P. Devine, Esq. and William J. Brennan, Esq.
Henry J. Nowak, J.
Plaintiff-Petitioner Travelers Casualty and Surety Company of America (Travelers) moves to renew and reargue NYSCEF Motion # 15, decided by Supreme Court, Erie County (Hon. Deborah A. Chimes, J.) on September 18, 2018. Defendant-Respondent Erie Canal Harbor Development Corporation (Erie Canal) opposes that motion.
In an April 25, 2012 Owner/Contractor Agreement (Contract), Erie Canal hired Travelers’ predecessor in interest, DiPizio Construction Company, Inc. (DiPizio) to act as general contractor for Erie Canal's Buffalo Inner Harbor Redevelopment Project (Project). The Contract required DiPizio to give Erie Canal specific notice for requests of extensions of time to complete work. In NYSCEF Motion # 15, Erie Canal sought partial summary judgment declaring that DiPizio or Travelers failed to comply with those notice requirements for nine requests for extensions of time. Travelers contested the motion with respect to six of the nine requests, concerning handrails, Commercial Street, change proposed request (CPR) # 52, concrete spalling, bridge height and improper termination delay. Supreme Court granted Erie Canal's motion.
The court has considered the following documents:
the Notice of Motion, the October 17, 2018 affirmation of Benjamin D. Lentz, Esq., the exhibit attached thereto and Travelers’ accompanying memorandum of law (NYSCEF # 716-719);
Erie Canal's memorandum of law in opposition to the motion (NYSCEF # 730);
Travelers’ memorandum of law in reply (NYSCEF # 737);
Erie Canal's motion papers in support of motion # 15 (NYSCEF # 223-226, 231-232, and 344-567);
Travelers’ motion papers in opposition to motion # 15 (NYSCEF # 586, 590-616);
Erie Canal's motion papers and reply in further support of motion # 15 (NYSCEF # 623-635 and 641);
the Stipulated List of Joint Exhibits for Cross-Motions for Summary Judgment and Joint Exhibits (NYSCEF # 237-274); and the September 18,2018 Order of Supreme Court, Erie County (Hon. Deborah A. Chimes, J.), along with the attached transcript of the decision (NYSCEF # 689-690).
On its motion to reargue, Travelers claims that the court overlooked or misapprehended (1) case law finding that actual or substantial compliance with notice provisions is sufficient when there is an extensive record of contemporaneous communications between the parties; (2) certain clauses within the contract regarding "changed conditions" and "change orders"; (3) evidence concerning when Travelers became aware of a concrete spalling problem at the Project; and (4) that Travelers was under no legal duty to provide notice to Erie Canal of delays suffered by DiPizio. The court grants reargument and addresses each of these issues on the merits. On its motion to renew, Travelers alleges that Danco Elec. Contrs., Inc. v Dormitory Auth. of the State of NY , 162 AD3d 412 (1st Dept 2018) sets forth new law that would change the court's determination regarding the potential effect of conditions precedent.
In granting Motion # 15, Supreme Court concluded that "defendant has shown that plaintiff failed to comply with the notice requirements of §§ 3.4 and 3.5" of the Contract. Section 3.4 provides that
"should [DiPizio] be, or anticipate being delayed or disrupted in performing the Work hereunder for any reason, ... it shall within three (3) days after the commencement of any condition which is causing or is threatening to cause such delay or disruption, notify [Erie Canal] in writing of the effect of such condition upon the Completion Date. [DiPizio] shall state why and in what respects the condition is causing or is threatening to cause delay, identify specific contract milestones that will be affected and provide an estimate of the duration of the delay. Failure to strictly comply with this notice requirement shall be sufficient cause to deny [DiPizio]’s change in the Project Schedule and/or Completion Date."
Section 3.5 provides that DiPizio "may be entitled to an extension of time for delays in the performance of the work" provided "that notice is given to the owner pursuant to the requirements of the immediately preceding paragraph."
A. Travelers’ Motion to Reargue
1. The Sufficiency of Contemporaneous Communications In Lieu of Notice
The "contemporaneous communications" cited by Travelers did not meet the requirements of § 3.4 of the Contract; they discussed various conditions but did not specifically identify why they would cause delay, contract milestones that would be affected, or the duration of delay. Therefore, the lack of notice argument by Erie Canal was not simply elevating form over substance. Travelers claims that a number of delays were caused by Erie Canal's own design changes, and that no one could know how the schedule and specific milestones would be impacted. DiPizio and Travelers were well aware of contract milestones, however. Upon receipt of a design change, they could have analyzed the effect of that change the same as "any [other] reason" that would delay or disrupt the project. Indeed, § 3.4 of the Contract mandated them to do so. Had DiPizio and Erie Canal wished to make an exception for Erie Canal's own design changes in the notice requirements of § 3.4, they could have done so.
Therefore, case law cited by Travelers is inapplicable to the facts in the record, and Travelers’ motion is denied on that ground.
2. The Application of Other Clauses in the Contract
On its motion to reargue, Travelers contends that the court should apply the less rigorous notice provisions of §§ 8.1-8.4 of the Contract instead of § 3.4 for the requests for time extensions for handrails, Commercial Street, CPR # 52, concrete spalling, and bridge height.
However, these arguments were never presented in Motion # 15. "Reargument does not provide a party ‘an opportunity to advance arguments different from those tendered on the original application’ " ( Garland v RLI Ins. Co. , 79 AD3d 1576, 1577 [4th Dept 2010], quoting Rubinstein v Goldman , 225 AD2d 328, 328 [1st Dept 1996], lv denied 88 NY2d 815 [1996] ). Therefore, Travelers’ motion is denied on that basis as well (see Garland , 79 AD3d at 1577 ).
3. Consideration of Travelers’ Awareness of the Spalling Problem
Travelers contends that concrete spalling was caused by an Erie Canal design error, which Travelers did not know of until November 5, 2013, when it received a report from its completion contractor. Erie Canal argues that the November 2013 letter was too late because a witness testified that he knew of the spalling in July or August 2013. Travelers’ responds that at the very least, there is an issue of fact based on evidence that the witness confused the timing of concrete shrinkage cracks as opposed to the concrete spalling.
Even if such an issue did exist, the November 6, 2013 letter fails to detail "specific contract milestones that will be affected" or "an estimate of the duration of the delay," as required by § 3.4 of the Contract. Therefore, the court denies Travelers’ motion on that basis.
4. Erie Canal's Motion Concerning Improper Termination Delay
In Motion # 15, Erie Canal argued that because Travelers never provided a notice of delay to Erie Canal contending that DiPizio was entitled to time extensions or that Erie Canal had improperly terminated DiPizio, Travelers should be barred from arguing that DiPizio was entitled to time extensions or improperly terminated. Unlike the other conditions at issue in Motion # 15, Travelers did not seek an extension of time for delay due to prior denials of time extensions or improper termination of DiPizio. Instead, Travelers claims that Erie Canal's denial of time extensions to DiPizio was a reason why termination of DiPizio was improper.
Travelers contends that it had no duty under §§ 3.4 and 3.5 of the Contract to provide Erie Canal with notice (1) that previous denials of time extensions caused additional delays or (2) that termination of DiPizio was improper. Erie Canal agreed that Travelers reserved the right to make such claims in their September 23, 2013 Takeover Agreement. In granting Motion # 15, the court excluded "improper termination delay" when finding insufficient notice with respect to the other conditions (for which Travelers did seek extensions of time). Therefore, Travelers could argue that this portion of the motion was not addressed by the court and was therefore denied. Nonetheless, because the September 18, 2018 Order purports to grant Erie Canal's motion in full, this court denies Erie Canal's motion for summary judgment to limit Travelers’ arguments concerning improper termination, including its argument that Erie Canal improperly denied DiPizio time extensions.
B. Travelers’ Motion to Renew
On its motion for leave to renew, Travelers must "demonstrate that there has been a change in the law that would change the prior determination" ( CPLR 2221 [e] [2] ). Travelers claims that the change in law occurred on June 5, 2018 (after Erie Canal's motion was filed but before Travelers’ responding papers were submitted), when the Appellate Division, First Department decided Danco Elec. Contractors, Inc. v Dormitory Auth. of State , 162 AD3d 412 (1st Dept 2018).
In Danco Elec. Contractors (162 AD3d at 413 ), the plaintiff contractor failed to satisfy a condition precedent to recovering disputed costs for extra work. The defendant forced price reductions as a result, even though the "plaintiff gave detailed written statements contesting defendant's determinations of the fair and reasonable value of the extra work" pursuant to the terms of the parties’ contract (id. ). The Appellate Division held that the "plaintiff should be excused from the non-occurrence of that condition, because otherwise it would suffer a disproportionate forfeiture, and the occurrence of the condition was not a material part of the agreed exchange" (id. , citing Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co. , 86 NY2d 685, 691 [1995] and Restatement [Second] of Contracts § 229 ).
This court does not find that Danco Elec. Contractors changed the law with respect to excusing parties from conditions precedent. In Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co. (86 NY2d 685, 691 [1995] ), the case cited in In Danco Elec. Contractors , the Court of Appeals uses nearly identical language in quoting the Second Restatement of Contracts § 229.
Furthermore, the court finds the facts in Danco Elec. Contractors (162 AD3d at 413 ) to be distinguishable from this case because the plaintiff's failure to comply with the condition precedent did not involve the timeliness or the substance of its notice to the defendant. The sole issue was whether the plaintiff was barred from recovery because the statements were not verified (id. ). Here, Erie Canal established that DiPizio and Travelers failed to submit timely and adequate notice in compliance with the Contract's substantive requirements for seeking time extensions. For these reasons, Travelers’ motion to renew is denied.
Submit order.