14 F.3d 818 (2nd Cir. 1994), 1248, Westinghouse Elec. Corp. v. New York City Transit Authority

Docket Nº:1248, Docket 92-7503.
Citation:14 F.3d 818
Party Name:WESTINGHOUSE ELECTRIC CORPORATION, Plaintiff-Appellant, v. NEW YORK CITY TRANSIT AUTHORITY, Metropolitan Transportation Authority, Defendants-Appellees.
Case Date:February 01, 1994
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 818

14 F.3d 818 (2nd Cir. 1994)

WESTINGHOUSE ELECTRIC CORPORATION, Plaintiff-Appellant,

v.

NEW YORK CITY TRANSIT AUTHORITY, Metropolitan Transportation

Authority, Defendants-Appellees.

No. 1248, Docket 92-7503.

United States Court of Appeals, Second Circuit

February 1, 1994

Argued March 18, 1993.

Page 819

Peter M. D'Ambrosio, Smith, Pachter, McWhorter & D'Ambrosio, Vienna, Virginia (John V. Snyder, Smith, Pachter, McWhorter & D'Ambrosio, Vienna, Virginia, John A. Redmon, Ellen Wahl Parker, Davis, Markel & Edwards, P.C., New York, New York, on the brief), for plaintiff-appellant.

Ira J. Lipton, New York City Transit Authority, Brooklyn, New York (Albert C. Cosenza, New York City Transit Authority, Brooklyn, New York, on the brief), for defendants-appellees.

Before: LUMBARD and ALTIMARI, Circuit Judges, and JAMES B. LOKEN, Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation.

ALTIMARI, Circuit Judge:

This case concerns a contract dispute between plaintiff-appellant Westinghouse Electric Corporation ("Westinghouse"), and defendants-appellees the New York City Transit Authority ("NYCTA") and the Metropolitan Transportation Authority ("MTA") (collectively herein "NYCTA" or the "Authority"). Following a series of conflicts between the parties concerning their contractual obligations, Westinghouse submitted a claim pursuant to the contract's alternative dispute resolution ("ADR") provision for damages and additional compensation. The ADR provision provided for dispute resolution by the NYCTA's Superintendent, W.D. Westfall (the "Superintendent"). The Superintendent denied Westinghouse's claim.

Westinghouse subsequently brought suit challenging the validity of the Superintendent's decision and the contract's ADR provision. The United States District Court for the Southern District of New York (Haight, J.) upheld both the provision and the Superintendent's determination. See Westinghouse Elec. Corp. v. New York City Transit Auth., 794 F.Supp. 79, 83-85 (S.D.N.Y.1991). Westinghouse then appealed the decision to this Court. For reasons discussed below, we certified the question of the ADR provision's validity to the New York Court of Appeals, see Westinghouse Elec. Corp. v. New York City Transit Auth., 990 F.2d 76, 80 (2d Cir.1993) (the "Certification"), which subsequently upheld the provision's validity. See Westinghouse Elec. Corp. v. New York City Transit Auth., 82 N.Y.2d 47, 603 N.Y.S.2d 404, 623 N.E.2d 531 (1993). The case now returns for our final determination. For the reasons discussed below, we affirm the district court's judgment.

BACKGROUND

Although a brief factual background of the case was presented in our Certification to the New York Court of Appeals, see 990 F.2d at

Page 820

77-79, the following more detailed description of the parties' interactions is necessary for our review of the Superintendent's determination.

In 1983, NYCTA and Westinghouse entered into a contract for the sale, delivery, and installation of power rectifier equipment to five substations for the New York City subway system. Over the course of Westinghouse's performance under the contract, disputes arose as to whether NYCTA failed to give Westinghouse timely access to the various substations, whether NYCTA improperly deleted certain contract work, and whether Westinghouse was being restrained from performing under the contract.

On November 3, 1988, at a meeting held to resolve various disputes, Westinghouse notified the Superintendent that Westinghouse's performance was effectively suspended due to numerous longstanding issues relating to design, access, and other matters. Westinghouse further explained that the effective suspension of its work constituted a constructive "work stop order" pursuant to the contract, and that Westinghouse would consider the contract terminated "for convenience" if the work restraints were not removed within 90 days. Westinghouse cited Article 2.07 of the contract, which provides as follows:

Stop Work Order. (a) The Authority may, at any time, by written order to the Contractor, require the Contractor to stop all, or any part, of the Work for a period of ninety (90) days (or any lesser period) after the order is delivered to the Contractor, and for any further period to which the parties may agree. Any such order shall be specifically identified as a "Stop Work Order" issued pursuant to this Article. Within the period of ninety (90) days (or the lesser period specified) after a stop work order is delivered to Contractor, or within any extension of that period to which the parties shall have agreed, the Authority shall either:

(i) cancel the stop work order, or

(ii) terminate the work covered by such order as provided in Article 2.08--Termination for convenience by the Authority.

Also on November 3, 1988, Westinghouse submitted a...

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