Clifford R. Gray, Inc. v. City School District of Albany

• Decision Date: 28 November 2000
• Citation: 716 N.Y.S.2d 795,277 A.D.2d 843
• Parties: CLIFFORD R. GRAY, INC., Respondent-Appellant,<BR>v.<BR>CITY SCHOOL DISTRICT OF ALBANY, Appellant-Respondent.
• Court: New York Supreme Court — Appellate Division

277 A.D.2d 843

716 N.Y.S.2d 795

CLIFFORD R. GRAY, INC., Respondent-Appellant,

v.CITY SCHOOL DISTRICT OF ALBANY, Appellant-Respondent.

Graffeo, J.

Decided November 28, 2000.

Cardona, P.J., Peters, Carpinello and Rose, JJ., concur.

Graffeo, J.

The principal issue presented in this litigation between plaintiff, an electrical contractor, and defendant, the owner of a school building which was the subject of a renovation project, is whether the "no damages for delay" clause included in the parties' contract^[1] is enforceable to bar plaintiff's claim for money damages for delays that affected the progress and completion of plaintiff's work on the project. After a nonjury trial, Supreme Court concluded that the clause did not preclude plaintiff's cause of action and awarded money damages. The parties cross-appeal and, for the reasons that follow, we affirm.

It is well settled that, in spite of the inclusion in a construction contract of "[a] clause which exculpates a contractee from liability to a contractor for damages resulting from delays in the performance of the latter's work * * * damages may be recovered for: (1) delays caused by the contractee's bad faith or its willful, malicious, or grossly negligent conduct, (2) uncontemplated delays, (3) delays so unreasonable that they constitute an intentional abandonment of the contract by the contractee, and (4) delays resulting from the contractee's breach of a fundamental obligation of the contract" (Corinno Civetta Constr. Corp. v City of New York, 67 NY2d 297, 309 [citations omitted]; see generally, Kalisch-Jarcho, Inc. v City of New York, 58 NY2d 377, 384-385). Here, plaintiff pursued two theories at trial: that the delays were uncontemplated and largely arose from a continuing breach of duty by defendant's construction management team, which failed to supervise and coordinate the work of the various subcontractors on the site.

Supreme Court credited the testimony of plaintiff's president and an architectural engineer called as plaintiff's expert witness who each detailed the causes of the delays that plagued the project. The construction schedule contemplated three phases, with plaintiff's most active participation scheduled in phases II and III. Pursuant to the contract terms, phase II (the construction of a new addition to the school) was to continue for 10 months and be finished in February 1995. However, it was not substantially completed until September 1995. Similarly, although phase III (renovation of an existing building) was anticipated to take six months, with completion in August 1995, the work was not concluded until July 1996. Among the various causes of the delays identified by Supreme Court were defendant's failure to timely obtain easements for electrical and drain sewer installations, the failure of defendant's construction manager to adequately supervise and coordinate the work of the various contractors, including the failure to prepare the coordinated construction schedules and drawings, the termination of both the construction manager in December 1994 and the general contractor in June 1995 and defendant's decision to hire 30 subcontractors in lieu of replacing the general contractor.

"Notwithstanding our broad scope of review in a nonjury trial, we accord great deference to the credibility determinations rendered by the trial court due to its ability to view the witnesses and the evidence firsthand [citations omitted]" (Auger v State of New York, 263 AD2d 929, 930; see, Matter of Rowe, 274 AD2d 87, 92; Silverman v Mergentime Corp./J.F. White, Inc., 252 AD2d 925, 926; Douglas Constr. v Marcais, 239 AD2d 803). According the fact finder the deference to which it is entitled, we find that Supreme Court reasonably credited the testimony that the project impediments were wholly unanticipated and the opinion proffered by plaintiff's expert that they were of a character and magnitude not ordinarily encountered or anticipated by parties to a contract of this nature. Moreover, as the evidence established that defendant's construction management team failed to substantially fulfill the express contractual obligation to schedule and coordinate the work, resulting in extensive work interruptions or delays and inefficient labor deployment, we see no basis to disturb Supreme Court's determination that there was a pervasive and ongoing breach of the contract. Under the totality of the circumstances, finding an ample basis in the record for the court's factual conclusion that the project delays were uncontemplated and that defendant was responsible for a breach of fundamental contractual obligations, we decline to disturb the holding that the "no damages for delay" clause did not bar plaintiff's claim for money damages (see, Mid-State Precast Sys. v Corbetta Constr. Co., 202 AD2d 702, lvs dismissed 84 NY2d 923, 86 NY2d 855).

Next, we turn to the parties' contentions concerning the applicability of the 72-hour notice component of the "no damages for delay" clause which prohibited a contractor from obtaining an extension of time to complete its work if it failed to issue a written request for such relief within 72 hours of the delay. Supreme Court found that the notice component was applicable to plaintiff's claim and, as a result of its application, plaintiff was not entitled to damages incurred before August 1995, the month that plaintiff forwarded correspondence specifically complaining of delays. Plaintiff was, therefore, awarded damages totaling $175,583 encompassing the period from September 1995 to July 1996 for extended site overhead,...