Herman H. Schwartz, Inc. v. City of New York (Rockaway Pollution Control Plant)

• Decision Date: 26 March 1984
• Citation: 100 A.D.2d 610,473 N.Y.S.2d 564
• Parties: HERMAN H. SCHWARTZ, INC., Respondent, v. CITY OF NEW YORK (ROCKAWAY POLLUTION CONTROL PLANT), Appellant.
• Court: New York Supreme Court — Appellate Division

Page 564

473 N.Y.S.2d 564

100 A.D.2d 610

HERMAN H. SCHWARTZ, INC., Respondent, v. CITY OF NEW YORK (ROCKAWAY POLLUTION CONTROL PLANT), Appellant.

Supreme Court, Appellate Division,

Second Department.

March 26, 1984.

Frederick A.O. Schwarz, Jr., Corporation Counsel, New York City (Stephen J. McGrath and June A. Witterschein, New York City, of counsel), for appellant.

Max E. Greenberg, Cantor & Reiss, New York City (Julius L. Schapira and Louis Cantor, New York City, on the brief), for respondent.

Before LAZER, J.P., and GIBBONS, WEINSTEIN and BOYERS, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, to recover damages for breach of a construction contract, defendant appeals from so much of an order of the Supreme Court, Queens County, dated September 8, 1982, as denied its motion for summary judgment dismissing all of plaintiff's claims against it on the ground of waiver.

Order reversed insofar as appealed from, on the law, with costs, motion for summary judgment granted and complaint dismissed.

On December 7, 1982, the plaintiff Herman H. Schwartz, Inc. and the defendant City of New York entered into a written contract which provided, inter alia, that the plaintiff was to be paid $4,449,750 to perform electrical work for the upgrading of the Rockaway Pollution Control Plant. The contract called for monthly partial payments and for liquidated damages of $300 per day if the project were completed after the scheduled completion date, which could be extended by the city. Applications for extensions of time had to set forth in detail the cause for delay in completion. Furthermore, the plaintiff agreed "to make no claim for damages for delay in the performance of [the] contract occasioned by any act or omission to act of the City or any of its representatives, and [agreed] that any such claims [would] be fully compensated for by an extension of time to complete performance of the work".

The contract provided that the plaintiff commence work on a date to be determined by the Commissioner of the Department of Water Resources of the City of New York and complete its work within 1105 consecutive calendar days. The commissioner directed the plaintiff to begin work on January 29, 1973, thus fixing the completion date at February 7, 1976. The work was not concluded on schedule and the parties began a procedure by which the plaintiff was granted extensions of time to complete the project and was not assessed liquidated damages. Twenty seven consecutive extensions were granted between February 8, 1976 and June 30, 1978. In each extension, plaintiff waived and released all claims which it might have had against the city except such claims as it might set forth in its final payment requisition. The city did not waive or release any claim it might have against the plaintiff for liquidated or actual damages for any reason whatsoever. The stated purpose of the granting of each extension was to expedite a payment to the plaintiff.

On June 30, 1978, Joseph T. Miller, the Assistant Commissioner of the Department of Environmental Protection of the City of New York in charge of the Bureau of Water Pollution Control determined, in the exercise of the discretion granted to him by the contract, that the project was substantially complete and directed the issuance of a substantial completion payment voucher. In July, 1978, plaintiff applied for its fifty-third progress payment, relating to work performed during May, 1978. Following conversations and a meeting held on July 25, 1978 between representatives of the parties, the accounts of which are disputed, Assistant Commissioner Miller arranged for a substantial completion inspection. The inspection was held, and substantial completion was approved, on August 9, 1978.

The plaintiff thereafter requested a final extension of contract time in order to obtain the substantial completion payment and, subsequently, the final payment. This request, dated October 4, 1978, included the following waiver:

"In consideration of the granting, for the purpose of expediting payment, by the Board of Extension of Contract Time, of an extension of contract time fixed in contract No. 4 for completion of work therein specified, we agree to and hereby waive and release all claims including, but not limited to, damage for delay or any other cause whatsoever which we may have against the City of New York, in connection with the aforesaid contract".

In both the letter making the request and a letter dated January 18, 1979 granting the request, it was noted that the city did not waive or...