Honeywell, Inc. v. City of New York

• Decision Date: 30 April 1985
• Citation: 108 A.D.2d 125,488 N.Y.S.2d 386
• Parties: HONEYWELL, INC., Plaintiff-Respondent, v. The CITY OF NEW YORK, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 386

488 N.Y.S.2d 386

108 A.D.2d 125

HONEYWELL, INC., Plaintiff-Respondent, v. The CITY OF NEW YORK, Defendant-Appellant.

Supreme Court, Appellate Division,

First Department.

April 30, 1985.

John F. Grubin, New York City, of counsel (June A. Witterschein, New York City, Emily Pines and Marvin R. Kwartler, New York City, with him on brief; Frederick A.O. Schwarz, Jr., Corp. Counsel, New York City, attorney), for defendant-appellant.

Julius L. Schapira, New York City, of counsel (Morris Dershowitz and John E. Osborn, New York City, with him on the brief; Max E. Greenberg, Cantor & Reiss, New York City, attorneys), for plaintiff-respondent.

Before MURPHY, P.J., and KUPFERMAN, CARRO and MILONAS, JJ.

MURPHY, Presiding Justice.

After public bidding in April 1973, plaintiff Honeywell, Inc., the lowest bidder, was awarded a contract to install and maintain a system of instrumentation and data logging equipment at the Rockaway, Jamaica, Bowery Bay and Tallman's Island sewage treatment plants. The information logged at these four plants was to be transmitted to a central computer to be housed at a fifth location on Ward's Island. The contract, executed on August 1, 1973, called for a total payment to Honeywell of $1,600,000. This project was part of the City's larger overall design to upgrade its sewage treatment and disposal facilities involving sixteen different construction contracts at a total cost of over $150,000,000.

As originally envisioned, Honeywell's performance was to span a five and one-half year period, three and one-half years of which were to be devoted to engineering and construction and two years to maintenance. Maintenance procedures were to begin following substantial completion of each of the four plants. The scheduled final completion for the entire project was February, 1979.

In January 1981, Honeywell commenced an action alleging that the City breached the contract by: 1) refusing to allow it to utilize Honeywell manufactured equipment on the project rather than that required by the specifications; 2) failing to properly schedule and coordinate the work of various contractors, as well as preventing Honeywell from obtaining full access to work areas on the various sites; and 3) failing to provide the necessary design conduit and wiring required to operate the Honeywell equipment. As a result plaintiff claims that completion at two of the sites was delayed for two years and completion of two other sites rendered impractical. Additionally, the Tallman's Island site could not be made operational because of alleged defective electrical and mechanical installation. Plaintiff, proceeding on a quantum meruit theory, sought recovery of $1,342,671. This figure represented a total claim of $2,687,004 as the reasonable value of the work performed pursuant to the contract less a payment by the City of $1,344,333. After trial, the jury found that Honeywell was entitled to a total quantum meruit recovery of $2,570,178 before deducting the City's payment. The City now appeals from the final judgment awarded against it of $1,225,845 plus interest.

After reviewing the lengthy trial record, we are of the opinion that plaintiff has failed to establish its right to any recovery whatsoever. We agree with the City's contention that, although the complaint is couched in terms of breach of contract and abandonment, it is in actuality a claim for damages due to delay. In Article 13 of its agreement with the City, Honeywell 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." Any such claim was to be fully compensated by an extension of time in which to complete the required work. Other articles of the agreement provided for notification by Honeywell to the City of any condition causing delay or requiring extra work as a prerequisite for extra work compensation. The Court of Appeals in Kalisch-Jarcho v. City of New York, 58 N.Y.2d 377, 461 N.Y.S.2d 746, 448 N.E.2d 413, has determined that such "no-damage-for-delay" clauses are enforceable where the conduct resulting in the delay complained of was not intentional and malicious or the result of gross negligence on the City's part. The voluminous record before us reveals a total lack of any evidence that the City acted with any malicious intent or in a grossly negligent manner. Accordingly the judgment should be reversed and the complaint dismissed.

Honeywell contends that it was prevented from performing its part of the contract by the failure of the City to provide wiring compatible with its instrumentation and to coordinate the installation by electrical contractors of required plant wiring. Separate electrical contractors for each site were required by General Municipal Law Sec. 101. While the installation of the wiring was delayed to such an extent that Honeywell threatened to bring suit, it was not the responsibility of the City to see that the electrical contractors performed in a timely fashion. In fact the contract obligated Honeywell to supervise the wiring of its equipment at each plant, and the record indicates that the City issued change orders and other directives whenever necessary to facilitate wiring. As to Honeywell's more general claim as to the City's alleged failure to coordinate the work of the various contractors on the construction sites, the evidence is clear that the agreement between the parties...