Joseph F. Egan, Inc. v. City of New York

• Decision Date: 23 April 1963
• Parties: JOSEPH F. EGAN, INC., Plaintiff-Respondent, v. The CITY OF NEW YORK, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 420

239 N.Y.S.2d 420

18 A.D.2d 357

JOSEPH F. EGAN, INC., Plaintiff-Respondent, v. The CITY OF NEW YORK, Defendant-Appellant.

Supreme Court, Appellate Division, First Department.

April 23, 1963.

Leon A. Fischel, New York City, of counsel (Seymour B. Quel, New York City, on the brief; Leo A. Larkin, Corporation Counsel, attorney) for appellant.

Louis Cantor, New York City, of counsel (Max E. Greenberg, New York City, attorney) for respondent.

Before BREITEL, J. P., and RABIN, EAGER, STEUER and BASTOW, JJ.

STEUER, Justice.

Plaintiff has recovered a verdict against the City of New York in the sum of $160,089.56 after a jury trial. The action is founded upon a contract for the plumbing work in the construction of Elmhurst General Hospital. The action originally embraced numerous claims but all except two of those were disposed of during trial prior to submission to the jury. The two remaining claims which went to the jury and are the subject of this appeal are a claim for extra work in the sum of $23,951.88 and a claim for damages due to delay, amounting to $120,000.

The claim for extra work arose in the following way, accepting plaintiff's version which was evidently accredited by the jury. A change in the contract plans necessitated further plans to coordinate the work of the various contractors. Defendant's chief engineer on the job directed plaintiff to hire an engineer to do this work. Plaintiff agreed, did hire such an engineer, and the claim represents his salary. Obviating all other questions that may be presented as to whether this was extra work, the amount is not recoverable under the contract. Article 27 of the contract provides that if the contractor deems that any order of the engineer calls for work not provided for in the contract, he must, before complying with such order or proceeding with the work, notify the Commissioner of Public Works in writing and request a final determination. If the determination is adverse to the contractor, the latter must notify the commissioner in writing that the work is being done or the direction being complied with under protest. The contract further provides that in the event of a failure to apply for such a determination any claim for extra compensation therefor is waived. Oral appeals or protests, according to the contract, shall not be deemed even substantial compliance.

Admittedly there was no request in writing for a determination and no protest. Plaintiff relies on three points to show a waiver of this clause. The first is that in the course of the work 82 change orders were issued and payment finally made upon them without the necessity of a request for a determination; secondly, that defendant's engineer stated that the matter of the extra expense would be left to future determination; and lastly, that the salary of this engineer appeared upon the daily reports submitted by plaintiff on the job. No one, nor the totality of these facts, shows a waiver.

The payment of the other claims for extra work could and did not result in lulling plaintiff into a feeling of security. Such claims were settled long after the work was done and were the result of negotiation with city officials on different levels. That the city later chose to adopt an equitable standard in regard to these claims is no indication that it would waive any rights in connection with this claim. Furthermore, all of these claims were recognized long after the time fixed in the contract for protest. The acceptance of these other claims could not have induced plaintiff to forgo protest. Nor are the oral representations of the engineer of any significance. It has long been recognized that the contract provision is designed for the very purpose of preventing a claim based on an assertion of oral waiver (Woodruff et al. v. Rochester & Pitts. R. R. Co., 108 N.Y. 39, 14 N.E. 832; O'Brien et al. v. Mayor, etc. of New York, 139 N.Y. 543, 35 N.E. 323).

Plaintiff points to the fact that the court charged on the question of waiver and the charge, not being excepted to, became the law of the case. In view of the motions to dismiss which made perfectly clear what the city's contention was in this respect, no exception to the charge was needed. Moreover, in terms the charge was unexceptionable. The clause could be waived but not in the manner which the contract provides against. Clearly the contract provides against oral waivers by the persons most likely to be involved in such transactions, namely, the city's field representatives on the job. Such an oral waiver is unavailing. That is not to say that there may never be a waiver but that the proof did not raise an issue of waiver in this instance.

As regards the claim for delay, the jury's verdict cannot bw sustained on the amount of the damage. While the amount is less than the rough estimate testified to, when the details of the claim are looked into it is seen that the amount is in substantial excess of the supporting figures. But more significant than this is whether plaintiff waived its right to claim for such damages. Plaintiff applied for a substantial completion payment. Before the same could be obtained it was necessary to obtain an extension of the contract time for completion. In applying for the latter plaintiff expressly stated it waived any claim that it might have for damages due to delay. The extension was granted and also the substantial completion payment. In due course final payment was made and accepted. It is plaintiff's claim that the waiver was brought about by financial duress. To support this plaintiff's president testified to a conversation with the commissioner to the effect that the latter would not approve the extension in any instance where there was a claim for damages due to delay. Plaintiff replied that its financial condition was such that the substantial completion payment was urgently needed. To which...