Tadco Constr. Corp. v. Dormitory Auth. Of The State Of N.Y., Civil Action No. 08-CV-0073 (DGT).

• Citation: 700 F.Supp.2d 253
• Decision Date: 19 March 2010
• Docket Number: Civil Action No. 08-CV-0073 (DGT).
• Parties: TADCO CONSTRUCTION CORP. and Thomas Demartino, Plaintiffs,v.DORMITORY AUTHORITY OF the STATE OF NEW YORK, Tyrone Middleton, Pat Cinelli, James Gray, Jack Kemp and John Does, Defendants.
• Court: United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)

700 F.Supp.2d 253

TADCO CONSTRUCTION CORP. and Thomas Demartino, Plaintiffs,v.DORMITORY AUTHORITY OF the STATE OF NEW YORK, Tyrone Middleton, Pat Cinelli, James Gray, Jack Kemp and John Does, Defendants.

Civil Action No. 08-CV-0073 (DGT).

United States District Court E.D. New York.

March 19, 2010.

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Bryan Ha, Attorney at Law, New York, NY, for Plaintiffs.

Joel Graber, NY State Attorney General, Litigation, New York, NY, for Defendants.

MEMORANDUM AND ORDER

TRAGER, District Judge:

This case arises out of a troubled construction contract between TADCO Construction Corporation (“TADCO”) and the Dormitory Authority of the State of New York (“DASNY”) to build a new dormitory facility on Staten Island. Plaintiff TADCO alleges multiple breach of contract claims against DASNY, and further alleges a due process violation under 42 U.S.C. § 1983 stemming from purportedly defamatory comments made by DASNY during its termination of the contract with TADCO and from DASNY's failure to pay TADCO promptly for work performed. Plaintiff Thomas DeMartino (“DeMartino”), TADCO's on-site superintendent and management representative, additionally asserts federal and state claims of false arrest, malicious prosecution and abuse of process, claiming that DASNY employees Tyrone Middleton, Pat Cinelli, Jack Kemp and John Doe improperly had him arrested for trespassing at the job site on two separate occasions. Defendants have moved to dismiss all of plaintiffs' federal claims as well as DeMartino's state law claims, and have requested that this court decline to exercise supplemental jurisdiction over TADCO's state law claims. For the reasons explained below, this motion is granted in part and denied in part.

Background

(1)

Contractual Disputes between TADCO and DASNY

a. Project Delays

The following facts are drawn from plaintiff's pleadings and, for purposes of this motion, are presumed to be true. In May 2005, defendant DASNY began soliciting bids for a new ten-bed residence building for the Staten Island Developmental Disabilities Services Office (the “project”). Compl. ¶ 14. The project was structured as a “multi-prime” project, meaning that four prime contractors would perform discrete segments of the project under the direct supervision of DASNY. Id. at ¶¶ 15-16. Four separate prime contracts were therefore awarded: one for general construction work, one for mechanical work, one for electrical work and one for plumbing work. Id.

Plaintiff TADCO, a general construction contractor, bid on and was awarded the contract for general construction work (the “contract”) around June 15, 2005. Id. at ¶¶ 17, 23. Prior to the instant dispute, TADCO had often been awarded state and municipal public works contracts and had previously worked with DASNY several times. Id. at ¶ 13. The contract specified that the project was to be completed by September 29, 2006. See Compl., Ex. A at 2 (contract between TADCO and DASNY).

However, the project was plagued with delays and problems from the outset. Plaintiffs generally attribute these delays to DASNY's funding problems and DASNY's poor management of the other prime contractors. Id. at ¶¶ 19-24. More specifically, TADCO points to several delays that were caused by events outside of its control and within DASNY's control. First, plaintiffs allege that their commencement of the project was delayed by approximately five months when DASNY unexpectedly required TADCO to perform some up-front work not included in the plans and specifications, including building a construction fence around the jobsite id. at ¶¶ 25-29, and probing and underground radar work to locate existing utility lines id. at ¶¶ 30-34. As a result of requiring this extra work, DASNY agreed to extend the completion date of the project by six weeks, from September 29, 2006, to November 15, 2006. Id. at ¶ 35. Then, a major design defect in the framing of the building set back TADCO's progress on the project further throughout June and July 2006. Id. at ¶ 41.

Further delays ensued as a result of the slow progress of the mechanical, electrical and plumbing work contractors (collectively, the “MEP contractors”). Id. at ¶¶ 42-50. TADCO believed the MEP contractors' deficient performance was the fault of poor supervision and direction on the part of DASNY, and approached DASNY with concerns over the progression of the project several times. Id. at ¶ 51. In a September 13, 2006 meeting, TADCO explains that DASNY “acknowledged its responsibility to provide overall project management and coordination,” promised to provide better supervision and coordination of the four prime contractors in the future and again extended the project completion date, this time until December 7, 2006. Id. at ¶ 52. Nevertheless, problems with the MEP contractors' performance continued throughout the fall of 2006. These problems led DASNY, in early December 2006, to extend the project completion date to January 11, 2007. Id. at ¶ 61.

At the same time these MEP delays were occurring, a dispute erupted between DASNY and TADCO regarding a contract provision that required TADCO to backfill open trenches at the jobsite with soil taken from on-site. Id. at ¶ 62. At some point, apparently during the summer of 2006 (the complaint specifies only “prior to September 2006”), TADCO discovered that the soil at the site was not suitable for use as backfill because of its high moisture content. Id. at ¶ 63. TADCO attributed its late discovery of this moisture problem to DASNY's failure to provide TADCO with any soil boring logs or geotechnical data. Id. at ¶ 64. Therefore, it asked DASNY to resolve the problem during fall of 2006. However, according to TADCO, DASNY was simply non-responsive. Id. at ¶¶ 66-73.

b. Thomas DeMartino's Arrests

In November, this unresolved backfill problem provoked a disagreement between an employee of DASNY and an employee of TADCO. One of DASNY's field representatives and now a named defendant, Tyrone Middleton, ordered DeMartino, TADCO's onsite project superintendent, to cover the open trenches at the jobsite with wood planks on November 9, 2006. Id. at ¶¶ 75-76. DeMartino refused, explaining that this work was not specified in the contract and would require extra labor, materials, supplies and equipment. Id. at ¶¶ 77-78. Middleton responded this same day by lodging a criminal complaint against DeMartino with the state police officers assigned to the facility, claiming that DeMartino was trespassing. Id. at ¶¶ 80, 134. The complaint additionally alleges that Pat Cinelli, the Director of DASNY's Statewide Utilities Unit, and/or Jack Kemp, the Chief of Construction Contracts for DASNY, “approved of and authorized” Middleton's actions in having DeMartino arrested. Id. at ¶ 139. As a result of Middleton's complaint, DeMartino was arrested, taken to the local precinct and issued a criminal summons for trespassing. Id. at ¶ 82.

Apparently, however, this arrest did not dissuade DeMartino from returning to the job site. In early January 2007, Middleton or some other DASNY personnel lodged a second criminal complaint against DeMartino, who was once again arrested for trespassing at the job site. Id. at ¶¶ 84-86. DeMartino spent one night in jail and was subsequently charged with criminal trespassing. Both of the trespassing charges were subsequently dismissed in their entirety. Id. at ¶¶ 83, 87.

c. Disputed Work

Throughout the course of TADCO's performance under the contract, DASNY repeatedly directed TADCO to perform “charge order” work, i.e., work not included within the contract fee negotiated. Id. at ¶¶ 88-89. DASNY at times used the “disputed work clause” in the contract to force TADCO to perform this work by claiming the work was “disputed.” Id. TADCO believed the contract entitled it to payment for the value of this extra work and requested payment, but DASNY allegedly delayed the processing of the charge orders for this work due to a lack of funding. Id. at ¶¶ 89-90. The accrual of several hundred thousand dollars of unpaid charge order work by December 2006 led TADCO to file an action in state court against DASNY on January 5, 2007, in which it sought to recover damages for “abuse of State process, failure to provide proof of funding, breach of implied covenants of good faith and fair dealing, and breach of contract.” Id. at ¶¶ 93-94. Neither party has provided any further information on the status of this state court action.

d. Termination of the Contract

At the time TADCO filed the state court lawsuit against DASNY, it estimates that it had completed over eighty-five percent of its work on the project. Id. at ¶ 95. However, TADCO asserts that, although it was willing and able to complete the project, it could not move forward without DASNY resolving the soil problem and problems with the MEP contractors, or responding to several requests for information that TADCO had submitted to DASNY. Id. at ¶¶ 96-99. TADCO's president reiterated this position in a letter to Jack Kemp, DASNY's Chief of Construction, on January 2, 2007. Id. at ¶ 99.

DASNY, however, believed that TADCO had failed to perform its obligations under the contract and did not demonstrate the ability to complete the work. Id. at ¶ 103. Although the parties exchanged several letters apparently attempting to come to some agreement, DASNY ultimately chose to terminate the contract with TADCO on January 17, 2007. Id. at ¶¶ 100-07. TADCO believes this termination was wrongful. As evidence, it points to the results of an investigation by First Sealord Surety, Inc., the bonding company that issued the performance and payment bonds on the project. Id. at ¶ 108. First Sealord Company's independent investigation report of March 28, 2007 concluded that “DASNY's election to terminate TADCO was unjustified and improper.” Id. At the time of termination, DASNY reportedly owed TADCO $79,485.00 for completed contract work and $45,402.31 in retainage, in...