Tempforce Inc. ex rel. Anton Wood Associates v. Municipal Housing Authority of City of Schenectady

• Decision Date: 29 July 1999
• Parties: TEMPFORCE INC., by ANTON WOOD ASSOCIATES, Doing Business as Tempforce of Albany, et al., Plaintiffs, v. MUNICIPAL HOUSING AUTHORITY OF the CITY OF SCHENECTADY, Respondent, and McNar Industries Inc., Appellant, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 240

694 N.Y.S.2d 240

TEMPFORCE INC., by ANTON WOOD ASSOCIATES, Doing Business as Tempforce of Albany, et al., Plaintiffs, v. MUNICIPAL HOUSING AUTHORITY OF the CITY OF SCHENECTADY, Respondent, and McNar Industries Inc., Appellant, et al., Defendants.

Supreme Court, Appellate Division, Third Department, New York.

July 29, 1999.

Lynch & Lynch (Michael C. Lynch of counsel), Albany, for appellant.

Richard G. Della Ratta, Schenectady, for respondent.

Before: CARDONA, P.J., MERCURE, CREW III, YESAWICH JR. and GRAFFEO, JJ.

GRAFFEO, J.

Appeal from an order of the Supreme Court (Lynch, J.), entered October 14, 1998 in Schenectady County, which, inter alia, granted defendant Schenectady Municipal Housing Authority's motion to dismiss the answer and cross claim of defendant McNar Industries Inc. against Schenectady Municipal Housing Authority.

Plaintiffs commenced this action against defendants Schenectady Municipal Housing Authority (hereinafter SMHA) and McNar Industries Inc. and others alleging, inter alia, breach of contract in connection with a roof replacement project at a housing complex owned by SMHA. SMHA and McNar, which was the general contractor, interposed cross claims against each other which are the subject of this appeal. SMHA served a demand for a bill of particulars seeking information pertaining to McNar's cross claim. In response, McNar alleged that SMHA caused considerable expense and delay by issuing defective contract specifications, by forcing McNar to utilize an off site storage area for staging and storing purposes, and by refusing to approve various material changes. By decision and order dated August 11, 1993, Supreme Court granted McNar's motion for leave to amend its cross claim against SMHA and denied SMHA's motion for an order of preclusion based on McNar's failure to provide a responsive bill of particulars.

SMHA served a supplemental demand for a bill of particulars and McNar did not object to any portion of the demand. However, unsatisfied with McNar's response, SMHA moved for an order compelling a responsive supplemental bill of particulars addressing the basis for McNar's cross claim and, more specifically, for information pertaining to alleged increased costs incurred and the cost/time breakdowns for the claims. Supreme Court granted SMHA's motion in July 1996. McNar served a second supplemental bill of particulars which alleged that "concurrent, overlapping and continuous problems [made it] impractical if not impossible to segregate the cost and damages" and also asserted that it was entitled to prove damages on a "total cost" method.

SMHA, again dissatisfied with McNar's response, moved to dismiss McNar's answer and cross claims asserting that McNar did not comply with the July 1996 court order to provide appropriate responses, or in the alternative, to compel McNar to provide the information SMHA demanded. In August 1997 Supreme Court conditionally granted SMHA's motion to dismiss McNar's answer and cross claims unless McNar complied with the supplemental demand. The court specifically stated that SMHA was entitled to the information demanded and that if McNar was to recover an equitable adjustment as alleged, it would be within the confines of article 10 of the parties' contract. ¹ Notably, the court commented that it was allowing McNar a "third bite of the apple". McNar served a third supplemental verified bill of particulars which prompted SMHA to move pursuant to CPLR 3041, 3042 and 3126 for an order dismissing McNar's cross claim and answer. Supreme Court held that McNar's third supplemental bill of particulars did not satisfy the standard of specificity required to proceed with its claims for equitable adjustment, and therefore, dismissed McNar's answer and cross claim against SMHA. McNar now appeals.

It is axiomatic that where a party refuses to comply with discovery demands, the trial court has broad discretion in fashioning a penalty (see, Rankin v. Miller, 252 A.D.2d 863, 864, 675 N.Y.S.2d 717). Although preclusion is a drastic remedy, it is appropriate "where a party's noncompliance with discovery demands is willful and contumacious" (id., at 864, 675 N.Y.S.2d 717). Here, McNar failed to particularize the damages it incurred as a result of SMHA's purported delay as required by the parties...