Tougher Indus., Inc. v. Dormitory Auth. of State
| Decision Date | 30 July 2015 |
| Docket Number | 518776 |
| Citation | 15 N.Y.S.3d 262,130 A.D.3d 1393,2015 N.Y. Slip Op. 06388 |
| Parties | TOUGHER INDUSTRIES, INC., Appellant, v. DORMITORY AUTHORITY OF the STATE of New York, Respondent. (And a Third–Party Action.). |
| Court | New York Supreme Court — Appellate Division |
130 A.D.3d 1393
15 N.Y.S.3d 262
2015 N.Y. Slip Op. 06388
TOUGHER INDUSTRIES, INC., Appellant
v.
DORMITORY AUTHORITY OF the STATE of New York, Respondent.
(And a Third–Party Action.).
518776
Supreme Court, Appellate Division, Third Department, New York.
July 30, 2015.
Robinson & Cole, LLP, New York City (Thomas J. Donlon of counsel), for appellant.
Eric T. Schneiderman, Attorney General, Albany (Owen Demuth of counsel), for respondent.
Before: GARRY, J.P., EGAN JR., ROSE and LYNCH, JJ.
Opinion
GARRY, J.P.
Appeal from an order of the Supreme Court (Platkin, J.), entered March 18, 2014 in Albany County, which, among other things, granted defendant's motion for partial summary judgment dismissing the complaint.
In April 2001, plaintiff contracted with defendant to be the prime contractor in charge of installation of heat, ventilation and air conditioning (hereinafter HVAC) during a major renovation project at a state psychiatric center. Plaintiff's completion of the work was significantly delayed by a multitude of design errors and other issues. As a result, plaintiff commenced the instant action asserting breach of contract and several other causes of action. Following extensive discovery, defendant moved for partial summary judgment seeking, as relevant here, to dismiss plaintiff's causes of action seeking damages for delay and extra work. Supreme Court granted the motion, finding that these claims were barred by a mandatory notice provision and a no-damages-for-delay clause in the parties' contract. Plaintiff appeals.
As a general rule, “contract clauses exculpating the contractee from liability to the contractor for damages resulting from delays in performance of the contract work” are valid and enforceable (Harrison & Burrowes Bridge Constructors, Inc. v. State of New York, 42 A.D.3d 779, 782, 839 N.Y.S.2d 854 [2007] ; see Kalisch–Jarcho, Inc. v. City of New York, 58 N.Y.2d 377, 384, 461 N.Y.S.2d 746, 448 N.E.2d 413 [1983] ). However, even where the contract contains such a clause, there are several recognized exceptions. As relevant here, a contractor may still recover for “delays caused by the contractee's bad faith or its willful, malicious, or grossly negligent conduct” (
Corinno Civetta Constr. Corp. v. City of New York, 67 N.Y.2d 297, 309, 502 N.Y.S.2d 681, 493 N.E.2d 905 [1986] ; accord Plato Gen. Constr. Corp./ EMCO Tech Constr. Corp., JV, LLC v. Dormitory Auth. of State of N.Y., 89 A.D.3d 819, 823, 932 N.Y.S.2d 504 [2011], lv. denied 19 N.Y.3d 803, 2012 WL 1592167 [2012] ; Clifford R. Gray, Inc. v. City School Dist. of Albany, 277 A.D.2d 843, 844, 716 N.Y.S.2d 795 [2000] ). A defendant seeking summary judgment dismissing a claim for delay damages “bears the initial burden of demonstrating prima facie that none of the exceptions to the ‘damages for delay’ clause are present” (Blue Water Envtl., Inc. v. Incorporated Vil. of Bayville, N.Y., 44 A.D.3d 807, 810, 843 N.Y.S.2d 681 [2007], lv. denied 10 N.Y.3d 713, 861 N.Y.S.2d 274, 891 N.E.2d 309 [2008] ; see Fowler, Rodriguez, Kingsmill, Flint, Gray & Chalos, LLP v. Island Props., LLC, 38 A.D.3d 831, 833, 833 N.Y.S.2d 146 [2007] ). Here, the parties do not dispute that defendant met this initial burden; rather, plaintiff argues that it successfully demonstrated the existence of triable issues of fact as to whether
defendant's conduct constituted gross negligence or bad faith. We disagree, and find no error in Supreme Court's grant of summary judgment.
Gross negligence differs in kind from claims of ordinary negligence, and requires a showing of “conduct that evinces a reckless disregard for the rights of others or smacks of intentional wrongdoing” (Soja v. Keystone Trozze, LLC, 106 A.D.3d 1168, 1170, 964 N.Y.S.2d 731 [2013] [internal quotation marks and citations omitted]; accord Finsel v. Wachala, 79 A.D.3d 1402, 1404, 915 N.Y.S.2d 323 [2010] ; see Abacus Fed. Sav. Bank v. ADT Sec. Servs., Inc., 18 N.Y.3d 675, 683, 944 N.Y.S.2d 443, 967 N.E.2d 666 [2012] ). Here, plaintiff claims that defendant was grossly negligent in permitting plaintiff to bid on the project when it knew of and failed to disclose defects in the HVAC design that would necessarily cause problems and delays. Plaintiff relies upon the testimony of an engineer who was employed by defendant to monitor the adequacy of the HVAC design work being performed by plaintiff's consultant, Crandell Associates, Architects and Facility Planners, P.C. According to plaintiff, reports completed by defendant's engineer at various stages of Crandell's design work reveal that he identified, but nonetheless recklessly failed to address, several potential design flaws, including spatial limitations that could—and later did—interfere with fitting HVAC ducts into interstitial ceiling spaces. However, the engineer testified that his role was limited to “identify[ing] the deficienc[ies],” rather than “mandat[ing] recommendations to [the] consultants.” Further, his reports reveal that he relied on representations by Crandell's subconsultant that it would investigate the issues that he had identified.
Even if the engineer or defendant had a duty to follow up on these representations and ensure that the design flaws were
corrected, their failure to do so cannot be said to meet the standard of “evinc[ing] a reckless disregard for [plaintiff's] rights” (Soja v. Keystone Trozze, LLC, 106 A.D.3d at 1170, 964 N.Y.S.2d 731 ). This is particularly true because an additional provision of the contract expressly charged plaintiff with the responsibility of examining the project site and satisfying itself “as to the nature and materials likely to be encountered, ... the general and local conditions, and all other materials or items which may affect the [w]ork.” Thus, plaintiff failed to demonstrate that the deficiencies in question were more than “design defects based on faulty architectural drawings [which were] ‘precisely within the contemplation of the [no-damages-for-delay] clause [ ],’ ” and the proof did not give rise to issues of fact as to defendant's gross negligence (LoDuca Assoc., Inc. v. PMS Constr. Mgt. Corp., 91 A.D.3d 485, 486, 936 N.Y.S.2d 192 [2012], quoting Gottlieb Contr. v. City of New York, 86 A.D.2d 588, 589, 446 N.Y.S.2d 311 [1982], affd. 58 N.Y.2d 1051, 462 N.Y.S.2d 642, 449 N.E.2d 422 [1983] ).
Next, plaintiff contends that defendant's efforts to schedule and coordinate the work of the numerous contractors involved in the project were so incompetent that they evinced a reckless disregard for the delays that were bound to result. As plaintiff contends, the contract required defendant to facilitate the preparation of a “critical path method” work schedule that was to be released shortly after construction began. This...
To continue reading
Request your trial