Westinghouse Elec. Corp. v. New York City Transit Authority, No. 1248

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtALTIMARI
Citation14 F.3d 818
PartiesWESTINGHOUSE ELECTRIC CORPORATION, Plaintiff-Appellant, v. NEW YORK CITY TRANSIT AUTHORITY, Metropolitan Transportation Authority, Defendants-Appellees. ocket 92-7503. United States Court of Appeals, Second Circuit
Docket NumberD,No. 1248
Decision Date01 February 1994

Page 818

14 F.3d 818
WESTINGHOUSE ELECTRIC CORPORATION, Plaintiff-Appellant,
v.
NEW YORK CITY TRANSIT AUTHORITY, Metropolitan Transportation
Authority, Defendants-Appellees.
No. 1248, Docket 92-7503.
United States Court of Appeals,
Second Circuit.
Argued March 18, 1993.
Decided Feb. 1, 1994.

Page 819

Peter M. D'Ambrosio, Smith, Pachter, McWhorter & D'Ambrosio, Vienna, Virginia (John V. Snyder, Smith, Pachter, McWhorter & D'Ambrosio, Vienna, Virginia, John A. Redmon, Ellen Wahl Parker, Davis, Markel & Edwards, P.C., New York, New York, on the brief), for plaintiff-appellant.

Ira J. Lipton, New York City Transit Authority, Brooklyn, New York (Albert C. Cosenza, New York City Transit Authority, Brooklyn, New York, on the brief), for defendants-appellees.

Before: LUMBARD and ALTIMARI, Circuit Judges, and JAMES B. LOKEN, Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation.

ALTIMARI, Circuit Judge:

This case concerns a contract dispute between plaintiff-appellant Westinghouse Electric Corporation ("Westinghouse"), and defendants-appellees the New York City Transit Authority ("NYCTA") and the Metropolitan Transportation Authority ("MTA") (collectively herein "NYCTA" or the "Authority"). Following a series of conflicts between the parties concerning their contractual obligations, Westinghouse submitted a claim pursuant to the contract's alternative dispute resolution ("ADR") provision for damages and additional compensation. The ADR provision provided for dispute resolution by the NYCTA's Superintendent, W.D. Westfall (the "Superintendent"). The Superintendent denied Westinghouse's claim.

Westinghouse subsequently brought suit challenging the validity of the Superintendent's decision and the contract's ADR provision. The United States District Court for the Southern District of New York (Haight, J.) upheld both the provision and the Superintendent's determination. See Westinghouse Elec. Corp. v. New York City Transit Auth., 794 F.Supp. 79, 83-85 (S.D.N.Y.1991). Westinghouse then appealed the decision to this Court. For reasons discussed below, we certified the question of the ADR provision's validity to the New York Court of Appeals, see Westinghouse Elec. Corp. v. New York City Transit Auth., 990 F.2d 76, 80 (2d Cir.1993) (the "Certification"), which subsequently upheld the provision's validity. See Westinghouse Elec. Corp. v. New York City Transit Auth., 82 N.Y.2d 47, 603 N.Y.S.2d 404, 623 N.E.2d 531 (1993). The case now returns for our final determination. For the reasons discussed below, we affirm the district court's judgment.

BACKGROUND

Although a brief factual background of the case was presented in our Certification to the New York Court of Appeals, see 990 F.2d at

Page 820

77-79, the following more detailed description of the parties' interactions is necessary for our review of the Superintendent's determination.

In 1983, NYCTA and Westinghouse entered into a contract for the sale, delivery, and installation of power rectifier equipment to five substations for the New York City subway system. Over the course of Westinghouse's performance under the contract, disputes arose as to whether NYCTA failed to give Westinghouse timely access to the various substations, whether NYCTA improperly deleted certain contract work, and whether Westinghouse was being restrained from performing under the contract.

On November 3, 1988, at a meeting held to resolve various disputes, Westinghouse notified the Superintendent that Westinghouse's performance was effectively suspended due to numerous longstanding issues relating to design, access, and other matters. Westinghouse further explained that the effective suspension of its work constituted a constructive "work stop order" pursuant to the contract, and that Westinghouse would consider the contract terminated "for convenience" if the work restraints were not removed within 90 days. Westinghouse cited Article 2.07 of the contract, which provides as follows:

Stop Work Order. (a) The Authority may, at any time, by written order to the Contractor, require the Contractor to stop all, or any part, of the Work for a period of ninety (90) days (or any lesser period) after the order is delivered to the Contractor, and for any further period to which the parties may agree. Any such order shall be specifically identified as a "Stop Work Order" issued pursuant to this Article. Within the period of ninety (90) days (or the lesser period specified) after a stop work order is delivered to Contractor, or within any extension of that period to which the parties shall have agreed, the Authority shall either:

(i) cancel the stop work order, or

(ii) terminate the work covered by such order as provided in Article 2.08--Termination for convenience by the Authority.

Also on November 3, 1988, Westinghouse submitted a letter reiterating the above points.

The Superintendent responded to Westinghouse in a letter dated November 14, 1988, explaining that there was no such thing as a "constructive work stop order," and that the contract did not ordinarily provide for damages for delay. The Superintendent further explained that the contract provided for a dispute procedure for evaluating claims for compensable damages, and that he would recommend Westinghouse be declared in default of the contract if it abandoned the work.

Subsequently, on February 3, 1989, Westinghouse suspended performance under the contract. In its notification to NYCTA, Westinghouse claimed that NYCTA's failure to remove certain impediments either physically prevented performance of the contract work, or so altered the work as to change the nature of the contractual obligations. The Superintendent responded by directing Westinghouse to discontinue all work pursuant to the contract. He explained that Westinghouse's suspension of performance constituted a breach of contract, and that he would recommend it be held in default of the contract.

NYCTA then notified Westinghouse that NYCTA was in the process of determining whether to declare Westinghouse in default of the contract, and directed Westinghouse to show cause as to why it should not be so found. In response, Westinghouse sought a meeting to discuss the issue of the default. NYCTA rejected the meeting proposal, and instead invited Westinghouse to submit a written statement. Westinghouse did not submit a statement, and informed NYCTA that it would be submitting a comprehensive claim on the contract.

On June 13, 1989, based on Westinghouse's abandonment of work, NYCTA declared Westinghouse in default under the contract pursuant to Article 7.01 of the contract. On June 21, 1989, Westinghouse submitted a "Request for Additional Compensation and Time Extension." Westinghouse sought payment for the cost of additional labor, materials and equipment, compensation for field office overhead and additional general and

Page 821

administrative expenses, and damages caused by NYCTA's deletion of contract work items. Westinghouse also requested that the default be rescinded, and asked for a Superintendent's decision pursuant to Article 8.03 of the contract. Article 8.03 of the contract, in relevant part, provides as follows:

Disputes. (a) In the event the Contractor and Authority are unable to resolve their differences concerning a determination by the Superintendent, the Contractor may initiate a dispute in accordance with the procedure set...

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13 practice notes
  • Stagl v. Delta Airlines, Inc., No. 423
    • United States
    • U.S. Court of Appeals — Second Circuit
    • April 17, 1995
    ...We review a district court's grant of summary Page 467 judgment de novo. See Westinghouse Elec. Corp. v. New York City Transit Auth., 14 F.3d 818, 821 (2d On appeal, neither party has questioned the district court's preemption ruling, and we therefore take it as given that state law applies......
  • Kyocera Corp. v. Prudential-Bache, No. 01-15630.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 29, 2003
    ...decision it did not directly address the propriety under federal law of doing so. See Westinghouse Elec. Corp. v. N.Y. City Transit Auth., 14 F.3d 818, 821-23 (2d Cir.1994). In addition, the Supreme Court has, in dicta and in the ERISA context, suggested that parties might be able in some c......
  • Hottle v. Seidman, 268 Conn. 694 (CT 5/4/2004), (SC 16941).
    • United States
    • Supreme Court of Connecticut
    • May 4, 2004
    ...enforceability of the clause. Westinghouse Electric Corp. v. New York City Transit Authority, 794 F. Sup. 79, 83 (S.D.N.Y. 1991), aff'd, 14 F.3d 818 (2d Cir. 1994). The contractor then appealed to the United States Court of Appeals for the Second Circuit and, relying on In the Matter of Cro......
  • Giano v. Senkowski, No. 359
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • May 16, 1995
    ...(2d Cir.1993). We review the district court's grant of summary judgment de novo. Westinghouse Elec. Corp. v. New York City Transit Auth., 14 F.3d 818, 821 (2d I. Giano's First Amendment Claim Giano argues that the prison's policy violates the First Amendment. We disagree. Prison walls are n......
  • Request a trial to view additional results
13 cases
  • Stagl v. Delta Airlines, Inc., No. 423
    • United States
    • U.S. Court of Appeals — Second Circuit
    • April 17, 1995
    ...We review a district court's grant of summary Page 467 judgment de novo. See Westinghouse Elec. Corp. v. New York City Transit Auth., 14 F.3d 818, 821 (2d On appeal, neither party has questioned the district court's preemption ruling, and we therefore take it as given that state law applies......
  • Kyocera Corp. v. Prudential-Bache, No. 01-15630.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 29, 2003
    ...decision it did not directly address the propriety under federal law of doing so. See Westinghouse Elec. Corp. v. N.Y. City Transit Auth., 14 F.3d 818, 821-23 (2d Cir.1994). In addition, the Supreme Court has, in dicta and in the ERISA context, suggested that parties might be able in some c......
  • Hottle v. Seidman, 268 Conn. 694 (CT 5/4/2004), (SC 16941).
    • United States
    • Supreme Court of Connecticut
    • May 4, 2004
    ...enforceability of the clause. Westinghouse Electric Corp. v. New York City Transit Authority, 794 F. Sup. 79, 83 (S.D.N.Y. 1991), aff'd, 14 F.3d 818 (2d Cir. 1994). The contractor then appealed to the United States Court of Appeals for the Second Circuit and, relying on In the Matter of Cro......
  • Giano v. Senkowski, No. 359
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • May 16, 1995
    ...(2d Cir.1993). We review the district court's grant of summary judgment de novo. Westinghouse Elec. Corp. v. New York City Transit Auth., 14 F.3d 818, 821 (2d I. Giano's First Amendment Claim Giano argues that the prison's policy violates the First Amendment. We disagree. Prison walls are n......
  • Request a trial to view additional results

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