A.H.A. General Construction Inc. v. New York City Housing Authority

241 A.D.2d 428, 661 N.Y.S.2d 213, 1997 N.Y. App. Div. LEXIS 8156
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 31, 1997
StatusPublished
Cited by3 cases

This text of 241 A.D.2d 428 (A.H.A. General Construction Inc. v. New York City Housing Authority) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A.H.A. General Construction Inc. v. New York City Housing Authority, 241 A.D.2d 428, 661 N.Y.S.2d 213, 1997 N.Y. App. Div. LEXIS 8156 (N.Y. Ct. App. 1997).

Opinion

Order, Supreme Court, New York County (Ira Gammerman, J.), entered January 17, 1996, which granted defendant-respondent’s motion for summary judgment, and denied plaintiff’s cross motion for a declaration that the work performed was extra work, and for an inquest to determine the amount owed for said work, unanimously modified, on the law, without costs, defendant’s motion is denied, and this matter is remanded for further proceedings.

On October 5, 1990, the New York City Housing Authority (“Housing Authority”) awarded two construction contracts to plaintiff A.H.A. General Construction, Inc. (“AHA”). One contract called for the rehabilitation of the three buildings and certain open spaces located at Jennings Street in the Bronx (“Jennings Project”), and the other involved the rehabilitation of three buildings at Hoe Avenue, also in the Bronx (“Hoe Project”). The contract price for the Jennings Project was $2,316,000, and for the Hoe Project was $2.41 million.

AHA claims that throughout the duration of both projects, the Housing Authority, as was its custom, frequently issued oral or written change orders requiring AHA to perform “extra work” (i.e., work other than that required by the contract at the time of its execution). AHA further asserts that on the oc[429]*429casions when extra work was directed, it sought compensation for such work either by obtaining a written change order from the Housing Authority approving the additional work, or by submitting correspondence demonstrating AHA’s position that the work was not required by the contract, and therefore was extra work requiring additional compensation. Several disputes arose over whether the work performed was extra work, or work required under the contract. On some occasions the Housing Authority issued the requested change orders, on others it refused, and on still others it issued change orders only to subsequently rescind them.

By separate Notices of Claim dated October 29, 1993, AHA submitted its final requisition for payment on both projects. With respect to the Jennings Project, AHA asserted in its Notice of Claim that it had received additional drawings from the Housing Authority that were not included in the original contract, and that AHA had performed the work required by the additional drawings. AHA’s Notice also stated that it had informed the Housing Authority of the additional work through correspondence at different stages in the project. AHA requested payment of $700,513.42 for extra work for the Jennings Project, and $205,126.34 for extra work on the Hoe Project. When AHA executed its contractor certificates, certifying its completion of the projects, it included a provision that there were “additional outstanding and unsettled items detailed in the previously submitted Notices of Claim.” The City paid AHA the contractual amount for both projects, but refused to make any payment for additional work.

In January 1994, AHA commenced this action against the Housing Authority asserting four causes of action. The first and third causes of action alleged a breach of the Jennings and Hoe contracts, respectively, based on the Housing Authority’s refusal to pay for extra work detailed in the Notices of Claim. The second and fourth causes of action sought recovery for unjust enrichment for the cost of the extra work on each project.

The Housing Authority moved for summary judgment dismissing the complaint, arguing that AHA had waived its right to recover for extra work by failing to comply with the notice and reporting requirements of the contract. Article 51 of the contract states that no action seeking compensation for extra work may be brought against the Housing Authority “unless the Contractor shall have strictly complied with all requirements relating to the giving of notice and or information with respect to such claims.” The notice requirements in [430]*430Article 27 require, inter alia, that in the event the Housing Authority determines that the work being performed is not extra work, the contractor must notify it within 5 days that the work is being performed “under protest,” or else the claim for extra work is waived. Also, a contractor claiming damages resulting from an act or omission of the Housing Authority is required to give notice within 5 days of the act or omission, and provide detailed statements and proof of damages within 30 days, or the claim would be waived. Under Article 28, a contractor performing extra or disputed work is required to furnish daily statements to the Housing Authority, during the performance of that work, including the name and number of each workman employed on the work; the number of hours employed; the character of the work; and the nature and quantity of any materials or equipment used.

AHA cross-moved for an order granting summary judgment, and an inquest to determine the amount of money damages due it. AHA’s president James Liapakis, in his supporting affidavit, averred that the Housing Authority was “being less than truthful” and was “acting in bad faith” by suggesting that no documentation existed to support AHA’s claim for extra work. Plaintiffs counsel noted the vast amount of correspondence between the parties on that issue, including requests by the Housing Authority to complete certain tasks, and AHA’s detailed proposals responding to those requests. Liapakis further stated that certified payroll reports and daily activity reports were kept regarding all of the work, and that those records were voluminous, but could be produced if necessary. He alleged that “separate records for the extra work can not be kept because it is physically impossible to do so.”

In its reply papers, AHA contended that the Housing Authority’s practice of ordering extra work and then unilaterally cancelling or rescinding a change order encompassing that work, constituted “wrongful conduct” designed to obtain extra work at no additional cost. AHA also alleged that the Housing Authority intentionally misrepresented that certain architectural drawings were included in the initial construction agreement, when in fact they were added after the contract was signed.

The IAS Court granted the Housing Authority’s motion for summary judgment on each cause of action, and denied AHA’s cross motion. The court found that there was no dispute that AHA had failed to comply with the contract’s notice and reporting requirements, and that the courts have “strictly enforced” those provisions. It further stated that although courts have [431]*431found a waiver where a contractor has substantially complied with notice and reporting requirements, no waiver will be found where the contract itself states that strict compliance is required. Since this contract required strict compliance, the IAS Court concluded that AHA was barred from recovering for the extra work. The court also rejected AHA’s assertion that maintenance of separate documentation for extra work was “physically impossible.” The IAS Court also dismissed the causes of action for unjust enrichment “because there is an express agreement covering the same subject matter.”

By notice of motion dated April 3, 1996, AHA moved for reargument and renewal of the IAS Court’s order. AHA reasserted its claim that the Housing Authority acted in bad faith by adding new drawings to the project while misrepresenting them as drawings from the original plan.

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Bluebook (online)
241 A.D.2d 428, 661 N.Y.S.2d 213, 1997 N.Y. App. Div. LEXIS 8156, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aha-general-construction-inc-v-new-york-city-housing-authority-nyappdiv-1997.