Bovis Lend Lease (LMB), Inc. v. Lower Manhattan Development Corp.

108 A.D.3d 135, 966 N.Y.S.2d 51

This text of 108 A.D.3d 135 (Bovis Lend Lease (LMB), Inc. v. Lower Manhattan Development Corp.) 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
Bovis Lend Lease (LMB), Inc. v. Lower Manhattan Development Corp., 108 A.D.3d 135, 966 N.Y.S.2d 51 (N.Y. Ct. App. 2013).

Opinion

OPINION OF THE COURT

Mazzarelli, J.

This dispute concerns the Deutsche Bank Building, which neighbored the World Trade Center and was severely damaged on September 11, 2001. Defendant, Lower Manhattan Development Corp. (LMDC), is a subsidiary of the Urban Development Corporation doing business as the Empire State Development Corporation, a joint city-state corporation charged with redeveloping lower Manhattan. LMDC purchased the building from Deutsche Bank after the 9/11 attacks and discovered that contaminants such as asbestos and lead were likely present. Accordingly, on September 8, 2005, LMDC and other governmental authorities approved a “Deconstruction Plan,” to abate, clean, decontaminate, empty, deconstruct, and remove the building.

Plaintiff, Bovis Lend Lease (LMB), Inc., submitted the winning bid to carry out the deconstruction plan. It and LMDC executed a contract requiring Bovis to perform the abatement, decontamination, and deconstruction services in exchange for a lump sum of approximately $74.8 million. That amount was later increased to approximately $81 million. Bovis made several representations and warranties in the contract. For [138]*138example, it acknowledged that it was accepting a lump sum and, except with LMDC’s consent, was not entitled to additional compensation, “notwithstanding whatever obstacles or unforeseeable conditions may arise or be encountered.” It “accept[ed] all conditions in the Building . . . and otherwise at the Site, whether or not such conditions were foreseeable, as they exist or may eventually be found to exist, and in whatever condition same may exist.” Bovis also agreed to accept a variety of risks, “whether they arise from acts or omissions of [Bovis], of LMDC, or of third persons, or from any other cause, and whether such risks are within or beyond the control of [Bovis] and/or are known or unknown, and foreseeable or unforeseeable.” One of the specific risks delineated in that section of the contract was “[t]he risk of all regulatory and other Governmental Authority delays.” In addition, Bovis agreed

“to make no claim for damages for delay in the Work (or the performance thereof) of any kind whatsoever, whether foreseeable or unforeseeable, and agree[d] that any such claim shall be compensated for solely by an extension of time to complete performance of the Work when the provisions of Article 12 hereof allow same.”

In the section describing the project’s “Scope of Work,” the contract provided that

“[a]ny and all changes to the Deconstruction Plan . . . require LMDC’s advance written permission and the approval of the applicable Governmental Authorities. No such changes may be requested without LMDC’s advance consent and written approval. No such changes shall be deemed Extra Work.”

Indeed, “Extra Work” was specifically defined in the contract, which made clear that anything not considered extra work was included in the work compensated for by the lump sum. As relevant here, extra work was defined as “[w]ork required by a written Change Order issued by LMDC pursuant to Article 22 hereof which . . . adds substantial scope or program to the Scope of Work.” The contract further specified: “For the avoidance of doubt, ‘Extra Work’ does not include [among other things] ...(f) any Work required by reason of any change in Legal Requirements . . . ; and/or (g) Work required by reason of any risk or obligation assumed by [Bovis] in any part of the Contract Documents.” A “Legal Requirement” was itself [139]*139defined, in relevant part, as “any statute, ordinance, code, law, rule, regulation, permit, agency notice or order, . . . order, decision, determination, or other written requirement, standard or procedure enacted, adopted or applied by any Governmental Authority, or any administrative . . . interpretation thereof, together with all related . . . implementing regulations.” The definition also made clear that “actions taken ‘in order to comply with any Legal Requirement,’ or actions ‘necessary to comply with any Legal Requirement’ shall include actions taken in order to meet a Legal Requirement in the absence of a written order or other such directive mandating such actions.”

Even if work qualified as Extra Work, the contract still specified that “[n]o Extra Work shall be performed except pursuant to a Change Order of LMDC expressly and unmistakably indicating LMDC’s intention to treat the Work described therein as Extra Work, subject to the next paragraph.” The “next paragraph” stated:

“If [Bovis] is of the opinion that any Work ordered to be done as Work pursuant to the Contract Documents is instead Extra Work (‘Disputed Work’), [Bovis] shall nevertheless comply with such order, but shall within 72 hours give written notice thereof to LMDC, stating why [Bovis] deems it to be Extra Work, and shall moreover furnish to LMDC time slips and memoranda as required by Article 7 hereof.”

Finally, the contract contained an “acceleration” provision, which stated:

“If at any time the Work is not progressing in accordance with the CPM Schedule or the Work is likely to be delayed for any reason within the control of [Bovis], or if LMDC otherwise desires to accelerate the Work for any reason, LMDC may give [Bovis] Notice requiring [Bovis] to:
“1.) increase the number of workers and/or the amount or types of machinery, tools, equipment, or materials employed by [Bovis] in or for the performance of the Work; and/or
“2.) schedule and conduct additional lawful work shifts. . . .
“Costs of additional labor, machinery, tools, equip[140]*140ment and/or materials, if any, required by LMDC under this Article:
“3.) shall be borne by [Bovis] as part of the Lump Sum if and to the extent the applicable acceleration of Work was necessary or appropriate to maintain [Bovis]’s compliance with, and progress under, the CPM Schedule as updated pursuant to the Specifications immediately prior to the date of such acceleration; or
“4.) otherwise shall be borne by LMDC as Extra Work.”

In the contract, Bovis agreed to a binding schedule for the work, which required it, among other things, to complete the work by March 15, 2007, “time being of the essence.” However, according to Bovis, factors completely outside of its control made completion by that date impossible. Most significant was what Bovis characterizes as unforeseen interference by regulators monitoring the efficacy of the abatement portion of the project. Bovis asserts that the plans and specifications it relied on in bidding for and entering into the contract provided that the protocol governing the abatement work was embodied in Industrial Code Rule 56 (12 NYCRR 56-1.1) (ICR 56) and that this was the standard that had been followed for decades in asbestos abatement projects in New York City. According to Bovis, ICR 56 does not require that representatives of regulatory bodies perform visual inspections of the ongoing work to ensure compliance with the standard. However, it claims that the relevant regulators, with LMDC’s knowledge and approval, insisted on visual inspections and adopted an unpractically high standard of cleanliness. For example, Bovis alleges that regulators would “fail” any portion of the building that contained pieces of debris larger than a dime, a supposedly arbitrary measurement.

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Cite This Page — Counsel Stack

Bluebook (online)
108 A.D.3d 135, 966 N.Y.S.2d 51, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bovis-lend-lease-lmb-inc-v-lower-manhattan-development-corp-nyappdiv-2013.