DiPizio Construction Co. v. Erie Canal Harbor Development Corp.

120 A.D.3d 905, 991 N.Y.S.2d 683, 2014 NY Slip Op 05710, 2014 WL 3882561, 2014 N.Y. App. Div. LEXIS 5686
Appellate Division of the Supreme Court of the State of New York·Decided August 8, 2014·No. Appeal No. 1·Published

Opinion

Appeal from an order of the Supreme Court, Erie County (Timothy J. Walker, A.J.), entered November 1, 2013. The order granted the motion of plaintiff-petitioner for partial summary judgment and denied the cross motion of defendant-respondent for partial summary judgment.

It is hereby ordered that the order so appealed from is unanimously reversed on the law without costs, plaintiff-petitioner’s motion is denied, defendant-respondent’s cross motion is granted and the fourth and sixth causes of action are dismissed.

Memorandum: Plaintiff-petitioner, DiPizio Construction Company, Inc. (DiPizio), and defendant-respondent, Erie Canal Harbor Development Corporation (Erie), entered into a construction agreement (Contract) pursuant to which DiPizio was to provide construction services for a certain revitalization project. DiPizio thereafter commenced this hybrid breach of contract action and CPLR article 78 proceeding contending, inter alia, that Erie had breached the Contract and the New York State Finance Law. DiPizio thereafter moved for partial summary judgment on liability on the fourth and sixth causes of action, and Erie cross-moved for partial summary judgment dismissing those causes of action. Supreme Court granted DiPizio’s motion and denied Erie’s cross motion. We now reverse.

In the fourth cause of action, DiPizio contended that Erie breached the Contract when it refused to accept DiPizio’s material handling plan (MHP), which sought to dispose of nonhazardous contaminated soil at a facility approved by the New York State Department of Environmental Conservation (DEC) rather than a sanitary or industrial landfill. In the sixth cause of action, DiPizio contended that Erie breached the Contract when it refused to approve DiPizio’s proposal to substitute Chester Gray granite for Virginia Mist granite.

[906] Resolution of this appeal depends on the principles of contract interpretation. “It is well settled that a contract must be read as a whole to give effect and meaning to every term . . . Indeed, ‘[a] contract should be interpreted in a way [that] reconciles all [of] its provisions, if possible’ ” (New York State Thruway Auth. v KTA-Tator Eng’g Servs., P.C., 78 AD3d 1566, 1567 [2010]; see RLI Ins. Co. v Smiedala, 96 AD3d 1409, 1411 [2012]). Therefore, “[e]ffect and meaning must be given to every term of the contract. . . , and reasonable effort must be made to harmonize all of its terms” (Village of Hamburg v American Ref-Fuel Co. of Niagara, 284 AD2d 85, 89 [2001], lv denied 97 NY2d 603 [2001]; see Matter of El-Roh Realty Corp., 74 AD3d 1796, 1799 [2010]). It is likewise well settled that “[t]he interpretation of an unambiguous contractual provision is a function for the court . . . , and [t]he proper inquiry in determining whether a contract is ambiguous is whether the agreement on its face is reasonably susceptible of more than one interpretation ... To be entitled to summary judgment, the moving party has the burden of establishing that its construction of the [contract] is the only construction [that] can fairly be placed thereon” (Nancy Rose Stormer, P.C. v County of Oneida, 66 AD3d 1449, 1450 [2009] [internal quotation marks omitted]).

We conclude that DiPizio failed to meet its burden on the motion and that Erie met its burden on the cross motion by establishing that its construction of the Contract is the only construction that can fairly be made. The “Contract Documents” included, inter alia, the Contract, the project manuals and addenda, the information to bidders and the special conditions. The provisions concerning the MHP are found in Project Manual Section 312003 Part 3.1, which deals with the identifying information that was to be included in the MHP Pursuant to Part 3.1(A) (7), the information contained in the MHP was to include identification of the primary and backup facilities for disposal of nonhazardous contaminated soil. That provision of the Contract states that “[t]he primary and backup facilities may be a recycling/treatment facility or a [DEC] approved lined landfill or other facility approved by [DEC] to accept this material” (emphasis added). Part 3.2 specifies the manner in which contaminated soil stockpiles and excavated materials are to be removed from the site. Part 3.2 (E) provides that “[a]t a minimum, if soil testing indicates the excavation material is not hazardous, based on the known contaminants present[,] these wastes must be disposed of at a sanitary or industrial landfill permitted to receive such wastes” (emphasis added).

DiPizio sought to dispose of the nonhazardous contaminated [907] soil at a DEC approved facility that was not a sanitary or industrial landfill. DiPizio contended that, inasmuch as Part 3.1(A) (7) permits the use of such a facility, Erie’s refusal to approve of that disposal plan constitutes a breach of the Contract. The Contract, however, also incorporated the terms of all of the information sent to bidders, including responses to requests for information (RFIs) that were sent to bidders before DiPizio executed the Contract. In one such response, Erie’s project manager specifically stated that “[f|or excess material requiring removal from site[,] . . . ‘these wastes must be disposed of at a sanitary or industrial landfill permitted to receive such wastes’ ” (emphasis added). Moreover, in response to two different RFIs made by DiPizio before DiPizio executed the Contract, Erie’s project manager clearly and unambiguously stated that any plan to use DEC approved facilities in lieu of landfills was in violation of Section 312003 Part 3.2 (E) and was “not consistent with the project requirements.”

To the extent that DiPizio and the court relied upon an internal letter between Erie’s project manager and Erie recognizing that the reason for DiPizio’s low bid was its desire to seek an acceptable DEC alternative to the landfill, we conclude that the document was not part of the Contract Documents and is thus extrinsic evidence that we may not consider where, as here, the Contract is not ambiguous (see South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272, 278 [2005]). It is well settled that “ ‘extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face’ ” (id.).

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DiPizio Construction Co. v. Erie Canal Harbor Development Corp., 120 A.D.3d 905, 991 N.Y.S.2d 683, 2014 NY Slip Op 05710, 2014 WL 3882561, 2014 N.Y. App. Div. LEXIS 5686 (N.Y. Ct. App. 2014).

120 A.D.3d 905 (DiPizio Construction Co. v. Erie Canal Harbor Development Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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