Fehlhaber Corp. & Horn Construction Co. v. State

65 A.D.2d 119, 410 N.Y.S.2d 920, 1978 N.Y. App. Div. LEXIS 13067
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 7, 1978
DocketClaim No. 50837
StatusPublished
Cited by25 cases

This text of 65 A.D.2d 119 (Fehlhaber Corp. & Horn Construction Co. v. State) 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
Fehlhaber Corp. & Horn Construction Co. v. State, 65 A.D.2d 119, 410 N.Y.S.2d 920, 1978 N.Y. App. Div. LEXIS 13067 (N.Y. Ct. App. 1978).

Opinion

OPINION OF THE COURT

Mikoll, J.

Fehlhaber Corporation and Horn Construction Co., Inc., a joint venture, on its low bid of $37,377,353.40 was awarded a public contract for the construction of the main platform foundation at the South Mall Project. The unit price contract entered into on July 5, 1966, provided for a September 1, 1968 completion date. About June 1, 1968, it became apparent that the contract work would not be completed as originally specified and the parties began discussions which culminated in February, 1969, in the signing of a modification agreement, dated and effective as of October 1, 1968. The new agreement provided that all work performed after October 1, 1968 was to be paid on a cost plus fixed fee basis and extended the completion date until March 1, 1970. The modification agreement contained a reservation by the claimant of its right to submit certain claims for damages arising out of the original contract period but limited the State’s liability for such claims to $1,200,000. Subsequently, the parties entered into a supplemental agreement, dated February 28, 1970, which increased the fixed fee, deleted a portion of the contract work and, again, extended the completion date until December 31, 1970. On April 30, 1971, the State and claimant, by mutual consent, [122]*122terminated the agreement and the remaining work was transferred to the Walsh-Corbetta Company.

The claimant was paid the total sum of $68,960,837.70 for work performed under the original contract and the subsequent agreements.

The contract for the foundation work was one of many construction contracts involved in the construction of the South Mall Project. A superstructure was to be erected on the foundation. Although, when claimant’s contract was awarded, the superstructure contract had not been let, the State elected to proceed with the foundation work under a "fast tracking” plan. "Fast tracking” was a procedure whereby the State would let certain contracts as soon as the design for them was completed without waiting for the design of the entire project to be completed. The State thereby hoped to economize and blunt the effects of inflation by the early performance of such contracts. At the time the claimant performed its contract, other contractors were also performing work at the site.

Claimant did the pile driving work and subcontracted the excavation work, the reinforcing steel work and part of the concrete work. The pile driving was virtually completed on schedule. However, only 41% of the concrete work was finished as of the original completion date. Approximately two thirds of the total work was performed by the September 1, 1968 completion date.

In its claim filed March 31, 1969, claimant sought $6,000,-000 in damages alleging that the State caused various delays and breached the original unit price contract. In particular, the claim alleged that the State: (1) failed and neglected to supervise progress and co-ordinate the work of other contractors performing work at the site; (2) made extensive changes and revisions in the plans and drawings for the work to be performed which were far beyond the amount and kind of changes to be reasonably anticipated; (3) failed to deliver to claimant physical access to large portions of the work areas on the project site; (4) caused further delays in claimant’s work by making changes in the mechanical and electrical installations; (5) made design changes in the foundation contract plans and specifications; (6) caused claimant further delay by taking an unreasonable time for processing and approving shop drawings; and (7) improperly rejected certain of claimant’s work as being improper and unsatisfactory and compelled claimants to redo such work.

[123]*123Claimant alleged the delays, design changes and interference resulted in four general categories of damages designated as claim items: (la) bar reinforcement: (lb) concrete and forms [subcontractors]; (lc) concrete and forms [contractor]; (2) unreimbursed overhead; (3) misclassification of excavation; and (4) change order allowances. An additional claim item for rescinded pumping payments is not involved on this appeal.

The Court of Claims in its decision found that there was proof of "three major sources of delay interference and failure to coordinate”: numerous changes of design, failure to remove or relocate existing utility installations, and failure to give claimant access to work areas. The trial court apportioned responsibility for the delays and found the State to be liable for 75% of the damages caused by the delays and the claimant to be responsible for 25%. The court found that the claimant incurred increased costs in the amount of $2,896,503 because of the delays and interferences and reduced this amount by 25% to reflect its finding on apportionment. The court further reduced the award to $1,200,000 plus interest in giving effect to the limitation of liability clause contained in the modification agreement.

The Court of Claims applied the 75%-25% apportionment forumula to claim item (la), bar reinforcement (with two exceptions); claim item (lc), contractor’s concrete and forms; and claim item (2), unreimbursed overhead. The court awarded the full amount under claim item (4), change order allowances, without applying the apportionment formula. The court rejected claim item (lb), the subcontractor’s concrete and forms, and claim item (3), misclassification of certain excavation work.

A—LIABILITY:

On this appeal the State contends that the Court of Claims erred in finding that the State breached its contract with claimant by interfering with claimant’s performance (1) through an excessive number of design changes; (2) in failing to grant access to areas within which claimant was required to perform work, and (3) in failing to remove utility lines. We disagree.

The trial court properly found, on the evidence adduced at trial, that the State breached its contractual duty to provide claimant with a reasonable opportunity to perform its work without interference or obstruction from the State. This court has stated the applicable law with respect to public construc[124]*124tion contracts as follows: "The rule is well established that a contractor is entitled to a reasonable opportunity to perform his contract without obstruction or interference and that the State may be held liable for failure to furnish such opportunity unless it has relieved itself by express language in the contract [citation omitted]”. (Peckham Road Co. v State of New York, 32 AD2d 139, 141, affd 28 NY2d 734.)

The claimant must prove his claim by a fair preponderance of the evidence (Zara Contr. Co. v State of New York, 7 AD2d 956, 957-958, mot for lv to app den 7 NY2d 706).

I. EXCESS NUMBER OF DESIGN CHANGES:

The evidence established that the State’s so-called "fast tracking” plan of construction required numerous design changes. When the bids on the superstructure came in too high, they were rejected. The State then redesigned the superstructure at the same time claimant was performing the foundation work. The ensuing superstructure design changes ultimately necessitated design changes in the foundation work. Moreover, prior to bidding, the contractor planned the job from contract drawings received from the State. Shop drawings detailing the work to be done were prepared from the contract drawings. Thus, changes in the contract drawings necessarily involved the shop drawings.

Claimant’s chief witness, Mr.

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Bluebook (online)
65 A.D.2d 119, 410 N.Y.S.2d 920, 1978 N.Y. App. Div. LEXIS 13067, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fehlhaber-corp-horn-construction-co-v-state-nyappdiv-1978.