Mid-State Precast Systems, Inc. v. Corbetta Construction Co.

202 A.D.2d 702, 608 N.Y.S.2d 546, 1994 N.Y. App. Div. LEXIS 1797
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMarch 3, 1994
StatusPublished
Cited by18 cases

This text of 202 A.D.2d 702 (Mid-State Precast Systems, Inc. v. Corbetta Construction Co.) 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
Mid-State Precast Systems, Inc. v. Corbetta Construction Co., 202 A.D.2d 702, 608 N.Y.S.2d 546, 1994 N.Y. App. Div. LEXIS 1797 (N.Y. Ct. App. 1994).

Opinion

White, J.

Cross appeals from a judgment of the Supreme Court (Harlem, J.) in favor of plaintiff, entered June 6, 1991 in Broome County, upon a decision of the court, without a jury.

The centerpiece of this appeal is the subcontract between plaintiff and defendant Corbetta Construction Company, Inc., the general contractor on the second phase of the construction of the 2.4 million square foot headquarters building for Union Carbide Corporation. Corbetta’s responsibilities included the excavation of the foundation and the erection of the superstructure. Plaintiff’s task was to manufacture precast concrete planks and to erect them on shoring Corbetta had put in place. The erection of the planks was slated to commence on November 1, 1978 and was to be completed within 12 months. The starting date was postponed to February 12, 1979 as the consequence of delay encountered when Union Carbide’s engineers determined that unforeseen subsurface conditions made it necessary to pour the concrete foundation footings to a [703]*703much greater depth than originally anticipated. Due to unusual weather conditions, the starting date was further delayed to late March 1979. The postponement of the starting date led to an extension of the completion date to March 1980. Plaintiff, however, did not complete its performance until August 28, 1980.

Plaintiff commenced this action to recover funds retained by Corbetta, compensation for alleged delays and extra work, and a share of an equitable adjustment settlement received by Corbetta from Union Carbide to compensate it for the delay in the foundation work. Corbetta counterclaimed for, inter alia, compensation for delays caused by plaintiff and for allegedly substandard work. At the conclusion of an eight-week nonjury trial at which more than 1,000 exhibits were received into evidence, Supreme Court issued a comprehensive decision awarding plaintiff $750,762 on its claims and Corbetta $348,972 on its counterclaims. Plaintiff entered a $401,790 judgment and these cross appeals challenging various components of Supreme Court’s awards ensued.

The first component challenged pertains to the equitable adjustment agreement between Corbetta and Union Carbide. Under this agreement, Corbetta received $6.1 million to compensate it for the extra costs it incurred in constructing the foundation. Plaintiff claims that it is entitled to a portion of this sum because $2 million was earmarked for the subcontractors and is being held in trust for their benefit.

Supreme Court found that the subcontractors who were delayed by the foundation problem were the intended beneficiaries of this fund and, pursuant to a formula it devised, awarded plaintiff a proportionate share of the fund which totaled $150,570. Defendants maintain that plaintiff was contractually not entitled to delay damages and, alternatively, that it did not establish its entitlement to such damages by competent proof.

Initially, we note that the broad “no damage for delay” clause contained in the subcontract is inapplicable to the equitable adjustment agreement because the delay caused by the foundation problem was not within the contemplation of the parties when they entered into the contract (see, Corinno Civetta Constr. Corp. v City of New York, 67 NY2d 297, 310). Assuming that Corbetta is holding these funds in trust, there is nothing in the agreement relieving the subcontractors from the obligation of establishing their claims. In fact, insofar as Corbetta’s claim was concerned, Union Carbide had the right [704]*704to verify the accuracy of cost data supporting it and, if it was found to be inaccurate, to terminate the agreement.

A contractor wrongfully delayed by its employer must establish the extent to which its costs were increased by the improper acts because its recovery will be linked to damages actually sustained (see, Berley Indus. v City of New York, 45 NY2d 683, 687). While it is recognized that such damages are difficult to ascertain, there must be a definite and logical connection between what is proven and the damages sought to be recovered (see, Scalamandre & Sons v Village Dock, 187 AD2d 496, lv denied 81 NY2d 710). Customarily, such damages are calculated on a quantum meruit basis by adding an allowance for overhead and profit to the actual job costs less the amounts paid (see, Whitmyer Bros. v State of New York, 47 NY2d 960, 962). In this instance, plaintiffs proof consisted of a letter wherein it stated that it had sustained damages of $1,065,982 from the start of the contract to August 31, 1980. In our opinion, because this letter was presented without supporting documentation or verification and consists primarily of plaintiffs estimates of its increased costs, it does not constitute adequate proof of damages because estimates are subjective as well as speculative (see, Kenford Co. v County of Erie, 67 NY2d 257, 261). Accordingly, Supreme Court should not have relied on this proof and should not have awarded plaintiff a share of the equitable adjustment award.

The next point of contention is Supreme Court’s award of $48,000 in liquidated damages to plaintiff. This award was predicated upon the clause in the subcontract which provided that, in the event the erection of the planking was extended beyond 12 months due to the fact that 50,000 square feet of shoring was not available on a weekly basis, the price paid plaintiff would increase "in the amount of $24,000 per month, for each month beyond the total twelve month period caused by interruptions of less than two weeks duration”. Supreme Court found that plaintiff was delayed two months, attributing 1 Vi months to the foundation problem and 1/2 month to shoring delays.

When claims are made for damages for delay, a plaintiff must show, inter alia, that the defendant was responsible for the delay and that the delays caused delay in completion of the contract (see, Manshul Constr. Corp. v Dormitory Auth., 79 AD2d 383, 387). As it is clear that the foundation problem was caused by Union Carbide, Corbetta cannot be charged with that delay (see, Triangle Sheet Metal Works v Merritt & Co., 79 NY2d 801). Thus, the issue distills to whether plaintiff is [705]*705entitled to be compensated for the 1/2-month shoring delay. To resolve this issue we must ascertain the intent of the parties as set forth in the language they utilized in the subcontract (see, Slatt v Slatt, 64 NY2d 966, 967). In our view, the fact that the parties only provided for an increase in price for each month of delay, without any mention of shorter periods of delay, clearly evinces their intent to limit compensation to delays which caused a full month extension of the work (see, General Construction Law § 31). Accordingly, we find that plaintiff is not entitled to an award of liquidated damages for a 1/2-month delay.

Lastly, with respect to the awards to plaintiff, we concur with defendants that Supreme Court’s award for change orders must be reduced to $11,189 to reflect credits to Corbetta for two change orders issued by plaintiff.

We now turn to Corbetta’s claim for delay damages premised on its allegation that plaintiff was responsible for 22 weeks of delay running from February 13, 1980 to July 11, 1980. Supreme Court agreed that plaintiff was responsible for delays but pointed out that every party involved in this project contributed to its late completion.

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Bluebook (online)
202 A.D.2d 702, 608 N.Y.S.2d 546, 1994 N.Y. App. Div. LEXIS 1797, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mid-state-precast-systems-inc-v-corbetta-construction-co-nyappdiv-1994.