Nassau Roofing & Sheet Metal Co. v. Facilities Development Corp.

70 A.D.2d 1021, 418 N.Y.S.2d 216, 1979 N.Y. App. Div. LEXIS 12655

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: June 21, 1979
• Status: Published

Opinions

— Appeal from an order of the Supreme Court at Special Term, entered July 13, 1978 in Albany County, which granted plaintiff’s motion for a preliminary injunction. Plaintiff Nassau Roofing & Sheet Metal Co., Inc. (hereinafter Nassau Roofing) seeks to enjoin defendant Facilities Development Corporation (hereinafter FDC) from disqualifying the plaintiff as low bidder on future construction contracts because plaintiff allegedly defaulted in the performance of an earlier contract with FDC relating to roofing work for the Lincoln Hospital in Bronx, New York. Evidence was introduced at a hearing on the alleged default showing that substandard materials were used on the Lincoln Hospital roof project, causing the roof to blister, that plaintiff violated the specifications by using asphalt and pitch materials in combination, causing a failure in the roofs waterproofing, and that moisture was allowed to collect within the roof structure, eventually creating numerous "tunnel blisters.” Plaintiff commenced the instant action, alleging bias in the hearing officer and claiming that the record lacked substantial evidence to support the FDC’s conclusion that the roofs defects were caused by Nassau Roofing. Special Term ruled that EDO’s action was arbitrary and capricious and awarded plaintiff a preliminary injunction enjoining FDC from disqualifying plaintiff as low bidder from other public improvements on the basis of its alleged default in performance of its Lincoln Hospital contract. On appeal FDC contends that Special Term erred in granting the preliminary injunction. We agree. In essence, plaintiff has alleged grounds for CPLR article 78 relief. Ordinarily, injunctive relief will not lie where there is an adequate remedy at law in a proceeding under article 78 (Kane v Walsh, 295 NY 198, 206; Southern Leasing Co. v Ludwig, 217 NY 100, 103). However, where a party seeks to preserve the status quo during the pendency of an article 78 proceeding and the remedy at law does not provide a "full measure of relief’, a preliminary injunction is appropriate supplemental relief (Matter of O’Reilly v Grumet, 308 NY 351, 358; Matter of Policemen’s Benevolent Assn, of Westchester County v Board of Trustees of Vil. of Croton-On-Hudson, 21 AD2d 693, 694; CPLR 6301). However, while the grant of a preliminary injunction lies within the discretion of the court, it may properly issue only when the plaintiff demonstrates "(1) likelihood of his ultimate success on the merits; (2) irreparable injury to him absent granting of the preliminary injunction; and (3) a balancing of equities [citations omitted]” (Albini v Solork Assoc., 37 AD2d 835). Plaintiff has shown that it has been denied contracts where it qualified as the lowest bidder due to the actions of the FDC. Plaintiff has thereby been caused irreparable harm since its damages cannot be ascertained and the legal remedy is inadequate to prevent the harm pending determination of the litigation. Nevertheless, we conclude that Special Term abused its discretion in granting the preliminary injunction. The plaintiff has failed to demonstrate a reasonable probability of being successful on the merits. The record establishes that FDC’s proof consists of evidence from an independent roofing expert that the substandard condition of the roof was due to the plaintiff’s improper installation. This testimony supports a finding of substantial evidence and/or a rational basis for the FDC decision and suggests that there is little likelihood that plaintiff would be successful on the merits. Further, it appears that plaintiff has also failed to meet the "balancing of the equities” test. In order for a preliminary injunction to issue it must be shown that the irreparable injury to be sustained by the plaintiff is more burdensome to it than the harm caused to defendant through imposition of the injunction (Edgeworth Food Corp. v Stephenson, 53 AD2d 588). Here, the granting of the preliminary injunction will adversely affect FDC’s ability to let contracts with assurance of the contractor’s reliability during pendency of this litigation in regard to construction work it was given a legislative mandate to expedite. Substantial harm to the operation of FDC is therefore probable. Maintainence of the status quo is the object of the grant of provisional injunctive relief (Chrysler Corp. v Fedders Corp., 63 ÁD2d 567, 569). It does not appear that the status quo would be maintained on these facts in the instant situation. The order of Special Term should be reversed. Order reversed, on the law and the facts, without costs; motion denied and matter remitted for further proceedings not inconsistent herewith. Sweeney, J. P., Staley, Jr., and Mikoll, JJ., concur; Kane and Herlihy, JJ., dissent and vote to affirm in separate memoranda.