Picciano v. Olympic Construction Co.

112 A.D.2d 604
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 18, 1985
StatusPublished
Cited by3 cases

This text of 112 A.D.2d 604 (Picciano v. Olympic 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
Picciano v. Olympic Construction Co., 112 A.D.2d 604 (N.Y. Ct. App. 1985).

Opinion

Per Curiam.

Cross appeals (1) from a judgment of the Supreme Court in favor of defendants, entered June 6, 1984 in Essex County, upon a verdict rendered at Trial Term (Mercure, J.), and (2) from an order of said court, entered June 6, 1984 in Essex County, which computed the amount of interest on the verdict.

This litigation involves rival breach of contract actions by a general contractor and its subcontractor. In the summer of 1977, the State Department of Environmental Conservation (DEC) entered into three contracts with plaintiff Louis N. Picciano and Son (Picciano). Two of the contracts required Picciano to install machinery and piping for snowmaking at Whiteface Mountain in Essex County and at Gore Mountain in Warren County; the third involved Picciano’s construction of sanitary facilities at Whiteface Mountain. Each contract bestowed broad power on DEC’S engineer to determine the meaning of specifications and whether the work performed conformed to the contract. Picciano was obligated to bring nonconforming work up to the engineer’s standards.

Picciano in turn entered into three separate subcontracts with defendant Olympic Construction Company, Inc. (Olympic). By those agreements, Olympic undertook to excavate trenches on Whiteface Mountain and Gore Mountain in which Picciano would lay pipe, to backfill those trenches and to build a water supply and waste water disposal system at Whiteface Mountain. The subcontracts provided for monthly payments to Olympic and contained clauses requiring that its work conform to the prime contracts between DEC and Picciano.

Olympic commenced excavation at Whiteface Mountain in June of 1977. The prime contracts provided that the trenches in which Picciano laid pipe were to afford 3 1/2 feet of cover, except in areas of continuous rock where one foot of cover sufficed. Representatives of Picciano and DEC inspected the work daily and, but for minor disputes which were resolved, accepted Olympic’s work.

Nevertheless, on September 10, 1977, DEC shut down the Whiteface Mountain project and demanded that all pipe, [605]*605including that previously positioned and backfilled, be set at a depth of 3 1/2 feet. Picciano and Olympic both objected vehemently. The next day, Louis Picciano and Bernard Gurney, on behalf of Picciano, participated in a conference telephone call with Leroy Miller and Gary Stowell, Olympic’s vice-president and secretary-treasurer, respectively. It is undisputed that Picciano demanded that Olympic immediately recruit additional men and machinery to comply with DEC’s directive that the trenches be redone and that Olympic balked, asserting that it was financially unable to do so. Olympic’s two representatives testified at trial that Louis Picciano then promised, "I can get the money, you get the men and equipment.” Picciano, on the other hand, contends that it only agreed to pay for removing and relaying the pipe, work not described in the original contracts, and that it did not undertake to pay Olympic for all the extra work which redigging the trenches entailed.

Olympic then proceeded to do the work ordered by DEC, but Picciano, believing it was not obliged to, refused to pay Olympic for all the rework and also did no make full payment on the subcontracts; as a consequence, Olympic encountered severe cash-flow problems. In early October, Olympic threatened to leave the job site if Picciano continued to fail to honor its requisitions for payment. To get funds, Olympic, on October 15, 1977, executed the following "Memorandum of Understanding” drafted by Picciano’s attorney:

"Whereas, Olympic needs money to continue to perform its work under its contract with Picciano, it is hereby agreed between the parties hereto that:
"1. Picciano will pay Olympic for the equipment and operator costs of removing and relaying the pipelines limited to the required "rework’ based on paper, verified requisitions approved by Picciano for "rework’ performed during 1977.
"2. It is expressly understood and agreed by the parties hereto that these payments are being made without admission of fault or liability on the part of either party and without prejudice to pursue any and all remedies available to either party in the future.
"3. Olympic agrees to proceed to perform its work under its contract with Picciano, immediately.” Thereafter, Picciano issued several joint checks to Olympic and its suppliers, but payments to Olympic were not forthcoming. On December 5, 1977, because of inclement weather and lack of compensation, Olympic discontinued working. Evidence introduced at trial [606]*606indicated that although Olympic had completed 98% of the Gore Mountain project and only seeding and other small details remained unfinished on the Whiteface Mountain sanitary contract, Olympic had not been paid in full on these projects either. During the winter months, each party charged the other with breaching the contracts and codefendant Aetna Casualty and Surety Company rejected Picciano’s claim that, as surety for Olympic, it was liable to Picciano. The following spring, an interrelated company of Picciano completed all of the subcontracts.

Picciano then instituted suit for breach of contract, alleging that Olympic was bound under the subcontracts to perform the rework regardless of whether DEC’s order to do so was erroneous. Olympic countersued, charging that Picciano’s failure to pay for the rework breached the oral contract reached during the telephone conference on September 11, 1977. The actions were then consolidated and tried before a jury, which rendered a unanimous verdict of no cause of action on Picciano’s claim and awarded Olympic damages totaling $208,782.54; when the verdict, which was in the form of a questionnaire agreed upon by the court and counsel, was announced, the forelady observed that no award for lost profits was being made on the Whiteface Mountain snowmaking contract. Picciano’s motion to set aside the verdict and for related relief was denied as was Olympic’s motion to have interest awarded at the legal rate and computed from January 1, 1978, the date of breach, rather than June 1981, the date of payment. These cross appeals followed.

Initially, it should be noted that we are obliged to view the evidence in the light most favorable to the successful party (Matter of Kornblum Metals Co. v Intsel Corp., 38 NY2d 376, 379) and that a jury verdict is not to be disturbed unless it "cannot be supported by any fair interpretation of the evidence” (Palermo v Gambitsky, 92 AD2d 1005, 1006; see also, Bechard v Eisinger, 105 AD2d 939, 940-941; Walsh v Morris, 88 AD2d 673).

Here, the evidence warranted the jury’s determination that Olympic had satisfactorily performed its obligations under the subcontracts until September 10, 1977. Furthermore, the jury’s conclusion that an oral agreement, for which there was valid consideration, was entered into on September 11, 1977 was also rationally supportable, for there was ample evidence that the prime contract allowed for trenching of one foot in continuous rock; that, despite this, DEC’s engineer unilaterally demanded a depth of 3 1/2 feet on all pipe; and the view [607]*607of Olympic’s expert that this order issued by the State’s engineer was unauthorized and nonbinding (see, Davis, Inc. v Merritt-Chapman & Scott Corp., 27 AD2d 114, affd 23 NY2d 872).

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112 A.D.2d 604, Counsel Stack Legal Research, https://law.counselstack.com/opinion/picciano-v-olympic-construction-co-nyappdiv-1985.