W&W Steel, LLC v. Port Authority

142 A.D.3d 478, 37 N.Y.S.3d 80

This text of 142 A.D.3d 478 (W&W Steel, LLC v. Port Authority) 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
W&W Steel, LLC v. Port Authority, 142 A.D.3d 478, 37 N.Y.S.3d 80 (N.Y. Ct. App. 2016).

Opinion

Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered on or about August 25, 2014, which granted defendant’s motion to dismiss the complaint for lack of subject matter jurisdiction, unanimously affirmed, without costs. Appeal from order, same court and Justice, entered on or about February 23, 2015, which, insofar as appealed from, denied plaintiff’s purported motion to renew, unanimously dismissed, without costs, as taken from a nonappealable order.

The National September 11 Memorial and Museum at the World Trade Center Foundation, Inc. (National Memorial) is responsible for designing, operating, and maintaining the World Trade Center Memorial, the Memorial Museum, and the Museum Pavilion. National Memorial hired Bovis Lend Lease (US) Construction LMB, Inc. (Lend Lease) as its construction manager in connection with the construction of the various 9/11 memorial sites.

National Memorial, through Lend Lease, entered into a contract with plaintiff W&W Steel, LLC, dated October 30, 2009, in which W&W agreed to furnish and install the structural steel for the Museum Pavilion for the amount of $7,289,240, subject to additions and deductions for changes and extra work. The contract provided that W&W would commence work on September 1, 2009; construction was to begin on March 16, 2010 and was to be completed, with certain stated exceptions, within 80 consecutive working days.

Months later, in an assignment agreement dated as of October 30, 2009, National Memorial assigned to defendant the Port Authority all of its rights and obligations under the contract; both the Port Authority and W&W Steel signed the [479]*479assignment agreement in March 2010. The assignment provided that, in the event of a dispute, the parties would resort to the dispute resolution mechanisms set forth in the contract. Article 28 of the contract, in turn, outlined the dispute resolution process, providing that the parties were to try “through their respective Project level representatives” to reach “an amicable settlement” of any dispute. If the parties were unable to reach a settlement, the dispute was to be submitted to “responsible senior management of each party who [were] not directly involved” with the contract, who were obliged to attempt to resolve the dispute within 60 days. If attempt at resolution also failed, the parties were required to authorize a senior employee designated by National Memorial (or, postas-signment, by defendant the Port Authority) to arbitrate a resolution. Moreover, the resolution was subject to “de novo review in a court of competent jurisdiction” after substantial completion of the project. The assignment did not contain any provision, express or otherwise, regarding waiver of sovereign immunity.

W&W alleges that it was directed to perform numerous changes and additions to its scope of work. W&W further alleges that, during the course of the project, the Port Authority actively and unreasonably delayed W&W in the performance and completion of its work, and as a result, W&W’s labor force had to remain on site for 195 calendar days longer than bid and planned.

As required by article 19 of the contract, W&W submitted for approval a number of “change orders” reflecting additional charges for uncontracted-for work. W&W alleges that the Port Authority approved change orders totaling $5,014,744 (of which $2,613,475 remains unpaid) and failed to process another $1,151,227 in pending change order requests, for a total of $3,764,702 in unpaid costs.

W&W claims that it sought to resolve its dispute over the change orders with the Port Authority at the project and senior management levels. W&W then requested on at least three occasions, in February through May 2011, that the Port Authority submit the claims to a designated arbitrator for decision; however, the Port Authority did not do so. Further, on January 11, 2012, W&W submitted a request for an equitable adjustment change order seeking $4,791,146 in additional costs not included in the change orders, but the Port Authority did not respond.

On or about March 30, 2012, W&W commenced a suit against the Port Authority and others (index No. 651025/12) (the first [480]*480W&W action), alleging claims for breach of contract, unjust enrichment, and quantum meruit. On November 27, 2012, the IAS court granted the Port Authority’s motion to dismiss the first W&W action, rejecting W&W’s argument that the various letters it had sent to the Port Authority constituted a notice of claim, and also rejecting W&W’s argument that the Port Authority should be estopped from invoking statutory notice requirements as a result of its conduct.

On November 30, 2012, W&W served the Port Authority with a notice of claim, detailing a claim for approximately $8.6 million. On December 14, 2012, W&W re-served the Port Authority with a revised notice of claim. Both versions of the notice of claim stated that construction was “delayed until June 4, 2010, and substantial completion was not achieved until April 4, 2011.”

On February 19, 2013, W&W moved to amend the complaint in the first W&W action to reassert claims against the Port Authority. The Port Authority opposed, arguing that the notice of claim was improper because W&W had not served it before commencing the action. The Port Authority also argued that W&W’s claims were barred by the one-year limitations period set forth in section 7107 of McKinney’s Unconsolidated Laws of New York (L 1950, ch 301, § 7).

On March 14, 2013, before the court had decided W&W’s motion to amend in the first W&W action, W&W filed a summons with notice in this action (index No. 650913/13). On or about April 10, 2013, the parties entered a stipulation in the first W&W action withdrawing W&W’s motion to amend its pleading.

On May 29, 2013 — more than 60 days after serving its notice of claim — W&W filed the verified complaint in this action. As in the first W&W action, W&W brought claims against the Port Authority for breach of contract, unjust enrichment, and quantum meruit, and added a claim for violation of State Finance Law § 139-f. W&W sought damages in the amount of $8,555,848.

The Port Authority moved under CPLR 3211 (a) (2) to dismiss this action for lack of subject matter jurisdiction. The Port Authority argued that W&W’s claims accrued “sometime in 2011,” as W&W’s work was substantially completed on April 4, 2011 and it began complaining about costs and delays even before that; accordingly, the Port Authority argued, no part of W&W’s claims accrued within one year before the action was commenced in March 2013. Thus, the Port Authority maintained, W&W failed to comply with the condition precedent to [481]*481suit contained in McKinney’s Unconsolidated Laws of NY § 7107.

The IAS court granted the Port Authority’s motion. Citing Yonkers Contr. Co. v Port Auth. Trans-Hudson Corp. (93 NY2d 375 [1999]), the IAS court held that “[t]he requirement to bring an action [against the Port Authority] within one year . . . [is] a condition precedent to suit, which cannot be tolled.” The court rejected W&W’s argument that its cause of action “did not accrue until the Port Authority breached the contract by refusing to issue payments for change orders or to accept W&W’s Request for Equitable Adjustment,” finding that W&W’s argument was “belied by the complaints it filed in this action and the [first W&W] [a]ction,” which W&W had filed more than a year earlier.

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Cite This Page — Counsel Stack

Bluebook (online)
142 A.D.3d 478, 37 N.Y.S.3d 80, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ww-steel-llc-v-port-authority-nyappdiv-2016.