WELSBACH ELECTRIC CORP v. JUDLAU CONTRACTING INC (2019)

Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered July 2, 2018, which granted defendants' motion to dismiss the third, fourth, fifth and seventh causes of action of the amended complaint, unanimously modified, on the law, to reinstate the seventh cause of action, and otherwise affirmed, without costs.

The causes of action relating to additional work, delay and acceleration of scheduled work were all properly dismissed, as the alleged cause of the delays was within the scope of the “no damages for delay” provision of the agreement between plaintiff and defendant Judlau Contracting, Inc. (JCI) (see Corinno Civetta Constr. Corp. v. City of New York, 67 N.Y.2d 297, 309, 313–314, 502 N.Y.S.2d 681, 493 N.E.2d 905 [1986]; Universal/MMEC, Ltd. v. Dormitory Auth. of State of N.Y., 50 A.D.3d 352, 353, 856 N.Y.S.2d 560 [1st Dept. 2008]).  Plaintiff failed to adequately allege either bad faith or a breach of a “fundamental, affirmative obligation” expressly imposed on defendants by the agreement (see Corinno Civetta, at 313, 502 N.Y.S.2d 681, 493 N.E.2d 905; Dart Mech. Corp. v. City of New York, 68 A.D.3d 664, 664, 891 N.Y.S.2d 76 [1st Dept. 2009]; Polo Elec. Corp. v. New York Law Sch., 114 A.D.3d 419, 419, 979 N.Y.S.2d 566 [1st Dept. 2014]).

Since damages caused by delays are precluded by the agreement between plaintiff and JCI, plaintiff also cannot recover damages under the bond due to such delays (see Varlotta Constr. Corp. v. Sette–Juliano Constr. Corp., 234 A.D.2d 183, 183, 651 N.Y.S.2d 484 [1st Dept. 1996]).  However, the bond, by its terms, covers payment for wages and compensation for labor performed and services rendered in furtherance of the construction project.  Plaintiff's first cause of action, which defendants have not moved to dismiss, concerns nonpayment for services rendered.  Accordingly, plaintiff's seventh cause of action, against the payment bond, should not have been dismissed.