LP CIMINELLI INC v. JPW STRUCTURAL CONTRACTING INC (2021)

Defendant, Frey Electric Construction, Co., Inc. (“Frey”) has applied for an order (Motion 4; Doc. 139) granting summary judgment and finding that Plaintiff, LP Ciminelli Inc. (“LPC”) breached its contract with Frey by failing to pay money owed to Frey, and granting Frey judgment on its Counterclaim in the amount of $775,962.76, together with applicable interest. LPC has cross-applied for an order (Motion 5; Doc. 189) granting leave to serve and electronically file an amended reply to Frey's Counterclaim.

BACKGROUND

As set forth in this court's recent Decision and Order, dated December 20, 2021, granting Defendant/Third-Party Plaintiff, JPW Structural Contracting, Inc.’s (“JPW”), application for summary judgment as to liability on its mechanic's lien, this action arises out of claims related to an extensive construction/renovation project performed on the Amphitheater at the Chautauqua Institution (“Amphitheater”), located in Chautauqua, New York (“Project”). The Project involved the complete tear down and reconstruction of the Amphitheater.

In February, 2016, Frey and LPC entered into a subcontract (“Frey Subcontract”) (Docs. 147, 199), pursuant to which Frey agreed to perform certain electrical work on the Project ¹ .

The Project's schedule was aggressive, in order to meet the Chautauqua Institution's (“Owner”) needs; essentially, the work had to be performed over the fall, winter, and spring of 2016 to 2017, to ensure the Amphitheater's availability to the Owner for its summer 2017 programs.

The Project began experiencing delays almost immediately in the fall of 2016, involving issues with the concrete foundations and caisson work being performed by Defendant, Manning-Squires-Henning Co., Inc. (“MSH”) and issues with the structural steel and precast concrete work being performed by JPW. These issues created significant changes to the Project schedule and work flow.

The original Project schedule contemplated a logical and efficient work flow starting with the “back of house” (where the main utility services and system sources were located) and moving through the “front of house.” However, instead of being able to commence work on the “back of house” areas in the fall 2016, as originally anticipated, the structure for the back of house was not complete and enclosed until late-February 2017.

As a result, Frey makes the following contentions:

• Frey was forced to perform both back of house and front of house work concurrently, on an accelerated schedule, and out of sequence;

• The unanticipated changes to the Project's schedule and work flow required Frey to exponentially increase its work force, by sometimes as much as three (3) times what was anticipated under the bid schedule.

• The “interior trades” (of which Frey was one of many) were stacked on top of each other, often in small areas, trying to catch up on the compressed schedule and complete the work by the completion date necessary to meet the Owner's needs.

• Frey was caused to experience prodigious inefficiencies in its work from what was anticipated under the original bid schedule, causing Frey to incur hundreds of thousands of dollars in damages and additional costs.

Frey put LPC on notice of the problems and damages caused by these issues.

DISCUSSION

Frey worked extensively with LPC over several months to prepare its claim, culminating in a final claim, dated December 29, 2017, in the amount of $775,962.76 (“Claim”), which is the subject of Frey's pending motion. Frey prepared the Claim in accordance with the methodology determined by LPC and supported with documents and information deemed sufficient by LPC. The Claim went through approximately five (5) iterations, with each new iteration responding to the specific requests by LPC for additional information and documents.

LPC directed, inter alia, that Frey utilize a method called the “measured mile” to calculate its work inefficiency costs and damages, and Frey followed such approach, including specifically following LPC's direction to use a comparison of Frey's actual labor hours against its original bid for purposes of the “measured mile” inefficiency calculation (“Measured Mile Approach”).

The Claim is voluminous and detailed, consisting of in excess of 620 pages of information and supporting documents and spanning six (6) filings on the NYSCEF System (Docs. 171-176).

The Claim is the product of a tremendous amount of work performed by representatives of Frey independently and working closely with representatives of LPC, at LPC's direction. For instance (and by way of one of many examples), for the “Actual Hours” of each of the Measured Mile items, representatives of Frey meticulously reviewed Frey's daily time sheets (Docs. 174-176; Claim, Tab 16) and color coded the hours spent on each item. Thus, the color coding on the Measured Mile chart at Tab 11 (Doc. 171) can be matched to the color coding of entries on the daily time sheets (Docs. 174-176; Claim, Tab 16; Doc. 180, ¶11). The Claim is supported by certified payroll records, Frey's daily time sheets, and other documents requested by LPC, as noted in the Claim (Doc. 180, ¶6).

Following submission of the Claim, no one at Frey received any feedback from LPC indicating that LPC had any issue with, or objection to, any of its components or any of the supporting documentation (Doc. 180, ¶16).

During his deposition, LPC's Vice President, Steven Dechert, testified regarding the Claim process and the inefficiencies and related problems that plagued the Project. He identified issues with MSH and JPW, such as, inter alia, precast concrete, foundations, caissons, and structural steel, and their impact on the Project. Mr. Dechert acknowledged that these issues caused: (i) Frey's work on the Project to be compressed and out of sequence; (ii) the “stacking of trades” and manpower issues (iii) the compressed schedule; and (iv) substantial inefficiencies for Frey (Doc. 144, pp. pp. 66-67, 69-70, 78-79).

With respect to the Claim process, Mr. Dechert acknowledged, inter alia, that LPC and Frey worked extensively on the claim; and that the final Claim addressed the concerns that LPC had raised with respect to prior iterations of the Claim, including acknowledging that the Measured Mile Approach toward calculating the Claim was consistent with the direction LPC provided (by comparing actual labor hours versus the bid hours) and were adequately supported with a proper form of documentation (certified payroll records and daily time sheets).

Accordingly, based on LPC's own admissions, Frey's work was substantially impacted by issues that were not caused or created by Frey, and Frey submitted a detailed Claim that complied with LPC's direction and was supported by valid and proper documentation as requested by LPC.

Under these circumstances, Frey has made a proper showing of its entitlement to recover the damages set forth in its Claim, as a result of the unanticipated inefficiencies, out-of-sequence work, stacking of trades, and manpower issues created on the Project - none of which were Frey's fault (Corinno Civetta Constr. Corp. v. New York, 67 NY2d 297 [1986]).

Frey's submission demonstrates, inter alia, that it properly adhered to the Claim process required by LPC, such that it has made a prima facie showing of entitlement to the relief requested. Thus, the burden shifted to LPC to produce evidentiary proof sufficient to establish the existence of genuine issues of material fact (Ferluck AJ v. Goldman Sachs & Co., 12 NY3d 316, 320 [2009]).

In opposing summary judgment, LPC contends that Frey has failed to prove that its Claim was caused by lack of productivity forced upon it by forces outside of its control and that Frey sustained damages due to its own acts and/or omissions. LPC also takes issue with Frey's use of the Measured Mile Approach and further contends that Frey breached “time of the essence” and similar provisions of the Subcontract.

LPC relies on the affidavit of Mr. Dechert, sworn to on January 18, 2022 (Doc. 192) for the contention that Frey sustained damages due to its own own acts and/or omissions, as opposed to lack of productivity forced upon it by forces outside of its control.

Mr. Dechert's affidavit begins by acknowledging the very point that Frey makes - i.e., that Frey experienced and was subjected to delays on the Project outside of its control:

I do not dispute that there were delays on the project, including delays attributable to defendants JPW and Manning Squires, which did have an impact on Frey's ability to perform its subcontract work in accordance with the original bid schedule attached to Frey's subcontract as Attachment E. Exhibit 3 at Attach. E.

In addition, I did acknowledge in my deposition that by virtue of the resulting compression of the project scheduling, Frey likely did experience periods of increased workforce, overtime hours, stacking of trades and out of sequence work, which conditions, when and to the extent experienced, would create inefficient working conditions.

(Id., at ¶¶4-5).

Mr. Dechert then seeks to walk back these clear statements by stating that he “never admitted or acknowledged that the foregoing conditions, to the extent experienced, resulted in loss of productivity and other damages to Frey in the amount of its claimed damages of $775,962.76” (Id., at ¶6). Mr. Dechert's use of the phrase “to the extent experienced’ is disingenuous, in light of his having expressly acknowledged at paragraph 5 of his affidavit that “Frey likely did experience periods of increased workforce, overtime hours, [etc.], which ․ would create inefficient working conditions” (Id., at ¶5).

LPC's contention that Frey sustained damages due to its own acts and/or omissions is belied by the record. It is undisputed that LPC never asserted to Frey that it was the cause of any delays or related issues on the Project. LPC never sent Frey a single notice, letter, electronic mail, or the like claiming that Frey was being inefficient or otherwise causing delay or disruption on the Project. Indeed, Mr. Dechert testified extensively to the Project's delays and never once attributed any of them to Frey (Doc. 144, pp. 66-67, 69-70, 78-79). Such testimony culminated, as follows:

Q Do you remember a discussion with Frey making a claim in relation to those issues [i.e., inefficiencies and stacking of trades]?

A. Do I recall a conversation I had with Frey about making a claim?

Q. Yes.

A. Conversations that I had with Kent [Frey] and Jack about these issues, the inefficiencies and the stacking of the trades, and -- it was -- you know, in our minds, it was very clear cut that the significant delays were caused by this precast concrete [i.e. JPW's work], and, to a lesser extent, the delays on the foundations and the caissons [i.e. MSH's work].

And, you know, I do recall a conversation I had with Kent [Frey] that this is what happened; this is why, you know, we're behind the eight ball, this is why you're behind the eight ball; and if you feel like you need to make a claim and submit a claim, submit a claim.

(Id., at pp. 78-79).

This testimony is crystal clear on its face, and attributes inefficiencies and stacking of trades exclusively to JPW and MSH.

Turning to the Measured Mile Approach, Mr. Dechert testified at his deposition that Frey had provided certain information LPC requested to substantiate the Claim, but “I can't speak to the validity of the data ․” (Doc. 144, pp. 125-26). Mr. Dechert also confirmed at his deposition that the Measured Mile Approach is the approach LPC directed Frey to follow and that it constitutes a “comparison between the bid estimate and the actual hours” (Id., at p. 127).

Accordingly, subsequent statements by Mr. Dechert criticizing the Measured Mile Approach as an inappropriate basis to have calculated the Claim constitute an improper “attempt to create feigned issues of fact designed to avoid the consequences of the earlier testimony” (Sunshine Care Corp. v. Warrick, 100 AD3d 981, 983 [2d Dept 2012] [rejecting affidavit “as an attempt to create feigned issues of fact designed to avoid the consequences of the earlier testimony”]; see also, Chrisman v. Syracuse Soma Project, 192 AD3d 1594, 1596 [4th Dept 2021] [“averments in the affidavit ․ which contradicted his deposition testimony, clearly constituted an attempt to avoid the consequences of [his] prior deposition testimony by raising feigned issues of fact, and was [thus] insufficient to avoid summary judgment”]).

Whether the Measured Mile Approach is the correct manner in which to have calculated the Claim is irrelevant, because LPC directed Frey to adhere to the Measured Mile Approach, and parties are permitted to chart their own course (see Mitchell v. NY Hosp., 61 NY2d 208, 214 [1984] [“unless public policy is affronted, parties to a civil dispute are free to chart their own litigation course ․ [and] may fashion the basis upon which a particular controversy will be resolved ․ and in doing so they may stipulate away statutory, and even constitutional rights”] [internal punctuation and citations omitted]).

Moreover, LPC is estopped by its own conduct from finding fault with Frey for using the Measured Mile Approach (Matter of Shondel J. v. Mark D., 7 NY3d 320, 326 [2006] [holding that a party will be estopped from asserting a right “․ after having led another to form the reasonable belief that the right would not be asserted, and loss or prejudice to the other would result if the right were asserted. The law imposes the doctrine as a matter of fairness. Its purpose is to prevent someone from enforcing rights that would work injustice on the person against whom enforcement is sought and who, while justifiably relying on the opposing party's actions, has been misled into a detrimental change of position”]; Matter of Marshall v. Pittsford Cent. Sch. Dist., 100 AD3d 1498, 1499 [4th Dept 2012]). In using the Measured Mile Approach, Frey utilized the exact comparison that LPC expressly required.

LPC also relies on the report of its expert, Wayne DeFlaminis, PE (“DeFlaminis Report”) (Doc. 179), which concludes, based on LPC's daily reports, that the Claim does not address what Mr. DeFlaminis refers to as Frey's “self-caused issues” (Id., at § 4.2, p. 46; § 4.2.2. p. 47). However, LPC never shared its daily reports with Frey during the course of the Project (Doc. 141, ¶¶15-16; Doc. 180, ¶¶18-19), and this aspect of the DeFlaminis Report is contradicted by Mr. Dechert's testimony.

The DeFlaminis Report is also inconsistent with LPC's response to Frey's interrogatory requesting that LPC “state with specificity the manner in which it is claimed that Frey's acts or omissions caused its damages.” On October 17, 2019, LPC responded: “[LPC] does not presently have knowledge of any specific manner in which Frey's acts or omissions caused its damages ․” (Doc. 177, Interrogatory No. 2). To the extent LPC became aware of additional responsive information, it had a continuing duty to supplement its interrogatory responses. However, LPC has never supplemented its response to Interrogatory 2.

The court also rejects Mr. DeFlaminis’ conclusion that Frey failed to use a proper approach to calculate the Claim, having previously determined that Frey followed the precise approach LPC directed.

The court otherwise rejects the DeFlaminis Report and finds that it fails to create any genuine issues of material fact, because it ignores or otherwise conflicts with the record (Montilla v. St. Luke's-Roosevelt Hosp., 147 AD3d 404 [1st Dept 2017]).

Finally, the court rejects LPC's reliance on § 5.1 of Frey's Subcontract and the Special Conditions § 00 0400 thereto, as bases to deny the Claim, in whole or in part.

Section 5.1 of the Subcontract provides, as follows:

Time is of the essence in this Subcontract. Subcontractor shall furnish all information requested by LPCiminelli to prepare, update and expedite progress schedules, including manpower requirements. Subcontractor agrees to conform to LPCiminelli's Project progress schedule, as amended from time to time, which is incorporated herein by reference and made a part hereof. Such conformance shall include, without limitation, timely submission of shop drawings as provided in Article 3 herein. LPCiminelli shall have complete control of the Project site on which the Work is to be performed and shall have the right to decide the time and order in which the various portions of Subcontractor's Work shall be installed and the priority of the work of all subcontractors. Subcontractor agrees to furnish and have available sufficient and satisfactory equipment, materials, supplies, and workmen to perform its Work in accordance herewith and with LPCiminelli's Project progress schedule. Subcontractor shall coordinate its Work covered by this Subcontract with that of all other contractors and subcontractors in a manner that will facilitate timely completion of the Project. Subcontractor shall call to LPCiminelli's attention any errors, inconsistencies and omissions in other subcontractors’ work that it discovers during coordination and construction. In furtherance thereof, Subcontractor shall examine the work installed by others that affects Subcontractor's Work and, if any defects exist, Subcontractor shall immediately notify LPCiminelli in writing. In such event, the Subcontractor shall not proceed until such defects are corrected or Subcontractor is given written authorization to proceed signed by LPCiminelli.

(Doc. 199, § 5.1).

There record is bereft of admissible evidence showing that Frey failed to comply with § 5.1. There is no evidence that Frey failed to “furnish all information requested by [LPC] to prepare, update and expedite progress schedules, including manpower requirements.” There is no evidence that Frey failed to adhere to [LPC]’s Project progress schedule,” that Frey interfered with LPC's “complete control of the Project site,” or LPC's “right to decide the time and order in which the various portions of Subcontractor's Work shall be installed and the priority of the work of all subcontractors.” Frey demonstrated that it “furnish[ed] ․ sufficient and satisfactory equipment, materials, supplies, and workmen to perform its Work in accordance [with the Subcontract] and with [LPC]’s Project progress schedule.” Finally, Frey has demonstrated that it sufficiently “coordinate[d] its Work covered by this Subcontract with that of all other contractors and subcontractors in a manner that will facilitate timely completion of the Project.”

Indeed, the record reflects that Frey performed at an exceptional level under difficult circumstances imposed upon it by others to ensure the timely completion of the Project. The least LPC could do would be to fairly and fully compensate Frey for its efforts.

Special Conditions § 00 0400 also relates to “time of the essence” and scheduling provisions, with which Frey complied. As previously shown, the delays created on the Project were the result of issues with the foundation, caisson, structure steel, and pre-cast concrete work, none of which were attributable to Frey. Accordingly, such delays may not serve as a pretextual breach of § 5.1 or Special Conditions § 00 0400.

It is well settled that a contractor or subcontractor complaining of injury (here Frey) has the burden of proving “the extent to which its costs were increased by the improper acts because its recovery will be limited to damages actually sustained (Berley Ind., Inc. v. City of New York, 45 NY2d 683, 687 [1978]). By working with LPC over several months to create a comprehensive Claim according to a Measured Mile Approach that LPC required, Frey has done so, and LPC has not submitted any evidence detracting from the validity or amount of the Claim.

In light of the foregoing, it is hereby

ORDERED, that Frey's motion for summary judgment is granted; and it is further ORDERED, that LPC's cross-application is denied, as moot.

This constitutes the Decision and Order of this court. Submission of an order by the parties is not necessary. The delivery of a copy of this Decision and Order by this court shall not constitute notice of entry.

FOOTNOTES

1.   A representative of Frey signed the Frey Subcontract on February 3, 2016. A representative of LPC signed it on February 12, 2016.

Timothy J. Walker, J.