{"id":902568,"date":"2024-04-17T15:20:15","date_gmt":"2024-04-17T21:20:15","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=902568"},"modified":"2024-04-17T15:20:17","modified_gmt":"2024-04-17T21:20:17","slug":"no-damages-for-delay-provision-bars-claim","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/no-damages-for-delay-provision-bars-claim\/","title":{"rendered":"Second Circuit: No-Damages-For-Delay Clause Bars Claim"},"content":{"rendered":"\n

John Mark Goodman | BuildSmart<\/a><\/p>\n\n\n\n


Listen to this post<\/a><\/p>\n\n\n\n

The Second Circuit Court of Appeals recently applied a no-damages-for-delay provision<\/a> to affirm the dismissal of a demolition contractor\u2019s breach of contract claims. The project involved reconstructing and raising the\u00a0Bayonne Bridge<\/a>\u00a0between Staten Island and New Jersey.\u00a0 The Port Authority awarded the general contract on the $1.29 billion project to the joint venture Skanska Koch Kiewit, Inc. Infrastructure Co. (JV).\u00a0The JV hired NASDI, LLC as the demolition contractor. After its work on the project was delayed over 19 months, NASDI sought $7.5 million in additional compensation.\u00a0After receiving only a fraction of the claim amount, NASDI sued the JV for breach of contract, quantum meruit, and breach of the covenant of good faith and fair dealing.<\/p>\n\n\n\n

The trial court granted summary judgment dismissing all of NASDI\u2019s claims. Specifically, the trial court held that the no-damages-for-delay clause in the contract barred the breach of contract claim. The Second Circuit affirmed. In doing so, the Second Circuit discussed two exceptions to the general rule that no-damages-for-delay clauses are enforceable in New York.  The court\u2019s discussion is excerpted below:<\/p>\n\n\n\n

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NASDI first takes issue with the district court\u2019s grant of summary judgment on its breach of contract claim, which the district court held was barred by the subcontract\u2019s no-damages-for-delay clause. Such clauses \u2013 which prevent a plaintiff from suing a defendant over delays that occur while performing on a contract \u2013 are generally valid and enforceable in New York.\u00a0See\u00a0<\/em>Corinno Civetta Constr. Corp. v. City of New York.<\/em>, 67 N.Y.2d 297, 309 (1986)<\/a>. And while New York law recognizes several exceptions under which a plaintiff can sue a defendant for delay, plaintiffs face a \u201cheavy burden\u201d in seeking to invoke them.\u00a0N. Star Contracting Corp. v. City of New York<\/em>, 611 N.Y.S.2d 11, 12 (1st Dep\u2019t 1994)<\/a>.2<\/sup><\/a><\/p>\n\n\n\n

NASDI contends that two of these exceptions apply here.\u00a0First<\/em>, it argues that the clause was unenforceable because the delays here \u2013 nineteen months in total3<\/sup><\/a>\u00a0\u2013 were \u201cuncontemplated.\u201d\u00a0Corinno<\/em>, 67 N.Y.2d at 309<\/a>. But New York courts have recognized that lengthy delays are generally foreseeable \u2013 and thus not uncontemplated \u2013 in complex construction projects.\u00a0See\u00a0<\/em>Manshul Constr. Corp. v. Bd. of Educ. of N.Y.C.<\/em>, 559 N.Y.S.2d 260, 261 (1st Dep\u2019t 1990)<\/a>\u00a0(reasoning that the \u201cnature of the work\u201d rendered such delays foreseeable);\u00a0Gottlieb Contracting, Inc. v. City of New York<\/em>, 446 N.Y.S.2d 311, 312 (1st Dep\u2019t 1982)<\/a>\u00a0(delays caused by \u201cother prime contractors\u2019 inaction\u201d and \u201cfaulty performance\u201d are \u201cprecisely within the contemplation of the exculpatory clauses\u201d). Consequently, New York courts have enforced no-damages-for-delay clauses against claims for delays of twenty or even thirty-two months, including in the context of construction projects similar in scope to the Bayonne Bridge project here.\u00a0See, e.g.<\/em>,\u00a0Comm.\u00a0<\/em>Elec. Contractors, Inc. v. Pavarini Constr. Co.<\/em>, 856 N.Y.S.2d 46, 47 (1st Dep\u2019t 2008)<\/a>\u00a0(enforcing no-damages-for-delay clause and granting summary judgment against claim premised on delay of twenty months in construction of museum);\u00a0Dart Mech. Corp. v. City of New York<\/em>, 891 N.Y.S.2d 76, 77 (2009)<\/a>\u00a0(same for delay of thirty-two months in project to build annex for sanitation department). Though NASDI cites to one decision that denied summary judgment on a claim premised on a two-and-a-half-year delay, that case involved a longer delay and behavior far more suspect than that at issue here.\u00a0See\u00a0<\/em>Bovis Lend Lease LMB v. GCT Venture<\/em>, 775 N.Y.S.2d 259, 260 (1st Dep\u2019t 2004)<\/a>\u00a0(\u201c[A]ppellants allegedly allowed tenant-requested design changes to continue unabated, thereby increasing the scope of the subcontractor\u2019s work and preventing completion in a timely fashion.\u201d). NASDI argues that several documents establish a genuine dispute as to the foreseeability of the delays, but those documents were either not timely presented to the district court or make obvious and generic points that construction had been delayed, which is not in dispute.<\/p>\n\n\n\n

Second<\/em>, NASDI argues that the no-damages-for-delay clause was unenforceable because the delays here were \u201cso unreasonable that they constitute[d] an intentional abandonment of the [sub]contract\u201d by SKK.\u00a0Corinno<\/em>, 67 N.Y.2d at 309<\/a>. Again, we disagree. As already discussed, the length of the delays alone was insufficient to make them \u201cunreasonable,\u201d given that New York courts have upheld no-damages-for-delay clauses against delays of greater length in similar contexts. And while NASDI makes much of a five-page letter by a demolition professional, who opined that the changes and delays to NASDI\u2019s work \u201camount[ed] to a cardinal change [i.e.<\/em>, abandonment] as recognized by the industry,\u201d App\u2019x at 1776, the letter was unsworn and its author stated in his deposition that he did not \u201cclaim to be an expert in anything,\u201d Dist. Ct. Doc. No. 80-1 at 2;\u00a0see also\u00a0<\/em>Capobianco v. City of New York<\/em>, 422 F.3d 47, 55 (2d Cir. 2005)<\/a>\u00a0(\u201c[U]nsworn letters \u2026 generally are inadmissible hearsay that are an insufficient basis for opposing a motion for summary judgment.\u201d). Furthermore, the letter failed to support its baseline conclusion \u2013 that there was a \u201ccardinal change as recognized in the industry\u201d \u2013 with any analysis explaining industry expectations or how the bridge project might have run afoul of them. App\u2019x at 1776;\u00a0see\u00a0<\/em>Kulak v. City of New York<\/em>, 88 F.3d 63, 71 (2d Cir. 1996)<\/a>\u00a0(\u201c[C]onclusory statements, conjecture, or speculation by the party resisting the motion will not defeat summary judgment.\u201d).<\/p>\n<\/blockquote>\n\n\n\n

The Second Circuit also addressed NASDI\u2019s claim for breach of the covenant of good faith and fair dealing. In that claim, NASDI asserted that the JV failed to act in good faith by allocating just $600,000 to NASDI from a lump sum settlement with the owner. The court disagreed, finding that the JV had provided a full account of its independent review and point-by-point rejection of NASDI\u2019s $7.5 million claim. With no evidence that the JV\u2019s calculations were incorrect or dishonest, the Second Circuit affirmed the trial court\u2019s dismissal of the claim for breach of the covenant of good faith and fair dealing.<\/p>\n\n\n\n

A full copy of the Second Circuit\u2019s complete decision is available\u00a0here<\/a>.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n\n\n\n

<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

John Mark Goodman | BuildSmart Listen to this post The Second Circuit Court of Appeals recently applied a no-damages-for-delay provision to affirm the dismissal of a demolition contractor\u2019s breach of contract claims. The project involved reconstructing and raising the\u00a0Bayonne Bridge\u00a0between Staten Island and New Jersey.\u00a0 The Port Authority awarded the general contract on the $1.29… Continue reading Second Circuit: No-Damages-For-Delay Clause Bars Claim<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,224,12027],"class_list":["post-902568","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-no-damages-for-delay-provision","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nSecond Circuit: No-Damages-For-Delay Clause Bars Claim - 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