Contractor Seeks $4M For Extra Work, Despite Maximum Contract Price

Friday, November 02, 2018 6:35 am
November 2018 - Volume 40 Number 11

Contract Changes --- Extra Work

H2 Consulting P.E., P.C. v. 38 Delancey Realty, LLC., 2018 N.Y. Lexis 4225 (September 24, 2018)

A court ruled that a contractor will have to provide a lot more convincing evidence---and go beyond “mere reliance on purported waivers”---to show that the parties agreed to a departure from strict contract provisions that precluded additional work claims, imposed delay penalties, and capped the contractor’s maximum payment for the project.

From 2007 until 2010, H2 Consulting P.E., P.C. (H2) served as the general contractor on a project, owned by Yang Tze River Realty Corp. (Yang Tze), to renovate a 16-story mixed-use building at 38 Delancey Street in New York City. Under the contract, Yang Tze was to pay H2 an amount not exceeding $18,351,000. According to the contractor, it performed all its contractual obligations but was not paid in full.

H2 first filed a mechanic’s lien against the property for approximately $4 million. It then filed a motion for summary judgment, charging Yang Tze with contract breach. Yang Tze countered that H2 itself breached the contract by negligently supervising the work site, breaching the contact’s indemnification provision, and abandoning the project prior to completion.

Because of the collective lack of evidence on H2’s part, the Supreme Court of New York denied the contractor’s motion and ordered both parties to appear for trial on December 1, 2018.

Contractor claimed owner caused 96 items of extra work

H2 specifically argued that Yang Tze failed to pay for additional labor and materials and delay damages that resulted primarily from the many owner-requested add-ons, extras, and changes to the original design. (Apparently, unbeknownst to H2, Yang Tze retained a second architectural firm who requested numerous [..]