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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: November 29, 2019

Alleged Poor Administration or Planning Insufficient to Bar Defendant’s Reliance on No Damages for Delay Clause

On November 19, 2019, the First Department issued a decision in WDF Inc. v Turner Constr. Co., 2019 NY Slip Op. 08379, holding that alleged poor administration or planning was insufficient to overcome a construction contract’s no damages for delay clause, explaining:

This case is factually strikingly similar to another action brought by plaintiff seeking delay damages in connection with another construction project. In that case, we found that the allegations in plaintiff’s proposed amended complaint established nothing more than inept administration or poor planning, rather than the bad faith or willful, malicious, or grossly negligent conduct that brings a case within an exception to the rule that no-damages-for-delay clauses are enforceable.

In this case, plaintiff’s sole argument is that summary judgment is precluded by issues of fact raised by an internal Turner email assessing potential damages, which plaintiff contends constitutes a party admission of liability. It is apparent from the email that Turner was assessing the costs claimed by plaintiff, not the viability of plaintiff’s claims under the terms of the subcontract, and, being an internal document, the email did not waive any of Turner’s rights or raise any material issues of fact as to the viability of those claims. The fact that Turner evaluated whether plaintiff incurred delay damages is irrelevant to the enforceablity of the no-damages-for-delay clause. Plaintiff failed to present evidence that Turner engaged in bad faith or willful, malicious, or grossly negligent conduct or that any other exception to the rule applies to render the clause unenforceable.

(Internal quotations and citations omitted).

One of the reasons parties often choose to have their contracts governed by New York law is that courts generally enforce agreements as written. Here, the contract provided that the plaintiff was not entitled to damages caused by a construction delay. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure how to enforce rights you believe you have under a contract.

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Posted in Commercial, Damages
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