In March 2024, the First Department, appellate division of New York, rejected a contractor’s claim that the City of New York, acting through a city agency, had an obligation to respond to a contractor’s delay claim submitted under Article 11 of the standard New York City construction contract. Tutor Perini Corp. v. City of New York, 2024 NY Slip Op 01263 (1st Dept. 2024).
The appellate court held that although Tutor Perini had a right to submit a delay claim pursuant to Article 11, there was no language therein requiring that either the city agency or the Comptroller’s Office respond to it. The court further rejected Tutor Perini’s argument that by failing to respond to its delay claim the city created “a contractual loophole by which [the City] can prevent [Tutor Perini] from ever suing for delay damages by declining to consider delay claims”. Neither Article 11 nor any other contract provision conditioned a lawsuit against the City for delay damages upon rejection of a claim.
Comment:
While the latest version of the standard New York City construction contract provides for certain compensable delay damages pursuant to Article 11, the City is under no obligation to respond to a contractor’s claim until after it sues the City in court. Accordingly, contractors who wait for a response to their Article 11 delay claim risk being time barred if a lawsuit is not filed within six (6) months from the date of substantial completion of the project as set forth in the contract.
To avoid this, contractors must be vigilant about not only complying with the notice provisions of Article 11 but thereafter filing a lawsuit against the City within six (6) months of substantial completion regardless of whether the City, Comptroller or agency has responded to their delay claim.
About the author: George Marco is an attorney practicing in the field of construction law. He also holds a Bachelor of Science in Mechanical Engineering and was previously employed as a Project Manager for a public improvement contractor.
If you would like more information regarding this topic or any other related to construction law please contact George Marco at george@gmarcolaw.com or call (516) 464-2320.
Disclaimer: This article is for informational purposes only and not intended to serve as legal counsel.
