Contract Clause Ruled Ambiguous

P.S. 270 in Queens. Image credit: Google Maps.

During a seven year period Contractor and School Construction Authority agreed to multiple time extensions on $32.75 million contract. In February 2001, The New York City School Construction Authority entered into a $32,750,000 contract with AMCC Corporation, a general contractor, to design and build P.S. 270, a three-story public school located at 233-15 Merrick Boulevard, Queens. Over the course of the construction, the contractor submitted proposed change orders to the Authority totaling $4,838,245.57 for the extra work. The Authority agreed to some change orders, but rejected others.

Between August 2004 and August 2011, the contractor and the Authority entered into a series of agreements that extended the contractor’s time to commence legal proceedings and serve notices of claim against the Authority. When the Authority and the contractor failed to reach an agreement on the extra work, the contractor sued the Authority for disputed extra work totaling $2,040,021.04.

The Authority moved to dismiss the contractor’s lawsuit, arguing that the contractor either had failed to either serve timely notice of claims, or failed to preserve claims in the extensions. Supreme Court Justice, Judge Phyllis Flug, agreed with the Authority and dismissed the contractor’s claims.

On appeal, the Appellate Division, Second Department reversed, ruling that the contract term extending the contractor’s time to serve a notice of claim was ambiguous as to whether it covered notices of claims that were timely as well as notices of claims that were already untimely at the time the extension was signed. The Appellate Division sent the case back to Judge Flug to resolve the issue of contract interpretation.

AMCC Corp. v. N.Y. City Sch. Const. Auth., 62 N.Y.S.3d 430 (2 Dep’t. 2017) (Attorneys: Vincent J. Torna, Sophia Cahill, for AMCC; Zachary W. Carter, Scott Shorr, Jonathan A. Popolow, for City).


By: Danielle Mabe (Danielle is a New York Law School Graduate, Class of 2018.)

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