Contractor denied $2.5 million claim

Image credit: School Construction Authority.

Plumbing company claimed time extension due to delays. In May of 2012, the New York City School Construction Authority awarded BG National Plumbing & Heating Inc. a contract to perform accessibility and electrical upgrades for the New York City School Construction Authority. When it became evident that BG Plumbing could not meet the contractual deadline, BG Plumbing filed a notice of claim with the City alleging it was entitled to an extension because of certain delays and impacts on the project. BG Plumbing did not include a claim for monetary damages.  The School Construction Authority denied the extension and claim.

BG Plumbing sued the City alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and a claim for extra work/changes. BG Plumbing sought damages in the amount of $2,455,740, a figure derived from a report produced at their request.

The City moved to dismiss the complaint on the grounds that BG Plumbing had failed to include a claim for money damages in its notice of claim in compliance with the requirements of Public Authorities Law § 1744, and failed to demonstrate compliance with the contractual requirement to provide timely notice of any alleged condition causing delay.

BG Plumbing sought to serve an amended complaint and to obtain an order deeming the notice of claim amended to include the required specified damages.

Supreme Court Justice Joseph Risi ruled with the City, and found that the original notice of claim filed by BG Plumbing was defective, and dismissed the BG Plumbing complaint. While mistakes or defects made in good faith can be corrected or disregarded at the discretion of the court, Judge Risi found that BG Plumbing had not met its burden. BG Plumbing chose not to not move for leave to amend its notice of claim until it e-filed its cross motion 16 months after the issuance of a report by the third party.

BG Plumbing appealed.  The Appellate Division, First Department, affirmed the lower court’s decision. The Appellate Division held that a notice of claim may be amended only to correct good faith and nonprejudicial technical mistakes.  Because the amendments to the notice of claim put forth by BG Plumbing were not technical in nature, they are not permitted as late-filed amendments to a notice of claim.

BG Nat’l Plumbing & Heating, Inc. v. New York City Sch. Constr. Auth, 150 NY.S.3d 279 (1st Dept’ 2021).

By: Christopher Devivo (Christopher is a New York Law School graduate, Class of 2022.)


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