UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

TRAVELERS CASUALTY AND SURETY COMPANY,

as Administrator for Reliance Insurance Company,

Plaintiff,

V.

WHITE PLAINS PUBLIC SCHOOLS,

Defendant/Counterclaimant,

TRATAROS CONSTRUCTION INC.,

Additional Defendant on the Counterclaims. 03 Civ. 8144 (CLB) (MDF)

Memorandum & Order

TRAVELERS CASUALTY AND SURETY COMPANY,

as Administrator for Reliance Insurance Company,

Third-Party Plaintiff,

V.

THOMAS MANAGEMENT SERVICES, L.L.C.,

Third-Party Defendant on the Counterclaims.

Brieant, J.

A non-jury trial was conducted from July 5, 2006 to July 20, 2006, in this diversity case involving a multi-prime Wicks Law project. The parties’ post-trial submissions were filed October 13, 2006. Familiarity of the reader with all prior proceedings in this case is presumed and certain undisputed facts are included herein for the sake of clarity. Having heard all of the evidence at trial and considered the parties’ post-trial submissions, the Court makes the following

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findings of fact and conclusions of law.

Travelers Casualty and Surety Company (“Travelers”) is a Connecticut corporation with its principal place of business in Connecticut. Travelers is the administrator for Reliance thsurance Company with respect to certain bonds involved in this action. Reliance Insurance Company (“Reliance”) is a Pennsylvania corporation with its principal place of business in Pennsylvania. Both corporations are authorized to transact insurance and surety business in the state of New York. Plaintiff Travelers acquired all of the rights and obligations under the hereinafter described surety bonds issued by Reliance, and Travelers became, and is, the Administrator for Reliance with respect to those bonds. Defendant White Plains Public Schools (“White Plains” or “WPPS”) is a public entity in charge of maintaining, operating and constructing the White Plains Public High School in White Plains, New York. This Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332.

On or about January 31, 2000, Defendant WPPS undertook the renovation, alteration and addition to the White Plains Public High School (the “Project”). See PX-5. The construction work took place within seven buildings (A through G). See PX-192; DX-955. On January 31, 2000, Trataros Construction (“Trataros”) entered into a prime contract for general construction (“General Construction Contract” or “the Contract”) with White Plains for general construction, including renovations and additions to the White Plains Public High School. The Contract incorporated by reference two additional agreements, the “General Conditions of the Contract for Construction” (“General Conditions”) and the “Supplementary General Conditions”

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(“Supplementary Conditions”). See PX-6; PX-7. Pursuant to the original Contract and prior to any amendments, the Project was to be completed by August 31, 2001. See PX-5. In accordance with the Construction Contract, Trataros delivered to White Plains a performance bond and payment bond issued by Reliance as Surety. See PX-l; PX-4. As earlier noted, after the issuance, Plaintiff Travelers succeeded to the rights and obligations under the bonds and became administrator for Reliance with respect to those bonds.

White Plains retained Kaeyer, Garment & Davidson Architects, P.C. (“KG&D” or “the Architect”) to serve as the Architect of Record for the Project, and retained Thomas Management Services, L.L.C. (“TMS” or “Thomas”) to serve as the Construction Manager and Owner’s representative for the Project. Among its other obligations, Thomas was responsible for coordinating the efforts of the several prime contractors on the Project, and for providing cost estimates for extra work and change orders arising during the course of the Project.

Trataros was one of five (5) separate prime contractors retained by Defendant White Plains under New York’s Wicks Law (N.Y. GEM. Mur4. LAW § 101) to renovate and construct additions to the High School for the Project. See PX-5. The Project work was divided among:

Trataros, as general contractor; F.A. Burchetta, Inc. (“Burchetta”), as electrical contractor; Richards Conditioning, Inc. (“Richards”), as FIVAC contractor; L.J. Coppola, Inc. (“Coppola”), as plumbing contractor; and Maines Food Services, Inc. (“Maines”), as food service contractor.

Trataros is now apparently out of business. Trial witness Mr. Carbone served as the

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Project Supervisor for Trataros from October of 2001 through January 1, 2003. As of January 1, 2003, before the declaration of default discussed below, Mr. Carbone was on the payroll of Travelers. See PX-13.

During the course of the Project, White Plains sent notice pursuant to the Surety’s Performance Bond that it was considering declaring a default against Trataros. Following a mandatory meeting of the parties held pursuant to the requirements of the Performance Bond, on February 1, 2001, Trataros, Travelers and White Plains entered into a Forbearance Agreement, by which White Plains granted Trataros a right to complete the work within extended time limits. See DX-6. On January 30, 2003, White Plains sent a formal notice of default based upon Trataros’ alleged failure to meet the Forbearance Agreement deadlines. White Plains demanded that Travelers perform its obligation as Surety to see to completion of the Construction Contract. See PX-13.

Travelers exercised its right under §4.2 of the Performance Bond and assumed completion of Trataros’ work, and, among other things, paid amounts in arrears owed by Trataros to numerous laborers, subcontractors and materialmen, in order to induce them to continue. See PX-l3, at p. 2, ¶f2-3; Scarpellino Tr. at 20-24.

Travelers contends that it performed and completed its obligations in accordance with the Performance Bond and the Construction Contract, but was not paid the Contract balance, as well as additional costs for change orders and extras, net of deletions or back-charges, owed by

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White Plains. As further discussed infra, Travelers concedes that, as on all major projects, certain punchlist items were not completed. Travelers also contends that the Project was actually substantially complete by January 30, 2003, the date of the notice of default, and I so find.

On or about July 16, 2003, Travelers filed a Notice of Claim with Defendant White Plains, which it amended on September 3, 2003, seeking in excess of $2,000,000, for work, extra work, change orders and/or additional costs in connection with the Project. See PX-2; PX-3.

On October 15, 2003, Travelers commenced this action for Defendant’s breach of contract. It seeks to recover damages for White Plains’ breach of its obligations to Travelers as Surety, upon Travelers’ substantial completion of all the work required under the General Construction Contract between Trataros and White Plains. It also seeks to recover damages for extra work performed by Trataros and/or Travelers.

In its Answer, Defendant White Plains interposed Counterclaims for delay damages against Travelers and Trataros in the amount of $7,295,564.31, for an alleged failure to fulfill Trataros’ obligations under the General Construction Contract. It claims that damages suffered by White Plains include extreme delay damages, as well as additional liabilities incurred by White Plains by virtue of two delay damage liquidating agreements with prime contractors Burchetta and Richards, into which White Plains voluntarily entered.

On October 15, 2003, and November 17, 2003, White Plains entered into separate

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liquidating agreements with Richards and Burchetta, respectively. This occurred after White Plains’ Architect and representative, KG&D, originally rejected their claims on the basis of a no-damage-for-delay clause found in Section 8.3.3 of the Supplementary Conditions, and applicable to all five prime contractors.

Richards had earlier commenced a lawsuit against the Board of White Plains to recover increased costs due to the delay in the completion of the Project. White Plains later entered into a liquidating agreement with Richards, which contained this provision:

 “Since the Board is legally liable to Richards for the impact of the delays caused by Trataros, the Board admits and acknowledges that it is liable to Richards in the amount of  $1,689,598 for delays in the completion of the Project and other costs resulting from the delays caused by Trataros.” See DXIi at ¶3. It also provided that the Richards claim against the Board “should be properly asserted by the Board against Trataros and/or Reliance as a pass-through claim” and the “Board agrees, expeditiously and in good faith, to assert and prosecute against Trataros and/or Reliance a claim in the amount of $1,689,598 (“the Trataros claim”), consisting of the $1,364,598 (which has not been reimbursed by the Board) in costs and expenses incurred by Richards due to the delays caused by Trataros and the $325,000 of such costs (which has been reimbursed by the Board).” Id. At ¶4.

Burchetta had not sued, but filed a Notice of Claim with the Board to recover increased costs due to delays. The Liquidating Agreement with Burchetta provided that the “Board admits and acknowledges that it is liable to Burchetta in the amount of $2,015,966.31 for delays and

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interference in the completion of the Project and other costs resulting from the delays caused by Trataros.” See DX-12 at ¶1. It provided that Burchetta agreed “to accept in full satisfaction and discharge of its claim the amount the Board shall be successftil in recovering from Trataros and/or Reliance/Travelers with respect to the claim.” Id. at ¶2.

In an earlier decision, this Court dismissed Defendant’s second and third counterclaims for damages asserted expressly as pass through claims made “on behalf’ of Burchetta and Richards. The Court left to the benefit of a plenary trial record, any decision and judgment as to whether delay damages could be awarded to White Plains, and whether any liabilities incurred by White Plains in connection with Richards and Burchetta might properly fall into a category of delay damages incurred by White Plains. See January 27, 2006 Memorandum and Order at 16-17.

On December 17, 2004, Plaintiff Travelers tiled a separate pleading denominated as a “Third Party Complaint,” against “Third Party Defendant” Thomas Management Services. As earlier noted, Thomas was the construction management company for White Plains during completion of the Project. In this secondary Complaint, Travelers claimed that any delay damages it may be determined to owe White Plains on the counterclaims were the result of Thomas’ failure to coordinate the Project, and that if Travelers were ultimately required to pay for any delay damages, then Travelers, as Surety, would be subrogated to the rights of White Plains against Thomas. White Plains made no claim against Thomas relative to the Project.

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In its earlier decision, the Court dismissed Travelers’ secondary Complaint on the theory that any poesible delay damages that might ultimately be found owing to White Plains at trial would be only those that were proved to have been proximately caused by Trataros’ delays, as opposed to any such damages proximately caused by Thomas.

To date, White Plains has refused to pay any amount of Travelers’ claim, based on its assertion that the damages owed by Travelers on White Plains’ counterclaims exceed the contract balance owing to White Plains, by which balance amount any damages accruing to White Plains would be offset.

In its January 2006 decision, the Court found White Plains’ pleading admissions sufficient to form a basis for the grant of partial summary judgment as to White Plains’ liability for the Contract balance, and determined that the appropriate balance amount and extras owed under the Contract remained disputed issues of fact to be resolved with the benefit of a plenary trial record. Accordingly, the Court herein determines the Contract balance owed, the legitimate extras and back-charges, and whether any delay damages may be awarded.

Contract balance due to Travelers

“The general rule is that: the surety has a priority right to the unpaid balance of the contract funds[,] which it may use to complete performance of the bonded contract.” United States Fid. & Guar. Co. v. Braspetro Oil Servs. Co., 369 F.3d 34,59 n.22 (2d Cir. 2004) (citation omitted). In its notice of default, White Plains stated that it “hereby agrees to pay the balance of

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the contract price to the Surety in accordance with the terms of the Construction Contract or to a contractor selected to perform the Construction Contract in accordance with the terms of the contract with the Owner.” See PX 13. It also stated that the “Owner demands that the Surety performs and completes the said Construction Contract.” Id. Travelers has shown, White Plains does not meaningfully dispute, and I find, that the outstanding balance of the Contract at the time of default was the sum of $l,026,019.76. See PX-17; PX-18; PX493, §2.

Extra Work Claims

Travelers has shown that it is entitled to the following four claims for extras pursued by Trataros, as these were legitimately submitted under the Contract. They include extras for exterior stone panels, additional metal framing, some approved change orders for which the approval amounts were insufficient, and a claim for the cafeteria’s aluminum trench cover installed instead of a specified steel trench cover.

Stone Panels

The original stone specification called for 1 inch thick stone panels for the trim on the exterior of the buildings, and designated Mankato-Kasota Stone (“Mankato”), an operator of a quarry in Minnesota, as the sole supplier of the stone to be used on the Project. See PX-19, at WPSD 015449; PX-22; Asimopoulos Tr. at 100; O’Neill Tr. at 180. After Trataros entered into the Contract, Mankato recommended, by facsimile dated March 9, 2000, that in order to achieve the desired result, the use of 2-1/2 inch thick stone panels was required, and that the originally specified 1 inch panels would be inadequate for the intended exterior application. See PX-24;

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Asimopoulos Tr. at 103-104, 106; O’Neill Tr. at 180-181. Approximately 11,500 square feet of stone panels were being used on the outside of the buildings and thus, had to be changed from 1 inch to 2-1/2 inch stone, which increased the weight of the stone panels by approximately 150% or more, thereby also requiring redesign of the steel upon which the stone was erected. See Asimopoulos Ti. at 102; O’Neill Tr. at 181.

Although Mankato had been the designated stone supplier in the original specification, KG&D delayed its approval of Mankato’s sample for approximately one year, because, as Erik Kaeyer of KG&D advised White Plains, KG&D “[had been] extremely concerned about the appearance and quality of the stone samples submitted” by Mankato and was “unable to resolve that issue through the usual channels.” See PX-19; PX-25; PX-27. Due to their concern, KG&D’s Calvin Black and Eric Kaeyer visited the quarry facility in Mankato, Minnesota, During that trip, the architects’ concerns about the appearance and quality of the Mankato stone were finally satisfied, as reflected by Kaeyer’s completion and delivery to Mankato on January 28, 2001, of a color range approval form and request to expedite a stone order. See PX-25; PX-27; Davidson Tr. at 900.

By letter dated March 2, 2001, and prior to beginning any of the stone panel work, Trataros gave notice to Construction Manager Thomas, that its original bid of $389,737.65 for labor, materials and equipment for the stone panel work, had been increased to $706,593.47, because of the change from 1 inch stone to 2-1/2 inch stone, for a net additional cost of $316,855.82. Trataros requested a response from the Architect. See PX-28; PX-29; Asimopoulos

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Tr. at 101-102; O’Neill Tr. at 185.

By letter dated March 19, 2001, KG&D rejected Trataros’ submittal for additional stone costs, for failure to comply with notice requirements under the General and Supplementary Conditions because the claim was submitted beyond the time limitation for making a claim under the Contract. See DX-848; Davidson Tr, at 843-846.

Under the General Conditions of the Contract, “Claims by either party must be initiated within 21 days after occurrence of the event giving rise to such Claim or within 21 days after the claimant first recognizes the condition giving rise to the Claim, whichever is later. Claims must be initiated by written notice to the Architect and the other party.” See PX-6, § 4.31.

Mankato-Kasota’s color range approval form states in bold lettering: “Fabrication of your order can not begin until we have received a completed copy of this color range approval form,” and KG&D Architect Russell Davidson admitted that fabrication of the stone had obviously not begun by January 28, 2001. See Px-25; Davidson Tr. at 901. As earlier noted, KG&D was informed on March 9, 2000, by facsimile from Mankato that the minimum thickness would need to be 2-1/2 inches, rather than the originally anticipated one inch. Before specifying this quarry as a sole source for decorative stone, the Architects knew, or should have known, or should have inquired, as to the proper thickness of the stone for exterior use (in order to avoid damage from freezing and spalling). See PX-24. KG&D thereafter took about a year to approve and order the Mankato stone, and ultimately informed Trataros of the stone selected and

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approved on February 12, 2001. See PX -26. As a practical matter, Trataros should not have been required to submit a claim until it was informed by KG&D what stone was actually chosen and approved, which did not occur until KG&D’s decision in February 2001, and neither KG&D nor White Plains can make a good faith claim of surprise or lack of notice of the increased price due to the adjustment to 2-1/2 inches, particularly bearing in mind that they were informed of the thickness issue in March of 2000. See PX-24; PX-25; PX-26; PX-27.

The Court finds that Trataros’ March 2, 2001 notice of claim for the extra stone work was timely and reasonable, as it was within 21 days from February 12, 2001, the date KG&D first informed Trataros that it had approved and ordered the 2V2 inch stone that Trataros would use on the Project.’ See PX-26; Asimopoulos Tr. at 107. Accordingly, the Court finds that Travelers is owed $316,855.82 for the change in the cost of the thicker stone.

Metal Framing Claim

Following the change to 2-1/2 inch stone siding, the steel framing had to be redesigned because the framing for 1 inch stone panels, which were in the original architectural drawings, could not be used with the thicker and heavier 2-1/2 inch stone panels. Compared with 1 inch stone, 2-1/2 inch stone panels required the use of more clips attaching the stone panels to the structural framing, additional headers, and thicker, stronger metal than the 16-gauge metal allowed in the original bid specification and drawings. See O’Neill Tr. at 180-183; Asimopoulos

_______________________

1Furthermore, as discussed infra, the contractually specified formalities for making claims for extras were loosely observed and effectively ignored by both sides in this case.

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Tr. at 109-112. The metal framing claim in the sum of $321,278.00, is for extra materials and work, necessitated by the change to 2½ inch stone, as well as by problems with the original drawings.

The Court finds that the redesign of the framing was also necessary because the original drawings called for steel angles to be installed at the head of the windows in Building G, even though the louver-covered air units were located over the windows blocking installation of the angles. As a result, Trataros had to use much heavier and costlier metal framing. See PX-37; PX-46; PX-34; Carbone Tr. at 325-326; O’Neill Tr. at 182-185; Asimopoulos Tr. at 112, 116-117.

Trataros retained CSC Engineering, a firm suggested by KG&D, to prepare shop drawings incorporating the changes to the metal framing as a result of the conflict between the steel angles/headers and the louvers and the change to 2½ inch stone. Calvin Black of KG&D formally approved the proposed changes by signing off on the shop drawings on April 4, 2001. See PX-38; Asimopoulos Tr. at 110-1 12, 117; Davidson Tr. at 849.

By a letter dated February 13, 2001 to TMS and copied to KG&D, and prior to commencing the extra metal framing work, Trataros submitted a revised quote in the sum of $321,278.00. This represented the cost of the work as reflected in the revised shop drawings, $417,875.00, minus the costs per the original specifications, of $96,597.00. See PX-32; PX-33; Carbone Tr. at 325; Asimopoulos Tr. at 117-118.

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After giving notice to TMS, Trataros commenced and completed the extra metal framing work under protest and forwarded a detailed estimate reflecting the additional scope of the work shown on the approved shop drawings for each of the affected buildings. See PX-32; PX-33; Asimopoulos Tr. at 118.

By a letter dated March 14, 2001, Trataros notified Thomas of the problems with the specified metal framing, and Calvin Black of KG&D responded by a fax memo to Thomas dated t’Jareh 17, 2001, instructing that the problems “should be resolved by Trataros, and any modifications submitted” and that “Trataros and their LMF [light metal framing] designer need to actually submit [the modifications}.” See PX-34.

Trataros’ February 13, 2001, notice of additional metal framing costs (PX-32) was timely under the contractual 21-day requirement for raising claims, as it followed immediately Trataros’ receipt of KG&D’s February 12, 2001 letter confirming that the stone had been selected and ordered.2 See PX-39. Trataros could not be required to submit its claim for additional metal framing before knowing that KG&D had approved and ordered Mankato’s 2-1/2 inch stone. Trataros gave notice before the metal framing work commenced, and immediately after Trataros discovered that it could not use the “L” shaped metal shelf shown in the original drawings to support the stone over the HVAC openings. In fact, Trataros had to redesign the metal framing system and needed much heavier and costlier steel in order to make up for the lack of “L” shaped

______________________

2 Again, as further discussed infra, the Parties did not consistently adhere to certain Contract formalities during the course of the Project.

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shelf angles shown on KG&D’s drawings.

Accordingly, the Court finds that Travelers is owed $321,278.00 for the required change in metal framing.

RFPs 1,2 &3 (GC-9)

Travelers’ claim in the sum of  $142,265.95, is made in relation to KG&D’s revisions to the original bid documents set forth in requests for proposal (“RFP’s”) 1,2 & 3. These changes included the addition of a bathroom, hardware and door changes, and other miscellaneous changes throughout the Project. Various additional changes were made to these RFP’s throughout the year following their original execution. See DX-l40; Asimopoulos Ti. at 124; O’Neill Tr. at 186.

Trataros provided cost proposals in response to the RFP’s in February of 2000, and as of May 24, 2001, Trataros had not received a response to its February 2000 proposal. See PX-40a; Asiniopoulos Tr. at 124. In May, Trataros alerted Thomas to the fact that the prior year’s estimate would need revision, as there had thus far been no response to it and no action was taken on the work. On June 20, 2001, Trataros sent Thomas revised proposals reflecting the escalations in price and changes in scope that had occurred in the intervening 16 months, in the total sum of $373,580. See PX-40a; PX-41. Prior to completing the work, Trataros notified KG&D and Thomas by a letter dated August 7, 2001, that it could not perform the work for the cumulative sum of $199,524.40, established by KG&D and Thomas, but that it would comply

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with the Change Order and proceed with the work under protest. See PX-43; O’Neill Tr. at 186- 187, 254-255; Asimopoulos Tr. at 125-128.

The work performed under protest by Trataros under RFP’s 1,2, and 3 constituted extra work performed with White Plains’ full knowledge of Trataros’ protest to the Architect’s estimate. The difference in price between Trataros’ proposal and White Plains’ is $74,055.60. With its June of 2001 proposal, Trataros submitted a detailed and facially reasonable accounting of the estimated costs for completing the extra work. See PX-41. White Plains has proffered no meaningful response to Plaintiff’s proposal, nor in support of the sum it paid of $199,524.40. A consulting group hired by Travelers’ counsel reviewed Trataros’ February 2000 cost proposal, its June 2001 escalated cost proposal, and White Plains’ May 2001 estimates, and concluded that Trataros should have received additional compensation of $142,265.95 for the work performed under the RFP’s. Accordingly, Plaintiffs claim for additional monies for RFP’s 1,2, and 3 is allowed in the amount of $142,265.95.

Trench Cover

The original contract specifications called for a steel trench cover, and upon the direction of Mr. Davidson at KG&D, his office sent Trataros a “catalogue cut,” or specification, for an aluminum trench cover manufactured by a company called Balco. See DX-836; DX-728; Davidson Tr. at 837; 897. Mr. Davidson testified, and I find that Trataros forwarded to his office a new submittal based on the Balco aluminum trench cover specification it had received from KG&D, along with the Balco specification itself, and that KG&D approved the new submittal on

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December 17, 2000. See DX-728; Davidson Tr. at 838.

On February 6, 2001, Trataros notified KG&D that it would proceed with the installation of the requested aluminum trench cover under protest, as Trataros was under the misimpression that trench covers were not within its scope of work. Trataros provided a detailed cost estimate in the sum of $19,859.07. See PX-44; PX-45a. Trataros thereafter realized that the contract documents specified installation of a steel trench cover, and it submitted a revised proposal on April 26,2001, in the sum of $15,741.45, representing the total cost of using an aluminum trench cover minus the total cost of using the specified steel trench cover. See PX-45b; PX-l93 at p.29; O’Neill Tr. at 179-780.

Thomas’ rejection (DX-636) of the change order was inappropriate as the alteration from a steel to an aluminum trench cover was reasonably interpreted by Trataros to be required by the Architect, and Travelers’ claim for $15,741.45 is allowed.

PCO’s

Testimony at trial revealed that the Owner’s representatives, Thomas and KG&D, did not always adhere to formalities when it came to extra work. Russell Davidson of KG&D testified on cross-examination that the contract’s 21-day written notice rule, which applied to claims by either party, did not apply to the Owner’s claims for back-charges against Trataros because notice was given “during part of the normal communications on the job site” and “nor would you necessarily” have documented notice. See Davidson Tr. at 921-925. White Plains, KG&D,

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TMS, and Richard Lasselle, who served as the Assistant Superintendent for Business for White Plains, are all sophisticated parties who were on-site regularly, or even daily. See Dixon Yr. at 506-508; DePaul Tr. at 714; Laselle Tr. at 600. They had actual notice of the extent of the extra work undertaken by Trataros at their request, and that there would be additional costs. They are thereby deemed to have waived the contractual 21-day written notice requirement. This conclusion of the Court comports with its January 2006 decision in which it rejected Travelers’ contentions that White Plains was precluded from stating delay claims for its failure to furnish proper or sufficient notice of delay claims. In that decision, the Court noted that there was sufficient correspondence and practical knowledge as to the possibility of delay issues, considering the notice of possible default, the forbearance agreement and the notice of actual default. As earlier noted in this decision, White Plains’ handling of the PCO’s and Claims for extra work asserted by Trataros/Travelers, and of its own forced credit change directives, demonstrated that it had modified and/or waived the formalities described in the Contract, with respect to the claims and the change order process, as is allowed by law. See Tridee Assocs., Inc.

v. NYCSCA, 739 N.Y.S.2d 179, 181 (2d Dep’t 2002). White Plains directed that the work be done and had actual notice of the extra work comprising the PCO’s.

The Court has considered the numerous PCO’s claimed by Travelers, numbered sporadically between the numbers 1003 and 1096, as well as the responses of White Plains to each of the PCO claims. Having considered the evidence and arguments, and with the exceptions noted below, the Court adopts the findings of fact proposed by Plaintiff Travelers in its proposed findings found in ¶¶l08-156, ¶¶l63-1 70, ¶¶ 77-237, and ¶¶242-260.

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The claim under PCO # 1003 is allowed in the amount of: $ 8,850.00

The claim under PCO # 1004 is allowed in the amount of: $ 64,546.00

The claim under PCO # 1006 is allowed in the amount of: $ 43,574.97

The claim under PCO # 1007 is allowed in the amount of: $ 2,553.35

The claim under PCO # 1011 is allowed in the amount of: $ 1,938.90

The claim under PCO # 1012 is allowed in the amount of: $ 750.00

The claim under PCO # 1014 is allowed in the amount of: $ 16,489.50

The claim under PCO # 1015 is allowed in the amount of: $  2,961.22

The claim under PCO # 1017 is allowed in the amount of: $ 30,938.55

The claim under PCO # 1026 is allowed in the amount of: $ 14,308.00

The claim under PCO # 1030 is allowed in the amount of: $ 16,784.00

The claim under PCO # 1031 is allowed in the amount of: $ 4,645.00

The claim under PCO # 1085 is allowed in the amount of: $ 2,125.00

The claim under PCO # 1086 is allowed in the amount of: $ 21,461.00

The claim under PCO # 1038 is allowed in the amount of: $   7,475.00

The claim under PCO # 1039 is allowed in the amount of: $ 17,236.97

The claim under PCO # 1042 is allowed in the amount of: $   5,200.00

The claim under PCO # 1050 is allowed in the amount of: $ 17,241.00

The claim under PCO # 1054 is allowed in the amount of: $   3,716.00

The claim under PCO # 1055 is allowed in the amount of: $   3,503.00

The claim under PCO # 1060 is allowed in the amount of: $   5,807.50

The claim under PCO # 1065 is allowed in the amount of: $   5,642.00

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The claim under PCO # 1079 is allowed in the amount of: $   5,047.35

The claim under PCO # 1080 is allowed in the amount of: $   5,095.65

The claim under PCO # 1081 is allowed in the amount of: $      953.58

The claim under PCO # 1088 is allowed in the amount of: $      565.00

The claim under PCO # 1096 is allowed in the amount of: $    3,352.21

The Court does not adopt Travelers’ proposed findings for PCO # 1029, PCO # 1082 and PCO # 1090. These three PCO claims are reduced or denied as set forth below. See generally, Proposed Findings of Fact submitted by White Plains.

The claim under PCO # 1029 is allowed in the reduced amount of: $ 6,311.80

The claim under PCO # 1082 is allowed in the reduced amount of: $ 3,188.90

The claim under PCO # 1083 is allowed in the reduced amount of: $ 3,151.00

The claim under PCO # 1090 is denied in whole.

Change Orders & Credits or Back-charges

The are several change order directives, which, according to White Plains, were negative change orders (credits to the Trataros Contract) representing back—charges for work done by other prin-ie contractors for the benefit of Trataros or to repair damage caused by Trataros or its subcontractors, and paid for by White Plains. See DX-127 at WPSD 001858; DX-l40 at WPSD 012834-882.

GC-25 is for temporary light and power supplied to Trataros by Burchetta in the amount

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of $3,019.94 represented by five different invoices. See DX-127, DX-140 at WPSD 012852-859. The Court agrees with Travelers that White Plains should not have paid for, nor back-charged for the temporary light and power provided in 2001 and billed in December 2003 via Change Order #CC-25, as the Owner was not to be involved in arranging for temporary power and lighting. However, the Court discerns that White Plains was likely billed for two out of five invoices referenced in the change order. Invoices ## 14316 and 13915 appear to show charges to White Plains of $235.32 and $823.62, respectively. Accordingly, Equity requires that the amount of $1058.94 be allowed as a back-charge. Upon production of documentary proof that the Owner paid Burchetta for the remaining invoices listed as part of GC-25, they may be also allowed.

GC-32 is a charge for repair to pole lights. Trataros acknowledged damage caused to the pole lights in the amount of $5,404.79 and only disputes the additional charges of $243.66, for installation of temporary power for Terrazzo repair ($162.44) and for the disconnect and removal of temporary power for Terrazzo repair ($81.22). See DX-127, DX-140 at WPSD 012860. For the same reasons applied to GC-25, the Court agrees with Travelers that the additional $243.66 for power services should not have been back-charged by White Plains, and the invoice documentation submitted in DX-140 does not clearly show if White Plains did pay Burchetta for those services, and in what amount. Accordingly, the amount of $5,404.79 is allowed as a back- charge. Upon production of documentary proof that Owner White Plains actually paid Burchetta for the power services, the additional amount of $243.66 may also be allowed.

GC-36 concerns damage to data cables allegedly caused by Trataros’ demolition efforts in

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the amount of $1,483.01. See DX-127; DX-140 at WPSD 012878-882. The evidence reveals that this cost was not properly back-charged by White Plains, as Burchetta was responsible for protecting the wires it removed prior to the demolition efforts. This back-charge is disallowed.

GC-39 concerns damage allegedly caused by Trataros to piping during the window replacement, requiring Richards to drill new holes and cut and cap the piping, at a cost of $2,015.44. See DX-127; PX-1 93. While DX-140 does not appear to contain a copy of the change order, the evidence shows that the damage most likely occurred as a result of a coordination issue, which should have been managed by Thomas, and in any case there is insufficient documentary evidence to allow the back-charge. GC39 is disallowed.

GC-40 for $52,571.00 concerns a credit sought by White Plains for Trataros’ and Travelers’ non-performance of terrazzo patching ($47,507) and ceramic tile work ($5,244) on entrance lobby columns, valued by KG&D for a total of $52,571.00. See DX-l27; DX-140. White Plains contends that the terrazzo patching was required and that the specifications called for tile on the columns. Travelers contends that the Architect’s drawings reveal a deliberate act by the designer to omit the tiles in the column area, in contrast to the background wall tiles, and that KG&D deliberately deleted the terrazzo base intended for the columns in a conversation with the flooring subcontractor. White Plains argues that any such discrepancies discovered by a contractor were to be addressed with the Architect. rt is not disputed that with regard to the tile work valued at $5,244 by KG&D, the Architect’s drawings differed from the specifications. Defendant’s exhibit DX-140, however, includes a copy of a memo dated August 17, 2001,

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written by Specialty Flooring Systems to Trataros, and copied to Erie Kaeyer at KG&D. The memo memorialized, from a meeting held that same day, an agreement between the Architect and the flooring subcontractor to the effect that the terrazzo base was deleted and that in lieu of a credit for that deleted work, the flooring contractor would install a thicker form of terrazzo elsewhere. See DX-140. The Court finds that the Architect knew of and approved this change from the specifications. Accordingly the portion of GC-40 representing a back-charge for tile work ($5,244) is disallowed.

Travelers contends that the terrazzo patching was not included in the contract, but by its expert report, concedes that the demolition drawing stated: “When you remove the old unit ventilator (UV), you must patch and paint.” See PX-l93. The report goes on to state that when the UV’s were removed in the corridors, “it was discovered that the UV’s were installed prior to the previous terrazzo being installed” and “TCI agreed to patch this area with concrete and then paint this area.” Id. With only minimal evidence and testimony having been offered on this matter, the Court finds that the necessity to patch the actual terrazzo was unforeseen and that the cost for the terrazzo cannot properly be back-charged by White Plains, where Trataros had agreed only to patch with concrete and to paint the area. Accordingly the portion of GC-40 representing a back-charge for terrazzo work is disallowed.

GC-41 involves the numerous PCO’s adjudicated supra.

GC-42 concerns interior and exterior work. Travelers concedes that $12,300 worth of

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punch-list items were left incomplete. The Court concludes that the forced change directive GC42 issued on November 19, 2003, was based in part on incomplete or old information. The amount of $ 12,300.00 is approved as a back-charge for work never ultimately completed by Trataros or Travelers.

Waiver of Substantial Performance Argument

Defendant urges the Court to conclude that Travelers waived its right to argue substantial performance because it failed to dispute Trataros’ default and to deny liability, but rather elected under Paragraph 4.1 to step in to complete the job, which it would not have had to do, had substantial performance been achieved by January 30, 2003, as argued by Travelers. It argues that if the Project had been substantially complete by January 30, 2003, Travelers would have had no further obligation under the Forbearance Agreement or the Performance Bond. Under the totality of the circumstances in this case, the Court disagrees.

With regard to a wholly separate issue earlier raised by Travelers, this Court held:

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