New York Trenchless, Inc v. Hallen Construction Co, Inc. 2011 WL 834148 (2nd Dep’t , March 8, 2011)

According to this case the No-Damage-For-Delay provision is alive and well, and will be enforced in NY. Here National Grid entered into a contract with Hallen to install an underground power transmission cable on Long Island. Hallen subcontracted with NY Trenchless (NYT) to provide drilling services. The subcontract contained a no-damage-for-delay provision. NYT experienced delays on the project and submitted a claim to Hallan, which was ultimately denied by National Grid. NYT sued Hallen seeking compensation for delays, lost time and extra work. Hallen defended and moved for summary judgment asserting the no damage for delay provision. In response NYT argued that followed National Grid’s drilling plan which were faulty. As a result NYT claimed that Hallen had acted in bad faith. The trial court granted Hallen’s motion dismissing NYT’s delay claim. On appeal the order was affirmed. As stated by the 2nd Dept.: “Clauses in construction contracts which bar contractors from recovering damages for delay in the performance of the contract are generally valid and enforceable (see, Corinno Civetta Constr. Corp v. City of New York and Kalish-Jarcho v. City of New York) “There are exceptions to this general rule, and a clause which purports to preclude damages for all delays resulting from any cause will not be read literally. “Thus even where a contract includes a provision barring damages for delay, ‘damages may be recovered for: (1) delays caused by the contractee’s bad faith or its willful, malicious, or grossly negligent conduct, (2) uncontemplated delays, (3) delays so unreasonable that they constitute an intentional abandonment of the contract by the contractee, and (4) delays resulting from the contractee’s breach of a fundamental obligation of the contract.” Here NYT attempted unsuccessfully to assert the “bad faith” exception based on the defective drilling plans it was given to work from. The court held, however, that NYT’s affidavit was “conclusory, vague, and contradicted by documentary evidence.” As a result the no-damage-for-delay was enforced and NYT’s claim for delay was dismissed.