Between periods of limitation and various notice provisions, there are traps aplenty ready to trip up a contractor attempting to assert a valid claim. A recent Supreme Court, New York County decision sent a contractor packing for yet another reason--it failed to preserve its claim in an extension of time request.
 
A contractor entered into a contract with the City of New York to rehabilitate 12 bridges. It claimed it was not fully compensated for its services on six of the bridges and commenced a breach of contract action seeking $1.8 million. The City argued that with respect to five of the bridges, the contractor failed to commence its action within the shortened period of limitations set forth in the contract—6 months from the date of the certificate of substantial completion. The court agreed and dismissed the claim as to five of the six bridges.
 
Yet, with respect to the sixth bridge, the City had made a clerical error concerning the certificate and could not demonstrate that the claim was time-barred on that basis. But it had another argument available to it.
 
New York State honors time extension requests that reserve a contractor’s right to file a claim. However, you have to explicitly state your right to reserve such a claim in the request or you will be deemed to have waived it, whether you did so intentionally or not. Although the contractor, in that case, reserved its claim in an early extension of time request, a later one did not include such a reservation. The court found the claim to have been waived.
 
Efforts by the contractor to demonstrate that later documents had all reflected an intention to reserve the claim (payment release waivers, statements of claim, notices of claim) all proved unavailing. Once it was waived, even accidentally, it could not be resurrected.

Contact GDB Construction Law attorney Randy J. Heller, Esq. for more information.