Summary Judgment in NY Breach of Contract

The Supreme Court of New York County recently heard the case of Hi-Tech Construction v. Housing Authority of the City of New York – the litigation sheds a great deal of light on the standard for summary judgment in a breach of contract case in New York. Summary judgment is a procedural tool available to either party in a litigation. It is a motion that basically asks the judge to rule in favor of the party filing the motion based solely on the pleadings and prior to actually hearing any evidence. In other words, to succeed in this kind of motion, the moving party must have an incredibly strong case – so strong there is no need to hear evidence. This type of motion is often filed, but rarely granted, so it is instructive to study a case where it was actually granted.

Background of the Case

Plaintiff sued defendant to recover damages for breach of contract. The contracts in question were public construction contracts, involving repairs, roof work, and brick work in two locations: the Harlem River and Sheepshead Bay.

The contracts both included a provision known as section 23. Section 23 provided that the plaintiff, if any disputes were to arise, would, within 20 days of the dispute or claim occurring, notify the defendant of the plaintiff’s intent to file a claim. The contract also provided that if such notice were not given, it would bar plaintiff’s right to recover via lawsuit or any other means, and would be deemed a waiver of plaintiff’s rights to recover.

Analysis: Summary Judgment

The court articulated the applicable standard for summary judgment in this case. The defendant (the party asking for summary judgment) must show, via admissible evidence, that there exist no material questions of fact. Since the function of a trial is to decide material questions of fact, this showing eliminates the need for a trial, and allows the court to issue a ruling on the legal issues.

Analysis: Contractual Provisions

The court then addressed the contract principles at issue. The first principle is that the failure by a party to comply with a contract’s condition(s) (often known as condition(s) precedent) bars further recovery. If a contract states that timely notice is required as a condition precedent to recovery, failure to provide this notice waives the right to recover.

There are various public policy arguments discussed throughout the opinion, as they relate to the specialized field of public construction contracts (in this case, those offered by the City). Most important is the citation of several previous cases involving the New York City Housing Authority (NYCHA) that include notice provisions. In all cases the notice provisions were strictly enforced due to the prevailing public policy of making public works contract disputes immediately known and certain, eliminating uncertainty and allowing the City to investigate immediately, instead of years later during litigation.

The NYCHA did in fact show evidence sufficient to fall within the previous precedent. Here, notice was not timely given by the plaintiff of the dispute. Thus the contract provisions, as a threshold matter, operated to bar liability on the dispute by defendant. Since there was no tenable claim of liability that the plaintiff could make, the case must fail and summary judgment was appropriate. It is also important to note that even if one party (eg the defendant) makes a sufficient showing that there are no material issues of fact, this is not conclusive, but merely shifts the burden to the other party (in this case the plaintiff) to make a counter-showing that a material issue does exist. Here, plaintiff could not make this kind of showing, and thus, loses.

Public construction contracts can involve subtleties of the law. It is thus important to hire experienced counsel to address these matters. Please do not hesitate to contact our officefor a consultation.