Morales Electrical Contracting, Inc. v. Siemens Building Technologies, Inc.

Filing 84

MEMORANDUM OF DECISION AND ORDER - It is hereby: ORDERED, that the Defendants motion for summary judgment dismissing the Plaintiffs fraudulent inducement cause of action is DENIED, and it is further ORDERED, that the Defendants motion for summary j udgment dismissing the Plaintiffs fraudulent concealment cause of action is DENIED, and it is further ORDERED, that the Defendants motion for summary judgment dismissing the Plaintiffs acceleration breach of contract cause of action is DENIED, and it is further ORDERED, that the Defendants motion for summary judgment dismissing the Plaintiffs change order breach of contract causes of action is DENIED, and it is further ORDERED, that the Defendants motion for summary judgment dismissing the Plain tiffs claim for consequential and indirect damages is DENIED, without prejudice, and it is further ORDERED, that jury selection in this case will take place on April 9, 2012 at 9:00am. Ordered by Senior Judge Arthur D. Spatt on 3/28/2012. (Coleman, Laurie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------X
MORALES ELECTRICAL CONTRACTING,
INC.,
Plaintiff,

MEMORANDUM OF
DECISION AND ORDER
09-CV-2743 (ADS)(ETB)

-againstSIEMENS BUILDING TECHNOLOGIES,
INC.,
Defendant.
---------------------------------------------------------X
APPEARANCES:
Vandenberg & Feliu LLP
Attorneys for the Plaintiff
60 East 42nd Street, 51st Floor
New York, NY 10165
By: Raymond L. Vandenberg, Esq.
Robert B. Bernstein, Esq.
Debra Kobrin Levy, Esq.
John C. Ohman, Esq., Of Counsel

Venable LLP
Attorneys for the Defendant
1270 Avenue of the Americas
New York, NY 10020
By: Lawrence H. Cooke, III, Esq., Of Counsel

SPATT, District Judge.
This lawsuit arises out of a subcontract that Morales Electrical Contracting, Inc.
(“Morales” or “the Plaintiff”) entered into with Siemens Building Technologies, Inc. (“Siemens”
or “the Defendant”) for the purpose of performing electrical work on a project at the JetBlue
Airways terminal at John F. Kennedy International Airport (“JFK”). Presently before the Court
is a motion by the Defendant for summary judgment dismissing all of the Plaintiff’s claims, or,

1

in the alternative, partial summary judgment limiting the Plaintiff’s available damages. For the
reasons set forth below, the motion is denied in its entirety.
I. BACKGROUND
Unless otherwise indicated, the following constitutes the undisputed facts of the case
derived from the parties’ submissions, accompanying affidavits, and Local Rule 56.1 Statements.
A. Factual Background
On March 23, 2006, Turner Construction Company (“Turner”) and Siemens entered into
a contract (“the Turner-Siemens Contract”) whereby Siemens agreed to undertake a construction
project at the JetBlue Airways terminal at JFK (“the JetBlue Project”). Pursuant to the TurnerSiemens Contract, Siemens agreed to perform and furnish all work, labor, services, materials,
parts, equipment, tools, scaffolds, appliances and other things for Facility Management Systems
(Control) Work on the Project (the “FMS Work”). (Def.’s 56.1, ¶ 6.) Incorporated into the
Turner-Siemens Contract was the General Provisions document issued by Turner and dated
March 20, 2006, (“Turner General Provisions”), which in turn incorporated a Turner Project
Master Schedule dated March 21, 2006 (the “Project Master Schedule”). The parties dispute
whether the Project Master Schedule was a multi-page detailed schedule, or a one page bar chart
summary. Because the initialed schedule appended to the Turner-Siemens Contract was the one
page bar chart summary, for the purposes of this motion, the Court will refer to the bar chart as
the “Project Master Schedule”. The Project Master Schedule identifies two milestones for the
JFK Project: Temporary Certificate of Occupancy on or before July 1, 2008, and Substantial
Completion on or before August 1, 2008. (Id., ¶ 11.) In addition, page 3Y of the Turner General
Provisions identifies a requirement to provide temporary heat, stating:
For temporary heating/cooling seasons, all HVAC control work for
the AHU‟s shall be complete to run equipment as a stand-alone

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control system from the control panel furnished and installed by
the FMS subcontractor. Metering system must be functional
during temporary operation.
(Id., ¶ 72.) The parties agree that this language indicates that temporary heat
would need to be provided by the fall of 2007.
By letter, dated April 18, 2006, Siemens Account Executive Geralyn Spadafino contacted
Alan Smith, the Vice President of Morales to solicit a bid for the electrical installation portion of
the FMS work (“the Work”), which stated that Morales should base its bid on 14 identified
categories of information, including the Turner General Provisions, and various sketches,
drawings, and diagrams that described the nature of the electrical work that Siemens sought
(“Invitation to Bid”). (Id., ¶ 29.) The Invitation to Bid stated that Morales should “please let us
know if you are missing any information” and invited Smith to contact Spadafino if Morales
required any further information in order to prepare a bid. (Id., ¶ 71.) Siemens states that all of
the documents listed on the Invitation to Bid, including the Turner General Provisions and the
Project Master Schedule, were transmitted to Morales as part of the “Bid Package”. (Id., ¶ 30.)
Morales denies that it received the Turner General Provisions or Project Master Schedule, and
states that it only received electrical drawings and mechanical drawings dated “1/17/06” through
Addendum #34, 23 hand-drawn sketches and certain building management system specifications.
(Pl.’s 56.1, ¶ 30.) In addition, Morales states that Siemens could not have sent the Turner
General Provisions with the Invitation to Bid because evidence indicates that Siemens did not
have the final version of the document as of that date. (Id., ¶¶ 10, 53.)
On May 16, 2006, Smith called Spadafino in order to determine when Siemens expected
the work to be completed. According to Morales, Spadafino told Smith that the Work would
begin in late 2006 and was to be completed in late 2008. (Id., ¶ 32.) For its part, Siemens states
that Spadafino represented that the JetBlue Project was to be completed in late 2008, not the
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Work. (Def.’s 56.1, ¶ 32.) It is undisputed that during this conversation, Smith did not ask for a
copy of the Turner General Provisions or any documented project schedule, and that Spadafino
did not refer Smith to the Turner General Provisions or the Project Master Schedule for
information about the duration of the JetBlue Project or the Work.
By letter dated May 17, 2006, Morales submitted an initial bid of $1,585,000 that it stated
was based in part on the Invitation to Bid “1-page coversheet dated 4/18/06” and “Siemens one
line diagrams 23 pages” (“Initial Bid”). (Spadafino Decl., Ex. B.) Subsequently, on August 30,
2006, another Morales employee, Giacomo Grandi, attended a meeting with Siemens employees
Richard Dillon, William Anderson and Robert Hayes at Siemens’ office in Pine Brook, New
Jersey (the “Pine Brook Meeting”). The Pine Brook Meeting was a “scope review” meeting, to
allow potential contractors to ask questions about the scope of the electrical installation work in
order to assist them in preparing their bids.
The parties dispute whether and to what extent Hayes informed Grandi that the scope of
the project was more expansive than what was reflected in the 23 pages of hand-drawn sketches
transmitted with the Bid Package. At this meeting, Grandi was given access to a submittal book
with information about the project (the “August Submittal Book”). The August Submittal Book
contained several changes from the drawings and diagrams included with the Invitation to Bid.
Although Grandi admits he was given the opportunity to look at the book and ask questions
about it, the parties dispute whether Grandi was aware that the August Submittal Book contained
material changes from the 23 hand-drawn sketches, and also dispute whether Grandi was given a
copy of the August Submittal Book to take back to Morales. Morales asserts that Grandi could
not have meaningfully reviewed the August Submittal Book at the Pine Brook Meeting because
“the book consisted of several hundred pages of detailed shop drawings that were not capable of

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any meaningful “review” in one sitting”. (Pl.’s 56.1, ¶ 83.)
In a letter, dated September 5, 2006, Smith wrote to Siemens’s project manager, Robert
Hayes, to break down the prices of Morales’ revised bid, and stating “Completion is based on
12/08”. (Morales Designee Dep., Ex. 9.) Subsequently, Smith had a conversation with Dillon to
discuss whether Morales could lower its final bid by $100,000. (Smith Dep., 103–04.) Neither
Dillon, Hayes, nor any other Siemens representative disputed Smith’s understanding of the target
completion date, sought to clarify whether Morales understood that the JetBlue Project
completion date was December 2008, or referred Morales to the Turner General Provisions or
Project Master Schedule.
On September 13, 2006, Morales submitted a second and final bid of $1,485,000, which
was accepted by Siemens. (Def.’s 56.1 ¶¶ 94–95.) On October 25, 2006, the parties’ agreement
was formalized in a written contract (“the Subcontract”). The parties dispute whether the
Subcontract incorporated the Turner-Siemens Contract, the Turner General Provisions, and the
Project Master Schedule. However, there is no dispute that these documents were not attached to
the Subcontract, and that no one at Morales read these documents prior to signing the
Subcontract.
The provision of the Subcontract addressing the schedule for the project stated that
“SUBCONTRACTOR shall commence the Work on September 21, 2006 and shall prosecute the
Work diligently as required by the project schedule to allow for project completion on or before
December 2008” (the “Term Provision”). The parties dispute whether the reference to “project”
means the entire JetBlue Project or the FMS Work, and whether “project completion” refers to
final completion or substantial completion. In addition, the Subcontract contained a provision

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allowing for the parties to enter “[s]pecific scheduling milestones and coordination
requirements” (“the Milestone Provision”). However, this provision was left blank.
Other relevant portions of the Subcontract include: (1) a waiver by Morales of its
reliance on any prior oral or written statements, agreements, or representations (“the Merger
Clause”); (2) a provision authorizing Siemens by written order “to make changes in the Work, or
the conditions under which it is to be performed, or . . . increase or decrease the services to be
performed” and stating that Morales “acknowledges and agrees that it waives all right or claim
for compensation for any additional or other work not specifically authorized in writing by
[Siemens] prior to the commencement of such work”; (3) a limitation on consequential damages;
and (4) a jury waiver for certain disputes.
Although the parties disagree about what documents constituted the Subcontract and the
meaning of specific provisions, Morales does not dispute that its principal, Alan Smith, read the
entire Subcontract carefully before signing it and made handwritten changes. In particular, Smith
added to Article 1.3 of Exhibit A to the Subcontract listing the relevant scope documents the
words “Morales quote dated 9-13-06” in the list of “Project Plans and Specifications” and “4-1806 23 pages of panels, sketches, (i) riser diagram (1) scope page” following the term “Siemens
Building Technologies submittal dated.” (Def.’s 56.1, ¶ 105.)
On or about October 31, 2006, Morales began its work on the JetBlue Project. (Def.’s
56.1, ¶ 134.) According to Morales, after it began the work, it made numerous requests for a
copy of a detailed trade-by-trade project master schedule. Although Siemens admits it did not
respond to these requests, Siemens contends that it was not in possession of an accurate detailed
schedule that it could provide Morales, and that all relevant scheduling information was available

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at the weekly foreman meetings, which a Morales representative could have attended, but did
not.
On April 3, 2007, Hayes sent Smith a copy of the Project Master Schedule, which
Morales contends was insufficient because it did not include information about the electrical
installation work, and did not disclose the temporary heat deadline. (Def.’s 56.1, ¶ 196, Pl.’s
56.1, ¶ 196.) In July 2007, Siemens and Turner began meeting with Morales to review the progress
of the FMS electrical installation as it pertained to the requirement to provide temporary heat.
(Def.’s 56.1, ¶ 161.) Following this meeting, Turner directed Siemens to provide Morales with a
comprehensive project schedule. On July 16, 2007, Siemens provided Morales with a Draft
Preliminary Schedule with a run date of November 30, 2006, (“Turner November 30th Draft
Schedule”). According to Morales, the Turner November 30th Draft Schedule was not the latest
draft, and, in any event, for the first time showed that Morales needed to substantially complete its
Work by October 2007.

Morales met the temporary heat deadline in November 2007. The parties dispute whether
this constituted the “substantial completion” of Morales’s work. Morales continued working on
the JetBlue Project until January of 2009. However, Morales contends that in the last five
months of 2008, it worked at the site only seven days and that the work it performed was change
order work that was not part of the Subcontract. (Pl.’s 56.1, 230–32.)
Between October 6, 2006, and December 22, 2008, Morales made 134 Change Order
requests for work performed that it believed was outside the scope of the original Subcontract.
(Def.’s 56.1, ¶ 201.) Morales submitted change order requests totalling $746,136.97 and
accepted payments from Siemens in respect of these change orders in the amount of
$421,177.18. Siemens contends that Morales was adequately compensated for the additional
work it performed. Morales disagrees, and claims it accepted lesser amounts for the work

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because: (1) it had to substantially complete its work in one year instead of the two years called
for in the Subcontract; (2) it had already been directed to perform the work and had expended
resources to do so; and (3) it was under “extreme financial duress” to accept amounts below what
it was rightfully owed because the amounts were offered on a “take-it-or-leave-it” basis. (Pl.’s
56.1, 204–22.) The parties dispute whether the amount of change orders was typical for a project
as large and complex as the work Morales was performing. (Def.’s 56.1, ¶ 224; Pl.’s 56.1,
¶ 224.) In total, Morales received $1,966,471.74 for its work on the JetBlue Project. (Def.’s
56.1, ¶ 225.)
B. Procedural History
On August 26, 2009, Morales filed an Amended Complaint against Siemens asserting the
following five causes of action: (1) Siemens fraudulently concealed information it was obligated
to disclose regarding the scope and duration of the JetBlue Project in order to induce Morales
into submitting a lower bid for the Subcontract; (2) Siemens fraudulently induced Morales to
enter into the Subcontract by misrepresenting the scope of the JetBlue Project and the duration of
time Morales would have to complete the Work; (3) Siemens breached the Subcontract by
expanding the scope of the Work and accelerating Morales’s time to complete it (the
“acceleration breach of contract claim”); (4) Siemens breached the Subcontract by failing to pay
fair value for the additional work reflected in four change orders; and (5) Siemens breached the
Subcontract by refusing to compensate Morales for the additional work associated with ten other
change orders (together with the fourth cause of action the “scope breach of contract claims”).
According to Morales, as a result of the acceleration and expanded scope of the Work, it was
forced to incur additional costs beyond those it had contemplated in bidding on the Subcontract

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and ultimately led to the loss of its business, resulting in Morales being unable to repay millions
of dollars in loans and the loss of millions of dollars in future profits. (Pl.’s 56.1, Add’l 46–50.)
In a Memorandum of Decision and Order dated February 16, 2010, the Court denied
Siemens’ motion to dismiss the Amended Complaint and permitted Morales to have an
additional opportunity to amend the complaint to plead their scope fraud claims with greater
particularity. (Docket Entry #29.) On March 8, 2010, Morales filed the Second Amended
Complaint asserting the same causes of action, but providing additional detail about Siemens
alleged misrepresentations about the scope of the work.
On August 29, 2011, Siemens filed the instant motion for summary judgment and on
February 21, 2012, the Court held oral argument on the motion.
II. DISCUSSION
A. Standard of Review – Fed. R. Civ. P. 56
It is well-settled that summary judgment under Fed. R. Civ. P. 56(c) is proper only “if the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). The moving party bears
the burden of establishing the absence of a genuine issue of material fact. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A fact is
“material” within the meaning of Fed. R. Civ. P. 56 when its resolution “might affect the
outcome of the suit under the governing law.” Id. at 248, 106 S. Ct. 2505. An issue is “genuine”
when “the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Id. In determining whether an issue is genuine, “[t]he inferences to be drawn from the
underlying affidavits, exhibits, interrogatory answers, and depositions must be viewed in the

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light most favorable to the party opposing the motion.” Cronin v. Aetna Life Ins. Co., 46 F.3d
196, 202 (2d Cir.1995) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 8
L. Ed. 2d 176 (1962) (per curiam), and Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465
(2d Cir. 1989)).
Once the moving party has met its burden, “the nonmoving party must come forward
with ‘specific facts showing that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (quoting
Fed. R. Civ. P. 56(e)). However, the nonmoving party cannot survive summary judgment by
casting mere “metaphysical doubt” upon the evidence produced by the moving party.
Matsushita, 475 U.S. at 586. Summary judgment is appropriate when the moving party can
show that “little or no evidence may be found in support of the nonmoving party’s case.” Gallo
v. Prudential Residential Servs., 22 F.3d 1219, 1223–24 (2d Cir. 1994) (citations omitted).
B. Whether the Defendant is Entitled to Summary Judgment on the Plaintiff’s Fraudulent
Inducement and Fraudulent Concealment Causes of Action
The Plaintiff’s fraudulent concealment and fraudulent inducement claims relate to alleged
misrepresentations and omissions relating to the duration of the Work (“duration fraud”) and the
scope of the Work (“scope fraud”). As an initial matter, the Court notes that the Defendant
moves for summary judgment on the ground that the Plaintiff’s fraud claims are duplicative of
the Plaintiff’s breach of contract claims. This same argument was raised by the Defendant and
rejected by this Court in its February 16, 2010 decision on the Defendant’s motion to dismiss.
The summary judgment record does not alter the Court’s finding on this issue and therefore the
Court finds that there are genuine issues of material fact precluding the Court from dismissing
the fraud causes of action as duplicative of the breach of contract causes of action.

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With respect to the duration fraud claim, the Plaintiff contends that the Defendant orally
represented that it had until December 2008 to substantially complete the Work and that the
Defendant confirmed this representation through the Term Provision of the Subcontract. The
Plaintiff further alleges that this representation was false, because it had only one year to
substantially complete its work insofar as its work had to be substantially complete by the
October 2007 temporary heat deadline. According to the Plaintiff, Siemens was aware that the
Work would have to be substantially completed within one year based on conversations with
Turner, the Turner General Provisions, and versions of a project master schedule within its
possession, but concealed this information from the Plaintiff in order to induce a lower bid.
The Plaintiff’s scope fraud claims are premised on the allegations that, the Defendant was
aware that it was basing its bid on the 23 pages of hand-drawn sketches it received with the Bid
Package, and that, based on the detailed shop drawings in the August Submittal Book, the
Defendant knew that the scope of the Work was more expansive than what was contained in the
23 pages of hand-drawn sketches.
The Defendant mainly contends that it is entitled to summary judgment on the scope and
duration fraud causes of action because the Plaintiff’s reliance on its alleged misrepresentations
and omissions with respect to the scope and duration of the Work was unreasonable as a matter
of law. In particular, the Defendant argues that the Plaintiff’s reliance was not justified because:
(1) the Plaintiff disclaimed reliance on any prior oral or written agreements in the Merger Clause
of the Subcontract; (2) the Plaintiff failed to exercise reasonable diligence in the review and/or
pursuit of relevant documents; and (3) the terms of the documents incorporated in the Subcontract

expressly contradict the purported misrepresentations and omissions.

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1. Merger Clause
Article 4.3 of the Subcontract states in relevant part:
The documents referenced in sections 4.1 and 4.2 constitute the
entire
Subcontract
between
CONTRACTOR
and
SUBCONTRACTOR
and
supersede
all
prior
and
contemporaneous negotiations, statements, representations,
agreements, letters of intent, awards, or proposals, either written or
oral. . . .
Contrary to the Defendant’s contention, the fact that the Subcontract contained a provision
generally disclaiming reliance on oral or written representations does not render the Plaintiff’s
reliance unreasonable as a matter of law.
Under New York law, “the introduction of extrinsic evidence with regard to a fraud in the
inducement claim is a well-known exception to the parol evidence rule.” Petrello v. White, 412
F. Supp. 2d 215, 226 (E.D.N.Y. 2006). Although New York law “has foreclosed parol evidence
where the contract includes a negotiated merger clause or an explicit disclaimer regarding the
same subject matter as the alleged oral representation”, Wall v. CSX Transp., Inc., 471 F.3d 410,
416, 416 n.5 (2d Cir. 2006) (citations omitted), “a general merger clause is ineffective . . . to
preclude parol evidence that a party was induced to enter the contract by means of fraud”, Mfrs.
Hanover Trust Co. v. Yanakas, 7 F.3d 310, 315 (2d Cir. 1993). Thus, where, as here, “[t]he
merger clause contains the standard boilerplate that typifies a general merger clause, and does
not contain any language specific to the representations at issue”, it will not preclude a fraudulent
inducement claim based on alleged misrepresentations. Fierro v. Gallucci, No. 06-CV-5189,
2008 WL 2039545, at *13 (E.D.N.Y. May 12, 2008). Accordingly, the existence of the Merger
Clause does not compel the dismissal of the Plaintiff’s fraud causes of action.

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2. Reasonable Reliance
In order to defeat the motion for summary judgment on grounds of fraudulent
inducement, the Plaintiff must raise a genuine issue of material fact as to whether it “reasonably
relied on false representations” made by the Defendant. Fax Telecommunicaciones Inc. v. AT &
T, 138 F.3d 479, 490 (2d Cir. 1998). “[R]easonable reliance is an essential element of fraudulent
inducement.” Psenicska v. Twentieth Century Fox Film Corp., 409 F. App’x 368, 371 (2d Cir.
2009). Under New York law, where “the facts represented are not matters peculiarly within the
party’s knowledge, and the other party has the means available to him of knowing, by the
exercise of ordinary intelligence, the truth, or the real quality of the subject of the representation
he must make use of those means, or he will not be heard to complain that he was induced to
enter into the transaction by misrepresentations.” Continental Airlines, Inc. v. Lelakis, 129 F.3d
113 (Table), 1997 WL 701363, at *3 (2d Cir. Nov. 10, 1997) (quoting Danann Realty Corp. v.
Harris, 184 N.Y.S.2d 599, 603 (1959)). “In assessing the reasonableness of a plaintiff's alleged
reliance, [courts] consider the entire context of the transaction, including factors such as its
complexity and magnitude, the sophistication of the parties, and the content of any agreements
between them.” Emergent Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 343 F.3d 189 (2d
Cir. 2003). With respect to the impact of due diligence obligations on reasonable reliance, the
Second Circuit stated in Lazard Freres & Co. v. Protective Life Insurance Co., 108 F.3d 1531 (2d
Cir. 1997):
“[W]here . . . a party has been put on notice of the existence of
material facts which have not been documented and he
nevertheless proceeds with a transaction without securing the
available documentation or inserting the appropriate language in
the agreement for his protection, he may truly be said to have
willingly assumed the business risk that the facts may not be as
represented. Succinctly put, a party will not be heard to complain

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that he has been defrauded when it is his own evident lack of due
care which is responsible for his predicament.”
Id. at 1543 (quoting Rodas v. Manitaras, 159 A.D.2d 341, 343, 552 N.Y.S.2d 618, 620 (1st Dep't
1990)).
Here, there are significant factual issues regarding what information about the scope and
duration of the project the parties either possessed or had access to both before and after entering
into the Subcontract. See In re Eugenia VI Venture Holdings, Ltd. Litig., 649 F. Supp. 2d 105,
118 (S.D.N.Y. 2008) ("The question of whether a plaintiff's reliance was reasonable typically
turns on plaintiff's knowledge, or access to knowledge, at the time the alleged misrepresentations
were made; that is, what Plaintiff knew or should have ascertained, given the particular
circumstances."). For example, Alan Smith, the Vice President of Morales testified at his
deposition that Geralyn Spadafino of Siemens told him in a phone conversation on May 16, 2006
that the Work was to last two years, from late 2006 to late 2008. (Pl.’s 56.1 Add’l ¶ 22.)
Giacomo Grandi, an employee of Morales, testified that Robert Hayes of Siemens told him at the
Pine Brook Meeting that it was “a two-year job” with a “substantial completion” date of
December 2008. (Pl.’s 56.1 Add’l ¶ 24.) However, both Spadafino and Hayes dispute these
accounts. Furthermore, the Plaintiff has submitted evidence from which a reasonable juror could
find that the Defendant was in possession of detailed project master schedules and general
provisions documents prior to November 1, 2006 showing that the electrical installation work for
the building management system would have to be completed within one year. (Pl.’s 56.1 Add’l
¶¶ 6–8.)
The record is also replete with issues of fact pertaining to the Defendant’s alleged
concealment of the project schedule after the Plaintiff commenced the Work, and whether and to
what extent this information was otherwise available to the Plaintiff. For example, the record

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contains a substantial amount of correspondence from Morales to Siemens after Morales
commenced the Work requesting copies of the JetBlue Project schedule and expressing concern
that the two year project was being compressed into a one year project. (See, e.g., Hayes Dep.,
Exs. 13, 14, 15, 21). The Defendant does not deny that it did not provide the Plaintiff with a
copy of the Project Master Schedule until April 3, 2007, and that it provided the Plaintiff with a
trade-by-trade master schedule on July 16, 2007 only after being directed to do so by Turner.
(Def.’s 56.1, ¶¶ 196, 198.) However, the Defendant provides an explanation that a reasonable
jury could find justified its actions and has submitted evidence that: (1) it was not in possession
of the various versions of the Turner master schedule the Plaintiff alleges it concealed (Def.’s
56.1, ¶¶ 177, 179); (2) the Plaintiff could have obtained a master project schedule from Turner;
and (3) the Plaintiff failed to attend weekly foreman meetings that would have provided the
Plaintiff with schedule information (Def.’s 56.1 ¶¶ 147, 150–56).
In addition, the record contains evidence submitted by both parties with respect to
whether a reasonable subcontractor would have reviewed the Turner General Provisions for
scheduling information or based its bid on an oral representation about a substantial completion
date without requesting a project schedule or written confirmation. For example, the Plaintiff’s
expert, Janet Meadows, a New York State Licensed Professional Engineer and Vice President of
the Controls Division at T.M. Bier & Associates, Inc., opined in her expert report that, in the
construction industry, “[u]nless you are told to examine the ‘General Provisions’ document for
information pertaining to Schedule and Milestones, there is no reason why anyone in our
business would expect that such a document, by its title, would contain anything else other than
Job Conditions, Safety Rules, Submittal Process and items of general nature about conditions at
the particular project site.” (Expert Report of Janet Meadows at 4.)

15

By contrast, the Defendant’s expert, Mark I. Anderson, the Executive Vice President of
Warner Construction Consultants, Inc., opined that “[t]o the extent that Morales underestimated
the requirements of the Project as a result of failing to consider all available information, or
asking for and obtaining all available information, Morales is responsible for any resulting
underestimation of the labor, materials, equipment and/or resources required to complete the
work.” (Expert Report of Mark Anderson at 15.)
Finally, while a review of the Turner General Provisions or August Submittal Book
would have rendered the Plaintiff’s reliance on the alleged misrepresentations and omissions
unreasonable as a matter of law, there is an issue of fact with respect to whether the Plaintiff was
ever “put on notice” that these documents contained material information that contradicted the
Defendant’s alleged misrepresentations. Cf. Creative Waste Mgmt., Inc. v. Capitol Envtl. Servs.,
Inc., 429 F. Supp. 2d 582, 608 (S.D.N.Y. 2006) (“It is unclear whether a reasonable contractor
would have been placed on notice of this condition prior to starting the dredging. These are
issues that must be established at trial and are inappropriate to determine at this stage of the
litigation.”).
Thus, a determination as to whether the Plaintiff reasonably relied on any alleged
misrepresentations or omissions involves a fact-intensive inquiry and credibility assessments that
cannot be resolved on a motion for summary judgment.
3. The Subcontract
“Under New York law, reasonable reliance is precluded when an express provision in a
written contract contradicts a prior alleged oral representation in a meaningful fashion.” Republic
Nat'l Bank v. Hales, 75 F. Supp. 2d 300, 315 (S.D.N.Y.1999) (internal quotation marks and
citation omitted); see also Bango v. Naughton, 184 A.D.2d 961, 963, 584 N.Y.S.2d 942, 944 (3d

16

Dep't 1992) (“[C]onflict between the provisions of the written contract and oral representations
negates the claim of reliance upon the latter.”).
According to the Defendant, the incorporation of the Turner General Provisions and the
Project Master Schedule deem any reliance by the Plaintiff on its purported misrepresentations
and omissions about the scope and duration of the project unreasonable as a matter of law. The
Plaintiff contends that, because the Turner General Provisions were not attached to the
Subcontract, they were not incorporated and therefore the Plaintiff is not bound by their terms.
“Whether an extrinsic document is deemed to be incorporated by reference is a matter of
law.” Sea Trade Co. Ltd. v. FleetBoston Fin., No. 03-CV-10254, 2007 WL 1288592, at *4
(S.D.N.Y. May 1, 2007). “To incorporate a document by reference, New York law requires that
the document be referenced beyond all reasonable doubt.” 4Connections LLC v. Optical
Commc’ns Group, Inc., 618 F.Supp.2d 178, 183 (E.D.N.Y. 2009) (citing Chiacchia v. Nat'l
Westminster Bank USA, 124 A.D.2d 626, 507 N.Y.S.2d 888, 889–90 (2d Dep't 1986)). “When
a contract clearly identifies a single document, it eliminates all reasonable doubt and thus
qualifies as an effective incorporation.” Id. (citing Progressive Casualty Ins. Co. v. C.A.
Reaseguradora Nacional De Venezuela, 991 F.2d 42, 47 n. 8 (2d Cir. 1993)).
In order for a document to be deemed incorporated by reference into another instrument
or agreement, the following two elements must be satisfied: (1) “the agreement must specifically
reference and sufficiently describe the document to be incorporated, such that the latter ‘may be
identified beyond all reasonable doubt’” and (2) “‘it must be clear that the parties to the
agreement had knowledge of and assented to the incorporated terms’”. Ryan, Beck & Co., LLC.
v. Fakih, 268 F. Supp. 2d 210, 223 (E.D.N.Y. 2003) (quoting PaineWebber Inc. v. Bybyk, 81
F.3d 1193, 1201 (2d Cir. 1996)). “While a party's failure to read a duly incorporated document

17

will not excuse the obligation to be bound by its terms, a party will not be bound to the terms of
any document unless it is clearly identified in the agreement.” PaineWebber Inc. v. Bybyk, 81
F.3d 1193, 1200 (2d Cir. 1996) (internal citations omitted).
Here, the Court finds that the Turner General Provisions was sufficiently identified in two
separate provisions of the Subcontract to satisfy the first element of the incorporation analysis.
First, Article 4.2 of the Subcontract incorporated the Turner-Siemens Contract, stating that:
This Subcontract is subject to each of the drawings, specifications,
addenda, terms and conditions contained or incorporated in the
Contract between CONTRACTOR and the Customer (the
“Contract”) which are hereby incorporated by reference excluding
only such terms and conditions which by ordinary and reasonable
rules of construction are not applicable to the portion of the Project
performed by the Subcontractor. . . .
(Id. (emphasis added).) There is no dispute that the Turner-Siemens Contract incorporated and
attached the Turner General Provisions, which in turn incorporated and attached the Project
Master Schedule. Although the Plaintiff contends that the Defendant had to attach the TurnerSiemens Contract in order to incorporate it, the law does not impose such a requirement. Cf.
Gold v. Deutsche Aktiengesellschaft, 365 F.3d 144, 150 (2d Cir. 2004) (“Moreover, while it
would have made sense for Deutsche Bank to have explained the form and to have provided
Gold the NASD rules that were incorporated by reference, we do not find on this record that the
failure to do so renders the arbitration clause invalid.”). Furthermore, the plain language of
Article 4.2 incorporating the Turner-Siemens Contract does not require the Turner-Siemens
Contract to be attached in order to be incorporated.
The second reference to the Turner General Provisions is in Exhibit A to the Subcontract,
which is entitled “Scope of Work and Schedule of Services”. Exhibit A contains two sections.
Article 1 is titled “SCOPE OF THE WORK” (the “Scope Section”) and Article 2 is titled

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“PERFORMANCE PERIOD/SCHEDULE” (the “Schedule Section”). Article 1.3 of the Scope
Section states:
Technical Specifications, Drawings, and Exhibits: The Work shall
be performed in strict accordance with the following
specifications, drawings and other attachments hereto, which are
specifically incorporated herein and made part hereof . . . .”
(Id.) Article 1.3 of the Scope Section lists nine items, including the “Turner General Provisions
dated 3/20/06”. The Plaintiff relies on the “attachments hereto” language in Article 1.3 to argue
that the Turner General Provisions and other documents listed in Article 1.3 were not
incorporated because they were not attached to the Subcontract. This argument in unavailing in
light of the fact that the Plaintiff inserted references to additional documents into Article 1.3 that
it contends are a part of the Subcontract, but which were not attached to the Subcontract. Indeed,
Alan Smith of Morales testified that he considered them part of the document.
A. Yes. I see Section 1.3, technical specifications and drawings
and exhibits.
Q. And the proposed subcontract says, “The work shall be
performed in strict accordance with the following specifications,
drawings and other attachments hereto, which are specifically
incorporated herein and made part hereof.”
What was your understanding of that phrase?
A. That phrase would mean that items listed below are to be
considered in processing our work.
Q. Are the items listed below to be considered part of the
subcontract?
....
A. The items listed below are part of - - in my opinion, part of the
contract.
(Smith Dep., 134–35.) Thus, as with the Turner-Siemens Contract, the Turner General
Provisions and the other documents referenced in Article 1.3 satisfy the first element of the
incorporation analysis.
With respect to the second element, the Court finds that it is clear that the parties “had
knowledge of and assented to the incorporated terms” relating to the scope of the Work, but not
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the duration of the Work, and therefore only the terms of the Turner General Provisions relating
to the scope of the Work were incorporated into the Subcontract and binding on the Plaintiff.
It is well-settled in New York that “incorporation clauses in a construction subcontract,
incorporating prime contract clauses by reference into a subcontract, bind the subcontractor . . .
as to prime contract provisions relating to the scope, quality, character and manner of the work to
be performed by the subcontractor.” Bussanich v. 310 East 55th St. Tenants, 282 A.D.2d 243,
244, 723 N.Y.S.2d 444, 445 (1st Dep’t 2001); see also S. Leo Harmonay, Inc. v. Binks Mfg. Co.,
597 F. Supp. 1014, 1024 (S.D.N.Y.1984), affd., 762 F.2d 990 (2d Cir. 1985); Wonder Works
Const. Corp. v. R.C. Dolner, Inc., 73 A.D.3d 511, 513, 901 N.Y.S.2d 30, 32 (1st Dep’t 2010);
Waitkus v. Metro. Housing Partners, 50 A.D.3d 260, 261, 854 N.Y.S.2d 388, 390 (1st Dep’t
2008). However, “[p]rime contract provisions unrelated to the work of the subcontractor, such
as a ‘dispute’ clause governing the resolution of monetary claims between the project owner and
general contractor, are not incorporated by reference into a subcontract.” U.S. Steel Corp. v.
Turner Const. Co., 560 F. Supp. 871, 874 (S.D.N.Y. 1983) (citations omitted); see also Wolff &
Munier, Inc. v. Whiting-Turner Contracting Co., 946 F.2d 1003, 1008 n.5 (2d Cir. 1991) (noting
that a clause barring damages for delay may be incorporated into a subcontract when the
incorporation is express and unambiguous).
Thus, any aspects of the Turner-Siemens Contract relating to the scope of the Work,
including the terms and conditions in the Turner General Provisions that are incorporated by
reference, were binding on the Plaintiff. This finding is further supported by the fact that the
Turner General Provisions were included as one of the relevant scope documents in Article 1.3
of the Scope Section.

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Nevertheless, on the record before the Court, the fact that the scope terms and conditions
are incorporated does not automatically warrant summary judgment for the Defendant on the
Plaintiff’s scope fraud claims. Although the Defendant generally states that it would have been
unreasonable for the Plaintiff to rely on the 23 hand-drawn sketches upon review of the Turner
General Provisions, the only evidence submitted by the Defendant are expert reports comparing
the 23 pages of hand-drawn sketches to the Addendum #34 drawings and the August Submittal
Book. Notably, the August Submittal Book is not included as one of the relevant scope
documents in Article 1.3, and in fact, as indicated by the testimony of Alan Smith at his
deposition, was removed by the Plaintiff from a draft of the Subcontract to protect Morales from
being bound by its contents.
Q. Is it true that you did not want to agree to a subcontract that
included the last bullet point in this section, which I will read,
“Siemens Building Technologies, submitted dated 9/27/06.”
A. That was one of the items that I had inputted on in my return of
the contract back to Siemens.
Q. And what was the reason that you provided specific input on
this identified item of the technical specifications, drawings and
exhibits?
A. The reason why I crossed out and changed and inputted
additional information on the last bullet point listed in this
subcontract was because we never saw the submittal book, and we
wanted to make sure it was clear, contract was clear, that our scope
was based on the 23 pages of hand draw sketches.
(Smith Dep., 125.)
Thus, at least on this record, there is a genuine issue of material fact with respect to
whether the Turner General Provisions and other documents incorporated in Article 1.3 disclose
that the scope of the Work was more expansive that what was represented in the 23 pages of
hand-drawn sketches. As a result, although the scope terms of the Turner General Provisions
were incorporated into the Subcontract, the Court denies the Defendant’s motion for summary
judgment dismissing the scope fraud claims.
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The Court reaches a different conclusion with respect to whether the terms of the Turner
General Provisions relating to the applicable schedule were incorporated by reference.
Generally, “[t]he time schedule of [a] prime contract [is] incorporated into the subcontract
because it relates to the scope, quality, character and manner of plaintiff's work . . . .” S. Leo
Harmonay, Inc. v. Binks Mfg. Co., 597 F. Supp. 1014, 1026 (S.D.N.Y. 1984); see also
Commercial Elec. Contractors, Inc. v. Pavarini Constr. Co., Inc., 5 Misc. 3d 1002(A), 798
N.Y.S.2d 708 (Table), 2004 WL 2282856, at *3 (N.Y. Sup. Ct. 2004) (holding that because the
time schedule of a prime contract is incorporated into a subcontract, the “[plaintiff’s] argument
that time schedule issues, such as delays, are not covered by the incorporation clause in the
Subcontract lacks merit”).
However, “the effects of incorporation by reference may be avoided by a finding of
inconsistencies between the terms of the contract signed by the parties and the incorporated
documents.” T. Bart Gary, Incorporation by Reference and Flow-Down Clauses, 10
Construction Law 1 (August 1990). “In the event of a conflict, a generally accepted rule of
contract construction is that the provisions of the contract will govern over conflicting terms in
the plans and specifications incorporated by reference.” Id.; cf. Oldcastle Precast, Inc. v. U.S.
Fidelity & Guar. Co., 458 F. Supp. 2d 131, 142 (S.D.N.Y. 2006) (“Under New York law,
‘[w]here there is an inconsistency between a specific provision and a general provision of a
contract, the specific provision controls.’”) (quoting Aguirre v. City of New York, 214 A.D.2d
692, 693, 625 N.Y.S.2d 597 (2d Dep't 1995)); Aramony v. United Way of America, 254 F.3d
403 (2d Cir. 2001).
Under Article 2 of the Subcontract titled “TIME OF PERFORMANCE”, the Subcontract
states “SUBCONTRACTOR shall prosecute and complete all Work under the Subcontract in

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accordance with the schedule in Exhibit A”. Absent from this provision is any reference to
performing the Work in accordance with the Turner-Siemens Contract or documents
incorporated into the Subcontract. Moreover, the relevant portions of the Schedule Section of
Exhibit A state as follows:
Article 2: PERFORMANCE PERIOD/SCHEDULE
2.1 Term: SUBCONTRACTOR shall commence the Work on
September 21, 2006, and shall prosecute the Work diligently as
required by the project schedule to allow for project completion on
or before December 2008.” [the “Term Provision”]
2.2 Milestones: Specific scheduling milestones and coordination
requirements are as follows: [the “Milestone Provision”]
2.3 Time of Essence: Time is of the essence in the performance of
this Work. SUBCONTRACTOR shall make whatever adjustments
in working hours, manpower, equipment, etc. deemed necessary to
complete the Work in accordance with the term of the Subcontract
and the specific schedule requirements hereof.
Unlike the Scope Section of Exhibit A, the Schedule Section does not make any reference to the
Turner General Provisions. Although the Term Provision references a “project schedule”, there
is no indication that this “project schedule” is the Project Master Schedule attached to the Turner
General Provisions or any other project master schedule. Furthermore, the Milestones Provision
is blank, despite the fact that the Turner General Provisions include the temporary heat deadline
milestone. The Court cannot say as a matter of law that a blank space, rather than a “yes” or a
reference to the Turner General Provisions, indicates that the Plaintiff “had knowledge of and
assented to” the incorporation of the temporary heat milestone, particularly in light of the fact
that Article 2 of the Subcontract identifies the governing schedule as appearing in the Schedule
Section of Exhibit A, not the documents incorporated into the Subcontract.
Nevertheless, both parties contend that the plain language of the Term Provision supports
their respective positions. The Defendant characterizes the Term Provision as referring to the

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final completion of the JetBlue Project. If true, then the Subcontract is silent with respect to the
Plaintiff’s substantial completion date, and, for breach of contract purposes, the relevant inquiry
is whether the Plaintiff was required to complete the Work prior to December 2008. There is no
dispute that the Plaintiff was still performing the Work, even if only minimally, until at least
November 2008. (Pl.’s 56.1, ¶ 230.) Thus, if the Term Provision is properly interpreted under
the Defendant’s definition, then it is unlikely that the Plaintiff can maintain the acceleration
breach of contract claim. However, because, under the Defendant’s characterization, the alleged
misstatements and omissions regarding the Plaintiff’s substantial completion date would be
collateral or extraneous to the Subcontract, the Plaintiff could maintain its duration fraud claims.
By contrast, the Plaintiff defines “project completion” as “substantial completion” and
the “project” as the “electrical subcontract work for the building management system being
installed as part of [the JetBlue] project”. (Pl.’s 56.1, ¶ 1–2.) Thus, under the Plaintiff’s
interpretation, the Term Provision confirms the alleged representations that the Work had to be
substantially completed by December 2008. If true, then the alleged misrepresentation and
omissions with regard to the Plaintiff’s substantial completion date were not collateral or
extraneous to the Subcontract, but rather were the actual terms of the Subcontract. As a result,
the Plaintiff’s duration fraudulent inducement claim would likely be subject to dismissal as
duplicative of its breach of contract claim, but the acceleration breach of contract claim would
survive.
“[A] motion for summary judgment may be granted in a contract dispute only when the
contractual language on which the moving party's case rests is found to be wholly unambiguous
and to convey a definite meaning.” Topps Co., Inc. v. Cadbury Stani S.A.I.C., 526 F.3d 63, 68
(2d Cir. 2008). “The existence of ambiguity is determined by examining the ‘entire contract and

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consider[ing] the relation of the parties and the circumstances under which it was executed,’ with
the wording to be considered ‘in the light of the obligation as a whole and the intention of the
parties as manifested thereby’”. Goldman Sachs Group, Inc. v. Almah LLC, 924 N.Y.S.2d 87,
90 (1st Dep’t 2011) (quoting Kass v. Kass, 91 N.Y.2d 554, 566, 673 N.Y.S. 2d 350, 696, N.E.2d
174) (1998)) (alteration in original). “To the extent the moving party's case hinges on
ambiguous contract language, summary judgment may be granted only if the ambiguities may be
resolved through extrinsic evidence that is itself capable of only one interpretation, or where
there is no extrinsic evidence that would support a resolution of these ambiguities in favor of the
nonmoving party's case.” Topps Co., 526 F.3d at 68.
Here, the parties dispute centers on whether: (1) the word “project” refers to the JetBlue
Project or the FMS Work and (2) the phrase “project completion” means final completion or
substantial completion. Turning to the plain language of the Subcontract, the Court notes that in
the Term Provision, “project” is spelled with a lowercase “p”. However, the JetBlue Project was
defined in the Subcontract as “Project”, with a capital “P”, and every other reference to the
JetBlue Project in the Subcontract refers to it as the “Project” with a capital “P”. Thus, the Court
cannot say as a matter of law whether the entire Jetblue Project, or only the FMS Work, is the
“project” referenced in the Term Provision.
Moreover, it is a general principle of construction law that “[u]nless otherwise defined by
the contract to mean ‘final completion’–the date on which the work is 100% complete,
‘completion’ ordinarily is understood to mean ‘substantial completion’–the date on which all
material elements of the work are sufficiently complete in conformance with the contract so that
the owner can use the work for its intended purpose.” See 5 Brunner & O'Connor Construction
Law § 15.15. However, the phrase “project completion” is not defined in the Subcontract, and

25

the parties have not sufficiently addressed this issue to permit the Court to make a finding at this
stage about its intended meaning as a matter of law.
Thus, the Court finds that the Term Provision is ambiguous in that it could suggest more
than one meaning when viewed objectively by a reasonably intelligent person who has examined
the context of the entire Subcontract and who is cognizant of the customs, practices, usages and
terminology as generally understood in the particular trade or business. See Curry Road Ltd. v.
K Mart Corp., 893 F.2d 509, 511 (2d Cir. 1990); see also World Trade Ctr. Props., L.L.C. v.
Hartford Fire Ins. Co., 345 F.3d 154, 184 (2d Cir. 2003). The Court finds that it cannot discern
the parties intended meaning as a matter of law. Thus, the Court denies the Defendant’s motion
for summary judgment on the ground that the Subcontract deems the Plaintiff’s reliance on its
alleged misrepresentations and omissions about the duration of the Work unreasonable as a
matter of law.
C. Whether the Defendant is Entitled to Summary Judgment on the Acceleration Breach
of Contract Claims
With respect to the acceleration breach of contract claim, Morales contends that Siemens
breached the Subcontract by accelerating its work because “the Subcontract called for the work
to be performed within a two-year window, i.e., by the end of December 2008, and it is
undisputed that in August 2007, Morales was informed that it had to substantially complete its
performance by October 2007”. (Pl.’s Br. at 23.) The Defendant seeks summary judgment on
this cause of action under three theories.
First, the Defendant contends that the plain language of the Subcontract permitted it to
accelerate the Work. This argument was raised by the Defendant and rejected by the Court in its
February 16, 2010 decision on the motion to dismiss. The Court adheres to its decision on this

26

issue in the motion to dismiss, and denies the Defendant’s motion for summary judgment on this
ground.
Next, the Defendant argues that, because the Turner General Provisions and the Project
Master Schedule as incorporated into the Subcontract disclosed the relevant deadlines, the
Plaintiff’s acceleration breach of contract claim fails because, as a matter of law, there was no
acceleration. As discussed previously, there are issues of fact precluding the Court from
resolving this issue as a matter of law. Moreover, the Plaintiff has also submitted documentary
evidence suggesting that the Defendant knew that the Plaintiff was unaware of the temporary
heat deadline until the Work was well underway, and that it may be entitled to additional
compensation based on acceleration. (See Ex. 9 at Ex. 14.)
Finally, the Defendant seeks summary judgment on the acceleration breach of contract
claim on the ground that it cannot be held liable for breaching the Subcontract because the
Plaintiff did not perform its own contractual obligations. The Court has reviewed the record and
the parties’ arguments and finds that the resolution of this issue presents issues of fact that
preclude a finding of summary judgment. Accordingly, the Court denies the Defendant’s
motion for summary judgment dismissing the acceleration breach of contract claim.
D. Whether the Defendant is Entitled to Summary Judgment on the Scope Breach of
Contract Claims
The Plaintiff argues that the Defendant breached the Subcontract by refusing to pay fair
value for the additional work reflected in four change orders and has refused to compensate it for
the additional work associated with ten other change orders. The Defendant seeks summary
judgment on the ground that the change orders fairly compensated the Plaintiff, and that the
Plaintiff waived its right to additional compensation by signing the change orders.

27

There is no dispute that the Subcontract permitted the Defendant to direct the Plaintiff to
perform work outside the scope of the Subcontract, as long as the Plaintiff was compensated for
those changes. The Defendant cites to the expert report of Mark Anderson, setting forth why the
additional work was not outside the scope of the project, and why the amounts that Siemens paid
for the work was consistent with the work provided. For its part, the Plaintiff does not provide
any evidence, expert or otherwise, to support its contention that it was underpaid for the changes.
(Pl.’s 56.1, ¶ 227.) However, whether the Plaintiff was adequately compensated for these
changes turns in large part on whether the Plaintiff was operating under an accelerated schedule,
and whether it was performing work outside the scope and duration of what it reasonable relied
upon in submitting its bid.
Moreover, while the Plaintiff may have signed the change orders, the Plaintiff has
submitted evidence that: (1) the parties were not adhering to the change order procedure as set
forth in the Subcontract because the Plaintiff was directed to perform the additional work prior to
the change orders being signed and (2) the Defendant allegedly led the Plaintiff to believe that
any discrepancies between the amount the Plaintiff believed was owed and the amount paid
could be resolved through an equitable adjustment at the conclusion of the Work. Thus, the
Court cannot say as a matter of law that the Plaintiff waived its right to contest those change
orders after the fact. Accordingly, the Court finds that there are genuine issues of material fact
and denies the Defendant’s motion for summary judgment dismissing the scope breach of
contract claims.
E. Whether the Defendant is Entitled to Summary Judgment on the Plaintiff’s Damages
The Defendant seeks summary judgment dismissing the Plaintiff’s “indirect,
consequential, and alleged damages beyond the scope of its out out-of-pocket losses, whether

28

asserted as contract or fraud damages”. (Reply Br. at 10.) However, based on the Court’s
review of the record and the applicable caselaw, the Court finds that it is inappropriate to make a
finding as to the available damages at this stage in the litigation. Accordingly, the Court denies
the Defendant’s motion for partial summary judgment on the Plaintiff’s claim for damages
without prejudice to renewal at or after trial.
III. CONCLUSION
For the foregoing reasons, it is hereby:
ORDERED, that the Defendant’s motion for summary judgment dismissing the
Plaintiff’s fraudulent inducement cause of action is DENIED, and it is further
ORDERED, that the Defendant’s motion for summary judgment dismissing the
Plaintiff’s fraudulent concealment cause of action is DENIED, and it is further
ORDERED, that the Defendant’s motion for summary judgment dismissing the
Plaintiff’s acceleration breach of contract cause of action is DENIED, and it is further
ORDERED, that the Defendant’s motion for summary judgment dismissing the
Plaintiff’s change order breach of contract causes of action is DENIED, and it is further
ORDERED, that the Defendant’s motion for summary judgment dismissing the
Plaintiff’s claim for consequential and indirect damages is DENIED, without prejudice, and it is
further
ORDERED, that jury selection in this case will take place on April 9, 2012 at 9:00am.
SO ORDERED.
Dated: Central Islip, New York
March 28, 2012

___/s/ Arthur D. Spatt_________
ARTHUR D. SPATT
United States District Judge

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