Enclos Corporation v. Dormitory Authority of the State of New York

Filing 15

MEMORANDUM-DECISION and ORDER - That DASNY's 10 Motion to Dismiss for Failure to State a Claim is DENIED. That DASNY shall file the appropriate responsive pleadings within the time allotted by the rules. That the parties notify Magistrate Judge Treece in order to schedule further proceedings in accorandance with this order. Signed by Chief Judge Gary L. Sharpe on 2/28/2013. (jel, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
ENCLOS CORPORATION,
Plaintiff,

1:12-cv-1760
(GLS/RFT)

v.
DORMITORY AUTHORITY OF
THE STATE OF NEW YORK,
Defendant.
________________________________
APPEARANCES:
OF COUNSEL:
FOR THE PLAINTIFF:
Dorsey, Whitney Law Firm
NY Office
51 West 52nd Street
New York, NY 10019-6119
FOR THE DEFENDANT:
Mazur, Carp Law Firm
1250 Broadway, Suite 3800
New York, NY 10001

DAVID C. SINGER, ESQ.
ELIZABETH R. BAKSH, ESQ.
ERIC A.O. RUZICKA, ESQ.

GARY L. RUBIN, ESQ.
FRANK L. WAGNER, ESQ.

Gary L. Sharpe
Chief Judge
MEMORANDUM-DECISION AND ORDER
I. Introduction
Plaintiff Enclos Corporation commenced this action against defendant
Dormitory Authority of the State of New York (DASNY), alleging several

contractual and quasi-contractual claims. (See Compl., Dkt. No. 1.)
Pending is DASNY’s motion to dismiss. (See Dkt. No. 10.) For the
reasons that follow, the motion is denied.
II. Background1
In March 2007, Enclos entered into a construction contract (“the
Contract”) with DASNY, wherein it agreed to “perform certain curtain wall
work and other exterior work at the John Jay College of Criminal Justice [. .
. ] in exchange for compensation . . . in the sum of $40,550,300.00.”
(Compl. ¶ 6.) As is relevant here, the Contract contains a provision entitled
“Claims for Delay,”2 (Dkt. No. 10, Attach. 4 at 19), which is a so-called nodamages-for-delay clause, (see Dkt. No. 10, Attach. 7 at 6; Compl. ¶ 44).
While Enclos implicitly acknowledges the effect of that clause, (see Compl.
¶¶ 44, 49), it nonetheless claims that DASNY’s redesign of the project,
change of the construction schedule, and failure to mitigate delays,
disrupted and delayed its performance of the contracted work. (See
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Unless otherwise noted, the allegations are drawn from Enclos’ Complaint and
presented in a light most favorable to it. To this end, the court, having discerned no disputes in
the parties’ recitations of the background and allegations, incorporates them by reference here,
and discusses only the allegations necessary to adjudicate the instant motion. (See Dkt. 10,
Attach. 7 at 1-4; Dkt. No. 13 at 2-8.)
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Because the Complaint incorporates by reference the Contract, (see, e.g., Compl. ¶¶
6, 13), the court may consider it “in deciding the defendant’s motion to dismiss,” Int’l Audiotext
Network, Inc. v. Am. Tel. and Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995).

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Compl. ¶¶ 22-39, 84-123.) Enclos further alleges that DASNY, as it did
during a previous project, promised—but later refused—to compensate it
for the disruptions and delays. (See id. ¶¶ 45-77, 145-54, 160-65.)
Consequently, Enclos now alleges the following eight causes of action: (1)
breach of contract for delaying the commencement of work, (see id. ¶¶ 8498); (2) breach of contract for delays during the project, (see id. ¶¶ 99-111);
(3) breach of contract due to disruptions in its work, (see id. ¶¶ 112-23); (4)
breach of contract based on DASNY’s promises to pay, (see id. ¶¶ 124-31);
(5) breach of warranty, (see id. ¶¶ 132-40); (6) fraudulent inducement, (see
id. ¶¶ 141-58); (7) promissory estoppel, (see id. ¶¶ 159-75); and (8)
misrepresentation, (see id. ¶¶ 176-94).
III. Standard of Review
The standard of review under Fed. R. Civ. P. 12 is well established
and will not be repeated here. For a full discussion of the standard, the
court refers the parties to its decision in Ellis v. Cohen & Slamowitz, LLP,
701 F. Supp. 2d 215, 218 (N.D.N.Y. 2010).
IV. Discussion
DASNY argues that Enclos’ contractual claims are barred by the
Contract, chiefly by the no-damages-for-delay clause. (See Dkt. No. 10,
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Attach. 7 at 6-20.) It further asserts that the quasi-contractual claims fail as
a matter of law because there is a contract between the parties that
governs the subject-matter in question. (See id. at 21-22.) In response,
Enclos contends that DASNY’s conduct falls within one of the recognized
exceptions to the no-damages-for-delay clause, and thus it is entitled to
sue under the contract. (See Dkt. No. 13 at 8-19.) And, with respect to its
quasi-contract claims, Enclos avers that these are plead in the alternative
in the event that DASNY’s promises did not constitute an enforceable
contract. (See id. at 24.) The court is presently unpersuaded by DASNY’s
arguments.
While it is possible that the no-damages-for-delay clause could
preclude Enclos’ contractual claims, see, e.g., Travelers Cas. & Sur. Co. v.
Dormitory Auth.-N.Y., 735 F. Supp. 2d 42, 58-59 (S.D.N.Y. 2010); Corinno
Civetta Constr. Corp. v. City of N.Y., 67 N.Y.2d 297, 309 (1986), it is
equally so, as Enclos seeks to prove, (see Dkt. No. 13 at 9-17), that one of
the general exceptions to that clause exists, which would entitle Enclos to
recover damages, see Travelers, 735 F. Supp 2d at 58-59. Thus, it is
simply premature—given the limited scope of review, see McCarthy v. Dun
& Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007), and the way in which
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the burden shifts in this type of case3—to determine whether the nodamages-for-delay clause controls, and assuming it does, if Enclos has
proven that an exception applies. And though skeptical of the viability of
Enclos’ quasi-contract claims, the court, in light of its decision with respect
to the contractual claims, deems it appropriate to allow Enclos additional
time to demonstrate, inter alia, how the contract does not govern DASNY’s
alleged misconduct. See Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70
N.Y.2d 382, 388 (1987) (“The existence of a valid and enforceable written
contract governing a particular subject matter ordinarily precludes recovery
in quasi contract for events arising out of the same subject matter.”). As
such, DASNY’s motion to dismiss is denied.
V. Conclusion

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As Judge Cote explained in Travelers, where DASNY prevailed on summary
judgment under the same no-damages-for-delay clause:
The defendant bears the prima facie burden of establishing that the damages
sought by the plaintiff are barred by the no-damage-for-delay exculpatory clause
of the parties’ contract. Part of the defendant’s required showing is demonstrating
prima facie that none of the exceptions to the damages for delay clause are
present. Once that prima facie burden has been met, the burden shifts to the
plaintiff to raise a triable issue of fact as the applicability of any of the [Corinno]
exceptions to the contractual bar.
In proving that one of the Corinno exceptions applies, the plaintiff bears a heavy
burden.
735 F. Supp. 2d at 57-59, 69 (internal quotation marks and citations omitted).

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WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that DASNY’s motion to dismiss (Dkt. No. 10) is DENIED;
and it is further
ORDERED that DASNY shall file the appropriate responsive
pleadings within the time allotted by the rules; and it is further
ORDERED that the parties notify Magistrate Judge Treece in order to
schedule further proceedings in accordance with this order; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
February 28, 2013
Albany, New York

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