In a July 21, 2011 decision by Justice Kitzes, the court denied the defendant M.A. Angeliades, Inc.’s (“MA”) motion to dismiss the cross claims by defendant WDF, Inc. and denied WDF’s cross-motion for sanctions against MA. The action arose out of a public works project at high school in Queens, where MA was the general contractor and WDF a subcontractor. The plaintiff’s (“ITC”) suit alleged that it was owed money by WDF in connection with a subcontractor agreement entered between ITC and WDF. WDF also entered a subcontractor agreement with MA, to provide labor, services and materials for the installation of HVAC facilities on the project. During the course of the project, at MA’s request, WDF performed additional work which was documented by certain “Change Orders.” WDF’s cross-claims sought payment for the work performed under the Change Orders, which MA had not yet made.
On its motion to dismiss WDF’s cross-claims, MA asserted that the contract between WDF and MA established that WDF was not due any payment. The contract provided that no payment was due until WDF submitted evidence that "no unpaid claims existed against it for ‘labor, materials, services, supplies of other obligations incurred by [WDF] in the performance of the Work.’” MA argued that because WDF had not paid its own subcontractors, which it deemed a condition precedent to receiving final payment on the project, it could not seek payment from MA. The court found that an issue existed as to whether MA directly caused the dispute between WDF and its subcontractors leading to the nonpayment. Therefore, the court held that because the condition precedent was directly tied to “the implied obligation of M.A to do something which would have enabled WDF to meet the condition precedent,” it could not then “insist upon the condition precedent, when its non-performance [wa]s its own doing.” Further, the court held that even if the condition precedent had definitively not been met, WDF’s substantial performance under the contract allowed it to recover.
WDF’s motion for sanctions asserted that MA’s conduct in seeking dismissal was frivolous because MA’s material factual statements were blatantly false. The court, however, held that the motion was based upon “assertions that are reasonably related to the evidence presented,” and therefore denied the motion.
Independent Temperature Control Servs., Inc. v WDF Inc., Sup Ct Queens County, July 21, 2011, Orin R. Kitzes, J, Index No. 2107/11