SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
600
CA 13-02032
PRESENT: SCUDDER, P.J., CENTRA, CARNI, AND LINDLEY, JJ.
DIPIZIO CONSTRUCTION COMPANY, INC.,
PLAINTIFF-PETITIONER-RESPONDENT,
V MEMORANDUM AND ORDER
ERIE CANAL HARBOR DEVELOPMENT CORPORATION,
DEFENDANT-RESPONDENT-APPELLANT.
(APPEAL NO. 1.)
PHILLIPS LYTLE LLP, BUFFALO (KENNETH A. MANNING OF COUNSEL), FOR
DEFENDANT-RESPONDENT-APPELLANT.
HISCOCK & BARCLAY, LLP, BUFFALO (MICHAEL E. FERDMAN OF COUNSEL), FOR
PLAINTIFF-PETITIONER-RESPONDENT.
Appeal from an order of the Supreme Court, Erie County (Timothy J.
Walker, A.J.), entered November 1, 2013. The order granted the motion
of plaintiff-petitioner for partial summary judgment and denied the cross
motion of defendant-respondent for partial summary judgment.
It is hereby ORDERED that the order so appealed from is unanimously
reversed on the law without costs, plaintiff-petitioner=s motion is denied,
defendant-respondent=s cross motion is granted and the fourth and sixth
causes of action are dismissed.
Memorandum: Plaintiff-petitioner, DiPizio Construction Company,
Inc. (DiPizio), and defendant-respondent, Erie Canal Harbor Development
Corporation (Erie), entered into a construction agreement (Contract)
pursuant to which DiPizio was to provide construction services for a
certain revitalization project. DiPizio thereafter commenced this hybrid
breach of contract action and CPLR article 78 proceeding contending, inter
alia, that Erie had breached the Contract and the New York State Finance
Law. DiPizio thereafter moved for partial summary judgment on liability
on the fourth and sixth causes of action, and Erie cross-moved for partial
summary judgment dismissing those causes of action. Supreme Court granted
DiPizio=s motion and denied Erie=s cross motion. We now reverse.
In the fourth cause of action, DiPizio contended that Erie breached
the Contract when it refused to accept DiPizio=s material handling plan
(MHP), which sought to dispose of nonhazardous contaminated soil at a
facility approved by the New York State Department of Environmental
Conservation (DEC) rather than a sanitary or industrial landfill. In
the sixth cause of action, DiPizio contended that Erie breached the
Contract when it refused to approve DiPizio=s proposal to substitute
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Chester Gray granite for Virginia Mist granite.
Resolution of this appeal depends on the principles of contract
interpretation. AIt is well settled that a contract must be read as a
whole to give effect and meaning to every term . . . Indeed, >[a] contract
should be interpreted in a way [that] reconciles all [of] its provisions,
if possible= @ (New York State Thruway Auth. v KTA-Tator Eng=g Servs., P.C.,
78 AD3d 1566, 1567; see RLI Ins. Co. v Smiedala, 96 AD3d 1409, 1411).
Therefore, A[e]ffect and meaning must be given to every term of the contract
. . . , and reasonable effort must be made to harmonize all of its terms@
(Village of Hamburg v American Ref-Fuel Co. of Niagara, 284 AD2d 85, 89,
lv denied 97 NY2d 603; see Matter of El-Roh Realty Corp., 74 AD3d 1796,
1799). It is likewise well settled that A[t]he interpretation of an
unambiguous contractual provision is a function for the court . . . ,
and [t]he proper inquiry in determining whether a contract is ambiguous
is whether the agreement on its face is reasonably susceptible of more
than one interpretation . . . To be entitled to summary judgment, the
moving party has the burden of establishing that its construction of the
[contract] is the only construction [that] can fairly be placed thereon@
(Nancy Rose Stormer, P.C. v County of Oneida, 66 AD3d 1449, 1450 [internal
quotation marks omitted]).
We conclude that DiPizio failed to meet its burden on the motion
and that Erie met its burden on the cross motion by establishing that
its construction of the Contract is the only construction that can fairly
be made. The AContract Documents@ included, inter alia, the Contract,
the project manuals and addenda, the information to bidders and the special
conditions. The provisions concerning the MHP are found in Project Manual
Section 312003 Part 3.1, which deals with the identifying information
that was to be included in the MHP. Pursuant to Part 3.1 (A) (7), the
information contained in the MHP was to include identification of the
primary and backup facilities for disposal of nonhazardous contaminated
soil. That provision of the Contract states that A[t]he primary and backup
facilities may be a recycling/treatment facility or a [DEC] approved lined
landfill or other facility approved by [DEC] to accept this material@
(emphasis added). Part 3.2 specifies the manner in which contaminated
soil stockpiles and excavated materials are to be removed from the site.
Part 3.2 (E) provides that, A[a]t a minimum, if soil testing indicates
the excavation material is not hazardous, based on the known contaminants
present[,] these wastes must be disposed of at a sanitary or industrial
landfill permitted to receive such wastes@ (emphasis added).
DiPizio sought to dispose of the nonhazardous contaminated soil at
a DEC approved facility that was not a sanitary or industrial landfill.
DiPizio contended that, inasmuch as Part 3.1 (A) (7) permits the use
of such a facility, Erie=s refusal to approve of that disposal plan
constitutes a breach of the Contract. The Contract, however, also
incorporated the terms of all of the information sent to bidders, including
responses to requests for information (RFIs) that were sent to bidders
before DiPizio executed the Contract. In one such response, Erie=s project
manager specifically stated that, A[f]or excess material requiring removal
from site[,] . . . >these wastes must be disposed of at a sanitary or
industrial landfill permitted to receive such wastes= @ (emphasis added).
Moreover, in response to two different RFIs made by DiPizio before DiPizio
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executed the Contract, Erie=s project manager clearly and unambiguously
stated that any plan to use DEC approved facilities in lieu of landfills
was in violation of Section 312003 Part 3.2 (E) and was Anot consistent
with the project requirements.@
To the extent that DiPizio and the court relied upon an internal
letter between Erie=s project manager and Erie recognizing that the reason
for DiPizio=s low bid was its desire to seek an acceptable DEC alternative
to the landfill, we conclude that the document was not part of the Contract
Documents and is thus extrinsic evidence that we may not consider where,
as here, the Contract is not ambiguous (see South Rd. Assoc., LLC v
International Bus Machs. Corp., 4 NY3d 272, 278). It is well settled
that A >extrinsic and parol evidence is not admissible to create an ambiguity
in a written agreement which is complete and clear and unambiguous upon
its face= @ (id.).
Although Section 312003 Part 3.1 (A) (7) at first glance seems to
permit use of a DEC approved facility in lieu of a landfill, upon closer
inspection it is clear that the section concerns only the identification
information that must be included in the MHP. The section concerning
the actual disposal of nonhazardous contaminated soil and the responses
to the RFIs, as incorporated into the Contract, contain specific mandatory
provisions requiring that such material be disposed of at a sanitary or
industrial landfill. A >[W]here two seemingly conflicting contract
provisions reasonably can be reconciled, a court is required to do so
and to give both effect= @ (Burgdorf v Kasper, 83 AD3d 1553, 1555).
Moreover, Ait is a well-established principle of contract interpretation
that specific provisions concerning an issue are controlling over general
provisions@ (Huen N.Y., Inc. v Board of Educ. Clinton Cent. Sch. Dist.,
67 AD3d 1337, 1338; see generally Muzak Corp. v Hotel Taft Corp., 1 NY2d
42, 46). Relying on those fundamental rules of contract interpretation,
we conclude that the Contract clearly and unambiguously requires
nonhazardous contaminated soil to be disposed of at a sanitary or
industrial landfill.
Inasmuch as Erie Aestablish[ed] that its construction of the
[Contract] is the only construction [that] can fairly be placed thereon@
(Nancy Rose Stormer, P.C., 66 AD3d at 1450 [internal quotation marks
omitted]), Erie is entitled to partial summary judgment dismissing the
fourth cause of action.
With respect to the sixth cause of action, concerning DiPizio=s
attempt to substitute Chester Gray granite for Virginia Mist granite,
we again conclude that DiPizio failed to meet its burden on the motion
and that Erie, in support of its cross motion, established its entitlement
to partial summary judgment dismissing that cause of action. Project
Manual Section 044310 Part 2.2 discusses the Contract requirements for
granite. Part 2.2 (A) states that the material must comply with AASTM
C 615,@ and Part 2.2 (B) lists the material specifications to which all
granite must conform. Part 2.2 (D), however, provides that AType A Granite
shall be Virginia Mist granite . . . or approved equal . . . [and] Type
B Granite shall be Cambrian Black granite . . . or approved equal@ (emphasis
added). Project Manual Section 016000 Part 2.1 (A) (6) further provides
that, A[f]or products specified by name and accompanied by the term .
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. . >or approved equal,= @ the proposed substitute product must comply with
the A >Comparable Products= Article to obtain approval for use.@ A
Comparable Product is defined in Section 016000 Part 1.3 (A) (3) as a
A[p]roduct that is demonstrated and approved through submittal process
to have the indicated qualities related to type, function, dimension,
in-service performance, physical properties, appearance, and other
characteristics that equal or exceed those of [the] specified product@
(emphasis added). Section 8 (D) of the Special Conditions, which are
part of the Contract Documents, clearly states that A[t]he
Architect=s/Engineer=s decision on substitutions and/or equivalencies
shall be final and is not subject to dispute by@ DiPizio.
DiPizio contends that the Aapproved equal@ requirement in Section
044310 Part 2.2 (D) applies only to approval of the aesthetic properties
of the granite because, otherwise, the material specification requirements
of Part 2.2 (A) and (B) would be rendered superfluous. Erie contends
that the material requirements of Section 044310 Part 2.2 (A) and (B)
are merely the minimum requirements for any granite to be used on the
Project and apply to both Type A and Type B granite. According to Erie,
Part 2.2 (A) and (B) are not rendered superfluous by the Aapproved equal@
requirements of Part 2.2 (D) inasmuch as the material specification
requirements of Part 2.2 (A) and (B) apply to other types of granite used
on the site. Erie thus contends that the Aapproved equal@ requirements
for Type A granite apply to all of the qualities of the named granite,
including the physical properties.
There is no dispute that Chester Gray granite complies with the
material requirements outlined in Part 2.2 (A) and (B) and that the
architect ultimately approved the aesthetic properties of the Chester
Gray granite. There is also no dispute that Erie=s architect determined
that the physical properties of Chester Gray granite were inferior to
that of Virginia Mist granite and rejected the substitution on that ground.
In our view, the Contract clearly and unambiguously requires that
the proposed substitute for Virginia Mist granite must have the indicated
qualities related to, inter alia, physical properties Athat equal or exceed
those of@ Virginia Mist granite. Erie established that the physical
properties of Chester Gray granite did not equal or exceed those of Virginia
Mist granite and, therefore, Erie had the discretion to deny approval
of the proposed substitution. Inasmuch as the decision of Erie=s architect
with respect to substitutions is final, we conclude that Erie is entitled
to partial summary judgment
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dismissing that cause of action.
Entered: August 8, 2014 Frances E. Cafarell
Clerk of the Court