88 N.Y.2d 22 (1996)
In public works contracts, strict compliance with notice and reporting requirements is a condition precedent to recovery for extra work, unless the public entity’s misconduct specifically prevented or hindered the contractor’s ability to comply with those requirements.
Summary
A.H.A. General Contracting sued the New York City Housing Authority (NYCHA) for breach of contract, seeking payment for alleged extra work performed under two construction contracts. NYCHA moved for summary judgment, arguing A.H.A. waived its claims by failing to comply with contractual notice and reporting requirements. A.H.A. countered that NYCHA acted in bad faith, excusing its noncompliance. The Court of Appeals held that A.H.A.’s failure to strictly adhere to the notice provisions barred its recovery, as NYCHA’s alleged misconduct did not prevent A.H.A. from complying with those requirements. The case underscores the importance of adhering to contractual conditions precedent in public works projects.
Facts
A.H.A. General Contracting was awarded two construction contracts by the New York City Housing Authority for work on Jennings Street and Hoe Avenue. The contracts contained clauses requiring the contractor to provide timely written notice and detailed documentation for any claims of “extra work”. A.H.A. claimed that NYCHA directed it to perform extra work with the understanding that change orders would be issued later. NYCHA later rescinded two change orders after the work was commenced claiming the work was contract work. A.H.A. subsequently submitted claims for extra work totaling approximately $1 million but failed to provide the daily written statements and documentation required by the contract.
Procedural History
A.H.A. sued NYCHA for breach of contract and unjust enrichment. The Supreme Court granted NYCHA’s motion for summary judgment, dismissing A.H.A.’s claims. The Appellate Division modified, denying NYCHA’s motion, finding a triable issue of fact as to NYCHA’s bad faith. The Appellate Division certified the question of whether its order was properly made to the Court of Appeals.
Issue(s)
Whether a contractor’s failure to strictly comply with notice and reporting requirements in a public works contract is excused by the public entity’s alleged bad faith, even if that bad faith did not prevent the contractor from complying with the notice provisions.
Holding
No, because strict compliance with notice and reporting provisions is a condition precedent to recovery, and the contractor’s non-compliance is only excused if the public entity’s misconduct actively prevented or hindered the contractor’s ability to comply with those provisions.
Court’s Reasoning
The Court of Appeals reversed the Appellate Division, holding that the notice and reporting requirements were conditions precedent to suit, not exculpatory clauses. The Court emphasized that a party cannot insist upon a condition precedent when its non-performance has been caused by that party. However, the relevant inquiry is not simply the public entity’s bad faith, but whether the alleged misconduct prevented or hindered the contractor’s compliance with the notice and reporting requirements. The Court found that A.H.A. failed to demonstrate how NYCHA’s rescission of change orders, inclusion of additional drawings, or alleged waiver based on past practice prevented it from complying with the contract’s notice requirements. The Court also noted the strong public policy considerations favoring scrutiny of bad faith claims when contractors seek to excuse noncompliance with notice provisions in public contracts, as these provisions protect the public fisc and the integrity of the bidding process. As the Court stated, “[t]hose arguments are even further flawed. There is no showing in the record that the prior agreements contained the same requirements, and no showing that the alleged past practice was the same.” Therefore, NYCHA’s summary judgment motion should have been granted.