Turner Construction Co. v. Us Framing Inc.

49 Misc. 3d 1213(A) (2015)

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Nature of the Case

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Facts

In January 2013, Turner (P) entered into a contract with Shelter Cove LLC to provide general construction services for a 104-unit apartment complex. On January 16, 2013, a written agreement naming P as contractor and D as framing subcontractor, dated January 14, 2013, was executed. D left the meeting with a copy of the Subcontract signed by D and initialed by both sides. A supply bond dated January 16, 2013, was issued on behalf of D's lumber supplier, Bridgewell Resources, LLC. Within one week of execution of the Subcontract, D submitted two applications for payment. The payment requests referenced the Subcontract sum of $2,370,000 and sought payments of $996,968, corresponding to the value of D's lumber contract with Bridgewell, and $25,000, corresponding to D's cost to store the building materials. P paid the applications by check on January 31, 2013, and D accepted and deposited the funds on or about February 4, 2013. On February 7, 2013, P countersigned the Subcontract and sent it to D via Federal Express to the address set forth in the Subcontract. D's address had changed in the interim, and D claims that the fully executed Subcontract never was delivered. The FedEx package was forwarded to D's new address, a multi-tenant complex, and an unknown individual signed for and accepted receipt of the package. By May 2013, D and Bridgewell made several submittals to P, and there were ongoing discussions between P and D concerning pricing issues. P was concerned by delays in D's hardware submittals and by the failure of D to return calls and emails. D claims that it was growing concerned about P's delays in approving change orders and fixing a firm start date. On the morning of June 4, 2013, an email stated: 'P is calling the bond in on the lumber and will be soliciting pricing from a local framer. D has made it clear that they cannot perform on this project.' P maintains that the email was not a termination notice and was not issued pursuant to the termination provisions of the Subcontract. D responds that the only reasonable interpretation was as a termination notice and that such a conclusion is supported by other contemporaneous communications between P and D's material suppliers. D submits an email from P to D's truss supplier, in which P requests 'truss pricing as we will be looking to hold a contract with you direct.' The sales manager for Bridgewell, who was copied submitted an affidavit regarding P's efforts to find a replacement for D and the effect that replacing D would have on the purchased lumber. After sending the email, P made repeated efforts throughout the day to reach D's, leaving multiple messages for both individuals. P finally reached D that evening. P maintains that D assured him that D would perform under the Subcontract. D denies this. On June 6, 2013, D's counsel advised P in writing that it considered the June 3, 2013 email to represent a wrongful termination. In the alternative, it claimed that the parties never had a valid Subcontract because P had failed to return a countersigned copy or advise D in writing that the Subcontract had been countersigned within 45 days, as required by Article II (1) of the General Conditions. P responded on June 7, 2013, with proof that the Subcontract had been executed and delivered on February 13, 2013. The letter also attempted to clarify that the June 4, 2013 email was not a termination notice and that P expected D's continued performance under the Subcontract. The letter sought assurances from D that it would continue to honor the Subcontract, as well as certain specific actions including the prompt delivery of outstanding submittals. D did not respond. On June 14, 2013, P invoked Article XI of the Subcontract and issued a three-day written notice to D of its default. D did not respond to the notice, and on June 21, 2013, P issued a notice of termination of the Subcontract. P replaced D. By novation agreement dated August 20, 2013, D's materials contract with Bridgewell was assigned to a replacement contractor. P seeks damages and D alleges that it is not bound by the Subcontract. D contends that, even if the Subcontract remained in effect, P wrongfully terminated it. D seeks damages for breach of the Subcontract and recovery for unjust enrichment.