George Pallas and Evan Blaker Win Summary Judgment and Dismissal, Saving Hill International $17 Million
In the breach of construction management contract matter, Cohen Seglias litigators George Pallas, Evan Blaker and Gary Repke, Jr. represented our client, construction management firm Hill International, against the New York-based contractor, E.W. Howell Construction Group. On November 8, the Hon. Jenifer G. Schecter, J.S.C., granted Hill International’s summary judgment motion for the dismissal of $17 million in dispute. This decision cautions contractors to be exact in their ADR requirements in their construction contracts.
Case Overview
Hill International was the construction manager on the construction of the Brooklyn College Performing Arts Center, a $55 million, 62,000-square-foot addition to the existing Leonard and Claire Tow Center for the Performing Arts in Brooklyn, NY. During the course of the project, there were extensive delays, some reaching nearly 1,500 days. The general contractor, E.W. Howell Construction Group, submitted a series of claims related to the delays—seven in total, six of which sought delay damages of over $7.5 million. E.W. Howell also submitted subcontractor claims totaling $8.3 million.
The contract contained an extensive alternative dispute process, requiring the general contractor’s, E.W. Howell, claims to be submitted to the construction manager, Hill International, who then had to submit the claims to the owner, the City University of New York (CUNY). CUNY was then required to attempt to resolve the claims or issue a unilateral decision, which would then be subject to an internal appeal. However, E.W. Howell was dissatisfied with this procedure and initially sought to have the contractual ADR procedures legally declared void and unenforceable. Its efforts failed with a final determination made in June 2017 denying E.W. Howell’s motion for leave to appeal filed with the New York Court of Appeals.
Still dissatisfied with the requirement that claims be decided via the internal dispute process, E.W. Howell then filed an action against Hill International, alleging a violation of its rights due to how its claims were handled. E.W. Howell claimed that Hill International improperly sat on its claims until the project was completed and claimed this methodology was in violation of its rights. During the time the action was pending, the City University Construction Fund rejected E.W. Howell’s claim on the merits. Our attorneys then moved for summary judgment on behalf of Hill International, arguing that even if there was any evidence that our client did not submit the claim as required under the contract’s ADR provisions, it only would have resulted in the claim being denied earlier in time. The court agreed with our arguments and dismissed E.W. Howell’s claim, leaving it to pursue its ADR remedies with the City University Construction Fund as set forth in the contract.
Key Takeaway
Learning from this case, contractors should ensure their contracts contain clear language that the ADR requirements include all claims, specifically claims relating to the manner in which the construction manager handles/processes claims made by the general contractor, including claims involving a breach of the implied covenant of good faith and fair dealing.
