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UNITED STATES EX REL. PEROSI ELEC. CORP. v. MANSHU

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK


July 25, 1996

UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF PEROSI ELECTRICAL CORPORATION, Plaintiff, against MANSHUL CONSTRUCTION CORP., et al., Defendants.

The opinion of the court was delivered by: LEVY

MEMORANDUM AND ORDER

 LEVY, United States Magistrate Judge:

 This action arises out of a renovation and improvement project for the Community Facilities Building at the United States Naval Station in Staten Island, New York, (the "Project"). Defendant Manshul Construction Corp. ("Manshul") was the general contractor on the Project. Manshul hired plaintiff Perosi Electrical Corp. ("plaintiff" or "Perosi") as an electrical subcontractor. In this action, brought pursuant to the Miller Act, 40 U.S.C. §§ 270a and 270b. Perosi is seeking to recover from Manshul and its surety, defendant Aetna Casualty and Surety Company ("Aetna"), payments it claims it is owed for work performed and materials furnished in connection with the Project. Manshul is counterclaiming for damages it allegedly incurred in order to correct or complete work Perosi was under contract to perform.

 By stipulation dated February 20, 1996, the parties consented to a trial before a Magistrate Judge. Accordingly, a bench trial was held before me on March 20 and 21, 1996, at which three witnesses testified: Richard Perosi, an officer of the plaintiff corporation; Alfred Haugland, Project Manager for the defendant corporation; and George Oprescu, Senior Project Manager for the Maximum Electric Company, an electrical subcontractor that also contracted to perform work for the Project. For the reasons stated below, I find in favor of plaintiff Perosi, in the total amount of $ 83,713.33, plus interest.

 FINDINGS OF FACT AND CONCLUSIONS OF LAW

 On or about September 26, 1991, the United States entered into a written contract with Manshul, whereby Manshul agreed to furnish the necessary labor and materials for the renovation and improvement of the Headquarters/Administration, Community Facilities Building at the Naval Station in Staten Island. On the same date, in accordance with 40 U.S.C. § 270a, Manshul and Aetna, as surety, executed and delivered to the United States a payment bond in the penal sum of $ 2,500,000, wherein Manshul and Aetna bound themselves jointly and severally to all persons furnishing labor or materials in connection with the Project. Manshul then entered into an Electrical Subcontract Agreement with Perosi, dated January 6, 1992, wherein Perosi agreed to supply all labor, materials and equipment necessary to complete the electrical work for the Project. *fn1" In consideration therefor, Manshul agreed to pay Perosi the sum of $ 835,000.

 On January 17, 1992, Perosi commenced performance of its obligations under the Electrical Subcontract Agreement. It is undisputed that, to date, Manshul has paid $ 720,245 to or on behalf of Perosi under that agreement. (See Amended Civil Pretrial Order at P 5) *fn2"

 Perosi's Claims

 Perosi contends that it duly completed and performed all of its obligations under the Electrical Subcontract Agreement, except as prevented or frustrated by Manshul's "material breaches": it thus seeks to recover the remainder of the balance due under that agreement, in the sum of $ 114,755, together with interest from February 17, 1994. (See First Amended Complaint at P 11). Perosi also seeks to recover for additional and extra work, not included in the Electrical Subcontract Agreement, that it claims Manshul directed it to perform and for which it claims it has not received payment. According to Perosi, such work includes: (a) furnishing control wiring for VAV boxes for the temperature control equipment; (b) remedying defective sheetrock cuts; (c) providing and maintaining temporary light and power to perform "miscellaneous site work" ordered by Manshul; (d) repairing ducts damaged by others; and (e) wiring a radio transmitter in the Administration Building. Perosi alleges that the fair and reasonable value of this extra work was $ 53,849.43; it thus seeks recovery of that amount, together with interest from February 17, 1994. Each of plaintiff's claims will be addressed in turn.

 The Electrical Subcontract Agreement

 The Electrical Subcontract Agreement, dated January 6, 1993, required Perosi to "supply all labor, materials and equipment necessary to complete all Electrical Work, as called for by the contract specifications and amendments and as shown on the contract drawings." Such work was to include, but was not limited to: (a) demolition and removal work, (b) electrical general requirements, (c) the underfloor raceway system, (d) overhead electrical work, (e) interior wiring systems, (f) interior switchboard, low-voltage, (g) pad mounted transformer (750 KVA), (h) interior lighting, (i) exterior lighting, and (j) the fire alarm and fire detecting system, all as described in the contract specifications and amendments. In addition, the agreement required Perosi to, inter alia, (1) furnish to the jobsite all extension cords as required, (2) provide all ground fault detectors as required, (3) provide all temporary light and power systems "for all days that work of the General Contractors trades shall be at the jobsite," (4) provide temporary site lighting as per the contract plans, specifications and amendments, (5) perform all site electrical work, including site lighting and all underground work, (6) furnish and install all new telephone ducts per the plans and specifications, (7) remove existing overhead electric lines, poles and transformers, as per the plans, specifications and amendments, (8) provide electrical lighting and power for the general contractor, (9) place all rubbish and debris into containers, for removal by others, (10) coordinate with other trades and provide coordination drawings, (11) provide all shop drawings, certificates as required by the Navy, test reports, catalogs and cuts, (12) perform all testing and provide all reports required for the Project, (13) furnish and install all underground work as per the plans, specifications and amendments, (14) provide all access doors related to its work, (15) furnish and install all electrical cells as shown on electrical drawing S-1, (16) furnish and install header trenches and covers, (17) furnish and install concrete bases for light poles, (18) provide all safety features including safety nets, goggles, signs, etc., and (19) furnish and install all sleeves required to be installed in foundation walls.

 Specifically excluded from the agreement were, inter alia, "control wiring," unless "shown on the electrical drawings under requirements of the electrical specifications," and "H.V.A.C. Control Wiring," defined by Richard Perosi at trial as "any control wiring that has to do with the heating, ventilating and air-conditioning system . . . ." (Trial Transcript ("Tr.") at 14).

 In addition, Paragraph 9 of the agreement, as amended, states in pertinent part:

 

Total payment to the Subcontractor for work performed hereunder shall be the total sum of $ 835,000 which sum shall be payable as follows: Payments to be made as work progresses and within ten (10) days of receipt of payment by General Contractor from the Owner, less ten percent (10%) retainage. Retainage to be paid within ten (10) days of receipt of payment of same by the General Contractor from the Owner.

 According to Richard Perosi's trial testimony, it was plaintiff's practice to submit requisition forms, or bills, to Manshul on a monthly basis, in order to receive payment for the work performed in the preceding thirty-day period. (Tr. at 18-19). Perosi submitted a total of twenty-four such requisition forms to Manshul in connection with work it performed for the Project. (Tr. at 19) Richard Perosi stated that, in order to determine the dollar amount of each requisition, Perosi's project supervisor, Al Santiago, would meet with a representative of Manshul and agree on a "percentage complete," which would be communicated back to Richard Perosi's office for submission. (Tr. at 23-24). It was Richard Perosi's understanding that Manshul was then expected to pay Perosi the amount billed, minus a "retainage," typically ten percent, which Richard Perosi described as an amount "that the general contractor holds to make sure the job gets completed." (Tr. at 25). Nevertheless, Mr. Perosi did not explain how he reached that understanding or describe any communications with Manshul in which such an arrangement was discussed. Nor did he personally witness any conversations or meetings in which Mr. Santiago and a representative of Manshul discussed or agreed on a "percentage complete."

 According to a payment summary sheet prepared by plaintiff and admitted in evidence as Exhibit 42, Perosi submitted requisitions totaling $ 835,000 and received payments totaling $ 704,730. Perosi thus claims that Manshul owes it $ 109,395 for work performed pursuant to the agreement, plus $ 20,875 in retainage, for a total of $ 130,270. Taking into account the $ 15,515 paid by Manshul directly to Hallmark Electric, in settlement of claims made by Hallmark Electric against Perosi for labor and materials provided in connection with the Project, Perosi's actual claim is for $ 114,755, plus claims for "extra" work, discussed in more detail below.

 Despite his statements concerning the alleged agreement between Perosi and Manshul regarding billing for work performed pursuant to the contract, Richard Perosi testified that Manshul often paid plaintiff less than the amount billed on the requisition form, so "the payments never matched or corresponded to the requisitions." (Tr. at 25-26). Indeed, on at least four occasions Manshul paid Perosi amounts ranging from $ 10,000 to $ 36,000 without having received a requisition for work performed.

 Contrary to Mr. Perosi's description of the requisition process, Alfred Haugland testified that the procedure was as follows:

 

[Perosi's] project manager would send a certain percentage completion in a formal requisition to [Manshul's] project manager . . . around the end of the month, usually around the 25th of the month. [Then, Manshul's project manager] would call me [and] say "Al, you establish[] the amount of work which Perosi has done this month because I'm expecting a requisition and then we'll review. I need the percentages from you." So, I would give [my project manager] the percentage which I thought was fair. . . . Then he would submit that requisition to the Navy. At some time [if] the Navy thought the percentages were too high, they would cut the requisition.

 (Tr. at 166). Thus, Mr. Haugland testified that it was common for subcontractors, including Perosi, to be paid less than the amount of their requisitions depending on Manshul's and the Navy's determinations concerning the percentage complete. (Tr. at 167).

 More significantly, however, Mr. Perosi admitted on cross-examination that he only visited the job site "once every couple of weeks. . . usually for about an hour." (Tr. at 61). Thus, he did not supervise his employees on a daily, or even a weekly, basis. Mr. Perosi further testified that his company did not maintain time sheets or payroll records for regular contract work related to the Project. (Tr. at 62, 76) Accordingly, Mr. Perosi has no direct, personal knowledge of what work was performed, by whom and when, and maintained no documentation to show what work his company completed. Of course, plaintiff bears the burden of proving its claims by a preponderance of the evidence. Richard Perosi's bare, unsubstantiated assertion that his company performed all of the work required under the Electrical Subcontract Agreement, without more, is insufficient to satisfy that burden.

 Notwithstanding plaintiff's failure to produce testimony from witnesses with personal knowledge, or some other documentation to support its assertion that it complied with all of its obligations under the contract, defendant concedes that Perosi is entitled to the full contract price minus backcharges for the work it failed adequately to perform or complete. (See Defendants' Post-Trial Brief at 15). Accordingly, each of Manshul's claimed backcharges will be addressed in turn.

 "Punch List" Work

 Among the tasks plaintiff was required to perform under the Electrical Subcontract Agreement were items contained on various "punch lists." In his trial testimony, Richard Perosi described "punch list" work as follows:

 

After an inspector visits the site and inspects all the work, he'll come up with work that is not to his liking or to the specs and he'll put on a list and the list has to be taken care of by whoever's responsibility it is.

 (Tr. at 31). Thus, a punch list is a list of corrective work to be completed. (Tr. at 68) Mr. Perosi testified that at some point, Manshul presented him with a punch list and the plaintiff company performed the work included on that list. (Tr. at 31, 67-68). A letter from Al Santiago, Project Manager for Perosi, to Lawrence Horowitz, Project Manager for Manshul, dated March 3, 1994, purports to confirm that Perosi completed at least some of that work. The letter, which was received in evidence as Exhibit 73, states in relevant part:

 

The electrical contract work on this project has been on a "Beneficial Occupancy Status" going back prior to February 7, 1994. This includes completing preliminary punch list work, dated 1/28/94 for the Third Floor, 2/1/94 for the Second Floor and 2/14/93 for the First Floor, generated by your C.Q.C. representatives.

 

The exceptions to the above are approximately 11 light fixtures that are being replaced for defective reasons and minor miscellaneous items.

 

* * *

 

We received subsequent punch list letters, dated 2/8/94, 2/18/94 and 2/23/94, which we are reviewing for compliance or other action. Our response will be forthcoming.

 However, this letter refers only to "preliminary punch list work," described by Richard Perosi as "the punch list before the primary punch list." (Tr. at 69) It does not purport to confirm that plaintiff completed the items on the final punch list. Moreover, Mr. Perosi admitted that his company did not repair or replace the eleven light fixtures to which the letter refers, although it was required to furnish such fixtures under the contract. (Tr. at 70-71).

 More importantly, Mr. Perosi admitted on cross-examination that he was not present on the job site when punch list work was performed, and did not personally check to see if his employees completed all of the items on the various punch list letters. (Tr. at 68) Other than Mr. Perosi's bare assertion that his company completed all of the punch list items, plaintiff introduced no testimony from witnesses with direct knowledge and no documentation or other evidence to support this claim. Indeed, plaintiff did not introduce into evidence the punch lists dated 2/8/94, 2/18/94 and 2/23/94, described in Exhibit 73, or a "final" punch list; thus, the court has no way of determining what work those lists required, let alone whether plaintiff completed such work. *fn3"

 Indeed, contrary to Mr. Perosi's assertions that his company completed all of the punch list items, Alfred Haugland testified that Perosi never completed its punch list work. (Tr. at 168) To support this claim, defendant introduced as Exhibit 77 a letter dated March 1, 1994 from Manshul to Perosi, which states:

 

Receipt is acknowledged of your letter wherein you state that $ 130,000 is due. At this point Perosi is endangering its payment by failing or refusing to complete its work. In fact, this project is now subject to liquidated damages which, in part, are due to Perosi's failure to perform. In this regard we refer you to your earlier commitments to complete given to our office on November 24th, 1993 and December 13, 1994. Neither of these commitments were kept.

 

We further refer you to our earlier correspondence advising of the lack of adequate manpower to complete your work. We also refer you to our earlier correspondence to your office of January 5, 1994 where we stated that the owner will not accept the building without proper operation and maintenance manuals. At the meeting at our office on February 5, 1994, Perosi's Mr. Santiago stated that he had all manuals and that he was withholding them for his own ends and purposes. This is unacceptable. Until the manuals are provided and punch list work completed, no further payments will be made and liquidated damages will be charged to the Perosi subcontract.

 

We urge you to return to the job and complete your outstanding obligations without further delay. Unless progress is made on the punch list and manuals, we shall have no choice but to contact your bonding company and look to your surety to complete this project.

 According to Mr. Haugland's trial testimony, Manshul hired a company called Maximum Electric to correct the punch list items that Perosi failed to remedy. (Tr. at 174) To substantiate that claim, defendant introduced as Exhibit 78 a bill from George Oprescu, Senior Project Manager for Maximum Electric, to Manshul dated June 6, 1994. The bill is entitled "PUNCH LIST WORK" and lists five specific punch list items, for a proposed price of $ 8,000. Manshul also introduced as Exhibit 79 a copy of a check from Manshul to Maximum Electric for $ 8,000, dated June 16, 1994.

 The court credits Mr. Haugland's testimony on this point. Accordingly, Manshul is entitled to $ 8,000 in backcharges for "punch list" work, plus overhead and profit, *fn4" for a total of $ 9,680.00.

 Failure to Furnish "As Built" Drawings

 Manshul contends that Perosi failed to provide "as built" drawings, described by Richard Perosi at trial as "drawings to show any changes that took place during the job." (Tr. at 71) Richard Perosi conceded on cross-examination that the Electrical Subcontract Agreement required his company to provide such drawings and that it failed to do so. (Tr. at 72). In fact, defendant introduced into evidence as part of Exhibit 29 a letter dated June 3, 1994 from Allan G. Schulman, President of Manshul, to Vincent LaPenta, General Manager of Perosi, which states:

 

You have refused to furnish and install certain light fixtures indicated on the punch list and to provide us with as-built drawings. Be advised that we shall perform this work and charge to your account all charges so incurred together with G.C. overhead and profit.

 Additional letters from Manshul to Perosi, dated May 13, 1994, May 17, 1994, June 9, 1994, and June 13 1994, all admitted as part of Exhibit 29, demand that Perosi furnish and install missing light fixtures and provide as-built drawings and warn that Perosi's failure to comply will result in backcharges to its account. When Perosi failed to complete this work, Manshul did so and then sent Perosi a bill for the cost it incurred. (Tr. at 176). Exhibit 32 is a bill for, among other things, preparation of the "as built" drawings. It charges Perosi $ 1,500 for the preparation of the drawings which, according to Mr. Haugland, constitutes the "fair and reasonable" value of the work. (Tr. at 176).

 Mr. Perosi testified that his company was in the process of producing the "as built" drawings when Manshul "went out and did it themselves." (Tr. at 149). Nonetheless, the amount of correspondence sent by Manshul on this issue indicates that Perosi did not complete the drawings in a timely manner. Accordingly, Manshul is entitled to $ 1,500 in backcharges for the cost of producing the "as built" drawings, plus overhead and profit, for a total of $ 1,815.00.

 Emergency Lighting

 Mr. Haugland testified that there was an "internal problem" with the emergency lighting installed by Perosi. Tr. at 180). He further testified that he spoke with Mr. LaPenta at Perosi concerning the problem and sent faxes to Perosi requesting that it remedy the problem. (Tr. at 180-81). When Perosi failed to correct the problem, Manshul hired Maximum Electric to do so (Tr. at 181) and paid it $ 457.38 for the work. (Tr. at 182) Manshul then billed Perosi $ 553.43 for the repairs to the emergency lighting, including overhead and profit.

 Plaintiff made no effort to dispute any part of this claim, and the court credits Mr. Haugland's testimony on this point. Accordingly, defendant is entitled to a backcharge of $ 553.43 for the cost of repairing the faulty emergency lighting.

 Library Light Fixture

 Manshul contends that, after Perosi finished repairing a light fixture in the library, the Department of the Navy reported that the fixture was operating "erratically" and demanded that it be corrected. (See Letter from D. A. Petno, Assistant Resident in Charge of Construction, to Manshul dated June 30, 1994; introduced as part of Exhibit 63). Correspondence from Manshul to Perosi indicates that Manshul hired Maximum Electric to perform the repairs, and paid it $ 756.00 for doing so. (See Exhibit 63) Manshul then billed Perosi $ 914.94 for the cost of hiring Maximum Electric to complete the repairs, plus profit and overhead. (Tr. at 188).

 Mr. Perosi testified that the light fixture came with a manufacturer's warranty, and that his company contacted the manufacturer about the faulty light fixture and then told Manshul that it was waiting for a new ballast to arrive. (Tr. at 120-21). Mr. Perosi admitted that his company never went back to the site to repair the condition (Tr. at 121), but he testified that his company was in the process of attempting to obtain a replacement fixture from the manufacturer when Manshul "jumped the gun and went and did it." (Tr. at 148).

 The only correspondence from Manshul to Perosi on this issue is a handwritten letter dated July 8, 1994 from Al Haugland to Vincent LaPenta, which states: "Attached find letter from the Navy regarding problems with Library lighting. We have assigned another electrical contractor to complete this work. We will bill your account for all costs incurred." (See Exhibit 66). Defendant produced no evidence to suggest that it gave Perosi notice of the problem or a reasonable opportunity to repair the condition. Accordingly, Manshul has failed to demonstrate that it is entitled to a backcharge for repairs to the library light fixture.

 Ceiling Support System Wiring

 Manshul argues that Perosi failed to install the necessary wires to support the florescent light fixtures in the drop ceiling. *fn5" It points to section 16510, paragraph 3.1 of the specifications, which requires Perosi to:

 

set lighting fixtures plumb, square and level with ceiling and walls, in alignment with adjacent lighting fixtures, and secure in accordance with manufacturer's directions and approved drawings. The installation shall meet with the requirements of NFPA 70. Mounting heights specified or indicated shall be to bottom of fixture for ceiling-mounted fixtures and to center of fixture for wall-mounted fixtures. Obtain approval of the exact mounting for lighting fixtures on the job before installation is commenced and, where applicable, after coordinating with the type, style, and pattern of the ceiling before being installed. Recessed and semirecessed fixtures may be supported from suspended ceiling support system ceiling tees if the ceiling system support wires are provided at a minimum of four wires per fixture and located not more than 6 inches from each corner of each fixture. Additionally, for recessed fixtures, provide support clips securely fastened to ceiling grid members, a minimum of one at or near each corner of each fixture. . . . (emphasis supplied)

 Richard Perosi admitted at trial that his company did not install the ceiling system support wires "at a minimum of four wires per fixture and located not more than 6 inches from each corner of each fixture," but he maintained that such wiring was "the ceiling man's responsibility." (Tr. at 123). According to his interpretation, this section does not require Perosi, or any specific subcontractor, to install the ceiling system support wires but merely states that the light fixtures may be supported from ceiling tees if the support wires are already in place. (Tr. at 127).

 Not surprisingly, Mr. Haugland's interpretation of this section differed from Mr. Perosi's. According to Mr. Haugland, this Section required Perosi to install the support wires after putting in the light fixtures. (Tr. at 195). He further testified that Manshul sent Perosi two faxes, dated November 2, 1993 and November 22, 1993, requesting that Perosi return to install the ceiling support wires. (Tr. at 196-97; Exhibits 54 and 55). When Perosi refused to do so, Manshul did some of the work itself, and then hired Nastasi White, the ceiling subcontractor, to perform the remainder of the work. (Tr. at 198; 226; 231).

 It is axiomatic that vague or ambiguous contract language must be construed against the drafter, in this case Manshul. Wong v. Michael Kennedy, P.C., 853 F. Supp. 73, 80 (E.D.N.Y. 1994) ("where a contract is ambiguous, it must be construed most strongly against the party who prepared it"); Jacobson v. Sassower, 66 N.Y.2d 991, 993, 489 N.E.2d 1283, 1284, 499 N.Y.S.2d 381, 382 (1985) ("In cases of doubt or ambiguity a contract must be construed most strongly against the party who prepared it and favorably to a party who had no voice in the selection of its language"); 67 Wall St. Co. v. Franklin Nat'l Bank, 37 N.Y.2d 245, 249, 333 N.E.2d 184, 187, 371 N.Y.S.2d 915, 918 (1975) (same); Willis v. New York City Police Dep't, 214 A.D.2d 428, 428, 625 N.Y.S.2d 43, 44 (1st Dep't 1995) ("this case involves the interpretation of a contract, which in cases of doubt or ambiguity, should be construed against the drafter").

 Here, the language of section 16510, paragraph 3.1 of the specifications, read alone, is vague and ambiguous: it does not state explicitly that it was Perosi's responsibility to install the ceiling system support wires, but simply provides, in passive language, that the florescent light fixtures "may be supported from suspended ceiling support system ceiling tees if the ceiling system support wires are provided."

 However, as Manshul points out, section 16510, paragraph 2.12 is entitled "SUPPORT HANGERS FOR LIGHTING FIXTURES IN SUSPENDED CEILINGS." It specifies two different types of wiring to be used for supporting the light fixtures in the drop ceilings: "FS QQ-W-461, composition 1010, soft annealed, light zinc coated finish, 0.1055 inches in diameter," and, for humid spaces, "ASTM A580, composition 302 or 304, condition annealed stainless steel or FS QQ-N-281, Class A nickel-copper alloy, 0.1055 inches in diameter." These requirements appear in Division 16 of the specifications, which refer exclusively to the electrical subcontractor, in this case Perosi. (Tr. at 116) Clearly, that division would not specify the exact type of wiring to be used to support the suspended light fixtures if it were not the electrical subcontractor's responsibility to install such wiring.

 At trial, Manshul provided adequate proof that it engaged one carpenter to perform this work for 28 hours at $ 52.64 per hour. (Tr. at 231-33; Exhibit 65). Adding in overhead and profit, Manshul's total cost for its work on the installation of support wires was $ 1,783.44. In addition, it paid Nastasi White $ 10,541.0. for its work installing wires. (Tr. at 198; 226) Thus, Manshul's total backcharges for this work totaled $ 12,755.22, including overhead and profit. Perosi did not dispute Manshul's claim concerning the cost of the installation. Since it was Perosi's responsibility to perform such work, Manshul is entitled to $ 12,755.22 in backcharges for the cost of installing the ceiling support wires.

 Removal of Temporary Lights and Wires

 Mr. Haugland testified that it was Perosi's responsibility to remove all temporary lights and wiring at the end of the job, and that he personally asked Mr. Santiago on several occasions to do so. (Tr. at 189; 237) To support its claim that Manshul asked Perosi to remove the temporary lighting, defendant introduced, as Exhibit 64, a handwritten fax from Al Haugland to Al Santiago, dated December 1, 1993, which states in its entirety:

 

We are installing entire ceiling tiles on 2nd floor. 2 weeks ago we mentioned that the Navy required the Temp lights to be removed. At that time you stated that it may not be a requirement.

 Mr. Perosi testified that he did not recall ever seeing this fax. (Tr. at 135). Rather, he testified that he did not know whether Manshul instructed Perosi to remove the temporary lighting and wiring (Tr. at 135) or whether Perosi ever did so. (Tr. at 136).

 Mr. Haugland testified that Manshul removed the temporary lights and wiring and billed Perosi $ 363.00 for the fair and reasonable value of some of that work. (Tr. at 190). In addition, Mr. Haugland testified that Manshul performed "about a hundred man hours" of work removing temporary wires as it "closed up the ceilings," at a total cost of $ 6,535.21, including overhead and profit. (Tr. at 243-44; Exhibit 68).

 Plaintiff did not dispute the contention that it was required to remove the temporary lights and wires; nor did it dispute Manshul's claim concerning the cost involved in performing that work. Accordingly, Manshul is entitled to $ 6,898.21 in backcharges for the cost of removing temporary lights and electrical wires.

 Waste Removal

 As explained above, the Electrical Subcontract Agreement required Perosi to "place all rubbish and debris into containers, for removal by others." Manshul contends that, because Perosi failed to properly remove its debris from the job site, Manshul was forced to incur the costs of such waste removal.

  Mr. Haugland testified that he sent a fax to Vincent LaPenta at Perosi, dated February 7, 1994 and admitted in evidence as part of Exhibit 70, which states: "When your men made the connection on the site poles they left the packing material at each pole. The Commander visited the site this afternoon @ 3:30 p.m. and instructed us to clean up immediately. . . . Please assign your men to police the adjacent properties at Tompkins Ave., etc." When Perosi failed to remove the debris, Manshul assigned some of its own employees to do so, at a cost of $ 699.79, including overhead and profit. (Tr. at 252-53; Exhibit 70).

 Plaintiff did not contest any of defendant's allegations concerning the failure to remove debris; in fact, Mr. Perosi testified that he did not have any personal knowledge as to whether or not his company ever removed this debris. (Tr. at 137) Accordingly, Manshul is entitled to $ 699.79 in backcharges for the cost of removing debris left by Perosi's employees.

 Installation of Trailer Steps

 Richard Perosi also conceded on cross-examination that Manshul paid to install stairs to Perosi's site trailer at Richard Perosi's request. (Tr. at 119). He testified that his company had agreed that Manshul would install the steps, keep a record of the cost and send Perosi a bill. (Tr. at 141). Mr. Perosi further admitted that Manshul sent him an invoice for that work "right away," and that his company did not remit payment. (Tr. at 141).

 Defendant introduced as Exhibit 53 a bill from Manshul to Perosi, dated January 5, 1993, for the cost of building stair's to Perosi's trailer at the worksite. The total amount of the bill is $ 662.38. Given Mr. Perosi's admission that his company agreed to pay Manshul the cost of installing the steps, Manshul is entitled to $ 662.38 in backcharges for performing this work.

 Revision from 500 MCM Wire to 250 MCM Wire

 Defendant introduced, as Exhibit 37, a document entitled "Amendment of Solicitation/Modification of Contract," dated May 14, 1993. The document was issued by the Department of the Navy to Manshul and reflects a revision in the electrical specifications for the main transformer, from 500 MCM electric cable to 250 MCM electric cable. Mr. Perosi testified that he recalled receiving a copy of the document, and that he recalled agreeing to give Manshul a credit of $ 4,800.00, which reflected a decrease in the cost of the electric cable. (Tr. at 139). Accordingly, Manshul is entitled to a backcharge of $ 4,800.00, plus overhead and profit, for a total of $ 5,808.00. (Tr. at 256).

 Malfunctioning Fire Alarms

 Mr. Haugland testified that there were a number of problems with the fire alarm systems after Perosi installed them. Specifically, "the alarms were going off at various times in three zones." (Tr. at 247). He testified that he sent a fax to Perosi, dated August 2, 1994 and admitted in evidence as part of Exhibit 71, which states: "We advise you that three lights are on in the Fire Alarm Cabinet with audio alarms --> (1) System Trouble (2) Signal Ground (3) City Trouble. You need to correct this immediately." (emphasis in original) When Perosi failed to correct the problems, Mr. Haugland sent a letter to Vincent LaPenta at Perosi, dated August 8, 1994 and admitted as part of Exhibit 71, which states:

 

On August 2, 1994, we advised you of a letter from the Navy informing us of three malfunctioning alarms within the fire alarm cabinet. We request that you immediately make the necessary repairs and/or replacements to insure that the fire alarm is in good working order. If this is not accomplished within 72 hours, we will perform the work required . . . and charge your account for all costs as well as general contractors overhead and profit.

 When Perosi continued to refuse to correct the problems with the fire alarms, Mr. Haugland sent a second letter on August 11, 1994, this time to the attention of Richard Perosi, which states:

 

Subsequent to our letters of August 2, 1994 and August 8, 1994 pertaining to the three malfunctioning alarms within the main fire alarm panel, we have engaged a maintenance subcontractor to make all corrections outside the Simplex panel. This subcontractor corrected the city alarm without entering the panel. However, he instructed us to notify Simplex [the manufacturer] to make corrections within the panel to the two other alarms -- trouble system and ground system.

 

When we notified Simplex we were informed that their warranty period with Perosi started April 6, 1993 and ended April 6, 1994. No arrangement had been made by Perosi for service after April 6, 1994.

 

We have engaged Simplex to make all necessary repairs. All costs incurred from out maintenance subcontractor and Simplex will be charged to your account as well as General Contractors overhead and profit.

 (Tr. at 250; Exhibit 71). Manshul subsequently sent Perosi a bill for the cost of the repairs, which totaled $ 326.70, including overhead and profit. (Tr. at 250-52; Exhibit 71).

 Mr. Perosi recalled receiving letters from Manshul about malfunctioning alarms within the fire alarm cabinet. (Tr. at 139). He testified that his company did not repair any part of the fire alarm system, because it was a warranty item and thus was the manufacturer's responsibility. (Tr. at 140). However, plaintiff submitted no evidence to support this contention or the proposition that it was not responsible for repairing the fire alarms.

 In addition, Mr. Haugland testified that there was a problem concerning the placement of seven fire alarm bells. According to his testimony, "Perosi's men put the fire alarm too high. They put the box for the fire alarm too high. So the distance between the top of the bell itself, the round bell, was too close to get the right vibrations from the bell. So what we had to do is cut the ceiling . . . and put a recess around the bell." (Tr. at 234). He explained that Manshul "asked Perosi to . . . drop it down to the right location and they refused to do that." (Tr. at 234). Accordingly, Manshul performed the work needed to reframe the sheetrock, at a cost of $ 2,117.50, including overhead and profit. (Tr. at 236; Exhibit 69). Plaintiff made no attempt to dispute this claim.

 Consequently, Manshul is entitled to backcharges of $ 326.70 for the cost of repairing the malfunctioning fire alarms, plus $ 2,117.50 for the cost of reframing the sheetrock around the fire alarms.

 Misplacement of Exterior Light Box

 Mr. Haugland testified that Perosi installed an exterior light box on the loading dock in the wrong location. He stated that he asked Mr. Santiago "to take care of it", but that "he never did." (Tr. at 254). Because Perosi failed to relocate the light box, Manshul assigned an employee to do the work, at a cost of $ 349.90, including overhead and profit. (Tr. at 255; Exhibit 81).

 Plaintiff made no attempt to dispute or contradict this claim. Accordingly, Manshul is entitled to a backcharge of $ 349.90 for performing this work.

 The Pre-Action System

 According to Manshul, the Electrical Subcontract Agreement required Perosi to install the electrical wiring for the pre-action system, a part of the fire detection system. Manshul contends that, because Perosi failed to perform this work, it was forced to hire Maximum Electric to do so, at a cost of $ 12,100, including overhead and profit. (Tr. at 213-14; Exhibit 66).

 Perosi, on the other hand, argues that the work on the pre-action system was not included in the Electrical Subcontract Agreement. To support this contention, it introduced into evidence certain correspondence between the parties indicating that Manshul had authorized Perosi to perform the electrical work on the pre-action system for the sprinkler alarms and acknowledged that such work was outside the contract. Specifically, a letter from Richard Perosi to Allan Schulman of Manshul, dated January 20, 1994 and admitted in evidence as Exhibit 6C, outlines the terms of an agreement for Perosi to complete work on the pre-action system "on a cost plus basis." The letter states that "payment terms will be 5 days after receipt of billing." In addition, two letters from Manshul confirm that it agreed to compensate Perosi separately for work performed on the pre-action system. The first is a handwritten note addressed to Perosi Electric and signed by Lawrence Horowitz, Project Manager for Manshul, which states: "You are hereby authorized to wire the pre-action system. The work is to be done this week. The cost for this work is to be discussed at a later date." In addition, after the signature appears the handwritten statement "Supt. will sign for time and material sheets." The note is dated January 11, 1994 and was admitted in evidence as Exhibit 6B. The second is a letter from Mr. Horowitz to Richard Perosi, dated January 21, 1994 and admitted in evidence as Exhibit 6A, which states:

  

We acknowledge receipt of your letter dated Jan. 20, 1994 regarding the electrical work for the pre-action system for the sprinkler. Please be advised that we agree with the terms of your letter with the exception that payment is to be made when 50% of the work is completed and the balance to be paid subsequent to final inspection and approval by the Navy.

  Mr. Perosi acknowledged that plaintiff never performed the work on the pre-action system and is not seeking compensation for any such work. (Tr. at 99) Nonetheless, the correspondence clearly indicates an intention on Manshul's part to compensate Perosi on a "cost plus" basis for the work on the pre-action system, an intention it would not have exhibited had it believed the Electrical Subcontract Agreement to include such work.

  Accordingly, Manshul is not entitled to a backcharge for the work performed by Maximum Electric to wire the pre-action system.

  Total Backcharges Based on the foregoing, Manshul is entitled to total backcharges as follows: Punch List Work $ 9,680.00 "As Built" Drawings $ 1,815.00 Emergency Lighting $ 553.00 Ceiling Support Wiring $ 12,755.22 Removal of Temporary Lights and Wires $ 6,898.21 Waste Removal $ 699.79 Trailer Steps $ 662.38 Cable Revision $ 5,808.00 Malfunctioning Fire Alarms $ 326.70 Reframing Sheetrock $ 2,117.50 Exterior Light Box $ 349.90 Total $ 41,665.70

19960725

© 1992-2004 VersusLaw Inc.



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