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Andrews International, Inc. v. New York City Housing Authority

November 24, 2008

ANDREWS INTERNATIONAL, INC. PLAINTIFF,
v.
NEW YORK CITY HOUSING AUTHORITY, DEFENDANT.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge

OPINION & ORDER

Plaintiff Andrews International, Inc. ("Andrews") and Defendant New York City Housing Authority ("NYCHA") each moves for summary judgment. Andrews claims that NYCHA breached their contract by failing to pay $112,196.58 of Andrews' invoices for security guard services. NYCHA claims that it was entitled to withhold this amount as liquidated damages because Andrews, not NYCHA, was in breach. NYCHA also brings a counterclaim against Andrews for additional "liquidated damages" in the amount of $400,000. For the reasons set forth below, summary judgment is granted in favor of NYCHA with respect to Andrews' claim, summary judgment is granted in favor of Andrews with respect to NYCHA's counterclaim, and both the claim and counterclaim are dismissed.

As this decision resolves the case, there will be no trial and the Clerk is instructed to close this matter and remove it from my docket.

I. FACTUAL BACKGROUND

On February 28, 2005, NYCHA and Andrews executed a contract ("NYCHA Contract"), whereby Andrews agreed to provide security services at certain of NYCHA's senior citizen residential developments.*fn1 (Pl.'s Rule 56.1 Statement ¶ 7.) The term of the NYCHA Contract was from March 1, 2005 to February 28, 2007. (Id. ¶¶ 8-9.) NYCHA's guidelines permit it to use, or "piggyback on," another New York City agency's standard agreement for services similar in scope. Thus, the NYCHA Contract incorporates by reference a contract for security services by the New York City Department of Housing Preservation and Development ("HPD Contract"), which is attached to the NYCHA Contract as Exhibit 1. (Id. ¶ 12.) In the NYCHA Contract, Andrews and NYCHA made various modifications of and additions to the HPD Contract to conform it to their agreement. (Id.)

A. Relevant Contractual Provisions

At particular issue in this dispute is Section 11 of Exhibit A to the HPD Contract, as amended by Addendum 2 dated March 27, 2002 ("Inspections Provision"), which is incorporated into the NYCHA Contract between Andrews and NYCHA. (Pl.'s Mot. for Summ J. Ex. 6.) The Inspections Provision provides in pertinent part:

At [Andrews'] expense, [Andrews] shall designate shift supervisors who shall make inspections of guards at [NYCHA] sites...

(a) Guards working day shifts at [NYCHA] office sites shall be inspected once per shift....

(d) Guards working the 4:00 P.M.--12:00 MIDNIGHT shift at building construction sites as well as [NYCHA] office sites shall be inspected twice per shift....

(e) Guards working the 12:00 MIDNIGHT--8:00 A.M. shift at building construction sites as well as [NYCHA] office sites shall be inspected twice per shift....

The NYCHA Contract also incorporates a liquidated damages provision in Article 11 of the HPD Contract ("Liquidated Damages Provision")), which provides in pertinent part:

If [Andrews] should fail to act in accordance with the Agreement specifications and under the terms and conditions of the contract, and at [NYCHA's] sole discretion, [Andrews] shall not be paid for the time short and in addition shall be liable to pay liquidated damages... in accordance with the following schedule:..

(e) Failure to provide required security site inspections, per shift, $25/shift. (Id.)

Finally, Article 10 of the NYCHA Contract ("Notice Provision") provides that

[i]n the event [Andrews] has a dispute with NYCHA under this Agreement, [Andrews] will, within 30 calendar days after such a dispute shall have arisen, notify NYCHA in writing of [Andrews'] contention and submit its claim, specifying the nature of the claim and the sum claimed.... [Andrews] will proceed with its duties hereunder in compliance with the written instructions of NYCHA, and such compliance will not be deemed to be a waiver ...


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