Background

In October of 2008, Trocom Construction Corp. signed a contract with the City of New York for Trocom to perform the reconstruction of a portion of Fulton Street in Lower Manhattan in connection with the Fulton Transit Center project. The contract contained a provision requiring Trocom to provide the city’s engineer with a notice of claim for any claimed delay impacts within 45 days of the date on which Trocom first incurred damages, and to provide an additional notice with updated details every 30 days thereafter. The contract allowed Trocom to seek an extension of these deadlines but warned that “on failure of (Trocom) to fully comply with the foregoing provisions, such claims shall be deemed waived and no right to recover on such claims shall exist.” The contract contained similar provisions for other claims, such as unpaid change orders.

During the project, Trocom encountered numerous delays and was required to perform significant additional work above and beyond its original scope. When these claims went unpaid, Trocom commenced a lawsuit against the city, seeking to recover $829,998.82 in unpaid change orders and $1,275,400. in delay damages, amongst other damages.

After discovery, the city moved for summary judgment dismissing Trocom’s lawsuit, alleging that Trocom failed to provide the city with the contractually required notice. While Trocom was constrained to admit that it did not strictly comply with these requirements, it argued that voluminous email correspondence, in person discussions at project meetings, and “thousands of pages of documents (provided) to the Comptroller” adequately advised the city of the details of Trocom’s claims. The city conceded that there were discussions, but argued that the complaints of “general delay,” without specifics, were woefully inadequate to apprise the city of the details of the claims, or substitute for contractual notice.

Decision

The motion court granted the city’s motion, finding that the complaints of general delay, without specifics, were not sufficient, and that it was incumbent on Trocom to “show that a particular delay actually delayed the completion of the project and did not run concurrently with independently caused delays.” The court held that Trocom made no such showing and failed to produce documents in response to the Comptroller’s request. The court further held that even if Trocom’s documents did provide specifics, the city was nevertheless entitled to strict compliance with the contractual notice provisions.

Trocom appealed, arguing that the city was unreasonable and unduly burdensome with its document demands. The appellate court affirmed, finding that Trocom had failed to comply with the contractual conditions, and had failed to raise any issue of fact as to whether it was hindered or prevented from complying with the contractual requirements by the city’s bad faith, negligence or misconduct.

Comment

Trocom is one in a long series of reminders that in most circumstances, contractual conditions precedent will be strictly enforced. Here a $3.5-million lawsuit ended up dismissed for a simple failure to follow contractual formalities. (Contractors should know that requirements to give notice of a claim may also come from statutes, city charters, or elsewhere, in addition to those found in the contract.) While Trocom’s claims here ended up buried in the graveyard of inadequate notice, this did not need to happen.

It goes without saying that contractors would be well advised to follow such contractual conditions precedent to the letter so that you are not in the position of having to later argue, like Trocom, that cobbled together correspondence constitutes the notice required by the contract. Often, and unfortunately, by the time the contractor recognizes that it is up against a deadline to submit a notice of claim, that deadline may have already passed. Your project people must learn to recognize the actions and correspondence from the Owner that trigger the Notice stopwatch. Further, never be afraid of being accused of starting a “letter war.” Like Tessio in the Godfather, sophisticated contractors will realize that it’s only business, and there are diplomatic and businesslike ways to do so.  In that regard, contractors should examine their contracts with experienced construction counsel so that they can—at the outset of, or during the progress of the job—have a checklist of what to submit when a claim arises, and the deadline for doing so.

About the authors: Thomas H. Welby, Esq., P.E., is General Counsel to the CIC and the BCA and serves as Senior Counsel to the law firm  Welby, Brady & Greenblatt, LLP. Gregory J. Spaun, Esq., is a partner with the firm.

Published: May 15, 2025.