This dispute arises out of a major construction project let at the College of Staten Island by the Dormitory Authority of New York State. Plaintiff The Sawcutter Corporation ("Sawcutter") was a subcontractor of defendant DCI Danaco Contractors, Inc. ("Danaco"), one of the project's prime contractors. Sawcutter entered into an agreement to remove certain building materials and provide certain core concrete drillings for duct and pipe penetrations on behalf of Danaco. Sawcutter brings suit claiming that it was not fully paid for the work it performed. Danaco denies that Sawcutter performed in accordance with the contract and counterclaims for the remedial action it contends it was forced to take on account of Sawcutter's defective duct penetrations. The suit is here on transfer from Supreme Court, Richmond County pursuant to CPLR 325 (d). With the plaintiff's claim on the surety bond against defendant Travelers Casualty & Surety Company set aside, the claim and counterclaim were tried to the Court sitting without a jury. The following constitutes the findings of fact, conclusions of law and the Decision and Order of the Court.

Because they are the most easy to dispose of, the Court will first address Danaco's counterclaim and the facts it has in common with any of Danaco's affirmative defenses. Other than the testimony of Dennis Nemick, Danaco's chief on-site manager for the College of Staten Island project, which parroted the naked assertion of defective performance alleged in the counterclaim, there was no proof of any work failure by Sawcutter. No proof was offered as to which penetrations were defective or in what ways they were defective. Mr. Nemick did proffer an excuse for the absence of any Danaco business records of the project, but Danaco made no effort through discovery or otherwise to attempt to reconstruct the missing records or to offer any other sort of proof as to the claimed defects. The counterclaim, therefore, must fail as does any defense rooted in the claim that Sawcutter's work under the contract was defective.

Next is the issue of variance. Though odd in a case where the defendant neither [*2]demanded a bill of particulars nor sought to refine the plaintiff's claims through interrogatories, Danaco did object to Sawcutter's motion at the close of its case to conform its pleading to the proof. At the nub was the offer in evidence of unpaid invoices several thousand dollars in excess of the sum claimed to be unpaid in the complaint. The additional sums came to light months before trial. They were known, it is undisputed, both by plaintiff's and defendant's counsel. Sawcutter did not formally move to amend the complaint at any time prior to trial. Danaco did not seek any additional discovery as a result of the revelation. Danaco's claim of surprise at trial in such circumstance rings particularly hollow as does its claim of prejudice, which truly amounts to a plea about the increased exposure that is inherent in any such amendment regardless of the time it is made. With surprise and true prejudice wanting, the proof is entitled to the upper hand, see D. Siegel, New York Practice § 242 (3d. 2003), and leave to conform the pleading to the proof should be, and hereby is, given. See, e.g., Alomia v. New York City Transit Authority, 292 App. Div. 2d 403, 738 N.Y.S.2d 695 ( 2d Dep't 2002).

Nevertheless, because of a quirk in the procedural history of this action, the pleading cannot be amended to the full amount established by the proof offered and received in evidence. Sawcutter actually offers proof in excess of the $25,000 jurisdictional limit of the New York City Civil Court but to no end. Even though this action was commenced in Supreme Court and transferred here pursuant to paragraph (d) of CPLR 325, this Court is still without power to permit an amendment to the pleading in any form that would increase the ad damnum beyond the jurisdictional limit of an action brought as of right originally in Civil Court. Such relief can only be granted by motion in Supreme Court accompanying a motion to re-transfer the action there. See Huston v. Rao, 74 App. Div. 2d 127, 427 N.Y.S.2d 36 (2d Dep't 1980). Sawcutter has displayed no inclination to make such motions. To the contrary, Sawcutter moved in the alternative to limit its motion to conform the pleading to the proof to the extent that the jurisdictional limit of the Court permits it. As a result, the Court orders that the plaintiff's complaint be deemed amended to raise the amount demanded from the $18,300 sum originally pled to $25,000, rather than the sum of unpaid invoices actually proved in excess of that amount.

Sawcutter, to be sure, through the testimony of Gerard Barsch, its president, and documentary evidence in the form of invoices, Plaintiff's Exhibits 1 thru 6 in Evidence, has proved that it performed work under the subcontract with Danaco beyond a preponderance of the credible evidence. Danaco's effort to stave off judgment on the basis of Sawcutter's allegedly defective workmanship has already been found to lack credibility. None of Danaco's other defenses can carry the day either.

Danaco's first defense is essentially the affirmative defense of payment. Danaco asserts that the "extra" work for which Sawcutter seeks payment here was part of the original job and was covered by the payments Sawcutter acknowledged receiving from Danaco. This assertion cannot withstand close scrutiny. The clear and compelling testimony by Mr. Barsch as to the nature and extent of the extra work and as to how the extra work was authorized by Danaco finds solid support in the documentary evidence. None of the items billed for in the three Sawcutter invoices that comprise Plaintiff's Exhibit 5 appear in the itemized job list set forth in [*3]the "Scope of Work" section of the Danaco standard form of contract executed by Mr. Barsch and Mr. Nemick in early June 1999. Even more significant, the Danaco payment document executed by Mr. Barsch on or around November 12, 1999,which was date stamped received by Danaco on November 18,1999, and which was received in evidence as Defendant's Exhibit B, does not purport to make a claim for work agreed to after May 20, 1999, that is the agreement date for the job items appearing on Plaintiff's Exhibit 4. In other words, if Defendant's Exhibit B is, as Danaco claims, proof that the extra work set forth in Plaintiff's Exhibit 5 and testified to by Mr. Barsch was actually paid, the proof fails miserably. Danaco can find no refuge here.

Next comes the related point that Sawcutter violated the contract because it did not bill for its work as required on the AIA's "Application and Certificate for Payment" document, which, Danaco points out further, would have obviated the argument about whether the extra work was really extra or was basic contract work. Like signing with the wrong color ink, this technical violation of the contract does not destroy the subcontractor's right to be paid in full for work actually performed. Contract law cannot be so wooden in its application. Even if a contractor doesn't complete work or performs defectively, the contractor is entitled to recover the full contract price less the cost of correcting the improperly performed work. Teramo & Co. v. O'Brien-Sheipe Funeral Home, Inc., 283 App. Div. 2d 635, 725 N.Y.S.2d 87 (2d Dep't 2001). So trivial an item as using the wrong form to bill for work properly completed cannot be, and is not, a defense to Sawcutter's claim for full payment to the jurisdictional limit of this Court.

Nor can Danaco succeed in its defense that Sawcutter is not entitled to payment because the work claimed by Sawcutter and found by the Court to be extra work was not authorized in the manner required by the contract. It is clear, where the Court finds on the credible evidence, as it hereby does, that oral directions to perform change or extra work at the job-site were part of the general course of conduct between contracting construction professionals, that such course of conduct may modify or vitiate, as the conduct of the parties did here, any contract provisions requiring written authorization or notice for such work.. Tridee Associates, Inc. v. New York City School Construction Authority, 292 App. Div. 2d 444, 739 N.Y.S.2d 179 (2d Dep't 2002); Barsotti's, Inc. Consolidated Edison Co. of New York, Inc., 254 App. Div. 2d 211, 680 N.Y.S.2d 88 (1st Dep't 1998). Given the credible testimony as to how Danaco ran its construction project at the College of Staten Island with Sawcutter, the contract provision requiring written authorization for extra or change work is not enforceable and does not bar Sawcutter's right to recover fully for the work it actually performed.

Lastly, Danaco contends Sawcutter is not entitled to full recovery because of the 10% retainage provision in the contract. That is, since the Dormitory Authority, Danaco avers, has not paid it in full for the College of Staten Island project, Danaco claims that Sawcutter is not entitled even at this time to more than 90% of the billing on the work it claims to have performed in 1999. The retainage provision of the contract is as follows:

Final payment shall be due after completion of all work, acceptance

by the Owner [the Dormitory Authority], compliance with all Sub- [*4]

contract obligations and receipt of final payment for [sic] the Owner,

which items shall be conditions precedent to the making of final

payment to Subcontractor.

Plaintiff's Exhibit 4 (emphasis supplied). Obviously, if the retainage provision is valid, the plaintiff's claim must then be reduced accordingly since Danaco's claim that the Dormitory Authority has not made final payment is not disputed by any credible evidence.

The retainage provision, however, is not valid. Contract provisions like this one are void as a matter of public policy. The right of a subcontractor to be paid for work actually performed cannot be made contingent upon the receipt of payment by the general contractor. As the Court of Appeals declared in West-Fair Electric Contractors v. Aetna Casualty & Surety Company, 87 N.Y.2d 148,158, 638 N.Y.S.2d 394, 398 (1995):

[A] pay-when-paid provision which forces the subcontractor to assume

the risk that the owner will fail to pay the general contractor is void and

unenforceable as contrary to the public policy set forth in Lien Law § 34.

By making payment by the owner to the general contractor a condition precedent to the payment by the general to its sub, the provision here cannot be construed as a "time for payment" clause as opposed to a void '"pay-when-paid" clause. Since the provision relied upon by Danaco "contains express language which imposes a condition on the legal responsibility of" Danaco to pay Sawcutter, it is void and unenforceable. Magnolia Construction Co. v. Arben Corp., 2003 WL 22801788 (2d Dep't, November 24, 2003). Even though Danaco has not been fully paid by the Dormitory Authority, Sawcutter is entitled to full payment from Danaco.

For all the foregoing reasons, The Court finds and determines that Sawcutter is entitled to recover on its breach of contract claim against Danaco, solely, in the amount of $25,000, with interest to be computed from August 31, 1999. Plaintiff to submit judgment.

This constitutes the Decision and Order of the Court.

Court Attorney to notify both sides of this Decision and Order.

December 31, 2003ERIC N. VITALIANO

Judge of the Civil Court

Decision Date: December 31, 2003