Initially, the Court notes that the action addressed herein [*2]is the only remaining one under this index number as all others have been resolved.

This is a cross-claim action for breach of contract damages and for quantum meruit damages commenced by cross-claim defendant, Prim-Con Construction Corp. ("Prim-Con"), against defendant, Humphreys & Harding, Inc. ("H & H"). The trial was held before this Court on the following dates: April 24, 2006, April 25, 2006, April 27, 2006, April 28, 2006 and May 2, 2006. Counsel for the parties requested time thereafter to submit post-trial memoranda.

Cross-claim defendant called James Primiano, Bradley Newman and Walter Langsford as Prim-Con witnesses. Defendant called Edward Card Richard Harding, Jr. and James Schultz as witnesses. The Court has had a full opportunity to consider the evidence presented with respect to the issues in this proceeding, including testimony offered and exhibits received. The Court has further had an opportunity to observe the demeanor of the witnesses called to testify and has made determinations on issues of credibility with respect to these witnesses. The Court now makes the following findings of fact and conclusions of law:

This action arises out of a construction project at the Chapin Home for the Aging ("Chapin") located in Jamaica, New York. In 1991, H & H and Chapin entered into a general contract of approximately $14 million for the construction of additions and alterations to the nursing home. On August 30, 1991, H & H, the general contractor for the project, and Prim-Con, the concrete subcontractor, entered into a written agreement whereby the parties agreed that Prim-Con would provide all supervision, labor, materials and equipment to perform concrete work. For the lump sum price of $935,000, Prim-Con was, in part, to furnish and install reinforced concrete associated with the concrete work required under the plans and specifications for the general contract. It is undisputed that at the time of H & H's termination of their sub-contract with Prim-Con, they had already paid them the sum of $844,944.

Between September 26, 1991 and May 14, 1993, Prim-Con undertook certain concrete projects under the subcontract and performed and furnished certain additional extra work, labor and services and incurred additional expenses for overtime. On a [*3]number of occasions, however, Prim-Con's work was found to be unacceptable to H & H. According to H & H, the primary flaw in performance was Prim-Con's failure to achieve the specified degree of flatness and levelness in the floor slabs. Bradley Newman, the site superintendent for H & H on the Chapin project, testified at trial about an error by Prim-Con with the concrete mix which prevented Prim-Con from finishing the slab on the date that it was poured. According to Newman, instead of adding an accelerator, which would speed up curing time in winter conditions, a retarder was added, which delayed the setting up of the concrete.

Newman further described problems with the fourth floor slab. Such problems with the concrete project caused Prim-Con to fall behind job progress and on February 6, 1992 H & H brought this issue to the attention of Prim-Con. In his letter, Newman notified that Prim-Con's reduction of manpower was impacting construction schedule.

H & H continued to object in writing to Prim-Con's work. On April 3, 1992, H & H issued a letter to Prim-Con, complaining of the irregular, spalled and blistered condition of the concrete slabs poured by Prim-Con. Additional complaints of Prim-Con's unacceptable workmanship was sent by letters dated June 10, 1992, July 22, 1992, July 23, 1992, August 21, 1992 and September 15, 1992. In these letters, H & H gave notice of various concrete projects that required remediation, including the one-story area slab, the installation for the stair nosings, the first-story slab, and the east patio concrete slab finish and scoring. Prim-Con, however, argues that it promptly performed remedial work and that these matters were all addressed in a timely manner and at Prim-Con's sole expense.

On May 7, 1993, H & H gave a three day notice to Prim-Con to cure or H & H would terminate the subcontract for default. This notice to cure was issued because Prim-Con's prior work was unacceptable to not only H & H, but also to Chapin and the U.S. Department of Housing & Urban Development. The notice specified three alleged deficiencies: (1) out of level slabs causing the door bucks to sit off the slabs, (2) unacceptable finished site work and (3) unacceptable concrete curb at the southeast parking area. Prim-Con argues, however, that H & H had already notified the owner five days earlier that Prim-Con had been dismissed.

On May 19, 1993, Prim-Con, requested that H & H furnish an updated schedule for the remainder and completion of the site work concrete. Prim-Con alleges that this request reflected its intention to complete its work so that it could proceed with the [*4]completion of the contract as soon as possible. At trial, however, Primiano testified that he had no intention of replacing portions of the damaged concrete work (here, the curb). Because H & H did not receive any communications from Prim-Con within three business days of the May 7, 1993 notice to cure, on May 20, 1993 H & H terminated the contract for cause.

Upon termination, both H & H and Prim-Con claimed amounts still due from the other party. Prim-Con prepared an estimate of the value of the work remaining in its subcontract. Based on a breach of contract theory of recovery, Prim-Con claims the sum of $122,651, the remaining balance of the contract. Based on a quantum meruit theory of recovery Prim-Con claims the sum of $140,891. H & H prepared a list of back charges detailing its costs to remedy, repair and complete Prim-Con's subcontract totaling $140,249.

H & H argues that it properly terminated Prim-Con's subcontract in May 1993 because Prim-Con failed to fulfill its performance obligations under the subcontract. H & H contends that based on both its notice to cure and termination of the subcontract, it was entitled to contract out the completion and correction of Prim-Con's work and charge the costs incurred against any monies unpaid to Prim-Con. Prim-Con argues that H & H's failure to give Prim-Con the contractually required opportunity to remedy any alleged defaults constituted a material breach of the contract.

According to Prim-Con, its termination was improper because it did not breach the subcontract; rather H & H breached the subcontract by failing to pay Prim-Con the monies owed on the project. Moreover, Prim-Con maintains that at the time that H & H terminated the contract they (H & H) had already certified to the owner in their application for payment that the concrete work (Prim-Con's work), was 97.9 percent complete.

Prim-Con seeks damages in the amounts of $122,651, based on breach of contract recovery, and $140,891, based on a theory of quantum meruit, for the value of the concrete work allegedly completed at the time of its termination, for which it had not been compensated. Under New York Law, a party who defaults under a construction contract may not recover any damages (under the contract or in quantum meruit), unless it has substantially performed under the contract. Intermetal Fabricators v. The Losco Group, 2000 U.S. Dist. LEXIS 11622 (S.D.NY 2000), citing Brown v. John H. Beyer, Inc., 1999 U.S. Dist. LEXIS 16023, No. 97 Civ. [*5]0142 (PKL), 1999 WL 945479, at *4 (S.D.NY Oct. 19, 1999); In re John's Insulation, Inc., 221 B.R. 683, 687-688 (E.D.NY 1998); In re Jandous Electric Construction Corp., 1989 Bankr. LEXIS 402, No. 88 C 20680, 1989 WL 81139, at *5 (Bankr. S.D.NY Mar. 24, 1989); Mechanical Piping Services, Inc. v. Jayeff Construction Corp., 215 AD2d 541, 626 NYS2d 547, 547 (2d Dept. 1995); Triple M. Roofing Corp. v. Greater Jericho Corp., 43 AD2d 594, 349 NYS2d 771, 773 (2d Dep't 1973).

To constitute substantial performance a party must establish that any defects were insubstantial, and that any failure to complete work was unintentional and inadvertent. Sear-Brown Associates v. Blackwatch Development Corp., 112 AD2d 765, 492 NYS2d 266 (4th Dep't 1985). "...[I]t is significant to note in Sear-Brown, the court found the defective work which amounted to 13 percent of the total contract price was not insubstantial." Wilson Roofing & Painting v. Jobco-E.R. Kelly Assoc., 128 AD2d 953, 954, 513 NYS2d 263 (3rd Dep't 1987).

Where however, the terminating party admits in a payment requisition form that the work completed was "...valued at 99.5 percent of the contract price," then the termination constitutes a breach of contract. 845 U.N. Ltd. Partnership v. Flour City Architectual Metals, Inc., 28 AD3d 271, 272, 813 NYS2d 404 (1st Dep't 2006). "The substantial performance rule precludes contract termination and limits a contracting party to a specific damage remedy (see F. Garofalo Elec. Co. v. New York Univ., 300 AD2d 186 (2002); Michael G. Buck & Son Constr. Corp. v. Poncell Constr. Co., 217 AD2d 925 (1995), lv denied 86 NYS2d 711 [1995])." Id. at 272.

Here, H & H does not dispute the claim that they represented, in fact certified, to the owner in their application for payment that the work completed in accordance with the contract documents was 97.9 percent complete. Moreover, H & H does not dispute that on the date of their termination notice to Prim-Con, they had paid Prim-Con the sum of $844,944 out of a total contract price of $935,000 (or approximately $967,000 with change orders). Such evidence supports a claim of substantial compliance.

Under a quantum meruit claim, a party may "recover its actual job costs for work, labor and services performed and material furnished, plus an allowance for overhead and profit." Maris Equip. v. Morganti, Inc., 163 F.Supp.2d 174, 186 (E.D.NY 2001). Quantum meruit damages must be "based upon 'a definite and logical connection between what is proven and the damages sought to be recovered' and cannot be speculative or [*6]conjectural." Aniero Concrete Co. v. Aetna Cas. & Sur. Co., 2002 U.S. Dist. LEXIS 20527 (S.D.NY 2002), citing Clifford R. Gray, Inc. v. New York, 251 AD2d 728, 674 NYS2d 440, 442 (NY App. Div. 1998). The "customary method of calculating damages on a quantum meruit basis in construction contract cases both on completed contracts and contracts terminated before completion is actual job costs plus an allowance for overhead and profit minus amounts paid." Aniero Concrete Co. v. Aetna Cas. & Sur. Co., 2002 U.S. Dist. LEXIS 20527 (S.D.NY 2002), citing Najjar Ind., Inc., et al. v. City of New York, 87 AD2d 329, 451 NYS2d 410, 413 (NY App. Div. 1982).

A court may not award damages on the basis of conjecture and guess work, but rather, damages must be proven with reasonable certainty. Intermetal Fabricators v. The Losco Group, 2000 U.S. Dist. LEXIS 11622 (S.D.NY 2000), citing Travellers Intl., A.G. v. Trans World Airlines, Inc., 41 F.3d 1570, 1577 (2d Cir. 1994); Trademark Research Corp. v. Maxwell Online, Inc., 995 F.2d 326, 332 (2d Cir. 1993); Kenford Co. v. County of Erie, 67 NY2d 257, 261 (1986).

Prim-Con's claims for damages under the quantum meruit theory are unsupported by the evidence.

Accordingly, upon all of the foregoing, the Court concludes that Prim-Con has satisfactorily proven their right to recover under a breach of contract, wrongful termination claim and is entitled to the sum of $122,651 plus statutory interest from January 4, 2002.

Prim-Con's claim for damages pursuant to a theory of quantum meruit is denied. H & H's cross-claims for damages for back charges is denied.

Submit Judgment.

Jamaica, NY

_________________________

JOSEPH P. DORSA, J.S.C.