NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS CONTRACT DISPUTE RESOLUTION BOARD

Transcription

1 Prismatic Development Corp. v. Dep t of Sanitation OATH Index No. 2405/14, mem. dec. (Oct. 22, 2014), aff d, Index No /2015 (Sup. Ct. N.Y. Co. 2015), appended Contractor waived claim for extra compensation in its application for an extension of time to complete contract. Even if claim was not waived, contractor failed to show that the denial of a change order violated the contract. Appeal dismissed. NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS CONTRACT DISPUTE RESOLUTION BOARD In the Matter of PRISMATIC DEVELOPMENT CORP. Petitioner - against - CITY OF NEW YORK DEPARTMENT OF SANITATION Respondent MEMORANDUM DECISION ALESSANDRA F. ZORGNIOTTI, Administrative Law Judge/Chair STEPHANIE RUIZ, Mayor s Office of Contract Services CHARLES M. KASS, ESQ., Prequalified Panel Member Pending before the Contract Dispute Resolution Board ( CDRB or Board ) is an appeal filed by Prismatic Development Corporation ( Prismatic ), on behalf of its subcontractor, EIC Associates ( EIC ). This dispute arises out of a $161,195,000 contract awarded by the City of New York Department of Sanitation ( DOS ) to Prismatic to demolish the existing Marine Transfer Station and build the new North Shore Marine Transfer Station in Flushing Bay, Queens, New York (Pet. Ex. A: Contract ). Prismatic hired EIC to conduct the pile driving operations required by the Contract. The dispute involves an appeal of DOS s denial of a change order filed by Prismatic on behalf of EIC seeking an additional $195,471 for costs EIC incurred

2 -2- as a result of a hidden underwater, man-made obstruction encountered at Pile #279 (Pet. Para. 6). DOS moved to dismiss the petition, arguing that Prismatic waived the claim in its application for a time-extension to complete the Contract. Prismatic opposed the motion. The Board reserved decision on the motion and DOS filed an answer. The matter was fully submitted on September 22, Oral argument was held on October 2, For the reasons below the appeal is dismissed. Prismatic waived the claim for extra compensation in its application for an extension of time. Even if the claim was not waived, Prismatic failed to show that DOS s denial of the change order was in violation of the Contract. BACKGROUND To manage the entire project, DOS contracted with URS/LiRo Corporation ( URS ) to act as the construction manager. Tony Aguero, of URS, was the on-site project manager/resident engineer/construction manager and was DOS s agent at all times relevant to this appeal. Prior to the pile work beginning, EIC participated in a test pile program to determine the depths of the piles to be driven, the soil conditions in the area, and the methodology and equipment required to drive the piles (Ans. at 4). After the test pile program was completed and work had commenced, EIC encountered an obstacle on June 9, 2011, while driving Pile #279 and notified Prismatic and Mr. Aguero (Pet. Exs. B, E). Testing in June and July determined that the obstacle was approximately 16 by 14 feet. On July 11, 2011, EIC set forth its proposed procedure and preliminary cost for removing the obstruction (Pet. Ex. F). In August and September 2011, EIC, Prismatic, and URS discussed proposals to by-pass or remove the obstruction. After much research, and with URS s approval, EIC cleared the obstruction on September 12, 2011 (Pet. Para. 11; Ans. at 4). Specification of the Contract provides in relevant part: 1. If an obstruction, which is not shown on the Contract Drawings, is encountered during pile driving operations, notify the Resident Engineer immediately. 2. Obstructions are defined as man-made or man-placed objects, materials, or structures, such as granite blocks, concrete, timber, logs, piles, or other man-placed materials encountered at or below ground surface which unavoidably and completely stop the progress

3 -3- (Pet. Ex. A1). of the pile installation or subsurface drilling work for more than one hour, despite the Contractor s diligent efforts, as determined by the Resident Engineer. 3. In driving operations, abandoned utilities and utility structures indicated on the Contract Drawings will not be considered obstructions. Bedrock shall not be treated as an obstruction during any driving operations. Naturally occurring dense soil, cobbles and boulders encountered during driving will not be considered as obstructions. The Contractor shall probe to locate the extent of the obstruction and propose a method of passing or removing it. 4. Obstructions shall not include any item whose penetration, demolition, removal, or excavation is included clearly and expressly in the Work of any other pay item.... Under Article 25 all change orders for extra work must be authorized by the DOS Commissioner (agency head). Article 25 further provides, All payments for change orders are subject to pre-audit by the Engineering Audit Officer and may be post-audited by the Comptroller and/or the Department. Contract Art (emphasis in original). Articles 31 and 32 expressly state that the resident engineer and the project manager, respectively, do not have the power to issue an Extra Work order, except as specifically designated in writing by the Commissioner. Moreover, under Article 32, all work is subject to the project manager s determination, direction, and approval, except where the determination, direction or approval or someone other than the project manager is expressly called for. Contract Art (emphasis in original). On August 28 and 30, 2012, EIC submitted documentation to DOS in support of a change order for $195,471 for extra work related to removal of the obstruction at Pile #279 (Pet. Ex. G). On October 11, 2012, DOS Engineering Audit Officer ( EAO ) returned the change order and requested additional documentation including photographs and the construction manager s reports to substantiate that the obstruction was man-made (Pet. Ex. H). On January 22, 2013, EIC provided a narrative with back-up documentation stating that based on probes made in June and July 2011, the obstruction was a concrete slab from prior DOS demolition projects. EIC noted that it was unable to send divers to verify the obstruction because it was buried in 12.5 to 15 feet of mud (Pet. Ex. I).

4 -4- By dated January 23, 2013, Mr. Aguero notified EAO that he and Mr. Urbanski, also of URS, had verified the accuracy of EIC s report and they strongly recommend that EIC be paid under the change order which URS had verified and signed (Pet. Ex. J). In the Mr. Aguero stated in their judgment the obstruction was man-made because of the fact that the top was very flat, its size and that it was floating in the mud. Mr. Aguero also noted that as the contractor chipped on the object it sank deeper into the mud and that all the boulders that were encountered on the site were round in shape. On January 29, 2013, Mr. Aguero notified Prismatic that EAO rejected the change order, finding it was inconclusive that the obstruction was man-made because no pictures were provided (Pet. Ex. J). 1 Prismatic notified EIC that the change order had been denied and filed a timely Notice of Dispute with DOS s Commissioner on EIC s behalf (Pet. Exs. K, L, M). The Notice of Dispute included an outline from EIC of the circumstances and understandings that developed once the obstruction was encountered. EIC noted that the obstruction was reported to Mr. Aguero and that actions were taken as directed by him. Based on the research as well as the location, size, and depth of the obstruction, it was generally believed that the obstruction was a remnant of the reconstruction project undertaken in the mid-1980 s by DOS and was a concrete deck from a demolished ramp. EIC recognized that in hindsight an attempt should have been made to identify the obstruction but that this was never discussed or directed by either Mr. Aguero or DOS. Trying to verify the object in 2012 as requested was not possible because the new deck structure had been fully constructed and sending divers to look for something buried in 13 feet of mud was not feasible (Pet. Exs. B, L). In its opposition papers, DOS questions whether the obstacle was a leftover piece of concrete ramp from the 1980 s and alleges that, under the Contract, Prismatic was responsible for removing an existing concrete ramp near Pile #279. Prismatic accomplished this by dropping it into the water and chopping it into pieces and was required to remove the debris before building a ramp over the area. The ramp, which Prismatic made from rubble and debris, handled heavy construction traffic which pushed any leftover pieces of concrete into the mud. DOS further alleges that Prismatic was issued a citation for the ramp rubble and was directed to 1 At some point Prismatic submitted photographs to EAO that allegedly depicted the materials found at Pile #279. However, it was later determined that the photos were of another area (Pet. Ex. B).

5 -5- remove it. It is unknown if all pieces of debris were removed because Prismatic failed to properly dredge the area (Ans. at 3-5). DOS attached photographs of the ramp demolition and the rubble road which shows large and small pieces of broken concrete. DOS further alleges that the two demolished ramps were made of different materials and that a sample of the obstacle would have allowed DOS to determine where it came from (Ans. at 15-16). Prismatic objected to DOS s submission regarding demolition of a ramp by Prismatic and alleged that this issue was never raised by EAO or the agency head designee. Prismatic admitted, however, that it was responsible for demolition of a ramp and the building of a rubble road in the vicinity of Pile #279 and claimed it was highly unlikely that this rubble caused the obstruction at issue here (Tr ). On June 24, 2013, Prismatic filed a third request for an additional time to complete the project (Pet. Ex. P). Contract Article (c) requires that an application for an extension of time set forth: A statement that the Contractor waives all claims except for those delineated in the application, and the particulars of any claims which the Contractor does not agree to waive. Failure to reserve a claim is deemed a waiver. In its application, Prismatic agreed to waive all claims it may have against the City of New York ( City ) except for, inter alia: (Pet. Ex. P). 2. All claims for monies due for extra and additional work by Prismatic and... EIC including: * * * (c) Claim for the additional costs due to the test pile program and subsequent impacts to the actual pile driving are to be submitted by... EIC. On October 1, 2013, DOS s agency head designee denied the claim for extra compensation. The designee noted that under Specification of the Contract, noncompensable obstructions include: (1) naturally occurring objects; and (2) objects that were to have been demolished and removed as work under the Contract. The designee cited to Comptroller Directive 7 section 3.5.1(b) that governs audits and requires the EAO to Evaluate the change order to ensure that it is not for work already required by the contract. Since no physical or photographic evidence was provided to satisfy EAO that the obstacle met the strict criteria to be considered extra work, the assumptions and conjecture made about the nature of the object were deemed insufficient (Pet. Ex. B).

6 -6- On October 28, 2013, Prismatic filed a Notice of Claim on behalf of EIC with the Office of the Comptroller ( Comptroller ) and submitted additional correspondence regarding the Comptroller s inquiry why the claim should not be deemed waived for failure to preserve it in the request for an extension (Pet. Exs. C, N, O). On April 2, 2014, Prismatic s request for an extension to complete the project was granted by DOS (Pet. Ex. Q). On April 7, 2014, the Comptroller denied the claim finding that Prismatic waived the claim by not specifically reserving the claim for additional compensation to remove the obstruction encountered while installing Pile #279 (Pet. Ex. D). Prismatic filed a timely petition with the CDRB. ANALYSIS The Board s authority to resolve contract disputes between the City and a vendor is set forth in the Procurement Policy Board Rules ( PPB Rules ). The PPB Rules were incorporated into Article 27 of the Contract. The PPB rules and Article authorize the Board to hear claims about the scope of work delineated by the contract, the interpretation of contract documents, the amount to be paid for extra work or disputed work performed in connection with the contract, the conformity of the vendor s work to the contract, and the acceptability and quality of the vendor s work RCNY 4-09(a)(2) (Lexis 2014). The Board reviews the decision of the agency head. 9 RCNY 4-09(g) (Lexis 2014). The Board s decision must be consistent with the terms of the contract. 9 RCNY 4-09(g)(4). As a threshold matter, Prismatic waived the claim for extra compensation in its application for an extension of time. Here Prismatic reserved in relevant part: All claims for... extra... work including, (c) Claim for the additional costs due to the test pile program and subsequent impacts to the actual pile driving are to be submitted by... EIC. New York courts have consistently enforced waiver of claims in connection with extensions of time. See Honeywell, Inc. v. J.P. Maguire Co., 1999 U.S. Dist. LEXIS 1872, at *27 (S.D.N.Y. Feb. 22, 1999), modified in part, adhered to in relevant part, 2000 U.S. Dist. LEXIS 3699 (S.D.N.Y. Mar. 17, 2000); Mars Associates, Inc. v. City of New York, 53 N.Y.2d 627 (1981), aff g, 70 A.D.2d 839 (1st Dep t 1979); Herman H. Schwartz, Inc. v. City of New York, 100 A.D.2d 610 (2d Dep t 1984); see also Pavarini McGovern, LLC v. Dep t of Parks &

7 -7- Recreation, OATH Index No. 1565/14, mem. dec. at 5-6 (June 20, 2014); LAWS Construction Corp. v. Dep t of Parks and Recreation, OATH Index No. 1445/14, mem. dec. at 8-10 (May 28, 2014); Commodore Maintenance Corp. v. Dep t of Transportation, OATH Index No. 1118/14, mem. dec. at 8-9 (Apr. 3, 2014); Ferreira Construction Co., Inc. v. Dep t of Transportation, OATH Index No. 1619/12, mem. dec. at (Nov. 16, 2012); ADC Contracting & Construction, Inc. v. Dep t of Parks & Recreation, OATH Index No. 1010/04, mem. dec. at 3-4 (June 24, 2004). In Mars, a contractor applied for an extension of time to complete a contract after it commenced a lawsuit on an outstanding delay claim under the contract. In the extension request, the contractor agreed to waive and release all claims which we may have against the City of New York arising out of the aforesaid contract except the following: various change orders and work under protest. Mars, 70 A.D.2d at 839. The contractor argued that filing a lawsuit before the execution of the waiver indicated intent on its part not to waive the delay claim. The Appellate Division rejected this argument. The Court held the City s waiver was clear on its face and that the contractor waived all claims, save only those arising out of change orders and work done under protest, which the parties understood meant extra work. Since the delay claim had no underpinning in the exemptions, it was dismissed. In affirming this decision, the Court of Appeals found that this was a sophisticated contractor and that the circumstances of the waiver demonstrate as a matter of law that it was designed to cover the claim upon which [the contractor] now sues. 53 N.Y.2d at 629. The Court further held that it was incumbent on the contractor to state its intentions with clarity if the exemptions were intended to be broader in scope. Id. The instant case is similar to Mars. Prismatic is a sophisticated contractor who secured a $161,195,000 contract with the City. Prismatic applied for an extension of time to complete the Contract after it commenced an Article 27 dispute and provided a waiver of all claims save for generally worded exemptions related to all claims for... extra... work including cost due to modifications to the test pile program and subsequent impacts to the actual pile driving. The claim for extra compensation for the removal of an obstruction at Pile #279 was not stated with any particularity as required by Contract Article (c). Like in Mars, Prismatic s prior submission of the Notice of Dispute to DOS cannot be construed as intent not to waive the claim it now seeks to pursue. See also ACS System Assocs., Inc. v. Dep t of Design & Construction,

8 -8- OATH Index No. 2041/14, mem. dec. at 5-6 (Sept. 4, 2014) (filing notice of dispute insufficient to preserve claim); Pavarini, OATH 1565/14 at 6 (same); LAWS, OATH 1445/14, mem. dec. at 9-10 (same); Commodore, OATH 1118/14 at 8 (same). Moreover, there is no evidence that Prismatic s exemptions were understood by the parties to cover any specific claims. Nor is it evident how a claim for the removal of an obstruction at Pile #279 relates to subsection (c). Prismatic relies on the words, and subsequent impacts to the actual pile driving to support the non-waiver argument. Whether a post-testing claim was being preserved is questionable because subsection (c) refers to the test pile program that occurred before the work began. Moreover, Prismatic identified post-testing exemptions in subsections (a) and (b) that relate to the removal of existing piles and the installation of new ones. Even if subsequent impacts to the actual pile driving was considered separate from the test pile program claims, the phrase is so broadly stated that it could cover any claim relating to pile driving. Similarly, the generally worded reservation, All claims for... extra... work in the introductory sentence could cover any claim for extra work under the Contract. Thus, it was incumbent on Prismatic to state its exemptions with clarity if it intended to have them cover the claim at bar. Mars, 53 N.Y.2d at 629; see also LAWS, OATH 1445/14 at 8-10 (broadly stated reservation of monies due to interferences with and construction changes in the work and for payment of... all monies for extra and additional work insufficient to preserve specific claim that design changes resulted in extra work). Prismatic s assertion that DOS should be estopped because it granted the extension without reservation is also without merit. It is well settled that the City, as a public entity, may not be estopped from enforcing a waiver on the basis of its employee s conduct. See Honeywell, 1999 U.S. Dist. LEXIS 1872 at * Indeed, Article 34 of the Contract provides an almost identical No Estoppel clause found in Honeywell (Pet. Ex. A); see also Herman H. Schwartz, Inc., 100 A.D.2d at 612 ( the city, due to its status as a public agency, may not be estopped from enforcing the waiver on the basis of its employee s conduct ). Even if Prismatic had not waived the claim, the appeal would be dismissed on the merits. Initially, we note that resolution of this claim does not require a determination whether the obstruction at Pile #279 was man-made and, if so, where it came from. This would require a fact-finding hearing that is not in the Board s purview. Rather, the Board s role is limited to determining whether the agency head s determination is consistent with the terms of the

9 -9- Contract. PPB rule 4-09(g)(4). We find that it is. Article 25 gives the agency head exclusive authority to approve a change order for extra work. While Mr. Aguero, the resident engineer, was designated to initially determine the nature of the obstacle at Pile #279 under Specification , his determination was subject to review by the EAO and the agency head under Article Moreover, the No Estoppel clause in section 34 of the Contract states that the City is not bound by any determination or opinion of the resident engineer. Even though Prismatic was not specifically required by the Contract to submit photographs or pieces of the obstacle, the EAO and the agency head had the obligation to audit the change order and the right to ask for additional evidence to verify whether the obstacle qualified as extra work under the Contract. Contract Art. 25.4; see also Comptroller Directive 7 section 3.5.1(b); New York City Charter 93(h) (Lexis 2014) ( agencies shall prepare and audit vouchers before payment... and shall forward vouchers to the comptroller for payment. ). There is no support for Prismatic s claim that EAO is limited to auditing the amount of the claim. Here, Prismatic failed to provide the proof requested. The fact that no one told Prismatic or EIC to take a photograph or collect a sample of the obstruction when it was cleared, does not require a different result. It was incumbent on them to adequately document the change order if it wanted to be compensated for the alleged extra work. It is notable that while Mr. Aguero believed the obstruction was man-made, he did not opine where it came from. If it was a piece of the concrete ramp demolished in the 1980 s, as alleged by Prismatic, it would constitute extra work. If it was a piece of the concrete ramp demolished under the Contract, as denied by Prismatic, it would not be extra work. Prismatic s argument that the CDRB should not consider these facts since they were not before the agency head is without merit. The agency head designee referred to naturally occurring objects as well as objects required to be removed under the Contract. Presumably, the designee was aware that Prismatic had recently demolished a concrete ramp in the vicinity of Pile #279 and was concerned about paying Prismatic twice for required work. In any event, the Board may consider materials not before the agency head. 9 RCNY 4-09(g)(3) (Lexis 2014) ( CDRB, in its discretion, may seek... additional material from any party as it deems fit ). Since it is likely that a photograph or a piece of the obstacle could have aided EAO and the designee in resolving where it came from, the denial of the change order for failing to provide the requested proof was

10 -10- reasonable under the Contract. CONCLUSION Prismatic s appeal is denied. This constitutes the final decision of the Board. All panel members concur. October 22, 2014 APPEARANCES: PECKAR & ABRAMSON Attorneys for Petitioner BY: HOWARD ROSEN, ESQ. COHEN SEGLIAS PALLAS GREENHALL & FURMAN, P.C. Attorneys for EIC Associates BY: SAWN R. FARRELL, ESQ. ZACARY W. CARTER, ESQ. CORPORATION COUNSEL Attorney for Respondent BY: TARA CHRISTIE MINER, ESQ. Alessandra F. Zorgniotti Administrative Law Judge/Chair

11 -11- SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY: IAS PART X PRISMATIC DEVELOPMENT CORP. and EIC ASSOCIATES, INC., Index No /2015 Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules -against- Decision, Order, and Judgment CONTRACT DISPUTE RESOLUTION BOARD OF THE CITY OF NEW YORK, CITY OF NEW YORK DEPARTMENT OF SANITATION KATHRYN GARCIA, AS COMMISSIONER OF THE CITY OF NEW YORK DEPARTMENT OF SANITATION, SCOTT M. STRINGER, AS COMPTROLLER OF THE CITY OF NEW YORK, AND CITY OF NEW YORK, Respondents X JOAN B. LOBIS, J.S.C.: Petitioners Prismatic Development Corporation ("Prismatic") a general contractor and EIC Associates ("EIC") a subcontractor bring this Article 78 proceeding to challenge the rejection of change order requests seeking $195,451 in additional payments. Prismatic was awarded a contract to demolish the existing Marine Transfer Station and build the North Shore Marine Transfer Station in Flushing Bay, Queens, New York in September The entire contract price was $161,195, EIC was the subcontractor responsible for the pile driving operations. Respondent City of New York Department of Sanitation ("DSNY") is the agency that entered the contract. Through the office of the Commissioner, DSNY rejected the claim for additional payment as did Respondent Stringer, as Comptroller. The dispute was then appealed to the Contract Dispute Resolution Board ("CDRB").

12 -12- In May of 2011 while working at a location identified as Pile #279 EIC encountered an obstruction to its work. It notified Prismatic of the obstruction. Prismatic gave EIC the go ahead to remove the obstruction. EIC submitted a proposal and cost estimate to Prismatic. The nature of the obstruction was determined by petitioners to be a concrete slab measuring approximately fourteen feet by sixteen feet. The method of removal of the slab was discussed amongst Prismatic, EIC, and URS Corporation ("URS"), the construction manager hired by the DSNY. Tony Aguero was the on-site senior project manager for URS. The contractor was directed to proceed with the removal of the obstruction. The cost to remove the obstruction was estimated to be $480,500. EIC was instructed to proceed on a time and materials ("T &M") basis. The obstruction was cleared in September Between June 9, 2011 and September 12, 2011 EIC submitted daily T &M tickets that were reviewed and signed by URS. Upon completion of the work petitioners sought an additional payment of $195,451 by submitting a change order for the additional costs incurred. The contract specified that if petitioners encounter obstacles in the pile driving or drilling operation a determination was to be made if the obstruction was man-made or naturally occurring. If it was determined that the obstruction was naturally occurring no additional compensation would be paid for the cost of eliminating the obstruction. If it was a man-made obstacle it could be a cause for additional compensation unless it was considered part of the demolition work that was contemplated in the contract. Another subcontractor, Nacirema, was responsible for the demolition of the old transfer station. The contract also contemplated that petitioner Prismatic would remove a ramp that existed in the vicinity of Pile # Approximately one year after the obstacle was removed a change order for $195, was submitted to DSNY. The DSNY Engineering Audit Office ("EAO") is charged with the audit of all vouchers before payment is made. The EAO evaluates the change order to ensure it represents additional work not contemplated by the contract for which additional money is appropriate. Articles 25.4 and 26.3 of the master contract incorporate this requirement. See also NYC Charter 93(h). The contract also provides that the Resident Engineer (URS) is not

13 -13- authorized to approve or direct extra work. Article Although the URS had approved the plan for removal of the obstruction the EAO rejected the request. The EAO sought more information from petitioners to substantiate that the removal of the obstruction was work outside the contract. It is the continued rejection of payment for removing the obstruction by the Commissioner and the CDRB that petitioners seek to reverse. Not only did the Commissioner and the CDRB refuse to make payment on substantive grounds, DSNY moved to dismiss the petition before the CDRB on the grounds that Prismatic had failed to expressly reserve the dispute over the obstacle removal in its application for an extension of time to complete the project. The contract provision Article (c) requires that an application for an extension has "a statement that the Contractor waives all claims except for those delineated in the application, and the particulars of any claims which the Contractor does not agree to waive... "The language used by Prismatic in pertinent part reads as follows: "2. All claims for monies due for extra and additional work by Prismatic and... EIC including: (c) Claim for the additional costs due to test pile program and subsequent impacts to the actual pile driving are to be submitted by... EIC." By a letter of April 7, 2014, the Office of the Comptroller denied a Notice of Claim submitted by Prismatic on behalf of EIC for payment for the removal of a subsurface obstruction citing the waiver clause. Both the substantive and procedural issues were decided by the CDRB in favor of the respondents. In this Article 78 proceeding petitioners argue that the CDRB acted arbitrarily and capriciously and contrary to law. As to the waiver issue, petitioners allege that the finding of waiver was contrary to law, that the language in the extension request was specific enough to preserve the claim, in fact the language was proposed by employees of DSNY. Petitioners assert that the CDRB failed to follow lawful procedure by declining to consider whether the

14 -14- Commissioner properly considered the claim. They argue that the EAO had no authority to determine whether the obstruction was man-made or man placed. They claim that the failure of the DSNY to follow the recommendation of their site representative URS was another basis to find that the CDRB's determination must be set aside. The petitioners also argue that the determination of the CDRB is fatally flawed because of an abuse of discretion or because its conduct was arbitrary and capricious in basing its decision on a requirement that proof be submitted that was not possible for petitioners to obtain and also that CDRB impermissibly speculated on what the Commissioner considered. In opposition the respondents DSNY, Kathryn Garcia, Scott M. Stringer as Comptroller, and the City of New York are all represented by the Corporation Counsel and submit one set of 4 papers. The CDRB, citing CPLR 7804(i) elects not to answer on the issues. Although the CDRB acknowledges that it is not a judicial officer and not within the ambit of 7804, as an administrative body it assets that it has no position and the real parties in interest are petitioners and DSNY. It submits the transcript of the assignment before it and a copy of its decision in a verified answer but takes no position on the controversy. The Corporation Counsel argues that the CDRB's determination was rationally based and was not arbitrary, capricious, nor an abuse of discretion. He argues that the interpretation of the language in the extension of time application was a proper one since no specific language identified the claims petitioners did not release included the charges for removal of the obstruction. Corporation Counsel cites to cases that found waivers and cases restating basic principles of contract interpretation in support of their argument for waiver. Respondents assert that the fact that DSNY staff may have suggested wording or consulted with or advised petitioners as to a course of action does not estop the respondents from arguing waiver. He argues the decision of the CDRB upholding the agency decisions was consistent with the contract and that the EAO rejection of the change order was proper. It was not irrational or arbitrary and capricious for the EAO to seek more information about the obstruction before signing off on the change order. Furthermore the CDRB's decision was not based on imposing an impossible standard of proof of the on petitioners nor did the CDRB consider evidence that was improper.

15 -15- In their reply, petitioners point out that respondents have not raised any factual disputes through proper affidavits, therefore there is no right to a hearing or trial. In addition they argue any allegation of improper dredging was never an issue before the Commissioner and should not be considered now. Finally they argue that the respondents' contract interpretations are wrong. 5 In an Article 78 proceeding, the court's review of an administrative action is limited to a determination of whether that administrative decision was made in violation of lawful procedures, whether it is arbitrary or capricious, or whether it was affected by an error of law. In re Pell v. Board of Educ., 34 N. Y.2d 222, 231 (1974). A determination is considered arbitrary when it is made "without sound basis in reason or regard to the facts." In re Peckham v. Calogero, 12 N.Y.3d 424, 431 (2009), citing Pell, 34 N.Y.2d at 231. If the agency's determination is rationally supported, the court must sustain the determination "even if the court concludes that it would have reached a different result than the one reached by the agency. Peckham, 12 N.Y.3d at 431 (citation omitted). The court must "defer to an administrative agency's rational interpretation of its own regulations in its area of expertise." Id. (citation omitted). The court cannot "weigh the evidence, choose between conflicting proof, or substitute its assessment of the evidence or witness credibility for that of the administrative factfinder." In re Porter v. New York City Hous. Auth., 42 A.D.3d 314 (1st Dep 't 2007). The Court finds that it was not an error of law to hold that petitioners had waived their claim for payment for the disputed work of removing the obstruction in their applications for extensions of time for completion. To determine whether a claim was preserved the precise language of the March 2014 extension application must be analyzed. Here the language specifically mentions the pile test program and subsequent impacts to actual pile driving. There is no mention of work done to remove an obstruction near Pile #279. Furthermore the extension application states that "subsequent impacts to the actual pile driving are to be submitted by EIC (emphasis provided). There is no mention of what if anything EIC submitted subsequently. The courts have upheld the contract language as requiring language that identifies the claims that are 6 not released with some detail. Both sides rely on the Court of Appeals holding in Mars Assoc. v. City of New York, 53 N. Y.2d 627 (1981). In this case the Supreme Court had denied the City's

16 -16- cross-motion for partial summary judgment. The Appellate Division reversed. 70 AD 2d 839 (1st Dep't 1979). The language in the Mars case "waived all claims except various change orders and work under protest." The Court of Appeals held that the language preserved only those change orders and work done under protest and enforced the waiver as to all other claims. See also Herman H. Schwartz v. City of New York, 100 A.D.2d 610 (2d Dep't 1984)(Schwartz); Naclerio Contr. Co. v. Envtl. Protection Admin., 86 A.D.2d 793 (1st Dep't 1982). The language here is not sufficient to preserve the dispute for removing the obstruction. The claim of estoppel as a result of the role of the URS in submitting language is equally unpersuasive. No estoppel can be found based on the acts of individual employees. See Schwartz, 100 A.D.2d at 612. The CDRB's upholding of the decision of the Commissioner was not made in violation of a lawful order, arbitrary or capricious, or affected by an error of law. The city respondents followed the procedures set forth in the contract. To say that decisions at the site would always bind the EAO or Comptroller's office would eliminate the safeguards to the public that internal audits provide. The decisions followed lawful procedure and did not ask for irrational standards of proof from the contractor or subcontractor. It is an appropriate function of the agencies to determine that payments are pursuant to the contract. The arguments raised by petitioners are not grounds to grant the relief requested. It is therefore 7 ORDERED that the petition is dismissed and the Clerk of the Court is directed to enter a judgment of dismissal accordingly. Dated: Nov. 24, 2015 ENTER: JOAN B. LOBIS, J.S.C.