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Fourth Department — Breach of Contract: Crane-Hogan Structural Systems Inc. v. State of New York

By: Daily Record Staff//November 15, 2011

Fourth Department — Breach of Contract: Crane-Hogan Structural Systems Inc. v. State of New York

By: Daily Record Staff//November 15, 2011

Appellate Division, Fourth Department

Breach of Contract

Force Account

Crane-Hogan Structural Systems Inc. v. State of New York
CA 10-02278
Appealed from Court of Claims

Background: The claimant had brought an action seeking damages for the defendant’s breach of a construction contract. The defendant had contracted with the claimant to rehabilitate the Veterans Memorial Bridge. The project involved a partial removal and repair of the bridge deck and supporting beams. While the work was under way, the parties discovered that the bridge was in greater disrepair that the plans reflected, and the defendant had halted construction. During negotiations for the additional work, the claimant agreed to proceed by “force account” to complete the project. Pursuant to the Department of Transportation, the force account procedure allowed for compensation on a time and materials basis. After the work was completed, the defendant had refused to pay 36.5 percent of the claim attributable to the force account work on account that much of it had already been paid during construction.

Ruling: The appellate division found that the court had erred in failing to credit the defendant for the amounts that it had paid to the claimant for overhead and profit. The record had demonstrated that the defendant had paid claimant in markup for overhead and profit through the force account procedure and, upon completion of the project the claimant ought to have been credited for the amounts paid using the force account procedure.

Owen Demuth of the New York State Office of the Attorney General for the defendant-appellant; Anthony J. Adams of Gates & Adams for the claimant-respondent

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