Opinion ID: 570028
Heading Depth: 3
Heading Rank: 1

Heading: W & M's Delay Damages

Text: 33 Both parties contend that the district court erred in its determination of W & M's delay damages by relying upon W & M's March 1988 offer to accept $500,000 in acceleration costs from Whiting-Turner. We agree. This offer of compromise was made nine months before W & M abandoned the project and before the full extent of its damages could be ascertained. Moreover, this offer did not purport to represent the full extent of W & M's damages, nor was it substantiated by competent proof of damages. In short, this figure was essentially an unreliable approximation of W & M's damages upon which the district court should not have relied in computing damages. 7 Novak & Co., Inc. v. Facilities Dev. Corp., 116 A.D.2d 891, 892, 498 N.Y.S.2d 492, 494 (3d Dept.1986). 34 Although a party is not to be denied damages when they are necessarily uncertain, see Berley Indus., Inc. v. City of New York, 45 N.Y.2d 683, 687, 412 N.Y.S.2d 589, 591, 385 N.E.2d 281, 283 (1978), New York law does not countenance damage awards based on [s]peculation or conjecture. Id. W & M's March 1988 approximation evidently represented its best estimate as to what it would cost to complete the job on an accelerated basis. As such, its estimation was no more reliable than a contractor's bid estimates, the inherent unreliability of which preclude their use in calculating damages. Novak & Co., 116 A.D.2d at 892, 498 N.Y.S.2d at 494; see also Najjar Indus., Inc. v. City of New York, 87 A.D.2d 329, 332, 451 N.Y.S.2d 410, 413 (1st Dept.1982); Columbia Asphalt Corp. v. State, 70 A.D.2d 133, 136, 420 N.Y.S.2d 36, 38 (3d Dept.1979). 35 There is no doubt that W & M, as the mechanical subcontractor, experienced substantial cost overruns on the IBM project. The issue on remand will be the extent to which Whiting-Turner, as general contractor, is answerable for these cost overruns. Thus, W & M must establish the extent to which its costs were increased by [Whiting-Turner's] improper acts because its recovery will be limited to damages actually sustained. Berley Indus., 45 N.Y.2d at 687, 412 N.Y.S.2d at 591 (emphasis added). 36 This will require the district court first to ascertain W & M's total delay damages. These are the difference between the contract price set by W & M to do the mechanical work and W & M's total job costs, including overhead and profits, if applicable. See Columbia Asphalt, 70 A.D.2d at 136-37, 420 N.Y.S.2d at 38-39; Whitmyer Bros., Inc. v. State, 63 A.D.2d 103, 108, 406 N.Y.S.2d 617, 620 (3d Dept.), appeal dismissed, 45 N.Y.2d 897, 411 N.Y.S.2d 9, 383 N.E.2d 561 (1978). The district court must then apportion the delay damages according to each party's responsibility for them. See Columbia Asphalt, 70 A.D.2d at 136-37, 420 N.Y.S.2d at 38-39; Fehlhaber Corp. v. State, 65 A.D.2d 119, 127-28, 410 N.Y.S.2d 920, 926 (3d Dept.1978). Thus, W & M cannot recover for costs occasioned by its own errors, either in performing the Subcontract or in preparing its bid and its underlying assumptions and projections. See Novak & Co., 116 A.D.2d at 892, 498 N.Y.S.2d at 494.