Court Opinion

ID: 5769962
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:30:09.771824+00
Date Added: 2024-06-11T08:41:44.839036
License: Public Domain

Tilzer, J. (dissenting).
The plaintiffs-respondents received from the general contractors, the defendants-appellants. in *373excess of. $5,800,000 as progress payments, less retained percentages, under their subcontract to perform the required pile driving work for the construction of the Newtown Creek Pollution Control Project. By the instant action the plaintiffs sought payment of the “retainages” (approximately $322,000—the amounts are not disputed) as well as a refund of insurance premium payments made by plaintiffs to defendants under the subcontract.
The plaintiffs’ right to recover the retainages depended whether there was ‘ ‘ completion ’ ’ and ‘ ‘ acceptance ’ ’ of the plaintiffs’ work within the meaning of those terms in the contractual commitments governing the parties. Plaintiffs claimed, and the trial court so held, that their work was completed and accepted on February 6, 1966 when all piles had been accepted by the defendants and the owner, the City of New York. Defendants contended that the only one empowered to accept the plaintiffs’ work was the Commissioner of the Department of Public Works of the city, and that until such time as the retain-ages were released and paid by the city to them, their obligation of payment to the plaintiffs did not mature.
We agree with the trial court that the “ question of what final acceptance is is a question of the interpretation of the contract.” We disagree with his conclusion that acceptance was the act of the general contractor, the defendants, and took place when the pile work was completed. Such interpretation, in our view, constitutes an alteration of the contractual definition of “ acceptance.”
The subcontract provided that plaintiffs agreed “ to be bound by all the pertinent terms, conditions and provisions of the Principal Agreement as though said terms, conditions and provisions were herein fully set forth at length.” The principal agreement, the contract with the city, specifies “ ‘ Approved,’ ‘ acceptable,’ ‘ satisfactory,’ and words of similar import shall mean and intend approved, acceptable or satisfactory to the Commissioner.” The principal agreement further specifies that the subcontract “ shall contain the same terms and conditions as to method of payment for work labor and materials, and as to retained percentages as are contained in this contract.” (Emphasis added.) While the Commissioner on July 31, 1967 certified that portions of the work were considered to be ‘ ‘ substantially complete ” (as contrasted with “ Final Acceptance ” hereinafter defined), he did not, as he might in his discretion pursuant to the principal contract, issue a voucher calling for payment of any part or all of the balance due under the contract, including moneys retained. Retainages are held by the *374city and their return may be sought at the end of guarantee periods, as the general contract stipulates, following 1 ‘ final acceptance of the work by the Commissioner, as evidenced by his signature upon his certificate of completion and acceptance filed in the Office of the Comptroller, a copy of which shall be sent to the Contractor.” No certificate of final acceptance has been issued by the Commissioner and the city still retains approximately $1,000,000 as retainages under the principal contract. And last but not least, the subcontract expressly stated that “ payment will not be made by the contractor to the subcontractor until the owner [City] has made payment to the contractor for the work. ”
Reading the instruments as a whole, and giving due recognition to the circumstances of the parties and to the purpose which they sought to accomplish, we find that the plaintiffs failed to prove final acceptance of their work entitling them to the payment of the retainages. The defendants’ obligation to pay the retainages has not accrued but will arise upon final acceptance by the Commissioner or payment to the defendants. (Eighth Ave. Coach Corp. v. City of New York, 286 N. Y. 84, 88-89; Mascioni v. Miller, Inc., 261 N. Y. 1.)
Insofar as the court awarded the plaintiffs $47,316.60 for unexpended insurance premiums, we find that our minds are not moved, as was the trial court’s “ in some degree however slight,” to a holding that plaintiffs established their right to an adjustment as to all insurance premiums. The typewritten rider to the subcontract did not provide for adjustment with respect to any coverage except return premiums given to the contractor in the event the subcontractor’s experience modification for workmen’s compensation had been reduced. The plaintiffs’ proof failed to meet this issue. Their only witness as to the insurance claim failed to establish what part, if any, of the premium was properly allocable to workmen’s compensation, so as to bring into play the provision of the rider which would give to plaintiffs credit for the return premium relating to such insurance.
The judgment appealed from should be reversed in its entirety and the complaint dismissed as to the claim for retainages withheld, without prejudice, and insofar as the judgment awarded a refund of insurance premiums a new trial should be had on the issue above set forth.
MoGrvEKH and Nunez, JJ., concur with McNally, J.; Tilzeb, J., dissents in opinion in which Capozzoli, J. P., concurs..
Judgment affirmed with $50 costs and disbursements to the respondents.