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Gothic Construction Group Inc. v. Port Authority

April 29, 1998

GOTHIC CONSTRUCTION GROUP, INC., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT,
v.
PORT AUTHORITY TRANS-HUDSON CORPORATION, A WHOLLY OWNED SUBSIDIARY OF THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY; PORT AUTHORITY OF NEW YORK AND NEW JERSEY, A BODY CORPORATE AND POLITIC CREATED BY INTERSTATE COMPACT, DEFENDANTS-RESPONDENTS. ARMENGOL CUEVAS, BRUCE FILL, PEDRO MONTANO, AND HIPOLITO ROLDAN, INDIVIDUALLY; AND HUDSON COUNTY DISTRICT COUNCIL OF LABORERS BENEFITS-FUNDS, PLAINTIFFS,
v.
GOTHIC CONSTRUCTION GROUP, INC., A NEW JERSEY CORPORATION, ROBERT CHARLES ENTERPRISES, INC., A NEW YORK CORPORATION, RCE/GCG CONSTRUCTION, NEAL TANIS, INDIVIDUALLY, AND ROBERT STIVALA, INDIVIDUALLY, AND THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY (FOR DISCOVERY PURPOSES ONLY), DEFENDANTS. FIP STRUCTURAL SYSTEMS, PLAINTIFF,
v.
GOTHIC CONSTRUCTION GROUP, INC., DEFENDANT. BLUE CIRCLE RAIA, INC. PLAINTIFF,
v.
GOTHIC CONSTRUCTION GROUP, INC., A CORPORATION OF THE STATE OF NEW JERSEY, AND NEAL M. TANIS, INDIVIDUALLY, DEFENDANTS.



Before Judges Petrella and Steinberg.

The opinion of the court was delivered by: Petrella, P.j.a.d.

Argued March 30, 1998

[9]    On appeal from Superior Court of New Jersey, Law Division, Hudson County.

Gothic Construction Company (Gothic) appeals from an order entered by the Law Division just before a scheduled trial date dismissing the complaint. No findings were made and the Judge gave no reasons for the order.

This litigation arises out of a contract between the Port Authority Trans-Hudson Corporation (PATH), a subsidiary of The Port Authority of New York and New Jersey (Port), and a joint venture between Gothic and Robert Charles Enterprises, Inc. (Gothic) for construction of a parking deck in the Journal Square Transportation Center parking garage in Jersey City, New Jersey. PATH advertised for bids for the Journal Square Project on September 13, 1993. On September 30, 1993, the Gothic joint venture submitted a bid proposal for the project. The contract was awarded to this joint venture on December 23, 1993.

Under the contract, Gothic was required to remove the top layer of concrete on the parking deck by means of hydrodemolition to expose the "rebar"; after this was completed, Gothic was to re-pour the parking deck using a special weather resistant concrete mix. Gothic had never before used either the hydrodemolition technique or this particular mix of concrete.

The contract provided for completion of the work within 210 days. However, the work was subject to numerous delays due to the weather, unexpected technical reasons, and imprecise descriptions in the contract specifications. As a result, Gothic requested an extension of time, which was granted with a specified schedule of milestone dates. Soon thereafter PATH informed Gothic that a milestone date had been missed and requested that the work be completed within a week. The work was completed one week after the end of the extension.

On September 26, 1994, PATH's Chief Engineer, Eugene J. Fasullo (Chief Engineer), wrote Gothic that it was in breach of the contract. On October 4, 1994, Gothic's letter acknowledged that PATH was terminating the contract, but Gothic did not accept PATH's declared breach. Instead, it wrote that it considered PATH the breaching party. Gothic characterized PATH's deadlines as "unrealistic," and vacated the project under protest. According to PATH, at that point 25% of the work had been completed.

After Gothic vacated the project, bids were solicited for a different contractor to complete the Journal Square Project. The schedule was recalculated by PATH in a new bid solicitation, which PATH justified in an internal memo, stating in part:

With the knowledge and experience gained from the original work effort, and knowing the technical expertise and construction requirements of the contract, staff is now recommending that the following five contractors be solicited ... because of the need to ... complete the hydrodemolition work under non-freezing conditions, the staff recommends that the following contractors because of their experience, financial security, prior job performance on PATH projects, and expertise be approved ...

The new contract was awarded to a new contractor based on a higher bid than the one on which Gothic had been awarded its contract.

Gothic *fn1 filed a complaint against PATH on August 30, 1995, on the ground of breach of contract and in the alternative, quantum meruit. In late November 1995 PATH answered, counter-claimed, demanded a jury and asserted that Gothic had breached the contract. As its fifteenth separate defense, PATH alleged that Gothic "failed to satisfy the contractual [sic] required alternative dispute resolution mechanism which is mandated before resorting to the judicial system." That defense apparently referred to the requirement contained in Chapter IV, Paragraph 16 of the Contract, which stated in relevant part:

To resolve all disputes and to prevent litigation the parties to this Contract authorize the Chief Engineer to decide all questions of any nature whatsoever arising out of, under, or in connection with, or in any way related to or on account of, this Contract (including claims in the nature of breach of Contract or fraud or misrepresentation before or subsequent to acceptance of the Contractor's Proposal and claims of a type which are barred by the provisions of this Contract) and his decision shall be conclusive, final and binding on the parties ...

All such questions shall be submitted in writing by the Contractor to the Chief Engineer for his decision, together with all evidence and other pertinent information in regard to such questions, in order that a fair and impartial decision may be made. In any action against PATH relating to any such question the Contractor must allege in his complaint and prove such submission, which shall be a condition precedent to any such action. No evidence or information ...


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