BDG Gotham Residential, LLC v. Western Waterproofing Company, Inc.

Background

The case arose from a June 25, 2018 construction-site accident. An overloaded mini-crane operated by Western, a subcontractor, toppled from a fourth-floor slab. The accident seriously injured two ironworkers and led the New York City Department of Buildings to issue a stop-work order. BDG, the property owner, and ZDG, the construction manager, alleged that the accident caused 185 consecutive calendar days of delay, increased project-completion costs, and delayed BDG’s ability to generate income from the building.

The plaintiffs sued Western for breach of contract, negligence, and gross negligence, seeking compensatory and punitive damages. They also sued Western’s surety for breach of a performance bond. In a September 30, 2024 opinion and order, the court granted defendants summary judgment—a ruling that claims could not proceed to trial because the record lacked sufficient evidence—on the plaintiffs’ punitive-damages claim, certain extended-loan-expense claims, and their claim for legal fees and expenses as contract damages. The court had denied summary judgment as to the separate AIG Bridge Loan claim.

Motion for Reconsideration

BDG and ZDG asked the court to reconsider portions of the September 30 ruling. They also asked the court to clarify that it had not decided whether hoisting activities that did not require a permit could resume between July 16, 2018, when the stop-work order was partially rescinded, and October 4, 2018, when it was fully rescinded.

Under Local Civil Rule 6.3, reconsideration is an extraordinary remedy. The moving party must identify controlling decisions or material facts that the court overlooked and that could have affected its earlier decision. Reconsideration is not a way to present new theories, make arguments that could have been made earlier, or reargue issues already decided.

Punitive Damages

The court declined to reconsider its ruling that the plaintiffs could not recover punitive damages. Under the New York standard discussed in the opinion, a plaintiff seeking punitive damages for a tort connected to a contract must show, among other things, that the conduct was part of a pattern of similar conduct directed at the public generally.

The plaintiffs agreed that the court had used the correct legal standard but argued that the court focused too narrowly on the pattern requirement. They contended that a construction-site safety violation affecting the public should be enough even without evidence of similar violations. The court rejected that argument because the plaintiffs identified no New York authority allowing punitive damages for this type of contract-related injury without a showing of a pattern. The court also noted that the plaintiffs had not identified controlling authority or material evidence that it overlooked.

Extended Loan Expenses

The plaintiffs sought additional interest and fees allegedly paid on loans because of construction delays. The earlier ruling granted defendants summary judgment concerning the AIG Loan, the EB-5 Loan, and the Valley & Member Loans because BDG had not produced admissible evidence establishing the existence or amount of the claimed damages, or both.

BDG argued that the court had improperly weighed the evidence instead of allowing a jury to decide the amounts. The court disagreed. It explained that the record did not show that the AIG Loan or EB-5 Loan had been extended, or that the delays caused additional expenses on those loans. The record also did not adequately support BDG’s assertion that the Valley & Member Loans were necessary because of the delays or explain the claimed total cost. BDG did not identify specific documents from which the claimed amounts could reliably be calculated. The court therefore adhered to its prior rulings on those three loans.

The opinion separately notes that the court had found admissible evidence supporting at least some expenses for the AIG Bridge Loan and had denied defendants’ summary-judgment motion as to that loan. This reconsideration order did not change that earlier ruling.

Legal Fees

The plaintiffs argued that an indemnification clause in the subcontract allowed them to recover their legal fees and expenses incurred in pursuing claims against Western, including in this action. The defendants argued that the clause applied only to third-party claims. The court had previously agreed with defendants and granted summary judgment on the fee-shifting claim.

The court denied reconsideration because the plaintiffs repeated their earlier arguments and did not show that the court had overlooked controlling law or important facts. The court also rejected the plaintiffs’ attempt to argue for the first time that the performance bond independently supported recovery of those fees, explaining that reconsideration is not a vehicle for arguments that could have been raised earlier.

Clarification and Disposition

The court said no clarification was necessary regarding whether non-permit hoisting activities could resume during the partially rescinded stop-work period. Nothing in the earlier opinion suggested that the court had decided that factual dispute, and the issue did not affect the claims or damage categories addressed by the summary-judgment motion.

The court denied the plaintiffs’ motion for reconsideration. The order did not alter the earlier summary-judgment rulings discussed above.