General Insurance Co. of America v. K. Capolino Construction Corp. (983 F. Supp. 403, 1997)

United States District Court for the Southern District of New York 1997-10-07

Citations

Full opinion text

OPINION AND ORDER

WILLIAM C. CONNER, Senior District Judge.

Plaintiff General Insurance Company of America (“General”) brought this action against defendants K. Capolino Construction Corp. (“the Capolino firm”), K. Capolino Design and Renovation, Ltd., Kenneth L. Capo-lino (“Capolino”) and Patricia M. Capolino seeking indemnification for costs it incurred in completing construction contracts on two housing developments owned by the White Plains Housing Authority (“the Authority”) for which General had issued performance bonds on the Capolino firm’s behalf. General stepped in and completed the jobs at the request of the Authority, after several disputes arose between the Authority and Capo-lino over the nature and scope of the work required to be performed under the contracts, and over payment to Capolino for work he asserts his firm had completed. We have jurisdiction under 28 U.S.C. § 1332.

After our November 9, 1995 Opinion and Order denying cross-motions, for summary judgment, on March 6, 1996 General amended its complaint to add claims in the alternative against the Authority in the event that it be determined at trial that the Authority breached the contracts. These claims were: for unjust enrichment (Claim 4); for indemnity against any recovery by Capolino on its counter claims (Claim 5), and for unpaid monies for alleged, extra work performed to complete the projects (Claim 6). In its March 29, 1996 Answer to General's Amended Complaint, defendant Authority brought five cross-claims against Capolino. These claims were: for declaratory judgment of the rights of the parties to terminate the Win-brook contract and to call upon General to complete the contract (Auth. Cross-Claim 1); for declaratory judgment of the rights of the parties to terminate the Schuyler contract and to call upon General to complete- the contract (Auth. Cross-Claim 2); for restitution against Capolino for monies it was overpaid on the Winbrook contract (Auth. Cross-Claim 3); for damages it incurred as a result of Capolino’s breach of the Winbrook contract (Auth. Cross-Claim 4); for damages it incurred as a result of Capolino’s breach of the Schuyler contract (Auth. Cross-Claim 5). Capolino then cross-claimed against the Authority for breach of contract (Cap. Cross-Claim 1) and against Anthony Tascione for negligent misrepresentation (Cap. Cross-Claim 2). Capolino and General have since settled all of their claims and counterclaims. (See 2/27/97 Stip. and Order Dismissing Certain Claims).

This Court conducted a non-continuous eight-day bench trial beginning March 11, 1997 and concluding April 3, 1997. This opinion constitutes the court’s findings of fact and conclusions of law pursuant to Fed. R.Civ.P. 52(a).

FINDINGS OF FACT

1. BACKGROUND

Plaintiff General is a Washington corporation; duly authorized to engage in the business of suretyship in the state of New York.

Defendant Authority is a corporate entity duly constituted under Article 13, Title 19, § 422 of the New York Public Housing Law. It is the owner and operator of low-income, low-rent residential buildings in the City of White Plains, including Winbrook Houses (“Winbrook”) and Schuyler DeKalb Apartments (“Schuyler”). At all times relevant to this dispute, the Executive Director of the Authority was Anthony Tascione. (Stip. of Agreed Facts (“Stip.”) #3.) Tascione was also the Contracting Officer. (Tase., 639.)

The Capolino firm is a New York corporation. It is a general contractor with its principal place of business in White Plains. The Capolino firm is owned by Patricia Capolino; its President during all times relevant to this suit was her husband Kenneth Capolino.

In the summer and early fall of 1991, the Authority sought bids from qualified contractors to undertake improvements on Win-brook in accordance with a set of contract documents and specifications. The Capolino firm was the low bidder and on or about February 19, 1992 a $263,773 contract for improvements to Winbrook was signed by Kenneth Capolino on behalf of the Capolino firm and by Anthony Tascione, on behalf of the Authority. Additional improvements for the cold water make-up lines were authorized by Board Resolution in the amount of $45,000 and by Change Order # 1 in the amount of $1,219, for a total contract sum of $309,992. In accordance with the contract, the Capolino firm delivered to the Authority performance and payment bonds issued by General. (Stip.# # 10,12.)

In the late fall of 1991, the Authority sought bids from qualified contractors to undertake improvements to Schuyler in accordance with a set of contract documents and specifications. The Capolino firm was again the low bidder, this time by approximately $73,227. (Exh. A86.) Concerned whether the Capolino firm could perform the contract for that amount, the Authority sent a letter to Capolino and received assurances that it could do so. (Tase., 635.) On or about May 11, 1992, a $235,743 contract for improvements to Schuyler was signed by Kenneth Capolino on behalf of the Capolino firm, and by Anthony Tascione on behalf of the Authority. In accordance with the contract, the Capolino firm delivered to the Authority performance and payment bonds issued by General. (Stip.# # 21-22.)

The Winbrook and Schuyler projects were both funded under HUD CIAP programs. Winbrook was CIAP 1989; Schuyler was CIAP 1990. Mr. Tascione testified at trial that the Authority had two years from the award of the monies under each CIAP to spend the monies awarded, and that it received the money for Winbrook in 1990 and for Schuyler in 1991. (Tase., 769.) Thus, at the time it accepted bids for the contracts with completion dates in 1993, it knew that the Winbrook funding would expire prior to the completion date. However, Tascione testified that this was simply a “procedural matter, just updating so we continue to have that line of credit open to us.” (Id. at 770.)

The contracts each incorporated by reference, among other things: A.I.A. document A201, entitled “General Conditions for the Contract for Construction” (the “ALA. General Conditions”); a Department of Housing and Urban Development (“HUD”) document entitled “General Conditions of the Contract for Construction — Pubic Housing Program” (the “HUD General Conditions”); and Division 1 General Requirements (“the General Requirements”). (Stip.# 11.)

At all times relevant to this lawsuit, the Modernization Coordinator for the Authority was Gilbert A. Gall (“Gall”) and the architects for the Winbrook and Schuyler contracts were Gismondi and Arnold, P.C., whose principal was Bernard S. Arnold (“Arnold”). The consulting engineers engaged by the Architect for the Winbrook project were Michael K. Dalton, Associates, whose principal was Michael K. Dalton (“Dalton”).

In August of 1992, a dispute arose between the Authority and Capolno over the payment of progress payments to Capolino on both contracts.

Regarding payment to the Contractor, the ALA. General Conditions provide:

9.3 APPLICATIONS FOR PAYMENT

9.3.1At least ten days before the date established for each progress payment, the Contractor shall submit to the Architect an itemized Application for Payment for operations completed' in accordance with the schedule of values----

9.3.1.2 Such applications may not include requests for payment of amounts the Contractor does not intend to pay to a Subcontractor or material supplier because of a dispute or another reason.

9.3.2 Unless otherwise provided in the Contract Documents, payments shall be made on account of materials and equipment delivered and, suitably stored at the site for subsequent, incorporation in the Work____

9.3.3 The Contractor warrants that title to all Work covered by an Application for Payment will pass' to the Owner no later than the time of payment. The Contractor further warrants that upon submittal of an Application for Payment all Work for which Certificates for Payment have been previously issued and payments received from the Oumer shall, to the best of the Contractor’s knowledge, information and belief, be free and, clear of liens, claims, security interests or encumbrances in favor of the Contractor, Subcontractors, material suppliers, or other persons or entities making a claim by reason of having provided labor,. materials and equipment relating to the Work.

9.4 CERTIFICATES FOR PAYMENT

9.4.1 The Architect will, within seven days after receipt of the Contractor’s Application for Payment, either issue to the Owner a Certificate for Payment, with a copy to the Contractor for such amount as the Architect determines is properly due, or notify the Contractor cmd Oumer, in writing of the Architect’s reasons for withholding certification in whole or in part as provided in Subparagraph 9.5.1.

9.4.2The issuance of a Certificate for Payment will constitute a representation by the Architect to the Owner, based on the Architect’s observations at the site and the data compromising the Application for Payment, that the Work has progressed to the point indicated and that, to the best of the Architect’s knowledge, information and belief, quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject to an evaluation of the Work for conformance with the Contract Documents upon Substantial Completion, to results of subsequent tests and inspections, to minor deviations from the Contract Documents correctable prior to completion and to specific qualifications expressed by the Architect. The issuance of a Certificate for Payment will further constitute a representation that the Contractor is entitled to payment in the amount certified.

9.5 DECISIONS TO WITHHOLD CERTIFICATION

9.5.1 The Architect may decide not to certify payment and may withhold a Certificate for Payment in whole or in part, to the extent reasonably necessary to protect the Owner, if in the Architect’s opinion the representations to the Owner required by Subparagraph 9.4.2 cannot be made. If the Architect is unable to certify payment in the amount of the Application, the Architect will notify the Contractor and owner as provided in Subparagraph 9.4.1. If the Contractor and Architect cannot agree on a revised amount, the Architect unll promptly issue a Certificate for payment for the amount for which the Architect is able to make such representations to the Oumer. The Architect may also decide not to certify payment or, because of subsequently discovered evidence or subsequent observations, may nullify the whole or a part of a Certificate for Payment previously issued, -to such extent as may be necessary in the Architect’s opinion to protect the Owner from loss because of:

.1 defective Work not remedied

.2 third party claims filed or reasonable evidence indicating the probable filing of such claims;

.3 failure of the Contractor to make payments properly to Subcontractors or for labor, materials or equipment;

A reasonable evidence that the Work cannot be completed for the unpaid balance of the Contract Sum;

.5 damage to the Owner or another contractor;

.6 reasonable evidence that the Work will not be completed within the Contract Time, and that the unpaid balance would not be adequate to cover actual or liquidated damages for the anticipated delay; or

.7 persistent failure to carry out the work in accordance with the Contract documents.

9.6 PROGRESS PAYMENTS

9.6.1 After the Architect has issued a Certificate for Payment, the Owner shall make payment in the manner and within the time provided in the Contract Documents____

9.6.2 The Contractor shall promptly pay each Subcontractor, upon receipt of payment from the Owner, out of the amount paid to the Contractor on account of such Subcontractor’s portion of the Work, the amount to which said Subcontractor is entitled____

9.7 FAILURE OF PAYMENT

9.7.1 If the Architect does not issue a Certificate for Payment through no fault of the Contractor, within seven days after receipt of the Contractor’s Application for Payment ... then the contractor may, upon seven additional days’ written notice to the Owner and Architect, stop the Work until payment of the amount owing has been received____

(Exhs. 1 and 81, emphasis added.)

The HUD General Conditions provide that:

4. Architect’s Duties and Responsibilities ...

e. Review and make recommendations with respect to the PHA payment of progress payment requisitions made by the Contractor.

6. Schedule of Amounts for Contract Payments ...

c. In order to receive progress payments as the work progresses, the Contractor shall submit to the Architect, on forms supplied by the PHA, periodic estimates showing the value of the work performed during each period based upon the items appearing in the approved breakdown. Such estimates must be submitted not later than 10 days in advance of the date set for payment, and are subject to correction and revision as required. In final form, they must bear the certification of both the architect and the PHA before any payment may be made.

8. Payments to contractor

a. Progress payments will be made at approximately 30 day intervals....

(Exhs. 1 and 81, emphasis added.)

The General Requirements provide:

SECTION 01741 — Method of Payment

1.01 Partial payments will be made as the work progresses not later than fifteen (15) days after the 25th day of each calendar month for work done, materials installed or materials delivered to the site during the preceding fiscal month on estimates certified or approved by the Owner.

(Exhs. 1 and 81, emphasis added.)

The general practice of the Capolino firm and the Authority regarding payment was as follows: the Capolino firm prepared payment applications several days before the end of the month, requesting payment for the amount of work it projected would be completed by the end of the month. (Cap., 70.) These applications were submitted to the Architect (Arnold) for certification, and a copy was given to Galli. Once the applications were certified by Arnold, Galli prepared a report that he presented to the Authority’s Board of Commissioners at the Board’s regular meeting, held on the second Tuesday of every month. (Cap., 87.) The Authority and Architect generally held a job meeting during the days preceding the submission of a payment requisition to the Board, so that concerns about the contractor’s work and his payment requisition could be considered and the requisition revised in time for submission _ to. the Board at its upcoming meeting. (Arnold, 281.) Once the Board approved an application, it would then be sent to HUD, who would provide the money to the Authority. The Capolino firm was generally paid approximately 5 weeks after it submitted an application. (Cap., 84, 87-88.)

II. THE CONFLICT AT WINBROOK

On or about February 20, 1992 the Capolino firm delivered a set of values on Winbrook to the Authority and to the Architect, which was approved. (Stip.# 13.) Pursuant to a written Notice to Proceed, March 2,1992 was prescribed as the starting date for the Win-brook Contract, and March 1, 1993 was prescribed as the scheduled completion date. (Exh. 7.)

The Authority paid the Capolino firm’s first five applications for payment, which included work through July 31, 1992, totaling $249,634.35. (Stip.# 16.) It withheld a 5% retainage, that by July 31 totaled $13,138.65. Thus, by the end of July, the Capolino firm had been paid for approximately 81% of the work, with another 4% held in retainage. Galli issued a “Construction Update” dated August 4, 1992, which stated that all of the Winbrook work had been completed except for the fire alarm activation, which was to be completed by September. (Exh. 48.) The Capolino firm’s July application included $17,500 for work on the vacuum pumps and $7,500 for work on the heat'timers. These amounts were paid. (Exh. A16.)

In its August application, the Capolino firm requested payment for $30,000 worth of work, including the remainder of the budget for the vacuum pumps and the heat timers ($1,000 for each). Naber Thomas was Capo-lino’s subcontractor for heat timers; National Heating was its subcontractor for the vacuum pumps. A job meeting was held on August 21, where Dalton asked for verification that the heat timer system was operational. (Exh. 14 (Arnold Mtg. Minutes).) On August 25, Arnold approved the requisition. (Cap., 69; Arnold, 282-283; Exh. 26.) He stated that at that time, he fully believed everything had beén done, but that it became apparent later that more work was required. (Arnold, 286.) A second “Mechanical Meeting” was held on August.26th, however, at which Dalton raised concerns that the work on the heat timers and vacuum pumps was not complete according to the specifications. (Exh. 16 (Dalton Mtg. Notes).)

Section 15500 of the specifications describes the work to be done on the heat timers and vacuum pumps as follows:

1,02 DESCRIPTION OF WORK

A. ...

C. ...

1. Replace existing heat timer systems in all buildings with new heat timer systems complete with associated valving traps, piping, wiring, controls, etc., compíete and fully tested. Engage the services of a factory trained representative of heat timers for two (2) days to start up and calibrate each system.

3. Rebuild each vacuum pump with new components of size, type, etc., as recommended by the pump manufacturer, and put in full working order under the supervision of the pump manufacturer. Test each pump and put it in full operation. Replace valves, etc., at each pump.

Section 15520 provides as follows:

3.05 TESTING

A. Perform all required tests to ensure proper operation of the entire heat timer control system including the control valve and actuator. Adjust or replace, as required, all components, devices, etc, and leave each system in a complete and fully operating condition.

(Exh. 1.)

The Winbrook drawings clearly indicate that the steam control valve is to remain. It is labeled in the drawings: “HONEYWELL AUTOMATIC ZONE CONTROL VALVE (STEAM) TO REMAIN.” in addition, the drawing “NOTES” state, in relevant part:

3. Provide new heat timer and all associated auxiliaries complete, including wiring panel, etc., to tie into existing automatic steam control valve. Disconnect and remove existing heat time controls and auxiliaries complete. See specifications for added information.

(Exh. 1A (Cap.), emphasis added.)

' Despite the drawings, Dalton took the position at the Mechanical Meeting that the contract with Capolino included work on the steam control valves and actuators under ¶ 3.05-A. (Exh. 16.) This assertion was apparently based in part on an August 14th letter to Arnold written by Bob Pockl, the Authority’s Superintendent of Maintenance, stating that no work had been done on the steam control valves and that in their present condition they were “totally useless.” (Exh. 18.) Pockl asserted that Capolino was required under the contract to “remove disassemble, repack generally overhaul the entire valve assembly, and reinstall valve, replace all Honeywell modulating motors ...” in order to “bring the heat timers up to operating specs.” (Id.) The Capolino firm, represented by Laura Villani, took the position that work on the steam control valves and actuators was not included in the contract. (Exh. 16.) Capolino’s subcontractor for the heat timers, Naber Thomas, reported that its work was finished and Capolino’s subcontractor for the vacuum pumps, National Heating, stated that their contract with Capolino did not include work on the steam control valves and actuators. (Id.)

Regarding the vacuum pumps, Dalton stated he believed the manufacturer had not been contacted for recommendations regarding rebuilding the pumps, and that all (gate and check) valves had not been replaced as per Section 15500 ¶ 1.02C. (Id.) This position was likely based upon Pockl’s August 14th letter, in which Pockl stated that while National Heating had allegedly replaced the pump seals, he found the replacement “questionable” and would only be satisfied by watching it being done. (Exh. 18.) Pockl asserted that the work on the vacuum pumps was incomplete and failed to comply with the specs, and listed numerous actions he believed Capolino was obligated to take in order to comply, including pulling the floats and controls for inspection and replacement as needed with new gasket material, flushing the tanks, pulling the pumps and installing Sarco seal kits, replacing all system check valves and gate valves, etc. (Id.) National Heating stated that it was the manufacturer’s representative and that it had examined the vacuum pumps and replaced those parts it felt necessary. However, it reported that it replaced check and gate valves in only two locations and that all other such valves were in satisfactory condition. (Exh. 16.)

In approximately November, the Authority learned that when Capolino had sent National Heating Section 15500 ¶ 1.02C of the specifications seeking a bid for the vacuum pump work, Capolino had circled “Replace valves etc., at each pump” and had written “ONLY IF NEEDED.” (Exh. 10 (July 16 fax from Capolino to National Heating inclosing specifications); Exh. A29 (November 20 letter from National Heating to Capolino stating it still did not have the specifications at issue).) Thus, although National Heating had agreed to replace the vacuum pump valves on. an “as needed” basis, unbeknownst to it, the contract required them all to be replaced. In addition, the possibility of a two-year warranty for the vacuum pumps was raised at the meeting.

On August 26, Dalton wrote a letter to Arnold stating that:

The work required to be performed for the Heat Timer and Vacuum Pump installations has not yet been completed and is not acceptable in its unfinished state. The Contractor must demonstrate to the satisfaction of th [sic] Owner that the entire installations will be completed and comply with the contract documents, prior to approval for payment.

(Exh. 17.) On August 27, Arnold forwarded this letter to Capolino and informed him that if the work was not corrected by September 4, his application for payment could not be processed as submitted. (Id.) In response to the disagreement and in order to facilitate payment of undisputed work, Mr. Capolino agreed that the Authority could withhold the $1,000 he had requested for heat timers, as well as the $1,000 for vacuum pumps. (Cap., 75-77; Exh. 20.) Arnold certified the adjusted application and the Authority accordingly paid the Capolino firm $26,500 for the month of August ($28,500 — $2,000), instead of paying the $28,500 it had initially requested ($80,000 x 0.95 = $28,500). (See Exh. A17.) This brought the total amount paid to the Capolino firm to $276,134.35, or approximately 89%, plus approximately $14,638 or 5% of retainage, for a total amount completed of roughly 94%. Arnold based his own August 25, 1992 request for payment of architect’s fees on 95% completion of Win-brook. (Exh. 55.) Galli wrote a “Constraetion Update” dated August 31, 1992 that stated that work at Winbrook was complete and “in the punch list stage” except for fire alarm activation and a dispute over the “validity of the completeness” of the heat timers and the vacuum pumps and that Galli reserved the right to pull $2,000 from the Capolino firm’s requisition if the work is not, complete. (Exh. 49.)

On approximately September 24,1992, Capolino submitted Application for Payment # 7 to Arnold, requesting payment for $16,-719 worth of work completed during September ($15,883.05 after retainage). (Exh. A18.) This amount included $15,000 for electrical work (on the fire alarms), $500 for clean up/punch list and $1,219 for ‘Vacuum Pumps — cold water make ups.” On September 30, Arnold rejected the application and returned it for corrections, writing “not appvd. overstated amts”. (Exh. 27.) Although Capolino had hot presented a claim payment for the $2,000 previously withheld on the vacuum pumps and heat timers, Arnold circled these two categories, as well as the $15,000 for the electrical and wrote “no response to our ,8/27/92, letter, work not $100%”. He also circled the $500 for clean up/punch list and wrote “too little to finish.” Arnold, made no notations on the $1,219 requested for cold water make ups. (Id.) There was no job meeting held in September. (Cap., 452.) On September 30, Galli wrote a construction update that stated “We are withholding payment from Capolino, who is notorious for not completing the final stages of work in a timely fashion.” (Exh. 108.) .Galli testified at trial, however, that he had no knowledge about the reputation of the Capolino firm, and that the sole basis of his statement was their work on the two Authority contracts. (Galli, 531.) Oh October 1, Arnold again submitted a request for payment of architect's fees based on 95% completion of Winbrook. (Exh. 56.)

During this same period, conflicts were surfacing under the Schuyler contract as well, particularly with regard to 26 windows the Capolino firm had contracted to install there. Mr. Capolino requested a job meeting rto discuss the problems on both projects, and the parties met October 9. In order to understand the interactions between the parties from that point on, we must now review the nature of the conflict at Schuyler. '

III. THE CONFLICT AT SCHUYLER

On or about May 11, 1992, the Capolino firm delivered a set of values to the Authority and to the Architect for the Schuyler project, which were approved, (Stip.# 23.) Pursuant to a written Notice to Proceed, May 12, 1992 was prescribed as the starting date for the Schuyler contract, and May 11, 1993 was prescribed as the completion date. (Exh. 81.) On May il, Capolino submitted an overall job schedule to the Authority, providing that the demolition of the window wall would occur in late May, and that the work on the windows would begin in mid July and be completed by early September. (Exh. 82.) On approximately June 26, Capo-lino submitted a revised job schedule to Arnold, which stated that the demolition of the window wall was done, but that work on the windows and wire guards would not begin until the end of September and would not be completed until May of 1993. (Exh. 83.) Arnold testified that he and Tascione.were unhappy that the original schedule providing that the windows would be in by the end of September had been modified to May after the demolition of the window walls had occurred because they had allowed the demolition of the window walls in May based upon the assurance they would be in by the fall. (Arnold, 318.) The area was to be used as a day care center, and though they acknowledged that Capolino had the right under the contract to take until May to install the windows, (id. at 885, see also Tase., 805), the space would be unusable without some sort of windows. Lack of windows was not the only issue preventing use of the day care center, however. Another contractor, ERA. Corporation (“ERA”), had demolished the area and then defaulted, requiring their surety to step in. (See Exh. 101; Cap., 246; Tase., 659.)

The Authority paid the Capolino firm’s first four applications for payment under the Schuyler contract, which included work through August 31, 1992, totaling $169,-6Í5.85. It kept a 5% retainage that by August 31 totaled $8,927.15. (Exh. A26.) Thus, by the end of August, the Capolino firm had billed and was eventually paid for approximately 72% of the work under the contract, with another 4% held in retainage. On or about September 24, 1992, the Capolino firm submitted to Arnold a. proposed Schuyler Application and Certificate for Payment #5 requesting payment for $25,900 worth of work ($24,605 after retainage). (Stip. #25; Exh. 85.) On September 30, Arnold returned the application for corrections. (Exh. 85.) On the first (summary) page he circled the $24,605.00 total and wrote “not approved, overstated amts.” On the second (detail) page he circled the $1,000 requested for Submittals and wrote “not 100%.” Capolino had requested $1,600 for General Conditions, and Arnold circled the $1,400 balance to finish and wrote “too little to finish.” Lastly, Arnold circled the $15,000 Capolino requested for the Windows and Wire Guards and wrote “41% of Windows in place?” (Id.) He made no notations regarding the $1,500 requested for Hollow Metal/Hardware, the $5,300 requested for ceramic tile, the $500 requested for Acoustical tile, or the $1,000 requested for Painting. (Id.)

At the time there were in fact no windows in place. With regard to the windows, the specifications state:

SECTION 08500 — ALUMINUM WINDOWS

1. GENERAL

1.02 Quality Control

a. For purposes of designating type and quality for work of this Section, drawings and specifications are based upon products of EFCO Corporation. Whenever substitute products are to be considered, supporting technical literature, samples and drawings must be submitted in order to make a valid comparison of the products involved.

(Exh. 81.) Capolino had made five submissions to the Architect between June 25th and September 29th in an attempt to get Arnold’s approval for an asserted equivalent to the windows provided in the specifications. The General Requirements set the guidelines for the use of equivalent materials as follows:

Section 01740 — Non-Restrietive Clause

Whenever a material, article or piece of equipment is identified on the plans or in the specifications by reference to manufacturers’ or vendors’ names, tradenames, catalogue numbers, etc., it is intended to establish a standard; and, any material article, or equipment of other manufacturers and vendors which mil perform adequately the duties imposed by the general design will be considered equally acceptable provided the material, article or equipment so proposed, is, in the opinion of the Architect, of equal substance and function. It shall not be purchased. or installed by the contractor without the written approval of the Architect and the Owner.

(Exh. 81, emphasis added.)

Gismondi and Arnold rejected all five of Capolino’s submissions as not equivalent. At trial, Arnold testified that Capolino did not submit the required detailed drawings or samples on any of the five window submissions. (Arnold, 317, 883.) Moreover, none of the windows that Capolino submitted were in fact equivalent. Gismondi and Arnold returned Capolino’s June 25 submission of an Eckert “Thermalux” window to him on July 2 with a circle around the description of the window as “prime finish” and a stamp initialed “GM” that stated “submit specified item.” (Exh. A102.) The specifications required a dark bronze anodized finish. (Exhs.88A, A99.) On July 22, Capolino submitted another Eckert window and on July 24 “GM” again stamped it “submit specified item” and wrote: “Submit project-out windows. Submit complete installation details. Submit double tilt windows. Submit specified finish. Submit glass U-value.” (Exh. A103.) This window also was not dark bronze anodized finish, nor was it double tilt as the specifications required, and there was no information given for numerous other specifications. (Id.; Exh. A99.) On July 29, Capolino submitted information on a Champion 2500 window. Markel returned the information on August 6, writing: “spiral, balance not permitted. Sill thickness. 1" insulated glass. U-values? Quality assurances.” (Exh. A104.) Although the specifications required 1" glass and a block-and-tackle balance type, the Champion 2500 had 7/8" glass and was spiral balanced. In addition, the submission contained no information on glass U-value. (Id.; Exh. A99.) On August 31, Capolino submitted a Champion 1000 window which Markel rejected the same day, writing on the cover sheet “air infiltration”, “U-value” and “Anodized finish.” (Exh. A105.) The Champion 1000 in fact did not satisfy the air infiltration and finish specifications, and the submission included no information on the glass U-value. (Id.; Exh. A99.) Lastly, on September 29, Capolino submitted information on a Kawneer -window, that was returned October 5, marked “double tilt.” (Exh. A106.) In addition to being single tilt, the submission included no information on glass U-value. (Exh. A99.) Thus, when the September payment application was rejected, there were no windows in place and none had been approved. However, Capolino had paid approximately $12,430 for sills, window guards and other materials. (Exh. 87.)

The day after submitting his payment requisition, Capolino submitted a request for a Change Order for increased cost incurred for substituting plumbing contractors. (Exh. 84.) The Capolino firm had based its Schuyler bid in part on an estimate supplied by B & L Plumbing. However, the authority subsequently disapproved of B & L because B & L was in litigation with the Authority. (Id., 6/11/92 Letter from Galli to Capolino.) Capolino quickly sent the Authority a revised subcontractor list, and on June 16, Galli sent a letter approving the list including “Bruni [sic] and Campisi” as the plumbing contractor. (Exh. 84.) Capolino’s September 25 letter requested an additional $5,865 to cover the higher cost of Bruno and Campisi pursuant to AI.A General Conditions II 5.2.3. This was a 76% increase above B & L’s bid. (Id.) On October 6 Arnold wrote a letter rejecting this request, stating that “such a claim for additional funds requested after the work has been performed and with no prior notification to the owner cannot be accepted.” (Exh. 84.) Capolino testified at trial that although he had told the Authority verbally that the' cost would be more, he had not written the increase down until his September 25 request for a change order. (Cap., 190-193.) His October 5th letter response to Arnold also states that he told the Authority Bruno and Campisi would be more expensive. (Exh. 84.) Arnold wrote back on the 6th telling Capolino to refer to (A.I.A. General Conditions) ¶ 4.3.7. Claims for Additional Cost for the proper procedure for requesting a claim for increased work. (Id.) This procedure requires written notice prior to performing the work. Capolino responded on October 8, stating that ¶ 5.2.3 applied, not ¶ 4.3.7. (Exh. 84.)

These disputes regarding the windows, the plumbing change order and payment of Capolino’s September payment application for Schuyler were raised at the October 9 meeting, along with the issues on Winbrook.

IV. CONFLICTS INVOLVING BOTH CONTRACTS

Capolino testified that after Arnold rejected the Winbrook payment application, he tried to contact Arnold, but could not reach him. (Cap., 98.) He described the relationship between his firm and the Authority as entering “the twilight zone” and alleged that his calls were not returned and that he received letters threatening to throw him off the job and debar him. (Id., 1157-58.) On October 9, Capolino, Arnold and Galli met in an attempt to resolve the problems regarding certification of Capolino’s September payment applications. Capolino testified he was anxious to have the applications certified immediately, in time to be sent to the next Board meeting for approval. (Cap., 100.) He added that he wanted to discuss payment of the Winbrook requisition, but that the others refused and insisted on discussing work on the steam control valves. (Id.) According to Dalton’s meeting notes, Capolino proposed $15,000 for extra work on the heat timers, and Galli told him this was excessive and suggested he secure further quotations, which Capolino agreed to do. (Exh. 30.) Dalton also states that although National Heating offered to extend the warranty to two years, Capolino refused. (Id.)

At the October 9 meeting, Capolino also requested that his September application for Schuyler be approved. He testified that Arnold and Galli refused to consider payment for the undisputed work and that Arnold told him “just give me the goddamn window I want.” (Id., 108-110.) Capolino then told the others that Mr. Tascione, as Contracting Officer, should be at the meeting, and when Galli and Arnold said Tascione was not available, Capolino left. (Id.) Arnold’s meeting notes state that Capolino refused to remain to discuss submission of correct shop drawings for the windows, the request for additional funds to use an alternate plumbing contractor, the status of the job and the rejected application for payment, and that while Galli, Dalton and Arnold wanted to remain to continue discussion, Capolino stated he preferred to have his attorneys respond. (Exh. 88.)

After the October 9 meeting, several volleys of letters passed back and forth between Capolino and the Authority. On October 9, Capolino wrote a letter to Tascione informing him that he had left the meeting earlier that day, and that several conflicts existed between his firm and Arnold, Dalton and Galli over the scope of work required by contract on both Winbrook and Schuyler. (Exh. 33.) Capolino set forth his position on the various disputes, ranging from the rejected window submissions and outstanding plumbing change order at Schuyler to the two-year warranty discussed for the vacuum pumps and the work on the steam control valves, and requested a decision from Tascione as the Contracting Officer, pursuant to the' HUD General Conditions. (Id.) He stated that he was enclosing updated payment applications and he requested a meeting to go over the issues, or in the alternative, a change order under HUD ¶ 9 that would allow him to go ahead with the work and apply for equitable adjustment. (Id.)

Capolino modified the updated Schuyler payment application he sent Tascione to include work through October 9, but did not reduce the amounts requested for any items Arnold had questioned on the September application. (Exh. A27.) The updated application did break down the $15,000 requested for Windows as $13,000 for Wire Guards and $2,000 for Sills. The only other changes in the submission were an addition of $200 for work allegedly completed on Resilient Tile, $1,500 for Painting, and $8,856 for Plumbing. (This included the $5,865 Capolino requested to substitute Bruno & Campisi). (Id.) On October 14, Arnold sent Capolino a letter referring him to his original schedule for replacing the windows, asserting that his failure to install windows or temporary coverings has resulted in a delay in opening the day care center, and that he awaited a conforming window submission. (Exh. 89.) Capolino responded on October 15th by stating that he was entitled to revise the schedule, that any demand that he complete the windows earlier was an acceleration requiring a Change Order under HUD ¶ 9(a)(4) and that he had no problems complying with any “legitimate” request of the Contracting Officer, as the Contract required. (Id.) On October 16, Tascione sent Capolino a letter stating his October 9 request simply repeated his September request, which was overstated according to Arnold. He noted that the Change Order (for plumbing) had previously been disapproved. (Id.)

On October 19, Capolino sent Tascione another letter requesting that Tascione approve the Schuyler payment application, per Section 01741 ¶ 1.01 of the General Requirements (stating that the “Owner” approves payment) and that they meet to try to resolve the issues. (Exh. 90.) On October 29, Tascione sent Capolino a letter directing him to correct within seven days the deficiency caused by his removal of the windows and subsequent failure to submit conforming windows or to install temporary windows. (Exh. 92.) Capolino responded the same day, stating that the windows had security screens and a “double wall with exterior sheathing” in accordance with General Requirements Section 02000 ¶3.3. (Id.) On October 30th, Galli sent Capolino a letter stating that ¶ 3.03(e) required at least 3/4" plywood, that there had been leakage problems, and that Capolino had caused delays in the day care center by demolishing under one schedule and installing under another. (Id.) Capolino wrote Tascione on November 3rd, asserting that Galli had no authority to order any work be done and requesting that Galli inform him of a window that would be an equal. (Id.)

On November 6, Capolino sent a letter notice of default under AI.A. ¶ 14.1.1.3 on the Schuyler contract to Tascione stating that the Capolino firm considers the Authority to “be in breach of its contractual obligations by not approving and processing a valid request for payment and furthermore by not making partial payments every 30 days. Please refer to A.I.A. 9.4.1 and HUD 6c and 8a.” (Exh. 95.) The letter asserted that the Authority had breached its obligation to accept equals for the windows, “by utilizing a specification written by one manufacturer without ranges in requirements and then strictly adhering to each picky item, thereby rendering no windows as equal.” (Id.) On November 9, Tascione sent a response stating that he supported Arnold’s position that the five window submissions were not equals, and that the failure to install windows was causing hardship to the day care center. (Exh. A74.) He concluded by stating that the Authority “expects your firm to perform all aspects of your contract in accordance with the specifications, not in accordance with your desires.” (Id.) On November 13, Capolino sent Tascione another letter, stating that the Authority had failed to cure its default, that the letter constituted the seven additional days notice provided by A.IN. ¶ 14.1.2, and that his firm requested the contract balance and damages. (Exh. A33.) The same day, Arnold sent Capolino a punch list of work to be completed in the men’s and women’s bathrooms. (Exh. 93.) On November 17, Capolino sent a letter stating that the punch list must have crossed in the mail with their termination notice, but promising to finish most of the items on the punch list. (Id.)

After the October 9 meeting, Capolino also sent Tascione a payment application for Win-brook. The application was identical to the one he sent Arnold in September, simply re-dated October 9. (Exh. A22.) On October 22, Dalton made a second site visit to Winbrook and sent Capolino a field report stating that a new interior sensor should have been installed, but was not, that no work on the steam control valves and actuator had been done as required by ¶ 305-A, and that the contractor “must demonstrate proper operation of steam control valves in all buildings to the Owner’s satisfaction. This must be done without delay as the heating season has now started.” (Exh. 36.) On November 2, Dalton again sent Capolino a copy of the field report, and asked “When will this work be completed?” (Exh. A28.)

In his November 9 letter to Capolino, Tascione informed him that he concurred with Arnold’s position regarding a change order for Winbrook and that National Heating’s bid had not included all of the work on the vacuum pumps because Capolino had not properly given them the specifications. (Exh. A74.) As discussed above, the letter concludes with an instruction to “perform all aspects of the contract in accordance with the specifications.” (Id.) On November 12, Capolino sent a notice of default on the Win-brook Contract to Tascione. Using language identical to that of the Schuyler letter, he informed Tascione that the Capolino firm considered the Authority to be in breach for failure to approve and pay payment requisitions. (Exh. A35.) On November 19, Capolino sent a second letter, stating that “pursuant to AIN. ¶ 14.1.2 we hereby give you the seven additional days notice and consider our contract terminated” and demanding damages. (Exh. A36.)

On November 23, Tascione wrote two essentially identical letters to Capolino (one for Schuyler and one for Winbrook) informing him that the Authority was considering holding his firm in default because he had failed to return numerous calls by Arnold and Galli, and because he had failed to address concerns with:

(1) Lack of contractor or subcontractor presence;

(2) Failure to adhere to approved schedule;

(3) Failure to complete work in accordance with plans and specifications;

(4) Failure to proceed with punch list items in accordance with inspection reports as devised by the Architect/Engineer. .

(Exhs. 60, 96.) Tascione sent a copy of this letter to General hoping it would step in. (Tase., 691.)

Capolino wrote a letter in response regarding Schuyler on November 25. He stated that the punch list was complete, that as Contracting Officer Tascione had an obligation to respond to his requests for clarifications, change orders, etc., and that his firm still had enough time to complete work under the project, had the Authority not defaulted. He concluded by requesting a meeting. (Exh. A34.)

On November 30, Capolino sent two letters (one for each contract), informing Tascione that he considered the Winbrook and Schuyler contracts terminated by prior notice and requesting payment of the full contract sum on each. ($33,757.65 for Winbrook and $65,-384.15 for Schuyler). (Exhs. A37 and A38.) Both letters stated that he still awaited scheduling of “the meeting we requested and you acknowledged.” (Id.) Galli’s Project Construction Status chart dated November 30 listed Capolino’s work at Winbrook as “100%” complete. The letter portion, however, stated that while the work was “substantially completed” there remained a dispute over the heat timers and vacuum pumps and that all payments to Capolino had ceased. (Exh. 51.) His Construction Update Status Chart stated that Schuyler was 92% complete, but the letter portion stated the day care center was still pending due to ERA’S fault and the still pending approval of the window shop drawings. (Id.)

On December 9, Capolino reiterated that he had terminated both contracts as per HUD ¶ 14.1.1.3. (Exh. 65.) On December 15th, Tascione sent two letters to Capolino (one for each contract), informing him that although it had requested specific performance on November 23rd, Capolino had not performed and that the Authority was therefore terminating the contracts upon the expiration of seven days notice. (Exhs. A78 and A79.) Tascione also sent letters to General, informing them of the default and pending termination, and requesting that General contact them to discuss the options under their bond. (Id.)

On December 16, Galli sent HUD a letter requesting an extension of time under the Winbrook CIAP, apparently from March of 1993 to September 1993, because of the delays it has incurred in reaching an amicable settlement with the Capolino firm as a result of the “timely termination” of Capolino’s contract. (Exh. 114.) Although no litigation had yet been filed, on March 1, Galli wrote a second letter to HUD stating that the extension was necessary due to the “existing and time consuming litigation” with the Capolino firm. He concluded that the matter was still under investigation and will probably create additional delays for the Authority. (Exh. 115.)

At trial, Arnold testified that the Capolino firm or its subcontractors appeared and did miscellaneous work on both projects in November, December, January and into February. (Arnold, 302.) Capolino argues that Galli’s Project Construction Status charts show that he was completing the jobs. (For example, Galli’s November 30th report includes a chart that lists Winbrook as 100% complete. However, the chart is in conflict with the text of the report that notes outstanding issues on the “validity of completeness” of the heat timers and vacuum pumps. (Exh. 51).) We do not consider Galli’s Project Construction Status charts to be a reliable indication of the work done at the projects. Even though Galli’s job may have been to offer a substantive evaluation of the status of completion of the projects, Galli testified that he simply relied upon the percentage completion that Capolino submitted in his applications! (See n. 5, supra.) Thus, the best evidence of what work was being done are the letters detailed above.

On January 7, 1993, all three parties met to discuss settlement of the claims. Capolino was represented by counsel and did not personally attend, apparently at Tascione’s request. A tentative settlement proposal was discussed whereby both parties would rescind their notices of default, General would complete the contracts and be paid the remainder, and would pay any monies owed to Capolino. (Exh. 71 (Brackenbury Meeting Notes (General’s representative)).) A final settlement was never reaehed because, although the parties exchanged numerous drafts, they could not agree on issues such as whether Capolino would be paid for the work he claims he completed. (See Exhs. A86-A92, A118-A119.)

On January 25, National Heating filed a Notice of Lien against the Housing Authority for $1,639 for its “repair of vacuum condensation pumps, installation of cold water makeup lines, overhaul centrifugal pump assemblies” pursuant to its contract with Capolino on Winbrook. (Exh. A44.) On February 26, Naber Thomas filed a Notice of Lien against the Authority for $44,356 for furnishing and installing “complete fire alarm system, intercom system and heat timers.” (Exh. A45.)

Between April 23rd and March 2nd, Tascione sent two letters to White Plains Officials and one to HUD stating that Capolino had been defaulted due to non-performance. (Exhs.116-118.) On March 2nd, Tascione sent a letter regarding both Winbrook and Schuyler to Arthur Maurice, Director of the Office of Public Housing at HUD advising him that the Authority had declared Capolino in default and asking that “HUD consider appropriate sanctions against this contractor as a result of his non-performance and noncompliance with the terms and conditions of his contract. These delays have resulted in significant inconvenience and delays to the tenants residing in White Plains as well as management, ultimately resulting in increased costs.” (Exh. 130.) Capolino was never sanctioned. (Tase., 785.)

Under the assumption that Tascione’s letters of default and termination to Capolino were valid, General and the Authority signed an agreement for completion of the remaining work on the Winbrook and Schuyler contracts (“the Completion Agreement”) after the settlement negotiations broke down in early March. (Exh. PI.) The Complétion Agreement provided that the Authority would pay General the remaining contract balances plus any additional amounts resulting from change orders. The amounts remaining under the contracts were $33,857 for Winbrook and $66,127.15 for Schuyler. Ackerman Construction Consultants, Inc. (“ACCI”), whose principal was Norman Reu, was approved as a qualified contractor for the completion of the work. Attached to the Completion Agreement were two letters written by Arnold on February 9, 1993 listing the work either to be corrected or completed by ACCI on each project. (Id.)

General spent the reasonable sum of $55,-739 to complete the Winbrook Contract. These costs were as follows:

1) $1,750 to Cali Brothers to patch holes in the stairwell floors at Winbrook. (These holes had been improperly cut for conduit relating to the fire alarm system later installed in the elevator shaft.) (Stip.# # 62-66.)

2) $250 to Cali Brothers to perform miscellaneous painting. (Stip.# # 67-69.)

3) $44,356 to Naber Thomas to complete its electrical work under its subcontract with Capolino. (Stip.# # 84-87.)

4) $1,639 to National Heating to complete its mechanical work under its subcontract with Capolino.

5) $7,744 to ACCI to perform work on the vacuum pumps to replace the check, gate and relief valves. (Pl.Exh. 26.) This work, though perhaps unnecessary, was required by General Requirements Section 15500 1.02(C)(3) “Replace valves, etc. at each pump.” As discussed above, Capolino had written misleading notations on the specifications it originally provided National Heating, thus its subcontract bid did not include replacement of these valves as the contract required.

In addition, General spent $24,470 to do work demanded by the Authority that was outside the scope of the Winbrook Contract, as follows:

1)$11,591 to ACCI to repair damage to the fire alarm system at Winbrook under protest that-it was not under the contract. (Stip. # # 88-93; Exh. 36.) This was extra work, since the HUD General Conditions ¶ 34(C)(4) clearly provided that the Housing Authority assumed all risk of loss due to vandalism. Arnold testified that Capolino had previously done this work and there was no evidence that, the vandalism was traceable to Capolino. (PI. Summary of Salient Deposition Testimony p. 3, Arnold Dep., pp. 43-46.)

2) $1,331 to ACCI to furnish and install additional transformers and relays to accommodate upgraded electric door locks installed by the Authority after Capolino was terminated. This work was not contemplated by the Winbrook Contract. (Cap., 1176.)

3) $11,548 to ACCI to refurbish the steam control valves and replace a linkage on a boiler valve under protest. (Pl.Exh. 35.) As discussed above, this work was not contemplated by the contract, which required the heat timers to tie into existing steam control valves.

The Authority paid General the $33,758 remaining on the Winbrook Contract upon General’s satisfactory completion of the project. (See Stip # 31; Exh. A37.)

General spent the reasonable sum of $59,-416 to complete the Schuyler Contract. These costs were as follows:

1) $22,334 for the delivery and installation of the elevator windows. This included the $13,100 ACCI paid to ROMCO upon delivery of the windows (which had been ordered by Capolino) and $9,234 of labor to Terance Maughan for their installation. (Stip. # # 32-41; Cap. 381, 454-55.)

2) $2,615 to Naber Thomas for electrical work he had done at Schuyler under his contract with Capolino. Naber Thomas performed this work, but was never paid by Capolino. (Stip.# # 76-81.)

3) $22,300 for the purchase and installation of 26 double hung EFCO windows. This included:

a) $9,975 to Terance Maughan for the EFCO windows (PI. Exh. 29; Stip. # # 41-46);

b) $2,850 to Terance Maughan for their installation (Id.);

c) $495 to Terance Maughan to modify the existing day care window openings to accept the EFCO window (Stip.# # 47-49);

d) $6,000 to Cali Brothers to remove the temporary windows installed by the Authority in the day care center, to re-frame the metal stud openings to match the masonry openings and to finish all twenty-six windows, including finishing the diywall around the windows (PI. Exh. 5, Reu 1078; Stip. # 50);

e) $2,800 to Cali Brothers to install the metal sills for the 26 windows and the elevator windows (Pl.Exh. 6); and

f)$180 to Turner and Harrison, Inc. for cutting down the hollow window sills bought by Capolino for the 26 double hung windows (Stip.# # 72-75).

4) $550 to Cali Brothers to repair a metal door jamb at Winbrook, to refinish the hew ground floor bathrooms at Schuyler and to caulk and touch-up paint as required where surface mounted conduit had been recessed. (Stip. # # 58-61; PI. Exh. 7.)

5) $1,305 to Terance Maughan for overtime work required in order to complete the installation of the windows while the day care center was closed for vacation. (Stip.# # 47-49.)

6) $10,312 to ACCI as its 21% mark-up for overhead and profit for managing the work. (Pl.Br., 30.)

The Authority paid General $62,682 of the remaining $66,127 remaining on the Schuyler contract upon General’s satisfactory completion of the project. (See Stip. # 31; PI. Br. p. 6, n. 2.)

Lastly, General paid $8,872 for the insurance coverage required on both projects, which was the same coverage as was required under both the Winbrook and Schuyler contracts. (Stip.# # 154-155.) Of this amount, based upon the costs to General to complete the contracts, $5,057 is attributable to Winbrook (57%) and $3,815 is attributable to Schuyler (43%).

CONCLUSIONS OF LAW

I. IN GENERAL

1. The Authority was entitled to refuse to pay a payment application unless it was certified by the Architect.

Certification by the Architect was required under both the HUD General Conditions ¶ 6(C) and A.I.A. General Conditions ¶ 9.6.1 before a payment-is due on an application. Although General Requirements Section 01741 provides that the payments will be on estimates certified by the Owner, the Authority was entitled to delegate this responsibility to its Architect, as both the A.I.A. and HUD General Conditions contemplate.

II. WINBROOK

2. Capolino did not materially breach the Winbrook contract by failing to pay its subcontractors prior to Arnold’s refusal to certify the September payment.

It is true that a party that seeks' to recover damages from another party for breach of contract must show that it itself is free from fault in respect to performance. 22A N.Y.Jur.2d § 417; Cf. Ellenberg Morgan Corp. v. Hard Rock Cafe, Assoc., 116 A.D.2d 266, 500 N.Y.S.2d 696, 699 (1st Dep’t 1986) (a party may not insist upon performance of a condition precedent when its nonperformance has been caused by the party itself). The Authority alleges that at the time it refused to pay the September application, Capolino was in breach of the contract, (specifically, A.I.A.¶ 9.3.3, supra), by failing to pay its subcontractors.

Initially, we note that any failure on Capolino’s part to pay his subcontractors would not justify the Authority’s failure to make progress payments to him. There is no evidence to suggest the Authority had knowledge of Capolino’s .alleged failure when it failed to make its payment, and it could not and did not use failure to pay subcontractors as a reason not to certify payment. U.S. for the Use and Benefit of D'Agostino Excavators, Inc. v. Heyward-Robinson Co., 430 F.2d 1077, 1086 (2d Cir.1970) (contractor entitled to withhold payment from subcontractor to protect itself from liability to subcontractor’s suppliers only if the contractor knew of the amount withheld, notified the subcontractor of its intent to withhold this amount; and actually withheld payments for the purpose of protecting itself), cert. denied, 400 U.S. 1021, 91 S.Ct. 582, 27 L.Ed.2d 632 (1971). Neither the rejected payment applications, nor Taseione’s November 9th and 23rd letters of default mention failure to pay subcontractors as one of the concerns of the Authority.

Moreover, the Authority has not met its burden of proving that Capolino had materially breached his warranty to pay his subcontractors. Under ALA. ¶ 9.3.3, when Capolino signed an application for payment he warranted that all work for which “Certificates for Payment have been previously issued and payments received from the Owner, shall, ____be free and clear of liens .... ” (emphasis added). Capolino’s submission of the August payment application did not breach this warranty. Though Capolino did breach the ¶ 9.3.3 warranty with his September payment application, this breach was cured within two weeks and was not 'material.

Nor has the Authority established that the Capolino firm breached its warranty to pay National Heating. When Capolino was paid October 7 for its August payment application, it had billed and been paid $17,500 for Vacuum Pumps. (Exh. A17.) This left only $1,000 in the category. However, Capolino had paid National Heating, the vacuum pump subcontractor, only $4,951, leaving $1,639 unpaid on its $6,590 contract. (Stip.# # 113-114.) There is no information in the record about National Heating’s billing, but assuming that National Heating had billed its entire contract price by August 31, this could only be $6,590 - $1,000 (withheld) = $5,590. Less retainage, the amount owed to National Heating would be $5,031, a difference of $40, and not a material warranty violation.

3. Arnold was obligated by the contract to certify the undisputed amounts Capolino requested for work on the “CleanUp/Punch List” ($500), on “Vacuum Pumps— Cold water makeups” ($1,219), and at least $10,000 of $15,000 requested for the Electrical work on the fire alarms, and his failure to do so was a breach of contract.

A.I.A. ¶ 9.5.1, supra, prescribes two procedures for the Architect to withhold payment. First, if the Architect cannot certify the amount