Luvin Constr. Corp. v Locust Val. Fire Dist.

[*1] Luvin Constr. Corp. v Locust Val. Fire Dist. 2004 NY Slip Op 51231(U) Decided on June 30, 2004 Supreme Court, Nassau County Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 30, 2004
Supreme Court, Nassau County

LUVIN CONSTRUCTION CORP., Plaintiff,

against

LOCUST VALLEY FIRE DISTRICT and RALPH LONGO, individually as Fire Commissioner, Defendants.



017360/03

Stephen A. Bucaria, J.

This motion, by defendants, for an order dismissing the plaintiff's Complaint, pursuant to Town Law Section 180, together with such other and further relief as to this Honorable Court may seem just and proper, is determined as hereinafter set forth.

This action arises out of a contract for construction work between plaintiff and defendant. Factually, on November 15, 2001, plaintiff, Luvin Construction Corp., entered into a contract with defendant, Locust Valley Fire District (hereinafter "District"), after a public bidding process. The plaintiff alleges that the District breached the contract in 2002 when the scope of work to be performed by Luvin was decreased without a written modification as required by the terms of the contract. In addition, the contract signed by the plaintiff required the Project Engineer Gannett Fleming to approve their work and authorize [*2]payment by signing payment requisitions. During the project, the District fired Gannett Fleming, and on July 11, 2002, plaintiff was notified that Ralph Longo, the District fire commissioner, was designated as the new Engineer. Thereafter, defendants District and Longo, awarded the same work, originally in Luvin's scope of work under the original written contract, to other contractors of their choice, namely Jarvis Contracting, Microtech Contracting Corp., and others. These other contractors were not bidders on the original contract, were not awarded work pursuant to a competitive bid, and were not responsive bidders meeting the requirements of the bid specifications. On several occasions throughout the project, Luvin was approached by the defendants to prepare estimates for additional work to be performed on the premises. Plaintiff was notified that it would not be performing the additional work, but instead by subcontractors who did not participate in public bidding as required by statute. On or about July 28, 2003, plaintiff had not been paid for work performed, and a letter was sent to the District demanding immediate payment and advising it of plaintiff's fear of the District's possible insolvency. The plaintiff had contacted defendants' bank and were advised that there were insufficient funds available to pay what was owed to them. On or about January 9, 2003, in an attempt to acquire information regarding the non-publicly awarded work on the job, a freedom of information request was made by plaintiff through its attorney. Defendants never responded to the request. A similar request was again made on March 4, 2003 directly to the District. In response to this request, the District's attorney called for a security of $25,000.00 to copy any documents. The plaintiff objected to this request, but renewed the FOIL request on September 15, 2003. Defendants' attorney responded on September 18, 2003 by directing plaintiff to contact the terminated engineer, without any further records or explanation given. Plaintiff commenced this action against the defendants less than two months later without ever having received detailed information requested regarding the subcontracted work.

DEFENDANTS' CONTENTIONS

The defendants contend that plaintiff failed to comply with the provisions of the Town Law Section 180, which provides that:

"no action shall be maintained against a Fire District upon or arising out of a contract entered into by a Fire District unless a written verified claim shall have been filed with the Fire District Secretary within six months after the cause of action shall have accrued."

The defendants argue that the courts have held that the filing of a Notice of Claim within six months after the contract date is a condition precedent to the commencement of an action against a Fire District. Relying on an affidavit of the District's Secretary, the defendants contend that the plaintiff did not comply with Town Law Section 180 because they failed to file a Notice of Claim. Therefore, the defendants allege that the plaintiff's failure to file a Notice of Claim requires a dismissal of this matter. [*3]

Regarding the plaintiff's third and fourth causes of action, defendants assert that because they are tort claims, they are governed by General Municipal Section 50-e. That

provision requires a Notice of Claim be filed with the Fire District within ninety (90) days after the commencement of the action as a condition precedent to the commencement of the claim. In addition, the defendants allege that General Municipal Section 50-i requires the Summons and Complaint be filed within one (1) year and ninety (90) days of the accrual of the cause of action. They also assert that where a statute of limitations has expired, the court lacks the authority to validate a late notice of claim; and with regard to contract actions against Fire Districts, the statute of limitations begins to run on the execution of the contract date, not a later date for the computation of the statute. Therefore, the defendants contend that the contract claims must be dismissed pursuant to Town Law Section 180, and the tort claims must be dismissed pursuant to General Municipal Laws 50-e and 50-i.

PLAINTIFF'S CONTENTIONS

The plaintiff asserts that the defendants diverted public funds to subcontractors that were never subject to the public bidding process, and as a result, they exhausted the publicly raised funds, resulting in an untimely, and ultimately, non-payment to the plaintiff. As a result of the defendants' choice to hire private subcontractors, plaintiff alleges that it was denied the opportunity to be the lowest responsible bidder. In addition, the plaintiff asserts that the requirement of competitive bidding in the letting of municipal contracts is uniformly construed as mandatory, and failure to abide by the statute renders the public works contract between the District and other subcontractors void and unenforceable. They also contend that it is well settled law that a defendant's misconduct acts to toll a statute of limitations such as General Municipal Section 50-e, or to toll a notice requirement such as Town Law Section 180.

The plaintiff alleges that defendants repeatedly violated the Freedom of Information Law, and that this was evidence of defendants' intentional concealment of their wrongful conduct. Plaintiff alleges that the defendants' attorney's demand of $25,000.00 to copy any documents was an active concealment of the fraudulent conduct by the defendants. They also assert that the defendants created their statute of limitations defense by their delay and refusal of production of the FOIL documents. Plaintiff relies on the affidavit of Benny Vigliotti, president of Luvin, which asserts that the lawsuit would have been timely filed had the defendants granted their requests under FOIL. They also allege that equitable estoppel prevents the defendants from being able to assert a statute of limitations defense. Finally, plaintiffs assert that by effectively concealing their conduct, the defendants made the filing of a Notice of Claim impossible.

The plaintiff asserts that defendants' motion must be denied since "breach of contract" is secondary to the violation of the public bidding laws, and the wrongful and fraudulent conduct which defendants engaged in which led to a breach of contract case.

[*4]DEFENDANTS' REPLY

The defendants assert that the plaintiff's complaint, at its core, seeks money damages for lost profit on work done or to be done pursuant to a lawfully awarded contract. They also allege that an unsuccessful bidder is not entitled to recover profits it might have made from a municipality had its bid been accepted. Because plaintiff's claims arise out of a contract, and seek damages for breach of contract, defendants contend that a breach of Town Law Section 180 requires a dismissal of plaintiff's claim. Defendants also allege that because plaintiff allowed the passage of six months before renewing their FOIL request, this aspect of the case should also be dismissed.

DECISION

Upon a motion to dismiss, the standard is whether the subject pleading states a cause of action. If factual allegations are discerned from the complaint, which, taken together, manifest any cause of action cognizable at law, then the motion will fail. (Maurillo v. Park Slope U-Haul, 194 AD2d 142, 606 NYS2d 243, 1993). Furthermore, it is well settled that in considering a motion to dismiss, the allegations in the complaint must be considered to be true, and granted every favorable inference. (DiStefano v. Nabisco, Inc., 2 AD3d 484, 767 NYS2d 891).

In applying the above legal principles to the facts of the case at bar, this Court has thoroughly examined the entire record, as presented, in the context of the applicable case law and statutory law. There is authority to grant this motion pursuant to plaintiff's failure to comply with Town Law Section 180 as required for contract actions. It has been established that the filing of a Notice of Claim within six months after the cause of action has accrued, in accordance with Town Law Section 180, is condition precedent to the instigation of a contract action against a Fire District. (Elmont Fire Dist. v. Lapeka Constr. Corp., 232 AD2d 636, 648 NYS2d 999, 1995; See also County of Rockland v. Town of Orangetown, 189 AD2d 1058, 1991). "A condition precedent is an act or event which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises," (Preferred Mortgage Brokers, Inc. v. Hervin Byfield, 282 AD2d 589, 723 NYS2d 230, 2000). It is not within the court's authority to disregard non-compliance with such a provision. (Lapeka Constr. Corp., 232 AD2d 636, 648 NYS2d 999, 1996) unless the defendants are estopped from asserting such defense.

It is well established that when a plaintiff was induced by fraud, misrepresentation, or deception to refrain from filing a timely action, a defendant may be estopped from pleading an affirmative defense of the Statute of Limitations, (Schirano v. Paggioli, 99 AD2d 802, 472 NYS2d 391, 1984). By ignoring plaintiff's first FOIL request, then making excessive demands of $25,000.00 for copies of documents in response to the second request, defendants were actively concealing information. Nevertheless, the established rule does not apply to the present [*5]plaintiff, as it was not prevented from filing this action as a result of defendants' deception, as demonstrated by the fact that the plaintiff initiated this action without ever having received the requested information. Therefore, defendant here is not estopped from pleading the Statute of Limitations defense. Therefore, plaintiff's failure to file a Notice of Claim eliminated its right under contract to demand compensation for defendants' breach.

With respect to plaintiff's third and fourth causes of action, both tort claims, General Municipal Section 50-e and 50-i apply. It is clearly stated in Section 50-i that "no action shall be prosecuted or maintained against a . . . fire district . . . unless a notice of claim shall have been made and served upon the . . . fire district in compliance with section fifty-e of this chapter," and that the "action or special proceeding shall be commenced within one year and ninety days after the happening of the event upon which the claim is based." This Court has no authority to permit this action, without a notice of claim, to be commenced after the expiration of the one year and ninety day Statute of Limitations (Jackson v NYC Transit Authority, 274 AD2d 501, 712 NYS2d 377, 2nd Dept., 2000). Section 50-e requires a claimant to file a Notice of Claim within the ninety days after the accrual of an action, and failure to do so renders a complaint subject to dismissal (Davidson v Bronx Municipal Hospital, 64 NY2d 59, 484 NYS2d 533, 1984). Notice of claim requirements are strictly construed, as compliance with them is a condition precedent to suit, (Giblin v Nassau County Med. Ctr., 61 NY2d 67, 74, 471 NYS2d 563, 1984). Because the plaintiff did not comply with these requirements, the law suit must fail.

In summary, the defendants' motion to dismiss is granted.

This order concludes the within matter assigned to me pursuant to the Uniform Rules for New York State Trial Courts.

So Ordered. [*6]

Dated

XXXJ.S.C.