Tulger Constr. Co. v State of New York

[*1] Tulger Constr. Co. v State of New York 2013 NY Slip Op 52332(U) Decided on April 3, 2013 Ct Cl Collins, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 3, 2013
Ct Cl

Tulger Construction Co., Claimant,

against

The State of New York, Defendant.

[FN1]

120253



APPEARANCES:

For Claimant:

Dunnington, Bartholow & Miller

By: Carol A. Sigmond, Esquire

Samuel A. Blaustein, Esquire

For Defendant:

Honorable Eric T. Schneiderman, Attorney General

By: Frederick H. McGown, III, Esquire

Assistant Attorney General
Francis T. Collins, J.

Defendant moves for dismissal of the instant breach of contract claim pursuant to CPLR 3211 (a) (2) and (8) on the ground this Court "has no jurisdiction to hear the claim because claimant failed to serve its claim on the Attorney General as required by Court of Claims Act §§ 10 (4) and 11(a) . . ."In the alternative, defendant seeks dismissal of claimant's second cause of action seeking damages in quantum meruit and requests that the parties be permitted to complete discovery no [*2]sooner than 90 days after service of the instant Order with notice of entry.[FN2] Claimant, Tulger Construction Co., opposes the motion and moves to convert its previously served notice of intention to file a claim pursuant to Court of Claims Act § 10 (8) (a) or to file and serve a late claim pursuant to Court of Claims Act § 10 (6).

In September 2008, claimant and defendant entered into a contract for replacement of the floor of the New York Air National Guard hangar at MacArthur Airport. According to the allegations in the claim, the work was delayed and claimant was caused to incur additional expenses due to defendant's failure to heed certain warnings regarding the manner in which a particular product, dry shake hardener, should be used. Specifically, claimant alleges the following:

" 7. Through no fault of Tulger, the Project was delayed.

8. Specifically in issue is the delamination of dry shake hardener from the concrete slab. Said issue was caused by OGS' disregard of warnings from the relevant subcontractor that the Contractual figures regarding dry shake hardener were incorrect.

9. Accordingly, Tulger was required to, among other things, purchase extra materials, rent extra equipment, conduct repairs and completion of the Contract was delayed.

10. Moreover, OGS took certain credits i.e. for rebar that was not used, that it was not entitled to and/or overstated the amount of the credit owed. . .

12. Throughout the Project, Tulger submitted certain change orders for additional work. . .

15. Tulger completed the Project and the work in issue was accepted by OGS in or about November 2009. . .

18. Tulger's claims were denied on or about August 4 and 5, 2011."

(defendant's Exhibit F, claim).

The claim, filed on August 19, 2011, alleges two causes of action, the first for breach of contract and the second for quantum meruit. Both causes of action seek damages in the sum of $100,000.00.

In support of its dismissal motion, defendant asserts that neither a claim nor a notice of intention to file a claim were served within six months of the date the claim accrued as required by Court of Claims Act § 10 (4). It also contends that the claim was not served on the Attorney General [*3]as required by Court of Claims Act § 11 (a) (i).[FN3] In the event the claim is not dismissed, defendant seeks dismissal of the second cause of action for quantum meruit, contending that no such cause of action may be maintained where there exists a written contract covering the subject matter of the dispute.

To the extent defendant contends that neither a notice of intention to file a claim nor a claim were served within six months after the claim accrued as required by Court of Claims Act § 10 (4), the Court finds defendant waived this defense by failing to raise its objection in either a pre-answer dismissal motion or as an affirmative defense in its answer (see Court of Claims Act § 11 [c]; defendant's Exhibit H, answer to claim).

Defendant's next contention that the claim was not served upon the Attorney General is supported by the affidavit of Janet Barringer, Senior Clerk in the Albany Office of the Attorney General, who avers that she has searched the electronic database maintained by the Office and found no record that a claim had been served upon the Attorney General. Rather, according to defense counsel, the Office of the Attorney General received a letter from the Office of General Services (OGS), together with a copy of the claim, on September 8, 2011. Defendant served an answer to the claim on October 3, 2011 in which it raised as defenses, inter alia, that this Court lacks both personal and subject matter jurisdiction due to the fact that the claim was "never served personally or by certified mail, return receipt requested, upon the attorney general pursuant to § 11 of the Court of Claims Act" (defendant's Exhibit H, ¶¶ 30, 31). In opposition to this branch of the motion, claimant's counsel argues that defendant was sufficiently apprised of the claim by virtue of its properly served notices of intention[FN4] and the fact that the claim was served upon OGS by certified mail, return receipt requested, and upon the Attorney General's Office by first class mail (see affirmation of Samuel Blaustein, ¶¶ 6, 8; affidavit of Khadija Laaroussi ¶ 4; claimant's memorandum of law pp. 12-13).It also argues the defendant should be estopped from asserting any jurisdictional arguments as it litigated the claim in a Supreme Court action for nearly two years before informing the claimant of the need to sue the State in the Court of Claims (claimant's memorandum of law, p. 13).

The State's waiver of immunity under section 8 of the Court of Claims Act is contingent upon claimant's compliance with the specific conditions to suit set forth in article II of the Court of Claims Act (Lepkowski v State of New York, 1 NY3d 201, 206 [2003]), including the service requirements of Court of Claims Act § 11 (a) (i), which provide, in relevant part, that a copy of the claim "shall [*4]be served personally or by certified mail, return receipt requested, upon the attorney general within the times hereinbefore provided for filing with the clerk of the court." Thus, the failure to serve a claim is a non-waivable jurisdictional defect which divests this Court of subject matter jurisdiction (Finnerty v New York State Thruway Auth., 75 NY2d 721, 723 [1989]; Johnson v New York State, 71 AD3d 1355, 1355 [3d Dept, 2010], lv denied 15 NY3d 703 [2010]; cf. Spaight v State of New York, 91 AD3d 995 [3d Dept 2012]; Rodriguez v State of New York, 307 AD2d 657 [3d Dept 2003]).

Defendant established in support of its motion that no claim was served upon the Attorney General. In opposition to the motion, claimant concedes that the claim was not served upon the Office of the Attorney General either personally or by certified mail, return receipt requested. The law is clear that the service requirements of Court of Claims Act § 11 must be strictly construed as they are jurisdictional in nature (Finnerty, 75 NY2d at 722-723). Neither service of the notices of intention to file a claim, the subsequent service of a claim upon the Attorney General by regular, first class mail nor service of the claim upon OGS by certified mail, return receipt requested, conform to the prescribed methods for service of a claim under Court of Claims Act § 11 (see Fulton v State of New York, 35 AD3d 977 [3d Dept 2006], lv denied 8 NY3d 809 [2007]; Govan v State of New York, 301 AD2d 757 [3d Dept 2003], lv denied 99 NY2d 510 [2003]; Thompson v State of New York, 286 AD2d 831 [3d Dept 2001]). As the defendant properly preserved its objection to the manner in which the claim was served as a defense in its answer (see Court of Claims Act § 11 [c]), dismissal of the claim is required. To the extent claimant contends defendant should be estopped from raising improper service as a ground for dismissal, it proffers no evidence of misfeasance or malfeasance on the part of the State which misled the claimant or would otherwise excuse its failure to properly serve the claim (see Tooks v State of New York, 40 AD3d 1347 [3d Dept 2007], lv denied 9NY3d 814 [2007]; Rivera v State of New York, 5 AD3d 881 [3d Dept 2004]).

The Court next turns to claimant's cross motion to convert its notices of intention to a claim pursuant to Court of Claims Act § 10 (8) (a). This section permits the court to treat a timely served notice of intention as a claim so long as the application for such relief:

"is made upon motion before an action asserting a like claim against a citizen of the state would be barred under the provisions of article two of the civil practice law and rules; the notice of intention was timely served, and contains facts sufficient to constitute a claim; and the granting of the application would not prejudice the defendant."

Claimant's request to treat its notices of intention as a claim must be denied because the notices were not timely served and fail to state facts sufficient to constitute a claim. Regarding the

timeliness of the notices of intention, Court of Claims Act § 10 (4) requires:

"A claim for breach of contract . . . shall be filed and served upon the attorney general within six months after the accrual of such claim, unless the claimant shall within such time serve upon the attorney general a written notice of intention to file a claim therefor, in which event the claim shall be filed and served upon the attorney general within two years after such accrual" [emphasis added].

As long ago explained by the Court in Waterman v State of New York (19 AD2d 264 [4th Dept 1963], affd sub nom. Williams v State of New York, 14 NY2d 793 [1964]), "[t]he expression claim accrued is not identical with the expression cause of action accrued. The claim accrues when it [*5]matures, and the words claim accrued have the same meaning as damages accrued." (19 AD2d at 266 [internal quotations omitted]; see also Edlux Constr. Corp. v State of New York, 252 App Div 373, 374 [3d Dept 1937], affd 277 N Y 635 [1938]). Damages accrue when work is " substantially completed or a detailed invoice of the work performed is submitted' " (C.S.A. Contr. Corp. v New York City School Constr. Auth., 5 NY3d 189, 192 [2005], quoting New York City School Constr. Auth. v Kallen & Lemelson, 290 AD2d 497, 497 [2d Dept 2002] [internal quotation marks and citation omitted]; see also Matter of Board of Educ. of Enlarged Ogdensburg City School Dist. (Wager Constr. Corp.), 37 NY2d 283, 290 [1975]; Richard A. Hutchens CC, L.L.C. v State of New York, 59 AD3d 766, 768 [3d Dept 2009], lv denied 12 NY3d 712 [2009]; Tom L. LaMere & Assoc., Inc. v City of Syracuse Bd. of Educ., 48 AD3d 1050 [4th Dept 2008]; Inter-Power of NY v State of New York, 230 AD2d 405, 408 [3d Dept 1997]). Here, claimant alleges in the claim that "Tulger completed the Project and the work in issue was accepted by OGS in or about November 2009" (defendant's Exhibit F, claim ¶ 15). Claimant's damages were therefore ascertainable, at the latest, in November 2009. The notices of intention served on November 16, 2010 and November 22, 2010 were, therefore, untimely.[FN5]

Timeliness issues aside neither of the notices of intention set forth sufficient facts to constitute a claim. Court of Claims Act § 11 (b) establishes the following requirements:

"The claim shall state the time when and place where such claim arose, the nature of same, and the items of damage or injuries claimed to have been sustained and, except in an action to recover damages for personal injury, medical, dental or podiatric malpractice or wrongful death, the total sum claimed. . . The notice of intention to file a claim shall set forth the same matters except that the items of damage or injuries and the sum claimed need not be stated."

Both notices of intention in the instant matter state, in pertinent part, the following:

"2. This claim arises from the acts or omission of the defendants. Details of said acts and omissions are as follows: The OGS issued changes to the contract plans and specifications that materially changed the manner in which Tulger was to perform the work and rendered the work more costly. (Change Order No. 60318) When Tulger's proposal for the change order was submitted the OGS refused to accept it; and instead of paying, demanded a credit from the contractor, Tulger" (defendant's Exhibits A and B).

To constitute a claim, Court of Claims Act § 11 (b) requires both the items of damage and the total sum claimed be stated (see e.g. Kolnacki v State of New York, 8 NY3d 277 [2007]; [*6]Lepkowski v State of New York, supra ). While Court of Claims Act § 11 (b) does not require a notice of intention to state "the items of damage or injuries and the sum claimed", in order to treat a notice of intention as a claim under Court of Claims Act § 10 (8) (a) , it must "contain[ ] facts sufficient to constitute a claim" (id.). Thus, the failure to include the items of damage and the sum claimed in the two notices of intention precludes the conversion of either to a claim under Court of Claims Act § 10 (8) (a).

The Court will next address claimant's application to file a late claim. The first issue for determination upon a late claim motion is whether the application is timely. Like an application under Court of Claims Act § 10 (8), Court of Claims Act § 10 (6) requires that a motion to file a late claim be made "before an action asserting a like claim against a citizen of the state would be barred under the provisions of article two of the civil practice law and rules." An action for breach of contract against a citizen of the state must be asserted within six years following its accrual (CPLR 213 [2]). As set forth previously, a breach of contract cause of action asserted by a citizen of the state accrues, and the statute of limitations begins to run, at the time of the breach (Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d at 402; John J. Kassner & Co. v City of New York, 46 NY2d 544, 550 [1979]). Here, the contract was breached, if at all, during the term of the contract, which was fully executed and approved by the Comptroller's Office in September 2008. The instant cross motion filed on February 26, 2013 is therefore timely.

Court of Claims Act § 10 (6) permits this Court, if the applicable statute of limitations set forth in article 2 of the CPLR has not expired, to allow the filing of a late claim upon consideration of the following factors: "whether the delay in filing the claim was excusable; whether the state had notice of the essential facts constituting the claim; whether the state had an opportunity to investigate the circumstances underlying the claim; whether the claim appears to be meritorious; whether the failure to file or serve upon the attorney general a timely claim or to serve upon the attorney general a notice of intention resulted in substantial prejudice to the state; and whether the claimant has any other available remedy." The statutory factors are not exhaustive nor is any one factor controlling (Matter of Gavigan v State of New York, 176 AD2d 1117 [3d Dept 1991]). The most important factor is whether the potential claim has merit, as it would be a futile exercise to permit litigation of a clearly baseless lawsuit (Savino v State of New York, 199 AD2d 254 [2d Dept 1993]).In deciding a late claim motion, the Court has broad discretion which will not be lightly set aside (Ledet v State of New York, 207 AD2d 965 [4th Dept 1994]).

Claimant denies a delay in commencing this action, pointing to the defendant's receipt of the improperly served claim on September 8, 2011 (claimant's counsel's memorandum of law, p. 15). The contract work was completed, however, by November 2009 (defendant's Exhibit F, claim, ¶ 15) and, as set forth previously, the notices of intention were served in November 2010. Neither ignorance of the law nor law office failure provide reasonable excuses for the delay in commencing the action (see Olsen v State of New York, 45 AD3d 824 [2d Dept 2007]; Matter of Robinson v State of New York, 35 AD3d 948 [3d Dept 2006]; Langner v State of New York, 65 AD3d 780 [3d Dept 2009]). As a result, the Court finds claimant failed to establish a reasonable excuse for its delay.

The intertwined issues of notice, opportunity to investigate and prejudice to the State will be considered together. Claimant contends that the State had notice of the facts of the claim and would not be unduly prejudiced in the event late claim relief is granted.As the State makes no contrary argument, these factors weigh in favor of the claimant.

With respect to the required showing of merit, the claim is sufficiently established where the claimant demonstrates that the proposed claim is not patently groundless, frivolous, or legally defective and there is reasonable cause to believe that a valid cause of action exists (Matter of Santana v New York State Thruway Auth., 92 Misc 2d 1 [Ct Cl, 1977]; Fowx v State of New York, 12 Misc 3d 1184[A] [ Ct Cl, 2006]). While the claimant failed to submit a proposed claim in support of its cross motion for late claim relief, the Court will consider the filed claim (defendant's Exhibit F) as its proposed claim for purposes of determining the cross motion.

Claimant established the potential merit of its first cause of action alleging breach of contract through the affidavit of Brendan O'Hara, Vice President of Tulger Construction Co., and the various documentation submitted therewith. A different conclusion is reached, however, with respect to claimant's second cause of action for quantum meruit. The law is settled that "[a] contractor cannot bring a quantum meruit claim for extra payments beyond the original contract price where there exists a contract governing how payment for extra work will be determined" (see Aviv Constr. v Antiquarium, Ltd., 259 AD2d 445, 446 [1st Dept 1999]; see also Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382 [1987]; Goldman v Metropolitan Life Ins. Co., 5 NY3d 561 [2005] [where there is a valid and enforceable written contract governing a particular subject matter, quasi-contractual recovery on a theory of unjust enrichment is ordinarily precluded for events arising out of the same subject matter]). Here, the proposed second cause of action for quantum meruit seeks recovery for extra work and delays, payment of which is specifically governed by the terms of the written contract. Accordingly, the claimant's proposed second cause of action lacks merit as a matter of law.

Finally, the last factor for consideration on a late claim application, whether the claimant has any other available remedy, weighs in favor of the claimant as no alternative remedy has been brought to the Court's attention.

Based on the foregoing, the Court finds that the weight of the statutory factors favors granting the claimant's application for late claim relief with respect to its first cause of action for breach of contract. A contrary conclusion is reached with respect to claimant's proposed second cause of action for quantum meruit (see Matter of Tinyes v State of New York, 82 AD3d 1109 [2d Dept 2011]; Ortiz v State of New York, 78 AD3d 1314 [3d Dept 2010]) .

Based on the foregoing, defendant's motion is granted and the claim is dismissed. Claimant's cross motion is granted to the extent it seeks to file and serve a late claim alleging breach of contract and is otherwise denied. Claimant is directed to file and serve its claim in accordance with Court of Claims Act § 11 and § 11-a within forty-five days of the date this Decision and Order is filed.

Saratoga Springs, New York

April 3, 2013

FRANCIS T. COLLINS

Judge of the Court of Claims

The Court considered the following papers:

Notice of motion dated December 12, 2012;

Affirmation of Frederick H. McGown, III dated December 12, 2012 with exhibits;

Notice of cross motion dated February 20, 2013;

Affidavit of Brendan O'Hara sworn to February 20, 2013 with exhibits;

Affidavit of Khadija Laaroussi sworn to February 20, 2013;

Affirmation of Samuel Blaustein dated February 20, 2013 with exhibits;

Memorandum of law of Carol A. Sigmond and Samuel A. Blaustein dated February 20, 2013;

Reply Affirmation of Frederick H. McGown, III dated March 4, 2013.

Footnotes

Footnote 1:By Order dated November 2, 2011 the caption was amended to reflect the only properly named defendant.

Footnote 2: To the extent defendant also requests an Order granting a "postponement of all discovery until after the determination of the current motion", the request is obviously moot at this point. Where the automatic stay provisions of CPLR 3214 (b) are inapplicable, a party seeking to stay discovery pending the determination of a motion may seek such relief by order to show cause. No such temporary relief was requested here.

Footnote 3: Although the defendant's notice of motion failed to specify lack of service or improper service of the claim as a ground for dismissal as required by CPLR 2214 (a), it included a general relief clause and raised this ground for dismissal in its supporting papers (see Kreamer v Town of Oxford, 96 AD3d 1130 [3d Dept 2012]; Tirado v Miller, 75 AD3d 153 [2d Dept 2010]).

Footnote 4: Claimant, purporting to act pro se, served the first notice of intention by certified mail, return receipt requested on November 16, 2010 (McGown affirmation, ¶ 4; defendant's Exhibit A; see also CPLR 321 [a]). Claimant's counsel served the second notice of intention by certified mail, return receipt requested, on November 22, 2010 (McGown affirmation, ¶ 5; defendant's Exhibit B). The two notices of intention are nearly identical with the second adding only the name and address of counsel for the claimant.

Footnote 5: Like the timeliness of a motion for late claim relief under Court of Claims Act § 10 (6), the timeliness of an application under Court of Claims Act § 10 (8) (a) is determined by reference to the statute of limitations applicable to a like claim asserted against a citizen of the state, in this case six years (see CPLR 213 [2]). Unlike a breach of contract claim, however, a breach of contract cause of action against a citizen of the state accrues at the time of the breach (Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 402 [1993]). Inasmuch as the alleged breach occurred sometime after the execution of the contract in 2008, a date less than six years prior to the making of the instant motion, the application for relief under Court of Claims Act § 10 (8) (a) is timely.