Bay Terrace Co-op. Section IV, Inc. v. New York State Employees' Retirement System

• Decision Date: 09 February 1981
• Parties: BAY TERRACE COOPERATIVE SECTION IV, INC., Respondent, v. NEW YORK STATE EMPLOYEES' RETIREMENT SYSTEM, Policemen's and Firemen's Retirement System, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 794

435 N.Y.S.2d 794

80 A.D.2d 571

BAY TERRACE COOPERATIVE SECTION IV, INC., Respondent, v. NEW YORK STATE EMPLOYEES' RETIREMENT SYSTEM, Policemen's and Firemen's Retirement System, Appellant.

Supreme Court, Appellate Division, Second Department.

Feb. 9, 1981.

Robert Abrams, Atty. Gen., New York City (Joseph F. Gibbons and Jeremiah Jochnowitz, Asst. Attys. Gen., Albany, of counsel), for appellant.

Arnold Eiger, Bayside (Lawrence B. Lame, Rego Park, of counsel), for respondent.

Before LAZER, J. P., and MANGANO, COHALAN and MARGETT, JJ.

MEMORANDUM BY THE COURT.

In a claim accruing in Queens County to recover damages for breach of contract, defendant appeals from an order of the Court of Claims, dated September 20, 1979, which, upon the claimant's motion, inter alia, to file a late claim, dismissed defendant's first affirmative defense (that the claim was untimely filed) and granted claimant leave to file a late claim pursuant to subdivision 6 of section 10 of the Court of Claims Act.

Order reversed, on the law, without costs or disbursements, motion denied, and claim dismissed for failure to timely file a claim.

Claimant is the net lessee and mortgagor of certain property in Queens County. Defendant is the assignee of the mortgage. Both parties agree that claimant is responsible for the payment of all real estate taxes, water charges and sewer rents. However, the parties provided in the mortgage agreement that claimant would deposit with defendant a sum of money equal to those charges, and defendant would pay the charges and rentals on behalf of claimant. Defendant arranged to have itself named on the bills and to have the bills sent directly to it.

In a proceeding unrelated to this action, claimant applied for a tax abatement pursuant to the New York City Administrative Code in connection with certain improvements which claimant had made. On April 21, 1977 the New York City Department of Finance notified claimant that there was a delinquency in the payment of certain taxes and that unless they were paid within 10 days from the date of the communication, proceedings on the tax abatement application would be suspended. In order to avoid this consequence, on April 29, 1977 claimant paid the taxes and charges directly notwithstanding defendant's obligation to pay them. In addition, in order to obtain a bill marked "Paid" claimant was required to pay interest in the sum of $2,468.77 as a penalty for late payment of these taxes and charges. The interest constitutes the subject matter of the instant claim.

On May 26, 1977 claimant wrote to defendant advising it of its delinquency in the payment of claimant's water charges and sewer rents and demanded immediate reimbursement. Defendant has disclaimed responsibility for the interest payment. It is defendant's position that it only received one bill for the period in question, on May 19, 1977, and that it forwarded payment for that bill to the city on May 25, 1977. Defendant then charged the entire amount (which included the interest penalty) to claimant's escrow account. Claimant was subsequently repaid by the city for the sums it had forwarded. However, despite demand therefor, defendant failed to credit claimant's escrow account for the amount of the interest or penalty assessed by the city for the late payment.

On March 17, 1978 claimant commenced an action in the Civil Court of the City of New York, County...