Cabrini Medical Center v. Desina

• Court: New York Court of Appeals Court of Appeals
• Writing for the Court: WACHTLER
• Citation: Cabrini Medical Center v. Desina, 64 N.Y.2d 1059, 489 N.Y.S.2d 872, 479 N.E.2d 217 (N.Y. 1985)
• Decision Date: 23 April 1985
• Parties: , 479 N.E.2d 217 CABRINI MEDICAL CENTER, Respondent, v. Cesar L. DESINA et al., Defendants, and Humphreys & Harding, Inc., Appellants.

Page 872

489 N.Y.S.2d 872

64 N.Y.2d 1059, 479 N.E.2d 217

CABRINI MEDICAL CENTER, Respondent, v. Cesar L. DESINA et al., Defendants, and Humphreys & Harding Inc., Appellants.

Court of Appeals of New York.

April 23, 1985.

John J. Abberly and Richard Hagouel Langsam, New York City, for appellants.

Gregory E. Ronan and Julius L. Schapira, New York City, for respondent.

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division, 101 A.D.2d 1034, 475 N.Y.S.2d 966, should be reversed, without costs, and arbitration of plaintiff's claims against defendants-appellants permanently stayed.

In July 1971, plaintiff, Cabrini Medical Center, retained defendants, Humphreys & Harding and Corbetta Construction Company, to serve as contractor and construction manager (the terms were by contract deemed synonymous) for the building of a 16-story addition to Cabrini's medical complex in Manhattan. Article 7 of their contract stated: "Final payment, constituting the entire unpaid balance of the Contract Sum, shall be paid by the Owner to the Contractor Twenty (20) days after Substantial Completion of the Work * * * provided the Work has then been completed, the Contract fully performed, and a final Certificate for Payment has been issued by the Architect." On December 20, 1973, the architect issued the certificate of substantial completion, and final payment was made to defendants. On November 22, 1974, plaintiff instructed its architect to release whatever funds had been retained pending completion of punch-list work. By that time a permanent certificate of occupancy had been issued and plaintiff had fully occupied the new facility. The retained funds were released on January 28, 1975.

On May 25, 1983, nearly a decade after final payment, occupancy of the building and release of the retained funds, the present suit was commenced, asserting a single cause of action against defendants for breach of contract based on fraud and negligence in construction of the building. Relying on the fact that masonry repair work was performed on the building in March 1977 and again in October 1981, Special Term denied defendants' motion to stay arbitration and dismiss the complaint on Statute of Limitations grounds, and granted the alternative relief sought by defendants, compelling the parties to proceed to arbitration. The Appellate Division affirmed. Because plaintiff's claim accrued prior to May 25, 1977, and is therefore time-barred, we reverse and direct that arbitration be permanently stayed. ^*

A cause of action against a contractor for defects in construction generally accrues upon completion of the actual physical work (see, State of New York v. Lundin, 60 N.Y.2d 987, 471 N.Y.S.2d 261, 459 N.E.2d 486). By itself instructing its architect to release all funds payable to defendants, plaintiff here signaled the completion of work under the terms of the contract. Moreover, the issuance of a final certificate of payment by the architect (see, Board of Educ. v. Celotex Corp., 58 N.Y.2d 684, 458 N.Y.S.2d 542, 444 N.E.2d 1006, affg. 88 A.D.2d 713, 451 N.Y.S.2d 290) and complete occupancy of the building by plaintiff (see, State of New York v. Lundin, 60 N.Y.2d 987, 990-991, 471 N.Y.S.2d 261, 459 N.E.2d 486, supra ) further indicate that completion occurred prior to May 25, 1977. The repair work performed by defendants' masonry subcontractor in October 1981--installation of some eight square feet of back-up concrete block--was at most incidental to construction of the building and cannot serve to extend the accrual date of plaintiff's cause of action (see, Phillips Constr. Co. v. City of New York, 61 N.Y.2d 949, 951, 475 N.Y.S.2d 244, 463 N.E.2d 585; State of New York v. Lundin, 60 N.Y.2d 987, 989, 471 N.Y.S.2d 261, 459 N.E.2d 486, supra ). Accordingly, plaintiff's action for breach of contract is barred by the applicable six-year Statute of Limitations.

Plaintiff's assertions of fraud and negligence contained within its breach of contract claim against defendants cannot serve to extend the Statute of Limitations. Even if a separate cause of action had been stated, pla...