Eastern Rock Products, Inc. v. State

• Decision Date: 28 December 1981
• Docket Number: No. 65444,65444
• Parties: EASTERN ROCK PRODUCTS, INC., Claimant, v. The STATE of New York, Defendant. Claim
• Court: New York Court of Claims

Page 868

446 N.Y.S.2d 868

112 Misc.2d 204

EASTERN ROCK PRODUCTS, INC., Claimant, v. The STATE of New York, Defendant.

Claim No. 65444.

Court of Claims of New York.

Dec. 28, 1981.

DeGraff, Foy, Conway, Holt-Harris & Mealey, Albany, for claimant; Melvin & Melvin, Roger Bradley, Syracuse, of counsel.

Robert Abrams, Atty. Gen. by William K. Barczak, Deputy Asst. Atty. Gen., for defendant.

MEMORANDUM DECISION AND ORDER.

THOMAS J. LOWERY, Jr., Judge.

In this claim to recover damages for an alleged breach of a public work's contract, the State moves pursuant to CPLR 3212 for an order granting summary judgment on the ground of release.

The contract was for the reconstruction of a portion of State Highway Nos. 670 and 671. It contained the standard release clause. ¹ After the State accepted the work, a final agreement ² was prepared and submitted to the claimant. At the time of the signing of the agreement, the claimant added a clause that purported to reserve its right to make a claim for certain concrete overlay work. Thereafter, a final estimate was prepared based on the final agreement. ³ The estimate fixed the sums that were concededly due under the contract and did not include any sums for items in dispute. On March 30, 1981, a check for the sum of $56,523.57 was mailed to the claimant. The latter sum represented the amount concededly due, less sums previously withheld by the Comptroller pursuant to section 220-b of the Labor Law. Attached to the check was a stub identifying it as the final payment. On April 3, 1981, the check was cashed by the claimant. On June 8, 1981, the subject claim was filed with this court. No detailed and verified claim was ever served on the Department of Transportation.

The State takes the position that the release clause in the contract, and section 145 of the State Finance Law, were triggered when the claimant accepted the check, which the State asserts constituted final payment ⁴ under the contract. It argues that these provisions bar the commencement of an action unless the claimant serves a detailed and verified statement of claim on the Department of Transportation within 40 days after the mailing of final payment, and files the claim with the Court and serves a copy upon the Attorney General within six months after such time. The State contends that since the claimant failed to file the requisite claim with the Department of Transportation, this action is barred.

The claimant does not dispute that if final payment was made and accepted its claim would be barred. It is the claimant's position, however, that the payment accepted here was not the final payment within the meaning of the contract. It alleges that the withholdings made by the Comptroller under section 220-b of the Labor Law were not authorized since they were made as a result of illegal wage rate redeterminations made by the Industrial Commissioner. Moreover, the claimant contends that, even assuming that such withholdings were authorized, the payment was not the final payment, since such payment may only be predicated on a final agreement, which did not exist here.

The claimant's argument that the withholdings made by the Comptroller were not authorized must be rejected. First, it has now been established that withholdings under section 220-b of the Labor Law are considered deductions authorized under the contract. (Snyder Construction Co. Inc. v. State of New York, 53 N.Y.2d 613, 438 N.Y.S.2d 786, 420 N.E.2d 978, revg., 73 A.D.2d 50, 426 N.Y.S.2d 102.) Moreover, the Comptroller is directed to make such withholdings once he has been informed by the Industrial Commissioner that unpaid wages or supplements appear to be due. ( Labor Law, § 220-b.) This is true, whether or not the underlying determinations of the Industrial Commissioner may ultimately be determined to be illegal or erroneous. Hence, any questions concerning the actions of the Industrial Commissioner in making wage rate determinations are irrelevant to the authority of the Comptroller to make the withholdings under section 220-b of the Labor Law and are properly the subject matter of a proceeding under article 78 of the Civil Practice Law and Rules. (cf. Snyder Construction Co. Inc. v. State of New York, 53 N.Y.2d 613, 438 N.Y.S.2d 786, 420 N.E.2d 978, revg., 73 A.D.2d 50, 426 N.Y.S.2d 102, supra.) This conclusion is well supported by policy considerations. To hold otherwise would necessarily embroil the court in the determination of collateral issues and would defeat the intent of the contract and the statute to establish finality with respect to both the subject matter of the contract and the State's financial responsibility in connection therewith. (See Brandt Corp. v. City of New York, 14 N.Y.2d 217, 250 N.Y.S.2d 407, 190 N.E.2d 493.)

The question of whether there existed a final agreement upon which the final payment was based must also be resolved against the claimant. First, the court would note that the claims for disputed concrete overlay work were submitted to the State and expressly rejected prior to the execution of the final agreement. Although the...