Mac Farland-Breakell Bldg. Corp. v. New York State Thruway Authority

• Decision Date: 06 December 1984
• Docket Number: FARLAND-BREAKELL,No. 68371,68371
• Parties: MACBUILDING CORPORATION, Respondent, v. NEW YORK STATE THRUWAY AUTHORITY, Appellant. (Claim)
• Court: New York Supreme Court — Appellate Division

Page 166

484 N.Y.S.2d 166

104 A.D.2d 139

MAC FARLAND-BREAKELL BUILDING CORPORATION, Respondent, v. NEW YORK STATE THRUWAY AUTHORITY, Appellant. (Claim No. 68371.)

Supreme Court, Appellate Division,

Third Department.

Dec. 6, 1984.

Robert Abrams, Atty. Gen., Albany (Clifford A. Royael, Albany, of counsel), for appellant.

Bryant, O'Dell & Basso, Syracuse (Robert F. Silkey, Syracuse, of counsel), for respondent.

Before KANE, J.P., and CASEY, WEISS, YESAWICH and LEVINE, JJ.

LEVINE, Justice.

Claimant entered into a contract with the New York State Thruway Authority (the Authority) in February, 1981, for the rehabilitation of Thruway bridges located in Montgomery County. The contract contained a clause which stated in substance that acceptance by the contractor of final payment would operate as a release of all claims arising out of the construction unless a detailed and verified statement of claim was served within 40 days of the mailing of such payment. During the course of the project, disputes arose concerning whether site conditions not contemplated by the contract required claimant to incur additional expenses. Without resolution of these disputes, the Authority mailed a check for final payment on February 11, 1983 which was accepted by claimant. Some 34 days later, claimant filed with the Authority a verified statement of claim for some $400,000 in connection with those extra costs.

On September 2, 1983, claimant commenced an action in the Court of Claims to recover that amount. The Authority then moved to dismiss the claim as untimely under section 145 of the State Finance Law. That section provides in language almost identical to the clause of the contract that "provision contained in a construction contract awarded by any state department or agency shall bar the commencement of an action for breach of contract on the sole ground of the contractor's acceptance of final payment", provided that a detailed verified statement of claim is filed within 40 days of the mailing thereof. The basis for the Authority's motion to dismiss was the further clause of section 145 barring suit on such a statement of claim if not brought within six months of the mailing of final payment, "provision of subdivision four, section ten of the court of claims act to the contrary notwithstanding". The Court of Claims rejected the Authority's position on the ground that the Authority was not a "State department or agency"; hence, section 145 of the State Finance Law did not apply and the court was able to exercise its discretion to permit a late filing of claim (Court of Claims Act, § 10, subd. 6). 123 Misc.2d 307, 472 N.Y.S.2d 1004. This appeal by the Authority ensued.

The issue as framed by the parties and as resolved by the Court of Claims is whether the Authority is a State agency under section 145 of the State Finance Law. The Authority principally relies upon Easley v. New York State Thruway Auth., 1 N.Y.2d 374, 153 N.Y.S.2d 28, 135 N.E.2d 572, wherein the Court of Appeals characterized the Authority as an agency of the State in upholding the constitutionality of section 361-b of the Public Authorities Law, which conferred jurisdiction on the Court of Claims to hear tort and contract claims against the Authority (id. at 376, 153 N.Y.S.2d 28, 135 N.E.2d 572). Section 145 was enacted subsequent to the Easley case (L.1970, ch. 513) and, therefore, the Authority contends that the Legislature is presumed to have used the phrase "agency of the State" with the quoted language of the Easley decision in mind.

We think that the Authority's position represents an oversimplified application of Easley and of the analysis necessary to determine the Legislative intent. First, a reading of the Easley decision leads us to conclude that "agency" was not used therein as a term of art. Rather, in alluding to the Authority as "an arm or agency of the State", the Court of Appeals was merely holding that it performed a State function to a sufficient degree to permit the Legislature to constitutionally confer jurisdiction on the Court of Claims. This is not determinative on the issue of whether statutory language variously referring to the State and/or its departments, commissions and agencies was intended to apply to the Authority or similar quasi-governmental bodies which were created as entities separate from the State. As the Court of Appeals subsequently explained its Easley decision:

Certainly, there is a close relationship between the Thruway Authority and the State, and we simply remarked that fact in upholding the Legislature's power to confer upon the Court of Claims jurisdiction to determine all claims against the Authority * * *. However close such relationship may be, though, it is abundantly clear that the Authority stands on its own feet * * * (Matter of Plumbing, Heating, Piping & Air Conditioning Contrs. Assn. v. New York State Thruway Auth., 5 N.Y.2d 420, 424, 185 N.Y.S.2d 534, 158 N.E.2d 238).

Nor are we persuaded that the Legislature's use of the term "agency" when it enacted section 145 of the State Finance Law, some 14 years after Easley was decided, demonstrates its intent to have the statute apply to...