MacFarland-Breakell Bldg. Corp. v. New York State Thruway Authority

• Decision Date: 10 February 1984
• Docket Number: No. 68371,FARLAND-BREAKELL,68371
• Citation: 472 N.Y.S.2d 1004,123 Misc.2d 307
• Parties: MACBUILDING CORPORATION, Claimant, v. NEW YORK STATE THRUWAY AUTHORITY, Defendant. Claim
• Court: New York Court of Claims

Page 1004

472 N.Y.S.2d 1004

123 Misc.2d 307

MAC FARLAND-BREAKELL BUILDING CORPORATION, Claimant, v. NEW YORK STATE THRUWAY AUTHORITY, Defendant.

Claim No. 68371.

Court of Claims of New York.

Feb. 10, 1984.

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

Robert Abrams, Atty. Gen., Albany (Mary E. Bisantz, Asst. Atty. Gen., Albany, of counsel), for defendant.

MEMORANDUM-DECISION and ORDER

HAROLD E. KOREMAN, Presiding Judge.

Claimant's action herein is for damages arising out of the alleged breach of a public improvement contract. The defendant's motion requests dismissal based on claimant's failure to timely commence its claim pursuant to the requirements of section 145 of the State Finance Law. A cross-motion by claimant seeks permission to file a late claim and, in the alternative, requests that its notice of intention be treated as a claim. Although the ultimate issue which must be decided herein is the applicability of section 145 of the State Finance Law to the commencement of public construction contract claims against the Thruway Authority, we must initially note that while a notice of intention and claim were filed with the Court and served on the Attorney General, neither document was served on the Thruway Authority. Said Authority "is an autonomous public corporation, with an existence separate and independent from the State," and service on the Attorney General is not sufficient to confer jurisdiction over the Thruway Authority as a party defendant (Cantor v. State of New York, 43 A.D.2d 872, 873, 351 N.Y.S.2d 197). Hence, aside from any issue concerning timeliness of filing, the subject claim against the Thruway Authority must be dismissed as jurisdictionally defective (see Kurtz v. State of New York, 40 A.D.2d 917, 338 N.Y.S.2d 345, affd. 33 N.Y.2d 828, 351 N.Y.S.2d 973, 307 N.E.2d 46). Similarly, the notice of intention, having never been served on the Thruway, may not be treated as a claim, nunc pro tunc (see Perry v. State of New York, 64 A.D.2d 799, 408 N.Y.S.2d 154). Continuing, however, the Authority was served with notice of claimant's cross-motion for permission to file a late claim (see Court of Claims Act, § 10, subd. 6), and the Court has thereby obtained the jurisdiction necessary to address this issue as it pertains to the Authority.

By virtue of the standard specifications which are part of claimant's contract with the Thruway Authority (see Fosco Fabricators v. State of New York, 94 A.D.2d 667, 462 N.Y.S.2d 662), acceptance of final payment constitutes a release unless the contractor serves upon the Authority, within 40 days of mailing of final payment, a detailed and verified statement of claim. On February 11, 1983, final payment was mailed to claimant, and on March 17, 1983, within 40 days thereof, claimant sent the required statement to defendant. Hence, claimant's acceptance of the payment did not automatically constitute a release. However, in order to commence an action against the Thruway, claimant was additionally required to serve on defendant, and file with the Court, a formal claim in compliance with section 11 of the Court of Claims Act, which claimant failed to do.

Assuming, as claimant contends, that the Court of Claims Act ( § 10, subd. 4) and not the State Finance Law ( § 145) provides the applicable period for claim filing, claimant nonetheless failed to commence its action within the six months provided therein. However, all of section 10 carries with it the ameliorative consequences of subdivision 6 thereof which states that "[a] claimant who fails to file a claim or notice of intention, as provided in the foregoing subdivisions, within the time limited therein for filing the claim or notice of intention, may, nevertheless, in the discretion of the court, be permitted to file such claim at any time 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" (Court of Claims Act, § 10, subd. 6 [emphasis added] ). Hence, claimant's late claim motion, brought within six years of accrual (see CPLR 213, subd. 2) could be properly considered by the Court. If, however, section 145 ^* applies said section provides for a six-month filing limitation which is to take precedence over subdivision 4 of section 10 of the Court of Claims Act. Moreover, if subdivision 4 does not supply the relevant filing period, the provisions of subdivision 6 extending the time limitations of section 10 would not be applicable (see Hull-Hazard, Inc. v. State of New York, Claim No. 64767, Motion No. M-27862, CM-27973, Court of Claims, January 6, 1983, Hanifin, J.; Chemung Contracting Corp. v. State of New York, Claim No. 66131, Motion No. M-26597, Court of Claims, May 13, 1982, Hanifin, J.; see, generally, Kembridge Corp. v. State of New York, 101 Misc.2d 904, 422 N.Y.S.2d 303). Thus, the Court would be without authority to entertain claimant's cross-motion for permission to late file, and we would have to find that its failure to commence a claim within six months of final payment, as provided by the State Finance Law, effected a complete release (see Eastern Rock Products, Inc. v. State of New York, 112 Misc.2d 204, 446 N.Y.S.2d 868, affd. 90 A.D.2d 691, 455 N.Y.S.2d 1019), and that any action by claimant on the subject contract is forever barred.

Defendant's principal argument in support of its position that section 145 controls is predicated on the use and meaning of the word "agency" as contained in the statute. In this regard, counsel for the defendant contends that the Thruway Authority has been held to be an "arm or agency of the State" (see Easley v. NYS Thruway Authority, 1 N.Y.2d 374, 376, 153 N.Y.S.2d 28, 135 N.E.2d 572) and that, therefore, the Legislature by including State departments and agencies under the coverage of section 145 intended said section to apply to the Thruway. Claimant, on the other hand, stresses that the Authority is an autonomous and independent public corporation distinct from the State (see Cantor v. State of New York, 43 A.D.2d 872, 873, 351 N.Y.S.2d 197, supra). Additionally, claimant points to a Court of Appeals decision rendered subsequent to Easley, viz., Matter of Plumbing, Heating, Piping and Air Conditioning Contractors Association, Inc. v. NYS Thruway Authority, 5 N.Y.2d 420, 185 N.Y.S.2d 534, 158 N.E.2d 238, wherein the Court refused to apply the strict bidding requirements imposed by section 135 of the State Finance Law to the Thruway Authority. While the decision in Matter of Plumbing is instructive, it is not directly on point. By its language, section 135 is made applicable to "boards or departments" of the State, in contracts of the State, and undeniably, the Thruway Authority is not the "State" or a board or department thereof (5 N.Y.2d 420, 424-425, 185 N.Y.S.2d 534, 158 N.E.2d 238), while in comparison, section 145 is made applicable to any "state department or agency " [emphasis added]. The question which is thus presented is the meaning of the word "agency" as contained in section 145.

By statutory definition the Thruway Authority is a "body corporate and politic constituting a public corporation" (Public Authorities Law, § 352). As a general proposition, the provisions of article 9 of the State Finance Law (wherein section 145 is contained) do not apply to the Thruway, or to other authorities or public corporations (see McKinney's Consolidated Laws of New York, Book 55, Introduction to the State Finance Law by Theodore Spatz Counsel to the State Comptroller, pp. XIII-XIV [1973]; see, e.g., Matter of Plumbing, Heating, Piping and Air Conditioning Contractors Association, Inc. v. NYS Thruway Authority, supra [State Finance Law, § 135]; Hanover Sand & Gravel v. NYS Thruway Authority, 65 A.D.2d 860, 410 N.Y.S.2d 381 [State Finance Law, § 174] ). An analysis of the legislative intent attaching to the use of the words "state department or agency" as contained in section 145 provides limited instruction. Although the documents appearing in the bill jacket (Bill Jacket to Assembly Bill 6374 [L.1970, ch. 513] ) do not mention whether or not section 145 is intended to apply to public corporations or authorities, the references throughout the bill jacket are to "State contracts," and it is noted therein that the "agencies" affected by the bill are the "Comptroller," the "Office of General Services," and the "Department of Transportation" (see Bill Jacket to Assembly Bill 6374, supra [Department of Audit and Control, Report to Governor, undated; Budget Report on Bills, May 1, 1970] ). Nothing appearing in the bill jacket would indicate that by using the word "agency," the Legislature evinced a conscious intention to include the Thruway Authority within the statute's purview. It might also be noted that the title given to section 145 is "Acceptance of final payment under a state contract " (emphasis added).

A conclusion that the phrase "State agency" as appearing in section 145 was not meant to include the Thruway Authority is further supported by an analysis of a similarly worded statute, section 146 of the State Finance Law. By its language section 146 is made applicable to "contracts ... made and awarded by any department or agency of the state." Despite the presence of the words "agency of the state," a review of the bill jacket relative to this statute (see Bill Jacket to Assembly Bill 1616-A [L.1981, ch. 1014] ) makes it abundantly clear that its provisions were not intended to apply to the Thruway Authority or other public corporations. Most instructive in this regard is a memo to the bill jacket by the Counsel to the Governor, wherein it is stated that:

"In response to a question I raised yesterday, Ken Shapiro (Counsel to Speaker Fink) telephone [sic] me today and indicated that he had spoken with Assemblyman Graber, and that Assemblyman Graber confirms that Assembly 1616-A is not...