Memphis Const., Inc. v. Village of Moravia

• Decision Date: 23 September 1977
• Citation: 59 A.D.2d 646,398 N.Y.S.2d 386
• Parties: MEMPHIS CONSTRUCTION, INC., Respondent, v. VILLAGE OF MORAVIA, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 386

398 N.Y.S.2d 386

59 A.D.2d 646

MEMPHIS CONSTRUCTION, INC., Respondent, v. VILLAGE OF MORAVIA, Appellant.

Supreme Court, Appellate Division, Fourth Department.

Sept. 23, 1977.

Gleason, Foulke, Magill & Hewitt, Auburn, Allan J. Bentkowsky, Auburn, for appellant.

Hersha & Scott, Camillus, Roger Scott, Camillus, for respondent.

Before MARSH, P. J., and MOULE, DILLON, GOLDMAN and WITMER, JJ.

MEMORANDUM:

Pursuant to a contract with the New York State Water Authority and the defendant Village, plaintiff installed main sewer lines within the Village. Construction was completed in 1971 and plaintiff was paid. In April, 1972, while lateral sewer lines were being installed by a third party the main sewer line, for reasons yet undetermined, either broke or was damaged, and required immediate repair. At defendant's request plaintiff repaired the sewer line, completing the work on August 14, 1972, and thereafter submitted vouchers (work orders) to the defendant in the sum of approximately $7,000.

Defendant received plaintiff's vouchers no later than December 26, 1972. Plaintiff commenced this action for payment on May 7, 1975. Defendant's answer alleges, inter alia, that plaintiff's action is barred by the statute of limitations (CPLR 9802) which provides in relevant part: "(N)o action shall be maintained against the village upon or arising out of a contract of the village unless the same shall be commenced within eighteen months after the cause of action therefor shall have accrued * * * ."

Defendant moved for summary judgment dismissing the complaint. Special Term denied the motion upon its finding that the defendant was equitably estopped from raising the statute of limitations as a defense.

In the circumstances of this case, it is unnecessary to reach the issue of equitable estoppel. We affirm on the ground that plaintiff's action is timely. Plaintiff's vouchers or work orders had never been audited and rejected prior to the institution of this action. Section 5-524 of the Village Law precludes the defendant from paying plaintiff's claims until they have been approved by the appropriate Village officer. Plaintiff's cause of action did not accrue "until it possesse(d) the legal right to be paid and to enforce its right to payment in court" (City of New York v. State of N.Y., 40 N.Y.2d 659, 668, 389 N.Y.S.2d 332, 339, 351 N.E.2d 988, 995; see also Reuter v. Town of Babylon 40 A.D.2d 710, 336 N.Y.S.2d 674).

This is not to say, however, that a municipality may forever frustrate potential causes simply by failing to audit submitted claims. The facts of every such case will determine whether there came a time when the claimant should have viewed his claim to have been constructively rejected, thus giving rise to the accrual of a cause of action (City of N.Y. v. State of N.Y., supra, 40 N.Y.2d p. 668, 389 N.Y.S.2d p. 339, 357 N.E.2d p. 994).

Defendant argues that plaintiff's claim was constructively rejected on the tenth day following plaintiff's letter of August 29, 1973 which stated, in part: "Legal action is not our way of doing business but we may have no recourse if we do not have our check within ten (10) days." This letter was one of several which passed between the parties and/or their representatives between the time of the submission of plaintiff's claims and the date the action was instituted. The...