Naetzker v. Brocton Central School Dist.
| Decision Date | 12 December 1975 |
| Citation | 50 A.D.2d 142,376 N.Y.S.2d 300 |
| Parties | Julian NAETZKER, Individually, and Naetzker, Thorsell & Dove and Naetzker, Thorsell, Dove & Gostomski, P.C., Respondents, v. BROCTON CENTRAL SCHOOL DISTRICT, Appellant. |
| Court | New York Supreme Court — Appellate Division |
Brandt & Laughlin, P.C., Westfield (Stephen Teret, Westfield, of counsel), for appellant.
O'Shea, Adamson, Reynolds & Napier, Buffalo (C. DeForest Cummings, Buffalo, of counsel), for respondents.
Before MARSH, P.J., and SIMONS, MAHONEY, GOLDMAN and DEL VECCHIO, JJ.
Under an agreement entered between the parties, petitioners (Architects) were retained to provide administrative supervision of a building construction project being undertaken by appellant (School District). The agreement provided for arbitration of all questions in dispute arising under their contract. Following the award of the general construction contract in March, 1967, the Architects undertook their administrative supervision duties, including approval of roofing specifications submitted by the roofing subcontractor as well as periodic issuance of certificates for payment to be made to the general contractor as the work progressed. On September 3, 1968 the construction project was substantially completed with final certificate for payment (less retainage amount being held for an additional one-year guaranty period) being issued by the Architects on November 7, 1969. In August, 1970, following notification from the School District of a roof leakage problem in the cafeteria wing of the constructed building, the Architects advised the general contractor by letter dated September 15, 1970 of its obligation to make repairs to the roof at no cost to the School District; and further advised that, providing such roof repairs were satisfactorily made prior to the meeting scheduled for September 2o, 1970 by the School District, the Architects would go on record stating the general contractor's eligibility to receive final payment of retained percentage money due under its construction contract with appellant. By letter dated September 22, 1970 the Architects advised the School District that, in their opinion, the general contractor had completed all contractual obligations and was eligible to receive final payment. Following such final payment to the general contractor, the cafeteria roof leakage problem continued which ultimately precipitated the School District's demand for arbitration, dated June 20, 1974, designating the nature of the dispute as a 'controversy concerning the planning, construction, supervision, and payment of roofs on portions of Brocton Central School buildings' and claiming relief by way of 'reimbursement for cost of replacement of roof.'
Upon receipt of the demand for arbitration, the Architects moved for a stay of arbitration pursuant to CPLR 7503(b) on the ground that the School District's claim was time-barred under sections 7502(b) and 214(4) and (6) of the Civil Practice Law and Rules by reason that any claim or cause of action against petitioners accrued more than three years prior to the date of demand for arbitration. A trial was thereafter held, limited to the issue of timeliness. On behalf of the Architects, testimony was adduced that, following their letter of September 22, 1970 advising appellant of the general contractor's eligibility for final payment, they had no specific discussion with the School Board until February, 1974 concerning the cafeteria roof problem, other than incidental discussions between the parties in May, 1971 relative to review of roof repair specifications for another building which were contemplated by the School Board. At that time the Architects undertook certain testing of the cafeteria roof and submitted to the School Board a written report dated May 20, 1974 which indicated that the subject cafeteria roof had not been constructed in accord with the construction contract specifications.
On behalf of the School Board, testimony was presented concerning a conference had with the Architects on June 21, 1971 for the purpose of reviewing roof specifications for contemplated roof repairs of a building, other than the cafeteria wing building, during which the subject of the roof leakage problem on the cafeteria wing building was discussed. However, the testimony indicated that the cafeteria roof leakage problem was raised only incidental to the subject matter of that meeting.
There was further testimony on behalf of the School Board that subsequent conversations were had concerning the cafeteria roof problem on unspecified dates in the latter part of 1971 and extending into 1972. It is significant that the School Board's witness conceded unequivocally that, during the course of these discussions, at no time did the Architects lull the School Board into a sense of security that the Architects would repair the leaking roof. After conclusion of the proof relative to timeliness, trial term held that the School Board's claim or cause of action was grounded in malpractice and thus was foreclosed by the applicable three-year statute of limitations, there being no basis for any extension of time by virtue of the 'continuous treatment' doctrine under standards established in Borgia v. City of New York, 12 N.Y.2d 151, 237 N.Y.S.2d 319, 187 N.E.2d 777.
In urging reversal, appellant here asserts three alternate contentions to sustain timeliness in its demand for arbitration, viz.:
(a) conceding its claim to be grounded in malpractice with a three-year limitation period, augmentation of 'continuous treatment' time rendered its demand timely;
(b) its claim being also one for breach of contract, the governing six-year limitation was applicable; and
(c) the gross negligence of the Architects in the performance of their contractual duties constituted constructive fraud, similarly governed by a six-year statute of limitations.
Ascertainment of a time limitation's effective date involves a two-step determination. The subject matter of the claim or cause of action must first be characterized to determine which period of limitation is applicable, followed by a determination as to when the cause of action accrued. Where accrual is outside the applicable period of limitation, the action is barred.
Appellant claims that it has three separate causes of action, viz.: an action in malpractice, augmented by the continuing treatment doctrine; breach of contract; and constructive fraud. The preliminary issue for determination, therefore, is upon which of the three causes of action is appellant's claim truly grounded. Appellant's own characterization of its claim appears in its notice of intention and demand to arbitrate. The nature of the dispute is there described as a 'controversy concerning the planning, construction, supervision, condition and payment of roofs in portions of Brocton Central School buildings', with relief sought being 'planning, construction, supervision, condition and payment' was responsible for that condition. In addition, appellant complains that the Architects breached their contractual duty as appellant's architects by issuing a certificate for final payment one week after notifying the general construction contractor of its obligation to make necessary repairs. On the basis of appellant's own characterization of its claims against petitioners, it appears that appellant's cause of action is initially and primarily grounded in architectural malpractice.
Where a party alleges causes of action in both professional malpractice and breach of contract, both will normally be considered together for the purposes of limitation of time. The shorter period of limitation applies when an injury is suffered as the result of malpractice, although the relationship between the parties originated in contract (Siegel v. Kranis, 29 A.D.2d 477, 478, 288 N.Y.S.2d 831, 832--833; Klein v. Parke-Bernet Galleries, 21 A.D.2d 772, 250 N.Y.S.2d 656; Carr v. Lipshie, 8 A.D.2d 330, 187 N.Y.S.2d 564). The rationale of such general rule is that, in the area of malpractice, the defendant's common law duty and contractual duty are one and the same and, therefore, at least for time limitation purposes, the action is one in negligence (Gautieri v. New Rochelle Hospital Association, ...
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