New York State Ass'n of Plumbing-Heating-Cooling Contractors, Inc. v. Egan

• Citation: 102 A.D.2d 901,477 N.Y.S.2d 737
• Decision Date: 07 June 1984
• Docket Number: PLUMBING-HEATING-COOLING
• Parties: In the Matter of NEW YORK STATE ASSOCIATION OFCONTRACTORS, INC., Appellant, v. John C. EGAN, as Commissioner of General Services of the State of New York, et al., Respondents.
• Court: New York Supreme Court Appellate Division

Page 737

477 N.Y.S.2d 737

102 A.D.2d 901

In the Matter of NEW YORK STATE ASSOCIATION OF PLUMBING-HEATING-COOLING CONTRACTORS, INC., Appellant, v. John C. EGAN, as Commissioner of General Services of the State of New York, et al., Respondents.

Supreme Court, Appellate Division Third Department.

June 7, 1984.

McNamee, Lochner, Titus & Williams, P.C., Albany (George F. Carpinello, Albany, of counsel), for appellant.

Robert Abrams, Atty. Gen. (Richard J. Dorsey, Asst. Atty. Gen., Albany, of counsel), for respondents Egan, Regan and Coughlin.

Bryant, O'Dell & Basso, Syracuse (La Verne F. O'Dell, Syracuse, of counsel), for respondent Kennedy.

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

MEMORANDUM DECISION.

Appeal from a judgment of the Supreme Court at Special Term, entered January 31, 1983 in Albany County, which converted petitioner's application, in a proceeding pursuant to CPLR article 78, into an action for declaratory judgment and declared that the State respondents illegally awarded certain construction contracts, but denied petitioner's prayer for relief seeking return to the State of moneys paid to respondent contractors in accordance with said contracts.

The facts underlying this matter may be found in our previous decision in Matter of New York State Assn. of Plumbing-Heating-Cooling Contrs. v. Egan, 86 A.D.2d 100, 449 N.Y.S.2d 86, affd. 60 N.Y.2d 882, 470 N.Y.S.2d 367, 458 N.E.2d 826, where we determined that the State respondents failed to comply with the competitive bidding requirements of section 135 of the State Finance Law in awarding certain construction contracts, and that the contractors, Roger P. Kennedy General Contractor, Inc. and Dominick Dan Alonzo, Inc., were necessary parties upon whom service of a supplemental summons was required to achieve a binding adjudication with respect to the validity of the contracts. Following this court's decision, petitioner's attempt to effect service of a supplemental summons and petition on April 29, 1982 was rendered ineffective by respondents' interim motion for leave to appeal to the Court of Appeals (CPLR 5519, subd. ). After respondents' motion for leave to appeal was dismissed (Matter of New York State Assn. of Plumbing-Heating-Cooling Contrs. v. Egan, 56 N.Y.2d 1030, 453 N.Y.S.2d 685, 439 N.E.2d 400), petitioner re-served the supplemental summons and petition on July 14, 1982. In the supplemental petition, petitioner added a request for the return to the State of all sums paid to the contractors and for counsel fees. Both contractors answered, objecting that the petition improperly requested relief different from that in the original petition, and raised, as affirmative defenses, laches and the Statute of Limitations. The State respondents also opposed the relief sought. By judgment entered January 31, 1983, Special Term converted the CPLR article 78 proceeding into a declaratory judgment action and found that the contracts were awarded in violation of section 135 of the State Finance Law, but that due to a multitude of factors, "the principles of gross laches, equitable estoppel and equity" required the denial of any relief as against the two contractors. Petitioner appeals only from so much of the judgment as dismissed the petition and rejected the request for counsel fees.

There should be an affirmance. Petitioner argues that since the contracts awarded to respondent contractors were void and unenforceable, neither contractor should be allowed to retain the funds paid for the work performed. The record establishes that the Alonzo contract was completed by January 12, 1982 and the Kennedy contract by February 25, 1982, with payments having been made on a weekly basis during the course of each project. As noted in our previous decision, "contractor who has performed work pursuant to a noncomplying contract may be denied recovery, either under its agreement or on the basis of quantum meruit, even when the unit of government has received the benefit of performance" (Matter of New York State Assn. of Plumbing-Heating-Cooling Contrs. v. Egan, supra, 86 A.D. p. 103, 449 N.Y.S.2d 86). Where, as here, payment has been made, the State may be entitled to full recovery (see Grand, Inc. v. City of New York, 32 N.Y.2d 300, 305, 344 N.Y.S.2d 938, 298 N.E.2d 105; Elia Bldg. Co. v. New York State Urban Development Corp., 54 A.D.2d 337, 388 N.Y.S.2d 462). At a minimum, petitioner argues for a partial forfeiture of respondent contractors' interests. The gravamen of this case, however, is whether Special Term correctly found that petitioner is barred by either the Statute of Limitations or laches from seeking such relief.

In view of this court's previous decision ordering petitioner to join respondent contractors in the instant proceeding, petitioners were authorized to serve a supplemental petition including the claims not previously made for monetary relief against the contractors. Since the supplemental petition did not add any causes of action against the original State respondents, it does not constitute an "amended petition" within the parameters of CPLR 3025. Moreover, petitioner was obligated to include all claims against respondent contractors arising from the subject transactions to avoid the risk of preclusion from maintaining these claims at a later date (see Smith v. Russell Sage Coll., 54 N.Y.2d 185, 192-193, 445 N.Y.S.2d 68, 429 N.E.2d 746).

We conclude, nonetheless, that the Statute of Limitations precludes petitioner's demand for relief. Contrary to petitioner's suggestion, this court's direction that petitioner join respondent contractors as parties did not preclude respondents from raising all available defenses. CPLR 217, in pertinent part, requires a CPLR article 78 proceeding to be commenced within four months "after the respondent's refusal, upon the demand of the petitioner * * * to perform its duty". Here, petitioner's order to show...