Oak Const. Co. v. State, Docket No. 9761
| Citation | 33 Mich.App. 561,190 N.W.2d 296 |
| Decision Date | 19 May 1971 |
| Docket Number | Docket No. 9761,No. 2,2 |
| Parties | OAK CONSTRUCTION COMPANY, a Michigan corporation, Plaintiff- Appellant, v. STATE of Michigan and Michigan Department of State Highways, Defendants- Appellees |
| Court | Court of Appeal of Michigan (US) |
Dan L. McNeal, Doyle & Smith, Lansing, for plaintiff-appellant.
Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Myron A. McMillan, Asst. Atty. Gen., for defendants-appellees.
Before DANHOF, P.J., and FITZGERALD and QUINN, JJ.
This appeal comes to us from the Court of Claims. Plaintiff contracted with the State Highway Department to do certain repair work on U.S. 10 in Pontiac, Michigan. The work began on May 21, 1963, and was completed on November 30, 1964.
On December 17, 1965, plaintiff submitted claims for 'extras' to the project engineer. 'Extras' are requests for compensation for necessary work done while completing the contract but not included in the contract specifications.
Final estimates of costs were completed by the project engineer on February 28, 1966, and sent to plaintiff on March 22, 1966. On April 28, 1966, plaintiff received a check from defendant covering the amount of the final estimate. This check excluded over $68,000 worth of 'extras' plaintiff claimed was due him under the contract.
Pursuant to procedures set up by defendant highway department, plaintiff, on May 7, 1966, presented a list of these disputed claims to the central office adjustment board of the highway department for review. The central office adjustment board rejected the claims in writing on April 1, 1968.
Subsequently, plaintiff filed a complaint in the Court of Claims for the amount of the 'extras' on March 28, 1969. Defendant filed a motion for an accelerated judgment on the grounds that plaintiff had not filed a notice of claim within one year after the claim accrued as required by M.C.L.A. § 600.6431(1) (Stat.Ann.1962 Rev. § 27A.6431(1)). On June 10, 1970, the lower court ruled that the defendant had not complied with M.C.L.A. § 600.6431(1) (Stat.Ann.1962 Rev. § 27A.6431(1)) because his claim had accrued on February 28, 1966, when the final estimate had been filed, and thus he had not filed notice of claim within the required one-year period. Plaintiff appeals as of right this ruling and dismissal of his claim.
The sole question for our determination and interpretation in this appeal is: when does a claim accrue, under the instant facts, within the meaning of M.C.L.A. § 600.6431(1) (Stat.Ann.1962 Rev. § 27A.6431(1))?
Plaintiff argues on appeal that his claim did not accrue until it was finally rejected by the central adjustment board of the highway department. He argues that as long as he was pursuing remedies within the highway department his claim had not accrued.
Defendant counters that plaintiff's claim accrued on February 28, 1966, when he received the final estimates from the project engineer.
It appears that this particular issue is one of first impression in this state, although the issue has given rise to not an inconsiderable amount of litigation in other states. See Edlux Construction Corporation v. State of New York (1937), 252 App.Div. 373, 300 N.Y.S. 509; Mount Vernon Contracting Corporation v. State of New York (1967), 52 Misc.2d 781, 276 N.Y.S.2d 1009; Fletcher-McCarthy Construction Company, Inc., v. State of New York (1967), 53 Misc.2d 62, 277 N.Y.S.2d 714; and Terry Contracting, Inc., v. State of New York (1967), 27 A.D.2d 499, 280 N.Y.S.2d 450.
The Court of Claims act contains two limitations. The first is that found in M.C.L.A. § 600.6431(1) which provides that a notice of claim must be filed within one year after the claim has accrued. The other is the three-year statute of limitations found in M.C.L.A. § 600.6452(1) (Stat.Ann.1962 Rev. § 27A.6452(1)). This section provides that an action shall be forever barred if a claim is not made within three years after the action accrues.
This Court, in the case of Anthonsen v. State Highway Commissioner (1966), 4 Mich.App. 345, 144 N.W.2d 807, reconciled these two provisions by ruling that the purpose of the one-year limitation is to give the state notice of claims against it; while the purpose of the second limitation is to provide a further period of time within which the claimant may make a more specific claim against the state. The act thus provides for a short one-year limitation within which to give notice of a claim to the state and a longer three-year limitation within which a claimant must make his claim specific. Anthonsen, supra, still did not answer the question of when a claim accrues within the context of the situation now before the Court. Two other cases deal with the general problem presented but do not aid in resolving the issue before us. These are Gilliland Construction Company v. State Highway Department (1966), 4 Mich.App. 618, 145 N.W.2d 384, and Reich v. State Highway Commissioner (1967), 5 Mich.App. 509, 147 N.W.2d 431.
On September 21, 1966, the Director of the State Highway Department sent a letter to state contractors setting forth the procedures to be used in requesting additional compensation for contract work. The first step there set forth was for the contractor to notify the project engineer in writing of extra work before the contractor begins the work. The second step is for the contractor, after completion of the work, to file a detailed written account of his claim with the project engineer. If the written decision of the project engineer is against the contractor, he may then take the final step of requesting review of the claim by the central office adjustment board. The central office adjustment board then reviews the claim and renders the contractor the final written dicision. Any further remedy for...
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