Professional Charter Services, Inc. v. State

• Decision Date: 12 September 1995
• Docket Number: No. M-51858,M-51858
• Citation: 633 N.Y.S.2d 443,166 Misc.2d 306
• Parties: In the Matter of PROFESSIONAL CHARTER SERVICES, INC., Claimant, v. STATE of New York, Defendant. (Motion)
• Court: New York Court of Claims

Page 443

633 N.Y.S.2d 443

166 Misc.2d 306

In the Matter of PROFESSIONAL CHARTER SERVICES, INC., Claimant, v. STATE of New York, Defendant.

(Motion No. M-51858.)

Court of Claims of New York.

Sept. 12, 1995.

Dennis C. Vacco, Attorney-General (Michael A. Rosas, New York City, of counsel), for defendant.

GERARD M. WEISBERG, Judge.

This is claimant's motion for permission to serve a late "Notice of Claim" pursuant to General Municipal Law § 50-e(5). There is no such paper as a "Notice of Claim" in Court of Claims practice, nor does the General Municipal Law apply. (See, Spinella v. State of New York, NYLJ, April 20, 1988, at 13, col. 1.) Inasmuch as the defendant has treated this as an application to serve and file a late claim pursuant to Court of Claims Act § 10(6), I shall rule on it as if it were.

From the papers, it appears that in 1991 claimant and Kingsboro Psychiatric Center (Kingsboro), a facility owned and operated by the State of New York (see, Mental Hygiene Law § 7.17) entered into a contract pursuant to which claimant was to provide bus service to Kingsboro. The contract period was from July 1, 1991 to June 30, 1992. The contract did not provide for a renewal. Defendant concedes in its papers that this contract was filed with and approved by the Comptroller of the State of New York.

On September 22, 1992, the parties entered into a second contract which extended the first contract from July 1, 1992 to June 30, 1993. Defendant also acknowledges that this contract was filed with and approved by the Comptroller and that approximately $4,200 is still owed under it. Thereafter, on July 1, 1993, the parties entered into a third contract which extended the first from July 1, 1993 to June 30, 1994. Claimant alleges that it performed this last contract but that defendant has refused to pay it some $30,000 earned thereunder. Defendant responds, and claimant does not contest, that this third contract was not filed with nor approved by the Comptroller. Defendant argues, therefore, that the contract is unenforceable under State Finance Law § 112(2).

As indicated above, claimant now seeks to file a late claim. Court of Claims Act § 10(6) specifies a number of factors which I must review in order to pass upon such an application. I shall address them seriatim. The first is whether the delay in filing the claim was excusable. Claimant's reason was that it and the State were engaged in settlement negotiations. This is insufficient. (See, Society of New York Hosp. v. State of New York, 21 A.D.2d 733, 250 N.Y.S.2d 161, lv. denied 14 N.Y.2d 490, 253 N.Y.S.2d 1029, 202 N.E.2d 159.) Moreover, claimant could have filed a notice of intention to file a claim without commencing suit while still negotiating and thereby have preserved its rights. (See, Court of Claims Act § 10[4].) As to notice, opportunity to investigate and substantial prejudice, defendant concedes that it had notice contemporaneously with the alleged breach. ^* It therefore had an opportunity to investigate and will suffer no substantial prejudice if the application is granted. I also note that claimant has no alternative remedy.

That brings me to the question of an appearance of merit, often the most important factor because it would be an exercise in futility to allow the filing of a meritless claim. (Prusack v. State of New York, 117 A.D.2d 729, 498 N.Y.S.2d 455.) As indicated above, defendant has conceded that claimant is owed approximately $4,200 under a contract filed and approved by the Comptroller. That obviously alleges a valid cause of action. As to the balance sought, defendant has asserted, without contradiction by claimant, that the third contract here was not filed nor approved by the Comptroller.

Effective September 1, 1992, State Finance Law § 112[2][a] provides:

"Before any contract made for or by any state department, board, officer, commission, or institution, shall be executed or become effective, whenever such contract exceeds ten thousand dollars in amount, it shall first be approved by the comptroller and filed in his office."

Thus, claimant's apparent failure to file the contract with, and obtain the approval of, the Comptroller, renders the third contract unenforceable. (Westgate North, Inc. v. State Univ. of N.Y., 77 Misc.2d 611, 354 N.Y.S.2d 281, aff'd without opn. 47 A.D.2d 1004, 368 N.Y.S.2d 1020, lv. denied 36 N.Y.2d 647, 372 N.Y.S.2d 1026, 334 N.E.2d 603.) Moreover, the State cannot be estopped to invoke the protection of this statute for that would defeat its purpose: the protection of the public from improvident or unfunded contracts. (See, Matter of Konski Engrs. v. Levitt, 69 A.D.2d 940, 415 N.Y.S.2d 509, aff'd on opn. below 49 N.Y.2d 850, 427 N.Y.S.2d 796, 404 N.E.2d 1337, cert. denied 449 U.S. 840...