Sabro IX v. State Office of General Services

• Decision Date: 12 July 1996
• Docket Number: No. 3,No. 88143,88143,3
• Citation: 229 A.D.2d 910,645 N.Y.S.2d 212
• Parties: SARBRO IX, d/b/a Sheldon Hall Associates, Appellant, v. STATE OF NEW YORK OFFICE OF GENERAL SERVICES, Respondent. (Claim) (Appeal)
• Court: New York Supreme Court — Appellate Division

Page 212

645 N.Y.S.2d 212

229 A.D.2d 910

SARBRO IX, d/b/a Sheldon Hall Associates, Appellant, v. STATE OF NEW YORK OFFICE OF GENERAL SERVICES, Respondent.

(Claim No. 88143.) (Appeal No. 3.)

Supreme Court, Appellate Division,

Fourth Department.

July 12, 1996.

O'Connor, Gacioch and Pope by John Domurad, Binghamton, for appellant.

NY State Department of Law, Div. of Appeal & Opinions by Michael Bukus, Albany, for respondent.

Before DENMAN, P.J., and LAWTON, WESLEY, DOERR and BALIO, JJ.

MEMORANDUM.

In 1984 the New York State Office of General Services requested bids for the rehabilitation of Sheldon Hall, located at the State University of New York-Oswego campus. Claimant, as the successful bidder, executed a development agreement and a lease agreement for the property. The agreements provided that claimant would lease Sheldon Hall for a period of 40 years and would renovate and convert the building into a private hotel, restaurant and conference facility, which it would thereafter operate. The agreements did not indicate whether the project would be subject to the prevailing wage schedule provisions of Labor Law article 8. Several years after claimant began redeveloping Sheldon Hall, the New York State Labor Department determined that the work was subject to the prevailing wage schedule. That determination was confirmed in 1991 by the Third Department (Matter of Sarkisian Bros. v. Hartnett, 172 A.D.2d 895, 568 N.Y.S.2d 190, lv. denied 78 N.Y.2d 859, 575 N.Y.S.2d 456, 580 N.E.2d 1059).

Claimant subsequently commenced this action, seeking money damages arising from its lease and renovation of Sheldon Hall. Claimant alleged that the parties had entered into the agreements based upon their erroneous understanding that the project was not subject to the prevailing wage schedule and that, as a result of that mutual mistake, claimant has expended approximately $4 to $6 million. Claimant asserted causes of action for breach of contract and misrepresentation and in addition asserted causes of action for rescission or reformation of the agreements based on mutual mistake and money damages based on quasi contract or unjust enrichment. The Court of Claims granted defendant's motion for summary judgment dismissing the complaint and this appeal ensued.

Claimant contends that the court erred in dismissing the causes of action seeking money damages based on equitable considerations on the ground that the court lacks subject matter jurisdiction. We agree. In determining the subject matter jurisdiction of the Court of Claims, the issue is "[w]hether the essential nature of the claim is to recover money, or whether the monetary relief is incidental to the primary claim" (Matter of Gross v. Perales, 72 N.Y.2d 231, 236, 532 N.Y.S.2d 68, 527 N.E.2d 1205, rearg. denied 72 N.Y.2d 1042, 534 N.Y.S.2d 940, 531 N.E.2d 660). As long as the primary claim is for money damages, the court "may apply equitable considerations" and grant incidental equitable relief (Psaty v. Duryea, 306 N.Y. 413, 417, 118 N.E.2d 584).

Here, the primary relief sought by claimant is monetary; claimant seeks rescission or reformation of the agreements only so that it can recover from defendant based on breach of implied contract or unjust enrichment arising from mutual mistake. Thus, the court has subject matter jurisdiction over the claims (see, Sheridan Drive-In v. State of New York, 16 A.D.2d 400, 406, 228 N.Y.S.2d 576; see also, Dominick Dan Alonzo, Inc. v. State of New York, 73 A.D.2d 760, 761, 423 N.Y.S.2d 301; St. Paul Fire & Marine Ins. Co. v. State of New York, 99 Misc.2d 140, 155-156, 415 N.Y.S.2d 949). To hold otherwise would leave claimant without a remedy because it is barred from seeking money damages from defendant in Supreme Court. Indeed, Court of Claims Act § 9(2) specifically provides the court with jurisdiction over claims for breach of contract, express or implied. Thus, the court has jurisdiction over contracts implied in law, "an obligation which the law...