State v. Lundin
| Decision Date | 01 December 1983 |
| Citation | 471 N.Y.S.2d 261,60 N.Y.2d 987,459 N.E.2d 486 |
| Parties | , 459 N.E.2d 486 STATE of New York, Appellant, v. Earl H. LUNDIN et al., Defendants, and William B. Heller et al., Respondents. PENN YORK CONSTRUCTION CORP., as Successor to Foster-Lipkins Corp., et al., Third-Party Plaintiffs-Respondents, v. PETER BRATTI ASSOCIATES, INC., et al., Third-Party Defendants-Respondents. |
| Court | New York Court of Appeals Court of Appeals |
The order of the Appellate Division, 91 A.D.2d 343, 459 N.Y.S.2d 904, should be affirmed, with costs.
In a suit by a construction project owner against a general contractor and architect for defective construction and design, the cause of action generally accrues upon the completion of construction, meaning completion of the actual physical work. Application of that well-established principle cannot be avoided in this case by the two arguments advanced by appellant, the owner.
First, for Statute of Limitations purposes the date of the final certificate is not controlling. In the contract before us, responsibility for issuance of the final certificate rested with the owner, which sets this case apart from Board of Educ. of Tri-Valley Cent. School Dist. v. Celotex Corp., 88 A.D.2d 713, 451 N.Y.S.2d 290, affd. 58 N.Y.2d 684, 458 N.Y.S.2d 542, 444 N.E.2d 1006. Where, as in Tri-Valley, the contract requires the architect to conduct inspections to determine completion dates and issue a final certificate, issuance of that certificate represents a significant contractual right of the owner and concomitant obligation of the architect. The architect's issuance of the certificate marks the completion of its performance and the point when the Statute of Limitations starts to run for a breach of its contractual undertaking. However, that same result does not obtain when the owner itself controls issuance of the final certificate. The final certificate in such circumstances may indicate the owner's acceptance of the work for purposes of contractual guarantees or equitable price adjustments, but it does not represent completion of the contractual obligations of the architect or general contractor for purposes of triggering the Statute of Limitations.
Second, construction may be complete even though incidental matters relating to the project remain open. Continuation of the owner's relationship with the architect and contractor beyond July 31, 1973--the key Statute of Limitations date--will not of itself serve to extend construction completion. With respect to the architect, the ongoing relationship related to postconstruction price negotiations, and not performance of its contractual duties. There is no indication in this record that the architect was asked to participate in any final inspection, and such inspection was in any event the responsibility of the owner's project manager. While the architect submitted a bill during 1974 for unspecified services in the amount of $263.58, given the magnitude of the project and the other undisputed facts such a minimal amount of work, even if performed after July, 1973, could not alter the fact that the project was demonstrably complete before July, 1973.
Similarly, with respect to the contractor, the relationship after July, 1973 concerned prices to be paid for work already completed and not further construction. While the amount of $175 worth of interior trim on the project was held open beyond July, 1973, this did not reflect a lack of construction completion but related to the process for making equitable adjustments. Appellant emphasizes that on certain forms the contractor indicated that final payroll periods for itself and its subcontractors ended on dates after July 31, 1973. These forms however, do not specify that any work was actually done after July 31, 1973, and there is no evidence that any work was done; no amounts are charged to appellant on these forms. Finally, appellant argues that the contractor did not certify the change order work as 100% complete until Payment Application No. 78, which covered the period ending July 31, 1973, six years to the day before the summons was served on the contractor. But the previous application for payment, covering a period ending May 15, 1973 (No. 77), indicated that the change order work was already 99% complete, leaving only a small amount which was done between May 15 and July 31. *
To be measured against these arguments are the uncontested facts that long prior to July, 1973 appellant had fully occupied the building in suit, it had assumed responsibility for building security, and it had permitted fire and liability insurance carried by the contractor to be canceled. Given these facts, it is significant that in all the volumes of affidavits and exhibits submitted to us, including the affidavit of appellant's assistant construction director fully familiar with the project, there is no mention of any actual ongoing construction after July 31, but only paperwork relating to price adjustments and other incidental matters from which it is surmised that construction continued.
On the point that construction was complete before July 31, 1973, there is no genuine triable issue of fact.
The majority today holds that the State's claim arising out of the allegedly defective construction of the Empire State Plaza in Albany is time barred, as a matter of law, even though the record is fraught with evidence to the contrary. In other words, the result of today's holding is that the State is not entitled to its day in court because the majority finds that it is beyond dispute that the construction was completed more than six years prior to the State's commencement of this action, despite the evidence in the record--much of it prepared and certified by defendants' architects and contractor--that the construction was actually incomplete on the majority's estimated date of completion and, in fact, continued for more than one year thereafter. I would reverse the order of the Appellate Division granting defendants' motions for summary judgment and would remit this case to Supreme Court for a hearing on the facts to determine the date on which construction of the Empire State Plaza was actually completed.
The State brought this action on July 31, 1979 to recover damages for breach of contract, specifically alleging improper design, installation and supervision thereof of the marble facing to the Swan Street building. Defendants are the architects whose contractual obligations included the planning, design and supervision of the installation of the marble; the successor to the primary contractor whose duties included attaching the marble; and the sureties who issued performance bonds with the contractor as principal. Defendants contend that the construction of the Plaza had been completed more than six years prior to the commencement of this action and, consequently, the Statute of Limitations had expired. The State, on the other hand, argues that its cause of action did not accrue until the final certificate of acceptance was issued and, in any event, work under the contract actually continued for a considerable time after defendants' alleged completion date.
Supreme Court granted defendants' motions for summary judgment, holding that the construction was completed at some undetermined time prior to July 31, 1973. The Appellate Division affirmed, again without determining a date of completion, and the majority today does likewise, holding that there is no evidence in the record that construction continued beyond July 31, 1973. While I agree that the mere formal issuance of a final certificate of acceptance by the State is not dispositive in this case, I also believe that there is more than sufficient evidence in the record supporting the State's contention and thereby raising a question of fact whether construction continued on or after July 31, 1973 and, consequently, whether the State's action was timely.
As we have consistently repeated, summary judgment is a drastic remedy and should not be granted whenever there is "any doubt " as to the existence of a factual issue (Millerton Agway Coop. v. Briarcliff Farms, 17 N.Y.2d 57, 61, 268 N.Y.S.2d 18, 215 N.E.2d 341; Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 144 N.E.2d 387) or whenever a factual issue is "arguable" (...
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