New York State Court of Claims

New York State Court of Claims
WEST HILLS v. THE STATE OF NEW YORK, #2004-016-074, Claim No. 101030, Motion Nos. M-68411, CM-68735
Synopsis

Motion and cross-motion for summary judgment were denied because factual issue remained. In underlying claim, it was alleged that the State wrongfully failed to extend highway towing services contract for an additional year. Affirmed 32 AD3d 849 [2d Dept 9/12/06].
Case Information
UID:
2004-016-074
Claimant(s):
WEST HILLS AUTO REPAIR, INC.
Claimant short name:
WEST HILLS
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
101030
Motion number(s):
M-68411
Cross-motion number(s):
CM-68735
Judge:
Alan C. Marin
Claimant’s attorney:
Marc P. Gershman, Esq.
Defendant’s attorney:
Eliot Spitzer, Attorney GeneralBy: Arthur Patane, Esq., AAG
Third-party defendant’s attorney:

Signature date:
November 29, 2004
City:
New York
Comments:

Official citation:

Appellate results:
Affirmed 32 AD3d 849 [2d Dept 9/12/06].
See also (multicaptioned case)



Decision

This is claimant’s motion for summary judgment, which arises from the State’s failure to extend a highway towing services contract for an additional year.
[1]
Defendant cross-moves for summary judgment dismissing the claim. The following facts are undisputed. Claimant West Hills Auto Repair, Inc. (“West Hills”) was awarded New York State contract #C002726 for the provision of roadside assistance services in an area known as “Beat #7,” which encompassed portions of the Northern State, Southern State and Sagitos parkways in Suffolk County. The term of the contract was from September 6, 1994 through August 31, 1996. The contract was signed by West Hill’s president as well as a representative of the State Department of Transportation, approved “as to form” by the Office of the Attorney General, and approved by the State Comptroller. See exhibit A to claimant’s moving papers.
Such contract provides that “[t]he Department [of Transportation] has the option to extend the contract, with the concurrence of [West Hills], for a term or terms not to exceed two additional years. If this option is exercised by the Department, [West Hills] must provide service during such option term or terms at the same annual fee as set forth in its offer.” See ¶18 of p. 5 of exhibit A to claimant’s moving papers.
On June 12, 1996, the Department of Transportation sent West Hills a letter stating in relevant part that:
. . . we would like to extend Contract C002726 between you and the New York State Department of Transportation, pending approval of the Office of the State Comptroller. The contract covers Highway Emergency Local Patrol Beat #7. The contract will begin on September 1, 1996 and remain in force until August 31, 1997. . . Please indicate your acceptance of this extension by signing . . .

West Hills agreed to the extension by signing a supplemental agreement, which was also signed by the State, approved as to form by the Attorney General and approved by the Comptroller. See exhibits D and E to claimant’s moving papers.
On June 13, 1997, the Department of Transportation sent West Hills a letter similar to the previous year’s, stating in relevant part that:
. . . we would like to extend Contract C002726 between you and the New York State Department of Transportation, pending approval of the Office of the State Comptroller. The contract covers Highway Emergency Local Patrol Beat #7. The contract extension will begin on September 1, 1997 and remain in force until August 31, 1998 . . . Please indicate your acceptance of this extension by signing . . .

On or about July 8, 1997, West Hills agreed to the second extension by signing a supplemental agreement, which was also signed by the State on July 16, 1997 and approved as to form by the Attorney General. However, the line for approval by the Comptroller remained blank. See exhibit G to claimant’s moving papers.
On August 13, 1997, the State sent West Hills a letter, which states in relevant part:
This letter concerns the Department’s previous offer to extend the above referenced contract. We regret to inform you that this offer has been rescinded. This decision is based upon the several additional contract violations which have occurred since we made the offer to extend. These recent violations, when added to the violations which occurred prior to the offer to extend, leave us no choice but to rescind the previous offer.
A contract extension is at the option of the Department, as is indicated in your contract with us. We are choosing not to exercise this option based on your lack of improvement since the offer to extend and the number of violations and penalty points assessed against your firm during the contract term. Your firm’s documented problems in delivering HELP services lead us to conclude that an extension would not at the present time be in the best interests of the Department or the motoring public. A successor contract will be established via competitive bidding upon the expiration of C002726.

See exhibit H to claimant’s moving papers.
* * *
West Hills contends that the August 13, 1997 letter was “improper as the June 13, 1997 offer was previously accepted by West Hills by written documentation signed on or about July 8, 1997.” As to the fact that the June 13, 1997 letter states that the extension offer was made “pending approval” of the Comptroller’s Office, West Hills argues that “[it] is well settled in the State of New York that extension or renewal contracts resulting from an option provision contained in a contract previously approved by the Comptroller of New York State, do not in and of themselves have to be approved by the Comptroller of New York State.” See claimant’s memorandum of law, points I.A and I.B.
The Court of Appeals has held that Comptroller approval is not necessary for extensions of contracts on the same terms as the original, where such original contract includes an initial fixed term and the option to extend on the same terms. City of New York v State of New York, 87 NY2d 987, 642 NYS2d 611 (1996). With that said, no authority has been presented that it is impermissible for the State to seek such approval in order to effect an extension.
Defendant has submitted a bulletin issued by the Comptroller’s Office, indicating that prior to June 14, 2001, it was the Comptroller’s practice on extensions to require “the approval of the Comptroller . . .”
[2]
Moreover, as set forth above, in the instant case, approval by the Comptroller was obtained for the previous year’s extension.
However, inasmuch as the defendant’s aforementioned letter of August 13, 1997 is cast only in terms of rescinding its offer, it is unclear whether the contract in this case was ever sent to the Comptroller. Defendant has offered no affidavit from the Comptroller’s Office and as claimant points out, the State has referred only to verbal contact with the Comptroller and “fails to annex a copy of any document indicating that the renewal contract was forwarded to the Comptroller’s Office[,] reviewed by the Comptroller’s Office and/or not approved by the Comptroller’s Office.” See ¶15 of the July 19, 2004 reply affirmation of Marc P. Gershman. In short, issues of fact remain which preclude the granting of summary judgment. See CPLR 3212(b).
For the foregoing reasons, having reviewed the submissions
[3]
, IT IS ORDERED that motion no. M-68411 be denied and cross-motion no. CM-68735 be denied.

November 29, 2004
New York, New York

HON. ALAN C. MARIN
Judge of the Court of Claims




  1. [1]Such allegation is contained in the first cause of action in this claim.
  2. [2]See exhibit D to defendant’s notice of cross-motion.
  3. [3]The following were reviewed: claimant’s notice of motion with affidavit and affirmation in support, exhibits A through N and memorandum of law; defendant’s notice of cross-motion with affidavit in support and exhibits A-G; claimant’s reply affidavit and affirmation; and the August 2, 2004 affidavit of Arthur Patane and the August 2, 2004 affidavit of Susan Fischer with exhibit H.