WEST HILLS v. THE STATE OF NEW YORK, #2007-016-032, Claim No. 101030
The cause of action maintaining that a road service contract had been extended
based on acceptance of a written offer of extension was dismissed when claimant
could not show that it was approved by the State Comptroller, as required per
the Second Department’s ruling on the motion practice in this case.
WEST HILLS AUTO REPAIR, INC.
Footnote (claimant name)
THE STATE OF NEW YORK
Footnote (defendant name)
Alan C. Marin
Marc P. Gershman, Esq.
By: Radna & Androsiglio, LLP
By: Robert G. Androsiglio, Esq. and Sandra M. Radna, Esq.
Andrew M. Cuomo, Attorney General
July 30, 2007
See also (multicaptioned
This is the decision following the trial of the claim of West Hills Auto
Repair, Inc., relating to its contract with the State to provide roadside
assistance to motorists for portions of the Northern State, Southern State and
Sagtikos Parkways in Suffolk County (cl exh 1, p. 12). West Hills had entered
into such contract with the defendant for an original period of September 6,
1994 through August 31, 1996. The contract provided that the State Department
of Transportation (DOT), with the consent of the contractor, had the option of
extending the contract for “a term or terms not to exceed two additional
years” (cl exh 1, pp. 5 and 64).
fee for an extension would be the same as that paid under the main contract,
approximately $388,000 per year.
The parties agreed to an initial contract extension for one year beginning
September 1, 1996. Near the end of that contract year, on June 13, 1997, the
Department sent West Hills a letter offering to extend the contract again, for
the period from September 1, 1997 through August 31, 1998, “pending
approval of the Office of the State Comptroller.” This letter included a
signature page, and was signed by representatives of West Hills and DOT on July
8 and July 16, 1997. (Cl exhs 4 & 5).
Two months later on August 13, 1997, Kevin Ruff, the director of DOT’s
procurement bureau, sent West Hills a letter that precipitated this lawsuit. It
stated that the “offer has been rescinded” because of
“several additional contract violations which have occurred since we made
the offer to extend . . .” (cl exh 6).
Claimant argues that the offer was accepted, a contract was in force for 1997
to 1998, and thus the offer cannot be rescinded. Defendant’s position
turns on the language in the June 13, 1997 letter that its offer was subject to
approval by the State Comptroller.
The central issue of whether a contract was in existence from September of 1997
through August of 1998 has been the subject of motion practice, which made its
way to the Appellate Division. In its ruling that West Hills was not entitled
to summary judgment, the Second Department stated that the
“‘supplemental agreement’ by which the claimant indicated its
acceptance of an offer to extend a certain Highway Emergency Local Patrol
contract [HELP], was expressly conditioned upon the approval of the [State]
Comptroller . . . ,” and that West Hills presented no evidence that the
Comptroller had approved the supplemental agreement. West Hills Auto Repair,
Inc. v State of New York, 32 AD3d 849, 850, 821 NYS2d 620 (2d Dept
At the trial of this matter, evidence was presented that could support a
conclusion that the absence of such approval was a result of unwarranted or
improper acts or omissions by DOT. With that said, the law of this case, per
the Second Department’s ruling, was that there can be no supplemental
agreement between the parties for September 1, 1997 to August 31, 1998 without
the approval of the State Comptroller, and no proof was offered at trial that
the 1997-1998 supplemental agreement was approved by the
Moreover, assuming for example, that a proposed contract is not sent to the
Comptroller’s Office or that contract approval by the Comptroller is
otherwise not effected and that in either instance, such is actionable, that
action lies with an Article 78 proceeding, not in the Court of Claims.
See Kick v Regan, 110 AD2d 934, 487 NYS2d 403 (3d Dept 1985), appeal
denied 66 NY2d 601, 496 NYS2d 1025 (1985); Matter of Express Industries
and Terminal Corp. v New York State Department of Transportation, 93 NY2d
584, 693 NYS2d 857 (1999); and Matter of Worth Construction Co., Inc. v
Hevesi, 8 NY3d 548, 838 NYS2d 10 (2007).
Accordingly, claimant’s first cause of action alleging that there was a
contract to provide emergency road services for one year commencing on September
1, 1997 is dismissed.
Causes of Action from the Contract
Claimant’s remaining causes of action arise from the period before
September 1, 1997 when the viability of the road service contract was not at
West Hills seeks $3,630.16 in interest for late payments under its contract
The Prompt Payment Law,
which is State Finance Law §179-d et seq
., requires the State to pay
its contractors within 30 calendar days; if it fails to do so, interest is
credited from the thirty-first day (§§179-f.2 and 179-g). However,
the start of the 30-day period is not measured from the date of the
contractor’s bill, or the date received. See subdivisions two and three
of State Finance Law §179-f. At trial, Howard White, who at the relevant
time was DOT’s Supervisor of Purchasing, explained the timing:
In this case with these, you have the receipt of an invoice coming into an
office in the State of New York, [which] does not start a clock . . . until it
gets to the individual who is the administrator of that contract . . . have the
services checked to make sure that they were [performed] . . . ensure that the
billing was proper, that there was nothing that had been charged against them,
any hours that weren’t operating . . . [G]o back to your log books . . .
So, until the administrator of the contract receives an invoice and has received
services and has reviewed those, the clock really doesn’t start on the
Prompt Payment Legislation.
For example, consider claimant’s exhibit 12D together with
defendant’s exhibit A. Exhibit 12D is an invoice from West Hills Auto
Repair, Inc. for $218.80 in interest. The invoice contains a brief descriptive
section, which provides that a West Hills invoice dated November 27, 1996 was
received by the State on December 5, the State’s check in payment was
dated January 17, 1997 and received at the West Hills Office in Huntington
Station on January 22, 1997.
Exhibit A is the paperwork generated by the State in response to the bill, on a
form known as the Standard Voucher. This document states that the service was
for four trucks on the road as part of the HELP Program for November of 1996.
We do not have the original invoice from West Hills, but Exhibit A apparently
indicates that at least one adjustment to the bill was made by DOT. There is a
basic amount owed of $29,488: four trucks on the road for 152 hours each during
the month at $48.50 per hour. Then in DOT’s response, there is an add-on
of $72.78 for overtime, and a deduction of $388 for time that one truck was out
of service, resulting in a net of $29,172.78, which was the amount the State
paid West Hills.
Item 3 of the Standard Voucher contains a space for the “MIR Date.”
That date is filled in as January 6, 1997, and as indicated, payment was made
January 17, 1997 - - within 30 days of the MIR date. Mr. White explained that
the MIR date triggers the beginning of the 30-day prompt payment period, and
that setting the MIR date is two-pronged: the invoice from the vendor is
received, and the services or merchandise checked to see if they were performed
To this trier of fact, the evidence offered by defendant on the timing of the
30-day prompt payment period was credible, is a sufficiently accurate
description of this process, and went effectively unchallenged.
Similarly, defendant supplies standard vouchers for seven other West
Hills’ invoices corresponding to all but two of claimant’s requests
for interest, each of which contains an interval between the MIR date and
payment date of fewer than 30 days (def exhs B through H). Claimant had asserted
that interest was due on ten items; defendant specifically responded to eight of
them. As for the other two West Hills’ invoices, inasmuch as
claimant’s methodology is flawed, even without the corresponding specific
vouchers, claimant has failed to meet its burden.
Other Items of Damages
1. First Aid. West Hills submitted a bill of $1,582 covering mandatory first
aid training and CPR certification for its drivers (cl exh 7). Defendant
responded on September 17, 1997, denying the request for reimbursement solely on
the basis of insufficient substantiation (cl exh 8). Claimant’s
paperwork, including the listing of each employee, the date and whether first
aid, CPR or both courses were taken, was sufficient to support its invoice (cl
exhs 7 and 9). Claimant is entitled to $1,582, with interest from September 17,
1997 subject to subdivision one of section 19 of the Court of Claims Act. This
provision of the Act provides that “If a claim which bears interest, is
not filed until more than six months after the accrual of said claim, no
interest shall be allowed between the expiration of six months from the time of
such accrual and the time of the filing of such claim.” West Hills’
claim was filed on September 9, 1999.
2. Placards. West Hills submitted a bill of $1,010 on September 2, 1997 for
the removal of placards on the side doors of its trucks, the repair of rivet
holes in the doors and the removal of stickers, which necessitated some
repainting (cl exh 10). Michael Napoli, vice-president of West Hills,
testified that these were placards DOT requested “[a]fter about the first
year in the contract.”
Susan Fischer in 1997 held the position Engineer in Charge in Mobility and
Contracts - - she administered nine contracts including the HELP contracts. On
the stand at trial, Ms. Fischer conceded the bill was for an after-contract
modification, but noted that none of the contractors, including West Hills,
objected, principally because the placards were photos of missing children (see
cl exh 11). Mr. Napoli did not dispute that he assented to placing the placards
and stickers. Such contract modification was not required to be reduced to
writing. This requested item of damages is denied.
3. Painting. A memo dated May 14, 1997 from Ms. Fischer to three HELP service
companies, including West Hills, provided that, “due to the numerous rear
end collisions HELP trucks have sustained,” the vertical face of each
truck’s rear bumper must be painted in “Safety Green” (cl exh
21). West Hills did the painting and on August 1, 1997, submitted a bill for
$415, which defendant rejected in a letter from Ms. Fischer (cl exhs 19 and 20).
Fischer argued that this was regular maintenance covered by the contract, which,
according to the May 14 letter, it was not. The contract provided that,
“HELP vehicles will be painted white” (cl exh 1, p.16). Claimant is
entitled to be paid $415, with interest from the September 17, 1997 rejection
letter, subject to the provisions of §19 of the Act.
4. Operational Penalties. West Hills submitted an invoice of $33,743.88 for
the month of July in 1997. DOT reduced that amount by $921.50 in penalties,
which are enumerated in its letter of September 10, 1997 (cl exh 23). Ms.
Fischer testified that, as a general matter, the contact administration staff
could conduct an internal review if there were some question about a penalty.
Appendix I of the contract contains sixteen pages under the heading
“Contractors’ Penalties”; it does not set forth an appeals
process (cl exh 1, pp. 41-56).
The Department’s letter lists six penalties, by date, truck and time
lost. Three were for late starts of 15, 30 and 45 minutes; the other penalties
were for: “[n]o driver for truck 705 AM shift,” a blown drive shaft
which resulted in two hours’ penalty, and “Mike [being] out of
uniform,”also a two-hour penalty.
Appendix I does not directly reference trucks starting late, but implicitly
covers same (see items 13 and 14 for leaving the worksite and taking excessive
break time). 
The contract allows a penalty
if an employee is not in “full uniform” (id.
, p. 50).
There was testimony suggesting that the starting time was determined via
radio/telephone contact with DOT, and that there were technical problems with
the communications system, but such was never fully developed. Napoli credibly
said that he did not learn of the penalties until his company was docked for
them, except he stated that he had been aware of the time that one of his
vehicles was 45 minutes late. As for the drive shaft, Napoli testified that it
had not had a “blown” drive shaft, adding if a truck had to be taken
out of service due to mechanical problems, “we had a certain amount of
time to put in a spare truck.”
West Hills had no prior penalties assessed during its three-year contractual
service work. The penalties at issue were assessed for one month just before
the end of the first extension and billed after it had run, and defendant
supplied no additional information in support. Other than the 45-minute
lateness offset, which amounted to $72.75, the other penalties assessed by
defendant are disallowed and claimant is entitled to $848.75 with interest from
the date of defendant’s letter, September 10, 1997, subject to the
provisions of §19 of the Act.
5. Equipment Return. The State deducted $7,884.44 from West Hills’
invoice for August 1997 road services (cl exh 27). A small portion, $36.38, is
for late penalties like those in item 4 above, which are denied to defendant for
the reasons stated above.
There are three entries totaling $5,348.06, which related to the return of
certain communication equipment, given that West Hills would no longer be
providing road service. The letter from DOT’s Fischer setting this out
was dated October 27, 1997.
Michael Napoli credibly testified that on at least four occasions after the
contract offer was rescinded his firm attempted to return the radios - - either
to the contractor that installed the radios or to DOT’s HELP office. He
clearly recalled these events:
Q. And what was the [reason] why they were rejecting the acceptance of the
A. They . . . Central Radio . . . were ordered not to accept them.
Q. And did they tell you who gave them direction not to accept the radio?
A. Susan Fischer.
Q. And did you try anywhere else to return these radios?
* * *
A. . . . Central Radio again . . .
Q. Who told you to go to Central Radio?
A. Florence Mainsweta . . . she worked under Sue Fischer.
Q. And when you went to Central Radio, did they accept the radios?
A. No, they didn’t accept the radios.
Ms. Fischer testified that they refused to accept the radios because she wanted
them “bench checked at the same time that the vendor was there so that
there would be no question that the radios had been given back to us in good
shape.” But Fischer conceded that had the radios been damaged, DOT could
have, in any event, charged West Hills. To the extent DOT maintains that it
needed a little more time to check the radios, its overall posture here
undercuts that position. Defendant’s argument is more than a little
forced, and I find it unpersuasive; claimant is entitled to $5,348.06.
DOT’s October 27, 1997 letter also contains $2,500 to be
“[w]ithheld until [the] Department can verify that all markings on
contractor’s vehicles, associating it with the State’s program, have
been removed.” This kind of holdback is not mentioned in the contract.
Fischer conceded that DOT could have checked the trucks at West Hills’
garage, but has no recollection of whether that was done. She said the holdback
came about because “we had received reports that the markings were not off
yet,” for which Fischer supplied no documentation, log entry or, for that
matter, a source. She testified as to being ordered to withhold $2,500 from
West Hills, but could not recall who told her, although she thought the
direction was likely given over the telephone. Napoli went unchallenged in
asserting that his company never received the $2,500. Accordingly,
defendant’s reduction for this amount is denied.
In sum, on this combined item covering late penalties, equipment return and
truck markings, claimant is entitled to $7,884.44, with interest from the date
of the October 27, 1997 letter, subject to the provisions of §19 of the
6. Roof Welding. On November 12, 1997, DOT returned a West Hills’
invoice for welding and refinishing the roofs of its five trucks at $750 plus
$38 for paint and materials for each truck, a total of $3,940 (cl exhs 31 and
32). Defendant states in its letter that these costs should have been reflected
in its bid. The Court agrees; this would be part of their vehicle costs. At
some point, the antenna would have to be removed; it just happened sooner than
West Hills would have liked. Granted, had the contract been held a sufficient
amount of time such that the trucks were fully amortized, West Hills would not
have faced this cost, but that was not defendant’s burden.
Claimant’s cause of action is denied.
7. Cell Phone Use. West Hills seeks reimbursement for cell phone use that it
paid for. In evidence is an invoice dated November 1, 1997, which lists three
years of bills, by calendar year: $6,425.98 for 1995; $4,211.32 for 1996 and
$3,876.98 for 1997. The invoice totals $14,514.28, and adds interest of
$1,535.70. (Cl exh 28).
The contract provides as follows: “The Contractor will supply a cellular
phone. Motorists will be allowed to use the cellular phone for local calls
only ”(cl exh 1, p. 17). Note that the contract also provides that a
HELP truck is not to spend more than ten minutes trying to get a disabled
vehicle going and, “[i]f a vehicle cannot be mobilized within the 10
minute time limit, the HELP vehicle operator will call the Operations Center
which will arrange assistance for the motorist.” (id., p. 12).
Further, cellphone usage is not covered by the list of HELP truck expenses in
Appendix H of the contract (cl exh 1, p. 39).
Defendant rejected claimant’s invoice by letter dated November 10, 1997
to the effect that West Hills had not supplied sufficient documentation,
attaching a sample tabular form for itemizing costs (cl exh 29). At the top of
this form is a statement as to what is reimburseable:
“The only cellular phone charges that will be reimbursed are those costs
incurred by the contractor when the cellular phone was used as a back-up for the
State supplied communication equipment.”
Claimant’s exhibit 30 is an earlier letter from Ms. Fischer to the three
HELP contractors in the area (dated October 24, 1995), which also contains a
sample form, one which is slightly different from the one attached to the 1997
DOT letter, and at the top of the page, contains the following:
“Reimbursement of cellular phone calls made to/received from INFORM and/or
State Inspectors.” The earlier form, unlike the second one, contained the
direction to attach copies of the phone bills.
The November 10, 1997 letter from Fischer provided that “this is the
first bill received requesting reimbursement for these costs.” Napoli
testified that the invoices from West Hills, together with backup, were
previously sent on an annual basis, were not paid, and the entire amount was
re-billed in its November 1, 1997 invoice. Ms. Fischer did not recall the
annual bills or what transpired with the other contractors on cell phone usage,
but as for whether the communications equipment operated smoothly:
Q. Wouldn’t you agree [there were] problems with the radio systems
involved with the HELP and the dispatch?
A. At times we had problems and we had the back up of their cell phone.
The West Hills’ vice-president explained:
Well the cell phones, as per the contract, were for the motorists’ use
only . . . but the State decided to use them because their radio system was
majorly inadequate, and the State started to use them causing us a hardship from
all three contractors. So the State decided to pay for the phone usage.
Napoli’s testimony was credible, and the core of it went unchallenged by
Fischer: West Hills Auto Repair made expenditures for cellular usage that were
not comprehended by the contract, outlays, which defendant promised to pay, at
least at some point - - re Fischer’s October 24, 1995 letter. However,
determining or calculating same presents a challenge. The most detail that was
offered on the $14,514.28 of phone usage was Mr. Napoli’s testimony:
Q. [What are] are these . . . cell phone calls . . . ?
A. It’s mainly from the State Department of Transportation’s phone
calls to us and from our drivers to them.
Q. When you say mainly, what are the other phone calls?
A. They were like maybe 30 seconds for a motorist here and there . . . Even
when [the system] was working somewhat, they would still use the phone.
Q. Who would use the phone?
A. The dispatchers or the inspectors.
Given the above, it is not necessary to decide what is needed to demonstrate
sufficient support for this expense: each phone bill; a business record that
is the summary of them; a selected sample that can be proven to be
representative; or a credible percentage mix of motorist use and non-contract
use. We do not have any of this information on the trial record, and the Court
is thus constrained to deny the cell phone expense request in its entirety.
In view of the foregoing, West Hills Auto Repair, Inc. is entitled to
$10,730.19. The Clerk of the Court is directed to enter judgment for claimant
in the amount of the sum of the following: i) $848.75, with interest thereon
from September 10, 1997 though March 10, 1998 and then interest from September
9, 1999 to date; ii) $1,997, with interest thereon from September 17, 1997
through March 17, 1998 and then interest from September 9, 1999 to date; and
iii) $7,884.44 with interest thereon from October 27, 1997 through April 27,
1998 and then interest from September 9, 1999 to date.
LET JUDGMENT BE ENTERED ACCORDINGLY.
July 30, 2007
HON. ALAN C. MARIN
Judge of the Court of Claims
. Claimant’s exhibit 1 is a 66-page
packet. Strictly speaking, the contract itself, C002726, covers pages 62-66,
but it incorporates the other material comprising the exhibit - - the bid
solicitation document and various appendices. In the text of the decision, the
reference to the contract will mean the entirety of exhibit 1.
. Thus, not a factor here is City of New
York v State of New York
, 87 NY2d 982, 642 NYS2d 611 (1996), in which the
Court of Appeals held that approval by the State Comptroller is not required for
extension on the same terms of an initial fixed-period contract.
. The amount of $3,630.16 is the sum of ten
separate interest calculations - - claimant’s exhibits 12A through 12 F:
$242.99, $256.08, $244.54, $218.80, $242.90, and $498.19; claimant’s
exhibits 24 A through 24 C: $253.08, $443.24, and $664.86; claimant’s
exhibit 33 for $565.48.
. The penalty is the putative hours lost
multiplied by the hourly rate and then by the factor of two.
. See claimant’s exhibit 1, pp.