New York State Court of Claims

New York State Court of Claims
C.O. FALTER v. NEW YORK STATE THRUWAY AUTHORITY, # 2008-015-022, Claim No. 112934, Motion No. M-74228, Cross-Motion No. CM-74382


In a breach of contract action relating to the construction of a building, Court granted claimant's motion for summary judgment and denied defendant's cross-motion to amend its answer to assert a counterclaim relating to defects in the work, holding that the proposed counterclaim failed to allege a total sum claimed as required by Court of Claims Act 11 (b) and because another action regarding the same subject matter was pending in the Supreme Court.

Case information

UID: 2008-015-022
Claimant short name: C.O. FALTER
Footnote (claimant name) :
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 112934
Motion number(s): M-74228
Cross-motion number(s): CM-74382
Claimant's attorney: Alario & Associates, P.C.
By: Linda E. Alario, Esquire
Defendant's attorney: Honorable Andrew M. Cuomo, Attorney General
By: Christopher Wiles, Esquire
Assistant Attorney General
Third-party defendant's attorney:
Signature date: April 1, 2008
City: Saratoga Springs
Official citation:
Appellate results:
See also (multicaptioned case)


Claimant moves for summary judgment on its claim asserting that the defendant has failed to pay monies due pursuant to an Uncompleted Work Agreement (annexed as part of claimant's Exhibit C). Defendant cross-moves to amend its answer to add a counterclaim alleging a setoff of the amount claimed and additional damages arising out of the allegedly poor workmanship with which the work was performed.

The claim filed on October 26, 2006 alleges the claimant entered into a contract (hereinafter referred to as the Contract) with the defendant on or about February 14, 2001 for the construction of a new two-story office and maintenance facility known as the Syracuse Canal Maintenance Facility. Claimant's performance under the Contract was completed on August 29, 2003 except that portion of the work covered by an Uncompleted Work Agreement executed by the parties in September, 2003. The claim alleges that acceptance of the work occurred on October 1, 2003. The Uncompleted Work Agreement provided for the release of funds retained under the Contract less $95,250.00, a sum representing double the estimated value of the work remaining to be completed under the Contract (Uncompleted Work Agreement, Article 2). The $95,250.00 was to be retained "until such time as the outstanding work has been satisfactorily completed" (Uncompleted Work Agreement, Article 2). The Agreement also provided that "[i]n case of any failure or omission of performance on the part of the Contractor, then and in such event the Authority shall use the said deposit to complete the uncompleted portion of the contract...." (Uncompleted Work Agreement, Article 5).

In support of its motion for summary judgment the claimant submitted proof that the work to be performed pursuant to the Uncompleted Work Agreement was completed and that the amount due under the Agreement ($95,250.00) had not been paid to the claimant (see affidavit of J. Christopher Stopen and Exhibits thereto). The proof in this regard consisted of defendant's correspondence acknowledging completion of the work pursuant to the Uncompleted Work Agreement and the defendant's failure to respond to a notice pursuant to CPLR 3123 requesting that it admit, inter alia, that "[a]ll items of work under the Uncompleted Work Agreement . . . were completed" and that "[t]he unpaid balance under the Uncompleted Work Agreement between claimant and defendant is $95,250.00" (see claimant's Exhibit C) .

In opposition to the claimant's motion for summary judgment and in support of its motion to amend the answer to add a counterclaim, the defendant submitted consultants' reports from Gannett Fleming and Protocol Building Services (defendant's Exhibits B and D respectively). Both reports indicate that there are defects in the roof of the structure constructed pursuant to the Contract. Defendant asserts that these defects appeared within one year following the date the Contract was accepted, a fact which it submits is memorialized in intra-office correspondence dated August 4, 2004 (see letter dated August 4, 2004 annexed as part of defendant's Exhibit B). Defendant argues therefore that its counterclaim has merit as the claimant agreed to remedy all defects "which shall appear within a period of one year form [sic] the date of 'Acceptance' by the Director" (see General Conditions of Contract, defendant's Exhibit C, Article 9.7). Defendant also supports its proposed counterclaim by reference to the Standard Clauses For All New York State Thruway Authority Contracts (defendant's Exhibit A), which provides in pertinent part the following:

"7. SET-OFF RIGHTS. The Authority shall have rights of set-off. These rights shall include, but not be limited to, the Authority's option to withhold for the purposes of set-off any moneys due to the Contractor under this contract up to any amounts due and owing by the Contractor to the Authority with regard to this contract, or any other contract with the Authority . . . ."

On September 26, 2006 the defendant commenced an action in the Supreme Court, Albany County, against the claimant and other entities involved in the design, construction and inspection of the Syracuse Canal Maintenance Facility. The complaint alleges that the defendants therein failed to properly perform the work required under the Contract and seeks damages in the amount of $800,000. The defendant herein admits that the action in Supreme Court is "based on the same matter and facts [as its proposed counterclaim], but only the Claimant has submitted an answer in that action and issue has not been joined with the other parties" (see affirmation of Christopher Wiles, Esq., dated December 28, 2007, 7).

In opposition to the defendant's cross-motion to amend its answer, the claimant argues that denial of the defendant's cross-motion is appropriate pursuant to CPLR 3211 (a) (4) as another action is pending in Supreme Court between the same parties regarding the same subject matter as is addressed in the proposed counterclaim.

It is well established that " 'summary judgment is a drastic remedy and should not be granted where there is any doubt as to the existence of a triable issue' " (Rotuba Extruders v Ceppos, 46 NY2d 223, 231 [1978] [citation omitted]). "The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case" (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Once the movant has made this showing, the burden shifts to the party opposing the motion "to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986] citing Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

It is undisputed that the work performed pursuant to the Uncompleted Work Agreement was completed and that there is an unpaid balance due under the Agreement in the amount of $95,250.00 (see claimant's Exhibit C). Claimant's entitlement to summary judgment therefore depends upon whether the defendant may assert the cost of repairing the alleged defects in the roof as a setoff in its proposed counterclaim, though an action premised upon "the same matter and facts" is currently pending in the Supreme Court.

State Finance Law 139 (1) and 139-f (1) require a public owner(1) to deduct from the amounts due to a contractor an amount necessary to satisfy any claims, liens or judgment against the contractor, and requires that a clause to this effect be included in all contracts. Thus, with respect to a claim for retainage, it has been observed that "claimant is only entitled to the retainage if the contract has been performed in accordance with the plans and specifications agreed upon between the parties" (State of New York v Fehlhaber Corp. & Horn Constr. Co., 69 AD2d 362, 374 [1979][citing State Finance Law 139, subd 1]). The Standard Clauses For All New York State Thruway Authority Contracts specifically provide for such a setoff (see defendant's Exhibit A). Notwithstanding these facts, however, the defendant failed to raise its purported entitlement to a setoff as an affirmative defense and has not sought to interpose such a defense as part of the instant motion (2) . Instead, defendant now moves to amend its answer to assert a counterclaim for "a set-off to any amounts owed claimant". As discussed below, the proposed counterclaim is jurisdictionally defective and subject to dismissal based upon the earlier action pending in the Supreme Court.

Preliminarily it should be noted that although the Court of Claims has no jurisdiction to entertain a claim by the State against an individual or entity, it does have jurisdiction to entertain a counterclaim regardless of the subject matter (Court of Claims Act 9 [3]; Matter of Tierney v State of New York, 55 AD2d 158 [1976]; Valentino v State of New York, 44 AD2d 338 [1974]; Gross & Son v State of New York, 214 AD 386 [1925], affd 243 NY 629 [1926]). A counterclaim will be treated as if it were a complaint or claim and must contain facts sufficient to state a cause of action (22 NYCRR 206.1 [c]; CPLR 3019 [d]; Kane v Kane, 163 AD2d 568, 571 [1990]). With certain exceptions not applicable here, the pleading requirements of Court of Claims Act 11(b) require that a claim state the total sum claimed as damages. The proposed counterclaim in this case fails to meet this requirement and is therefore jurisdictionally defective (Kolnacki v State of New York, 8 NY3d 277 [2007], rearg denied 8 NY3d 994 [2007]).

Notwithstanding this defect, the proposed counterclaim would be subject to dismissal pursuant to CPLR 3211 (a) (4), which permits the Court to dismiss an action on the ground that "there is another action pending between the same parties for the same cause of action...." As the claimant correctly points out, the defendant commenced an earlier action in the Supreme Court seeking the identical relief. "Courts enjoy broad discretion when considering whether to dismiss a claim on the ground that another matter is pending between the same parties dealing with a similar issue" (Mann v Malasky, 41 AD3d 1136, 1137 [2007]). "Thus, a court may dismiss an action pursuant to CPLR 3211 (a) (4) where there is a substantial identity of the parties for the same cause of action" (Montalvo v Air Dock Sys. 37 AD3d 567, 567 [2007]; see also Coppa v Fabozzi, 5 AD3d 718 [2004]). As the subject matter of the earlier commenced Supreme Court action is admittedly the same as that contained in the defendant's proposed counterclaim, the Court finds that the assertion of the proposed counterclaim in this Court would be inappropriate (cf. Matter of William J. Murphy, P.C. v State of New York, 157 AD2d 155 [1990], lv denied 76 NY2d 715 [1990]). Such a conclusion is particularly appropriate where, as here, the first filed action in Supreme Court encompasses defendants not amenable to suit in the Court of Claims. Accordingly, the defendant's cross-motion to amend its answer to assert a counterclaim is denied.

With regard to the claimant's motion for summary judgment, the defendant failed to oppose the motion with proof that the work performed under the Uncompleted Work Agreement was neither accepted nor completed. In contrast, claimant submitted proof which established for purposes of the motion that the claimant, in fact, completed the work required by the Agreement and that the work was accepted by the defendant. As the defendant admittedly owes the claimant $95,250.00 for the work performed under the Uncompleted Work Agreement and raises no affirmative defenses to the claim, summary judgment in favor of the claimant in this amount is appropriate.

Based on the foregoing, the claimant's motion for summary judgment against the defendant in the amount of $95,250.00 is granted and the defendant's cross-motion to amend its answer is denied.

Interest is awarded from June 19, 2006, the date the defendant received the last document required for close-out of the Uncompleted Work Agreement (see CPLR 5001).

Pursuant to Court of Claims Act 11-a, claimant shall recover the filing fee paid to the Clerk at the commencement of the action.

Let judgment be entered accordingly.

April 1, 2008

Saratoga Springs, New York


Judge of the Court of Claims

The Court considered the following papers:

  1. Notice of motion dated November 15, 2007;
  2. Affidavit of J. Christopher Stopen sworn to November 14, 2007 with exhibits;
  3. Memorandum of Law of Linda E. Alario dated November 15, 2007;
  4. Notice of cross-motion dated December 28, 2007;
  5. Affirmation of Christopher Wiles dated December 28, 2007 with exhibit;
  6. Affidavit of Andrew Nagy sworn to December 21, 2007 with exhibits;
  7. Reply affidavit of Linda E. Alario sworn to January 11, 2008 with exhibits;
  8. Second Memorandum of Law of Linda E. Alario dated January 14, 2008.

1. Pursuant to State Finance Law 139-f (1) a public owner includes the State, a public department, a public benefit corporation or a public corporation or official thereof.

2. To the extent the defendant seeks a setoff this is properly raised as an affirmative defense and the claim for recoupment of additional moneys is properly asserted as a counterclaim (see Slate v State of New York (284 AD2d 767 [2001]; cf. Nab Constr. Corp. v City of New York, 276 AD2d 388 [2000] [Defendant's affirmative defense was not a counterclaim in which relief could be awarded regardless of the plaintiff's success or failure on its complaint and third-party complaint predicated thereon was therefore improper.])