New York State Court of Claims

New York State Court of Claims

BRONX COUNTY HISTORICAL SOCIETY v. STATE OF NEW YORK, #2009-039-128, Claim No. 114307, Motion Nos. M-75678, CM-76062


Synopsis


Defendant’s motion to dismiss the claim pursuant to CPLR 3211 and for an award of summary judgment pursuant to CPLR 3212 on the grounds that the claim is barred by Section 41 of the State Finance Law and the terms of a grant agreement between the parties, and that the Court lacks jurisdiction is denied. The Court concludes in the first instance that it has jurisdiction of the claim since the essential nature of the claim is to recover money. The Court further concludes that triable issues of fact exist with respect to whether funds were “appropriated and available” under the agreement pursuant to State Finance Law § 41.

Case Information

UID:
2009-039-128
Claimant(s):
THE BRONX COUNTY HISTORICAL SOCIETY
Claimant short name:
BRONX COUNTY HISTORICAL SOCIETY
Footnote (claimant name) :

Defendant(s):
STATE OF NEW YORK1 1.The Court has, sua sponte, amended the caption to reflect the State of New York as the only proper defendant.
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
114307
Motion number(s):
M-75678
Cross-motion number(s):
CM-76062
Judge:
James H. Ferreira
Claimant’s attorney:
Ray Beckerman, P.C.By: Ray Beckerman, Esq.
Defendant’s attorney:
Hon. Andrew M. Cuomo
Attorney General of the State of New York
By: Saul AronsonAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
July 21, 2009
City:
Albany
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Claimant seeks damages for defendant’s alleged breach of a written agreement designated as NYS Contract # TM6Y495 (hereinafter contract #495) which was signed by the parties and dated June 14, 2007. The agreement provides, in relevant part, for an award to claimant of $30,000.00 for the period from April 1, 2006 to August 31, 2007 to cover the salary of an assistant librarian and costs associated with telephone, supplies and materials. Claimant contends, among other things, that defendant breached the agreement when it declined to pay to claimant the sum of $19,077.10 after claimant submitted to defendant an appropriate payment voucher during June 2007, and that defendant committed an anticipatory breach of the contract when, on August 10, 2007, defendant provided claimant with written notification that it would not be providing claimant with any of the $30,000.00 award.

Issue was joined, and defendant now moves the Court for an order dismissing the claim pursuant to CPLR 3211 and granting summary judgment pursuant to CPLR 3212 on the grounds that the claim is barred by Section 41 of the State Finance Law and the terms of the grant agreement between the parties, and that the court lacks jurisdiction of the claim. Defendant argues that contract #495 was signed in error as there was no legislative appropriation for the money, and that contract #495 represents the duplication of a prior award for the same amount and the same period of time that was provided to claimant pursuant to NYS Contract # TM6Y489. Defendant contends that, since the parties’ agreement pursuant to contract #495 provides for an award to claimant that is greater than the amount appropriated by the New York State Legislature (hereinafter Legislature), the agreement violates section 41 of the State Finance Law, which is expressly incorporated into the agreement, and the claim is barred. Defendant further argues that the Court lacks jurisdiction of the claim because the underlying cause of action involves a challenge to an agency determination and, accordingly, claimant’s legal remedy is limited to bringing an Article 78 proceeding in the New York State Supreme Court.

Claimant opposes defendant’s motion and cross-moves the Court for an order granting summary judgment as to its First, Second and Fourth Causes of Action in the amount of $30,000.00 with interest.

The Court concludes in the first instance that it does possess subject matter jurisdiction of the claim. “As a court of limited jurisdiction, the Court of Claims has no jurisdiction to grant strictly equitable relief” (Madura v State of New York, 12 AD3d 759, 760 [2004]). “Thus, in determining the subject matter jurisdiction of the Court of Claims, the threshold question is ‘[w]hether the essential nature of the claim is to recover money, or whether the monetary relief is incidental to the primary claim’ ” (id. quoting Matter of Gross v Perales, 72 NY2d 231, 236 [1988]). Here, claimant only seeks to recover grant money that was allegedly awarded to it by the New York State Legislature pursuant to a written contract and, accordingly, the Court has jurisdiction of the claim (see Starling Realty Corp. v State of New York, (286 NY 272 [1941], rearg denied 286 NY 696 [1941]; Drislane v State of New York, 7 AD2d 141 [1958]; Amarnick v State of New York, 84 Misc 2d 112 [1975], affd 52 AD2d 1007 [1976]; Forelli v State of New York, 179 AD2d 394 [1992]; and New York City Housing Auth. v State of New York, 294 AD2d 105 [2002], lv denied 98 NY2d 611 [2002]).

The Court also concludes that triable issues of fact exist with respect to whether funds were “appropriated and available” under contract #495, thereby precluding an award of summary judgment to defendant. State Finance Law § 41 provides, in relevant part, that “[n]o state officer, employee, board, department or commission shall contract indebtedness on behalf of the state, nor assume to bind the state, in an amount in excess of money appropriated or otherwise lawfully available.” In support of their motions, both parties offer copies of contract #495 with identical executory clauses which state that “[i]n accordance with Section 41 of the State Finance Law, the State shall have no liability under this contract to the Contractor or to anyone else beyond funds appropriated and available for this contract.”

Several courts have interpreted the type of executory clause that is the subject of this dispute, “i.e., one conditioning payment of funds upon their availability . . . by means of legislative appropriation” (New York City Housing Auth. v State of New York, 294 AD2d 105, 106 [2002]; see also Starling Realty Corp. v State of New York, supra; Drislane v State of New York, supra; Amarnick v State of New York, supra; Forelli v State of New York, supra).

In Starling Realty Corp. v State of New York, (supra), the State, as the tenant of certain office space, prematurely canceled its lease which contained an executory clause conditioning the State’s liability on the availability of money to the Superintendent of Public Works for the leasing of the subject premises. The State had decided to discontinue the office that occupied the rented space and did not, therefore, request any funds for the payment of the lease during the budgetary process. The Court of Appeals affirmed the Court of Claim’s dismissal of the landlord’s claim for rent finding that the landlord “was made aware, both by its implied knowledge of the law and by an express provision in the lease itself, that the liability of the State for rent reserved for the full term was conditional” (id. at 278). In so holding, the Court noted that

“[w]e may not ignore the limitations by which the Legislature has thus restricted the expenditures of public moneys. ‘They are wise and should be enforced. The state has chosen to enact something similar to the statute of frauds for its own protection. Those dealing with it do so knowing this fact and at their own risk. * * * However inequitable the conduct of the state may be, it has said that it shall only be responsible upon one condition * * *’ ”


(id. at 277-278 [citation omitted]).

More recently, and in contrast to the circumstances presented in Starling Realty Corp., (supra), the Court in Forelli v State of New York, (supra), affirmed an award to claimants by the Court of Claims for breach of a lease agreement by the State’s Office of General Services (hereinafter OGS). As in Starling, (supra), the lease contained an executory clause conditioning payment of rent by OGS upon the availability of moneys appropriated to the Commissioner of OGS. The Court explained that “[t]he word ‘available’ in such context relates to the appropriation of funds by the Legislature and the allocation of such funds by the appropriate officer or body . . . such that the unavailability is dependent upon a legislative or budgetary determination or directive not to provide funds for the expenditure in question” (Forelli v State of New York, supra at 396 [citation omitted]).

It is well settled that, as the proponent of summary judgment, defendant must “[establish] its entitlement to judgment as a matter of law by tendering proof, in admissible form, sufficient to demonstrate the absence of any material issue of fact” (Econobill Corp. v S&S Machinery Corp., 62 AD3d 940, 942 [2009]). Thus, in order to obtain summary judgment based upon the contract’s executory clause, defendant must offer sufficient proof to establish that no “legislative or budgetary determination or directive” to award to claimant the sum of $30,000.00 pursuant to the terms of contract #495 exists.

In support of its motion, defendant offers, among other things, the affidavit of Joseph A. Grimaldi, Jr., Program Administrator and Assistant Director of the Grants Bureau of the New York State Office of Parks, Recreation and Historic Preservation (hereinafter Parks). Grimaldi explains that part of the responsibilities of the Grants Bureau is to administer grants that are awarded to Parks by the Legislature during the budget process. Parks receives notice of a legislative grant through a legislative initiative form, and the grant is subsequently confirmed by the New York State Division of Budget by issuance of a Budget Certificate of Approval of Allocation. Parks then notifies each recipient of the award by letter.

Here, Grimaldi contends that the New York State Assembly (hereinafter Assembly) mistakenly sent the Grants Bureau two separate legislative initiative forms during December 2006 and January 2007 for the same, single grant to claimant of $30,000. He explains that since the Grants Bureau received two separate legislative initiative forms, it assigned the first grant an identification number of PKS-06-NY-489, and the latter grant an identification number of PKS-06-NY-495. The Grants Bureau then sent separate letters notifying claimant of the grants during January 2007 and February 2007. Grimaldi states that during the interim, on January 21, 2007, the Grants Bureau received a Budget Certification which included, among other certifications, one for $30,000 for claimant. However, when “Parks realized the error . . . [it] checked with the Division of Budget for a second $30,000 Budget Certification for claimant [but] could not locate one.” Grimaldi offers that “in [his] experience, only one Legislative Initiative Form is sent to Parks for each initiative or item, although it is not uncommon for a grantee to receive more than one appropriation representing separate initiatives or member items in a single fiscal year.” He goes on to explain that “[i]ndeed, in the same 2006-2007 fiscal year, claimant received a $10,000 grant (also a member item) of which it was notified on October 23, 2006.”

Defendant also offers various documents in support of its motion. Those documents include, among others, two awards letters from the Chief of Grants of Parks dated January 18, 2007 and February 16, 2007 identifying the separate awards as PKS-06-NY-489 for $30,000 and PK-06-NY-495 for $30,000 (see Defendant’s Exhibits “B” and “E”), two legislative initiative forms for fiscal year 2006-2007 each with an award of $30,000 to claimant for “general operating support” (see Defendant’s Exhibits “A” and “D”), a Certificate of Approval of Allocation from the Director of the Budget (hereinafter Certificate) (see Defendant’s Exhibit “C”), two fully executed contracts, each related to an award of $30,000 for the period from April 1, 2006 through August 31, 2007 (see Defendant’s Exhibits “H” and “I”) and a letter from the Chief of Grants of Parks, Kevin Burns, to claimant dated August 10, 2007 notifying claimant that Parks was unable to locate the award in the State budget for contract #495 (see Defendant’s Exhibit “J”).

Following a review of defendant’s proof, the Court is unable to conclude that no triable issues exist with respect to whether a second award of $30,000 was appropriated by the Legislature to claimant pursuant to the terms of contract #495. Grimaldi, as the Assistant Director of the Grants Bureau, does not have first hand knowledge of whether the Assembly, the Senate or the Governor appropriated a second award of $30,000 to claimant, nor does the Certificate contain sufficient information for the Court to determine whether a second $30,000 award was allocated to claimant (see Defendant’s Exhibit “C”). The Certificate contains the total awards that were appropriated to various agencies and departments for the fiscal year beginning on April 1, 2006 by the Senate Majority, the Assembly Majority and the Governor, but it does not contain an itemization of the amounts awarded to each entity under those agencies or departments - e.g., all grants awarded to claimant through Parks for the 2006-2007 fiscal year.

Defendant also attaches a supplemental page to the Certificate that is entitled “SFY 2006-2007 Legislative Initiatives” and “Office of Parks, Recreation and Historic Preservation” which includes a total agency award to Parks of $105,000 and an individual award to claimant of $30,000. However, based upon a review of the Certificate, the Legislature and the Governor allocated over $13.5 million dollars to Parks during fiscal year 2006-2007, which is significantly more than the $105,000 that is reflected on the supplemental page. Additionally, there is no reference to the $10,000 grant that was awarded to claimant in the same 2006-2007 fiscal year in the Certificate or the supplemental page (see Grimaldi Affidavit and Defendant’s Exhibit “C”).

Nor does the August 10, 2007 letter from Burns, the Chief of Grants for Parks, to claimant eliminate any issues of fact with respect to whether $30,000 was appropriated in the State budget for contract #495 (see Defendant’s Exhibit “J”). The letter establishes only that Parks could not locate the award. Notably, Burns asked claimant in the letter to provide Parks with any evidence that it may have of a second $30,000 award.

For the same reasons discussed above, the Court is unable to award summary judgment to claimant with respect to its First, Second or Fourth Causes of Action.

Accordingly, it is hereby ORDERED that M-75678 and CM-76062 are hereby denied.


July 21, 2009
Albany, New York

HON. JAMES H. FERREIRA
Judge of the Court of Claims


Papers Considered
:
  1. Notice of Motion to Dismiss dated October 9, 2008;
  1. Affirmation in Support of Motion to Dismiss of Saul Aronson dated October 9, 2008 with exhibits;
  1. Affidavit in Support of Motion to Dismiss of Joseph A. Grimaldi, Jr. sworn to on September 23, 2008;
  1. Notice of Cross Motion dated November 19, 2008;
  1. Affidavit of Gary D. Hermalyn sworn to on November 8, 2008 with exhibits; and
  1. Affirmation in Opposition to Cross Motion of Saul Aronson dated February 4, 2008.