New York State Court of Claims

New York State Court of Claims
FRAMAN MECHANICAL v. THE STATE OF NEW YORK, # 2010-015-168, Claim No. 117181, Motion No. M-78279

Synopsis

Renewal of claimant's prior cross-motion for late claim relief was granted in breach of contract claim.

Case information

UID: 2010-015-168
Claimant(s): FRAMAN MECHANICAL, INC.
Claimant short name: FRAMAN MECHANICAL
Footnote (claimant name) :
Defendant(s): THE STATE OF NEW YORK
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 117181
Motion number(s): M-78279
Cross-motion number(s):
Judge: FRANCIS T. COLLINS
Claimant's attorney: Steven Berkowitz & Associates, P.C.
By: Ira E. Dorfman, Esquire
Defendant's attorney: Honorable Andrew M. Cuomo, Attorney General
By: Frederick H. McGown, III, Esquire
Assistant Attorney General
Third-party defendant's attorney:
Signature date: August 4, 2010
City: Saratoga Springs
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

Claimant, Framan Mechanical, Inc. (Framan), moves to reargue and renew this Court's prior Decision and Order granting the defendant's motion to dismiss the claim for failure to comply with the pleading requirements of Court of Claims Act 11 (b) and denying claimant's cross-motion to amend the claim or permit the filing of a late claim.

Pursuant to a contract with the State, claimant performed renovation work on Building 19 at the Kingsboro Psychiatric Center located in Brooklyn, New York. The claim asserts two causes of action for breach of contract. The first alleges the defendant failed to pay the contract balance of $161,137.28 and the second that defendant failed to pay delay damages in the amount of $1,082,389.22. The claim also sets forth causes of action for unjust enrichment (third cause of action) and quantum meruit (fourth cause of action). In granting the defendant's dismissal motion the Court stated the following:

"The allegations in the claim are entirely conclusory and fail to set forth sufficient facts to enable the defendant to determine the basis for the claim. While damages are sought for "[a]dditions and deletions" to the scope of the work under the Contract (defendant's Exhibit 1, claim, 12), neither the nature of the work nor the date it was performed are alleged in the claim. The claim for delay damages (second cause of action) is similarly deficient. Moreover, there is no explanation in the claim for how the damages were calculated nor any information from which the date of accrual could be gleaned. To the extent the claim alleges causes of action for unjust enrichment and quantum meruit, no factual basis for these claims separate and apart from the breach of contract claims is alleged. As it is not defendant's responsibility " 'to ferret out or assemble information that [Court of Claims Act ] 11 (b) obligates the claimant to allege' " the Court concludes that the claim is insufficiently particular to meet the pleading requirements of 11 (b) (Dinerman v NYS Lottery, 69 AD3d at 1146, quoting Lepkowski v State of New York, 1 NY3d at 208)" (Framan Mechanical, Inc. v State of New York, (UID No. 2010-015-126, Claim No. 117181, [Ct Cl, March 23, 2010] Collins, J.).

The Court denied claimant's cross-motion to amend the claim based on the well-settled principle that a jurisdictionally defective claim may not be cured by way of amendment (citing Hogan v State of New York, 59 AD3d 754 [2009]; Nasir v State of New York, 41 AD3d 677 [2007]; Manshul Constr. Corp. v State Ins. Fund, 118 AD2d 983 [1986]; Grande v State of New York, 160 Misc 2d 383 [Ct Cl 1994]). Claimant's request for late claim relief was also denied. In this regard, the Court found the affidavit of Frank Manginelli, President of Framan, submitted in support of the claimant's cross-motion, to be as devoid of factual detail as the claim itself, adding only that the work was completed on March 28, 2008 and that the claim accrued on March 26, 2008.(1)

In seeking reargument claimant contends that the Court misapprehended the nature of the

claim because it is "not seeking damages relating to additions and deletions to the scope of the work but is seeking payment of the contract balance, which is confirmed and not refuted by the Defendant" (affirmation of Ira E. Dorfman dated May 17, 2010, 11).

In support of renewal, claimant's counsel states that he was unaware of the need to establish the merits of the claim on the motion for late claim relief (claimant's counsel's memorandum of law in support of motion, pp. 8, 11). Claimant now submits a detailed affidavit from Frank Manginelli, President of Framan, in which he avers that the initial contract amount was $1,865,000.00 "which included an allowance of $70,000.00 for additions and deletions to the Contract" leaving a final contract amount of $1,795,000.00 (affidavit of Frank Manginelli sworn to May 7, 2010 , 3). Mr. Manginelli states further that Framan submitted a payment application to the Office of General Services (OGS) on May 28, 2008. The payment application, claimant's Exhibit H, is unsigned and bears the notation "submitted as pencil copy" written at the top. This application reflects that 5% retainage was deducted from the amount billed leaving an "adjusted" pay amount of $71,387.27. Mr. Manginelli indicates that although Framan believed it completed the work on or around March 28, 2008, the date it submitted its application for payment, the Office of General Services claimed by letter dated February 12, 2009 that contract work was not completed until September 8, 2008. The letter from OGS includes a claim for liquidated damages in the amount of $134,000.00 due to a 268-day delay in the progression of the work stating "[i]t took many months of follow up letters to eventually get Framan to complete the installation and training of the Building Management System which was completed on . . . 9/8/08. The facility accepted the system on 9/8/08" (claimant's Exhibit I).

The next letter claimant submits in support of renewal is a letter from OGS dated March 5, 2009, which again reflects the assessment of liquidated damages in the sum of $134,000.00 for claimant's delay in completing work on the contract (claimant's Exhibit J). The claimant was advised either to submit a final payment request for certification by the Engineer-In-Charge or provide written notice of its objection to the assessment of liquidated damages and/or the physical completion date designated by OGS (id.). Mr. Manginelli indicates in his affidavit that an accrual date of June, 2009 was set forth in its initial claim because Framan was attempting to resolve the liquidated damages issue until that time.

With respect to Framan's claim for delay damages, Mr. Manginelli explains that "Claimant put defendant on notice that it reserved the right to file a delay claim related to the asbestos issues (OGS's Construction Manager erroneously stated that there was no asbestos in the building), [and] the delay in the sheet rocking that hindered the progression of the installation of the fan coil units and scheduling of training" (affidavit of Frank Manginelli sworn to May 7, 2010, 15). According to Mr. Manginelli, instead of paying the delay damages claim, the defendant assessed liquidated damages against the claimant. Mr. Manginelli asserts that OGS admits Framan is owed $27, 137.27.(2) A motion to reargue is addressed to the sound discretion of the Court and requires the moving party to demonstrate that the Court overlooked or misapprehended matters of fact or misapplied existing law to the facts presented (see, CPLR 2221 [d][2]; Peak v Northway Travel Trailers, 260 AD2d 840 [1999]; Spa Realty Assoc. v Springs Assoc., 213 AD2d 781 [1995]). Such a motion does not serve as a vehicle to permit the unsuccessful party to argue once again the very questions previously decided (see, Foley v Roche, 68 AD2d 558, 567 [1979], lv denied 56 NY2d 507 [1982]). That branch of claimant's motion seeking reargument is based on the contention that the Court misapprehended the nature of the claim in that the claimant is not, in fact, seeking damages related to "additions and deletions to the scope of the work" as characterized by the Court in its Decision and Order dismissing the claim. Rather, claimant contends that it seeks the outstanding unpaid balance due under the contract. The claim was dismissed, however, because it failed to set forth sufficient facts to enable the defendant to determine the basis for the claim and ascertain its liability under the circumstances (citing, inter alia, Lepkowski v State of New York, 1 NY3d 201, 207 [2003]).(3) While claimant now contends that it makes no claim for additions and deletions to the scope of the work, several allegations in the claim led the Court, and undoubtedly the defendant, to conclude otherwise. The Preliminary Statement in the claim alleged that "[t]he services FRAMAN actually provided to OGS . . . were far greater than the scope of the work described in the Contract . . . FRAMAN performed the work pursuant to the Contract along with additional work, and submitted change orders in accordance with the Contract" (Claim, p. 2). Paragraph 5 of the claim alleges that "FRAMAN performed the work pursuant to the Contract" while paragraph 6 states "FRAMAN also performed additional work and submitted change orders in accordance with the Contract, but OGS has failed to pay FRAMAN." In the first cause of action for breach of contract, it was again alleged that "[a]dditions and deletions to the scope of work under the Contract were approved by OGS" (claim, 12). If, as claimant now contends, the claim is for the failure to pay for work which was performed pursuant to the original contract specifications, and nothing more, allegations relating to a claim for additional work outside the scope of the original contract should not have been set forth in the claim. The lack of factual detail regarding the nature of the claim, which was the underlying basis for the Court's finding that the claim should be dismissed, was compounded by the inclusion of multiple references to a potential cause of action which counsel now contends the claim does not assert. As indicated in this Court's prior Decision and Order, the claim fails to set forth sufficient facts to enable the defendant to ascertain the basis for the claim or the extent of its liability under the circumstances. (Lepkowski v State of New York, 1 NY3d at 207; Heisler v State of New York, 78 AD2d 767 [1980]). Inasmuch as "the failure to strictly comply with the substantive pleading requirements of Court of Claims Act 11 (b) 'is a jurisdictional defect warranting a dismissal for lack of subject matter jurisdiction' " was required (Hogan v State of New York, 59 AD3d 754, 754-755 [2009], quoting Signature Health Ctr., LLC v State of New York, 42 AD3d 678, 679 [2007]; see also Jones v State of New York, 56 AD3d 906 [2008]). To the extent claimant sought to amend its claim to cure the defects, the law is settled that "a jurisdictionally defective claim cannot be cured through an amendment" (Hogan v State of New York, 59 AD3d at 755). Claimant's motion to reargue is therefore denied.

It is well settled that " 'a motion to renew must be based upon newly discovered evidence which existed at the time the prior motion was made, but was unknown to the party seeking renewal, along with a justifiable excuse as to why the new information was not previously submitted' " (Tibbits v Verizon N.Y., Inc., 40 AD3d 1300, 1302-1303 [2007]; quoting Wahl v Grippen, 305 AD2d 707, 707 [2003]; see also CPLR 2221[e]). "Because renewal is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation, a party seeking that relief must provide a reasonable justification for the earlier failure to present such facts" (Cippitelli v County of Schenectady, 307 AD2d 658, 658 [2003] [internal quotation marks and citation omitted]).

In support of claimant's motion to renew, it submits an affidavit from Frank Manginelli, the President of Framan, and various correspondence to and from the defendant bearing upon the nature of the claim and the date it accrued. Unlike the affidavit of Mr. Manginelli submitted in the first instance, the newly submitted affidavit details the facts which support claimant's allegation that defendant failed to pay money owed for work performed on the contract, the date the work was completed and sufficient facts from which a date of accrual may be determined (see Richard A. Hutchens CC, L.L.C. v State of New York, 59 AD3d 766, 768 [2009], lv denied 12 NY3d 712 [2009][a claim accrues when damages become ascertainable]). The affidavit is additionally supported by reference to correspondence from OGS reflecting the assessment of liquidated damages against the claimant resulting from its purported 268-day delay in completing the project (claimant's Exhibit I) and OGS' intention to deduct this amount from the contract balance (Exhibit J). While there appears to be a question as to whether or not the delay was the fault of the claimant, as the defendant contends, or the unexpected discovery of asbestos as the claimant contends, sufficient facts were set forth in Mr. Manginelli's affidavit to establish the potential merit of the claim for purposes of a motion for late claim relief under Court of Claims Act 10 (6). Notably, even assuming the deduction of liquidated damages from the remaining contract balance is appropriate, it appears money may nonetheless be owed to Framan for work performed under the contract.

Notwithstanding the potential merit of at least some portion of the claim, however, no reasonable justification is established for the claimant's failure to submit a sufficiently detailed affidavit and supporting documentation in the first instance (see Davis v Evan, 304 AD2d 1023 [2003]; CPLR 2221 [e]). Claimant's counsel's excuse that he was unaware that the merits of the claim were at issue is surprising given that even a cursory review of the statutory criterial set forth in Court of Claims Act 10 (6) would have enlightened claimant's counsel relative to the factors considered on a motion for late claim relief, including the potential merit of the claim (see also Savino v State of New York, 199 AD2d 254 [1993]; Matter of Santana v New York State Thruway Auth., 92 Misc 2d 1 [1977]). That this was not done is evident from the fact that claimant's counsel failed to even reference the statute in support of his initial application.

Nevertheless, "even in situations where the criteria for granting a reconsideration motion are not technically met, courts retain flexibility to grant such a motion when it is deemed appropriate" (Loris v S & W Realty Corp., 16 AD3d 729, 730 [2005]; citing, inter alia, Pinto v Pinto 120 AD2d 337, 338 [1986]). Renewal is appropriate "so as not to defeat substantial fairness" where, as here, the failure to establish the criteria for late claim relief in the first instance was due largely to oversights by claimant's counsel (Cruz v Bronx Lebanon Hosp. Ctr., 73 AD3d 597 [2010] [even where the vigorous requirements for renewal are not met, renewal may be granted so as not to defeat substantial fairness]). While no reasonable justification is offered for claimant's counsel's failure to make a sufficient evidentiary showing on the original motion, public policy favoring the disposition of cases on the merits warrants granting claimant's motion to renew the prior motion to the extent it sought late claim relief.

Without rehashing all of the statutory criteria necessary for granting late claim relief,(4) claimant's late claim application appears timely, having been made well within the applicable statutory period. The statute of limitations on this contract action is six years (CPLR 213 [2]) and the law is settled that such a claim accrues when damages become ascertainable (Richard A. Hutchens CC, L.L.C. v State of New York , 59 AD3d 766 [2009], lv denied 12 NY3d 712 [2009]). Whether the breach of contract claim accrued on March 26, 2008, as alleged in the claimant's proposed amended claim, or upon receipt of the letters from OGS denying payment of the contract balance in February and March of 2009 (claimant's Exhibits I and J), it is clear that the late claim application is timely.

Nothing submitted in support of claimant's renewal motion alters the Court's prior determination that claimant has failed to establish a reasonable excuse for the delay in filing the claim. Mr. Manginelli's excuse that Framan was attempting to resolve the liquidated damages issue through June, 2009 is unreasonable as Framan could have extended its time to file and serve a claim by merely serving a notice of intention. No reasonable excuse having been established, this factor weighs against granting late claim relief.

Claimant's submissions on the instant motion sufficiently establish that the State had notice of the claim, an opportunity to investigate and would not suffer prejudice should late claim relief be granted. As the State makes no contrary showing, these factors weigh in favor of the claimant.

In support of renewal, claimant sufficiently established the potential merit of its breach of contract causes of action through the submission of Mr. Manginelli's affidavit and the various correspondence referenced therein. However, the potential merit of claimant's proposed causes of action for unjust enrichment and quantum meruit is not apparent (see Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382 [1987] [damages may not be awarded on a quasi contract theory of recovery where there exists a valid written agreement covering the same subject matter]).

No alternative remedy exists, according to Framan.

A review of all of the factors, especially the apparent lack of prejudice and potential merit of the first and second causes of action for breach of contract, persuades the Court that late claim relief is appropriate. However, claimant has failed to comply with the requirement contained in Court of Claims Act 10 (6) that "[t]he claim proposed to be filed, containing all of the information set forth in section eleven of this act, shall accompany such application." Considering the claimant's proposed amended claim as a proposed claim for purpose of the motion for late claim relief, the third and fourth causes of action based upon a quasi-contractual theory of recovery are patently meritless and the first and second causes of action for breach of contract remain vague and confusing. As a result, the Court will grant renewal of claimant's cross-motion for late claim relief and, upon reconsideration, vacate that branch of this Court's Decision and Order dated March 23, 2010 denying claimant's cross-motion for late claim relief only with respect to claimant's first and second causes of action for breach of contract, and grant the motion to that limited extent. Claimant is directed to serve and file a claim in compliance with Court of Claims Act 11 and 11-a within 45 days of the date this Decision and Order is filed. Claimant's motion to reargue is denied.

August 4, 2010

Saratoga Springs, New York

FRANCIS T. COLLINS

Judge of the Court of Claims

The Court considered the following papers:

  1. Notice of motion dated May 18, 2010;
  2. Memorandum of law of Ira E. Dorfman dated May 18, 2010;
  3. Affirmation of Ira E. Dorfman dated May 17, 2010 with exhibits;
  4. Affidavit of Frank Manginelli sworn to May 7, 2010 with exhibits;
  5. Affidavit of Junaid Ahmed sworn to May 11, 2010 with exhibit;
  6. Affirmation of Frederick H. McGown, III dated June 9, 2010;
  7. Memorandum of law of Frederick H. McGown, III dated June 9, 2010.

1. . The date of March 26, 2008 appears to have been a typographical error as Mr. Manginelli's affidavit sworn to May 7, 2010 submitted in support of the instant motion references only the March 28, 2008 date as the date he "believed" Framan completed the work (see Affidavit of Frank Manginelli sworn to May 7, 2010, par. 6). Moreover, Mr. Manginelli's assertion that the claim accrued on March 26, 2008 rendered the claim filed on July 28, 2009 untimely. The date of accrual alleged in the filed claim was June 18, 2009.

2. This figure appears to have been computed by deducting the liquidated damages assessment of $134,000.00 from the contract balance of $231,137.00 less $70,000 which Mr. Manginelli indicates was an unearned contract allowance (Manginelli affidavit sworn to May 7, 2010, par. 7 and Exhibits I and J).

3. As noted recently by the Appellate Division, Third Department, the pleading requirements of Court of Claims Act 11 (b) are more rigorous than those set forth in CPLR 3013 (Robin BB. v Kotzen, 62 AD3d 1187, 1188 [2009]).

4. As set forth in this Court's prior Decision and Order, subdivision 6 of section 10 of the Court of Claims Act permits this Court, if the applicable statute of limitations set forth in article 2 of the CPLR has not expired, to allow the filing of a late claim upon consideration of the following factors: "whether the delay in filing the claim was excusable; whether the state had notice of the essential facts constituting the claim; whether the state had an opportunity to investigate the circumstances underlying the claim; whether the claim appears to be meritorious; whether the failure to file or serve upon the attorney general a timely claim or to serve upon the attorney general a notice of intention resulted in substantial prejudice to the state; and whether the claimant has any other available remedy."