| Zurich Am. Ins. Co. v Ramapo Cent. School Dist. |
| 2009 NY Slip Op 04418 [63 AD3d 729] |
| June 2, 2009 |
| Appellate Division, Second Department |
| Zurich American Insurance Company et al.,Respondents, v Ramapo Central School District, Appellant. |
—[*1] Wolff & Samson, P.C., New York, N.Y. (Jonathan Bondy of counsel), forrespondents.
In an action to recover damages for breach of contract, the defendant appeals from an orderof the Supreme Court, Rockland County (Nelson, J.), dated July 1, 2008, which denied itsmotion for summary judgment dismissing the complaint.
Ordered that the order is affirmed, with costs.
In 2003 the defendant Ramapo Central School District (hereinafter the School District)entered into a contract with Parsippany Construction Co., Inc. (hereinafter PCC), for variousschool construction work. The plaintiff Zurich American Insurance Company (hereinafterZurich) issued a payment bond for the contract. In addition to its rights as surety, Zurich tookassignment of PCC's rights against the School District.
On December 5, 2005 PCC submitted various claims to the School District for theadjustment of claims for compensation which were additional to the agreed-upon contract price.Significantly, PCC's letter did not set a deadline or other ultimatum for the payment of the claim(cf. James [*2]McCullagh Co., Inc. v South Huntington Union Free School Dist.,39 AD3d 480, 481 [2007]; Alfred Santini & Co. v City of New York, 266AD2d 119, 120 [1999]; Dodge, Chamberlin, Luzine, Weber Architects v Dutchess CountyBd. of Coop. Educ. Servs., 258 AD2d 434, 435 [1999]). Rather, PCC requested that theclaims be submitted to mediation in the event they could not be adjusted (see Matter of Mahopac Cent. School Dist.v Piazza Bros., Inc., 29 AD3d 699, 701 [2006]).
The School District's project architect responded by letter dated February 7, 2006, whereinhe declined to approve the claims and referred PCC to the mediation provisions of the contract.By letter dated March 2, 2006, addressed to the project architect and the School District, PCCrequested that mediation be initiated on this claim and that a mediation of a prior claim bereactivated. Shortly thereafter, counsel for the parties engaged in discussions to select amediator. The following month, on April 5, 2006, counsel for the School District advisedcounsel for PCC "my client feels comfortable proceeding with [the suggested mediator]." On orabout November 8, 2006, the parties entered into a formal mediation agreement. The mediationwas scheduled to commence on December 6, 2006. However, the mediation was adjourned toFebruary 12, 2007 because the School District failed to bring a person with authority to settle theclaims to the mediation. At the conclusion of the February 12, 2007 mediation session thedispute was not settled and the School District advised PCC that the claims were rejected. Byletter dated March 22, 2007, apparently concerned that certain discussions "since the conclusionof the mediation" might be "considered settlement discussions," the School Districtsuperintendent wrote to PCC to advise that the participation by the School District in "thesediscussions in no [way] waives or obviates either the contractual or statutory requirementsrelative to pursuing claims against the School District." Significantly, the Superintendent's lettermade no reference to the almost year-long process leading to the mediation session, but waslimited to the post-mediation discussions. On April 9, 2007 PCC filed a notice of claim and thisaction was commenced by, among others, Zurich on November 20, 2007.
The School District moved for summary judgment, arguing that PCC's notice of claim wasuntimely under Education Law § 3813 (1) since it was filed more than three months afterthe February 7, 2006 letter which, the School District contended, rejected PCC's claims forpayment. The School District also argued that the lawsuit was untimely as it was not commencedwithin one year after February 7, 2006 (see Education Law § 3813 [2-b]). TheSupreme Court denied the motion. We affirm.
Pursuant to Education Law § 3813, no action may be maintained against a schooldistrict unless a notice of claim was served within three months of the date on which the claimaccrued (see Education Law § 3813 [1]; C.S.A. Contr. Corp. v New York City School Constr. Auth., 5 NY3d189, 192 [2005]; Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d539, 547 [1983]; Angelo Capobianco,Inc. v Brentwood Union Free School Dist., 53 AD3d 634 [2008]). "The requirement ofEducation Law § 3813 (1) that a notice of claim be served upon a school district in anaction arising from a contract within three months from accrual of the claim is a conditionprecedent to maintaining such action" (Consolidated Constr. Group, LLC v Bethpage Union Free School Dist.,39 AD3d 792, 794 [2007]). In addition, an action against a school district must becommenced within one year after the cause of action arose (see Education Law §3813 [2-b]; Allshine, C.S. v South Orangetown Cent. School Dist., 305 AD2d 617, 618[2003]; Henry Boeckmann, Jr. & Assoc. v Board of Educ., Hempstead Union Free SchoolDist. No. 1, 207 AD2d 773, 775 [1994]). In actions "for monies due arising out of contract,accrual of such claim shall be deemed to have occurred as of the date payment for the amountclaimed was denied" (Education Law § 3813 [1]) that is, [*3]when there has been either an express rejection of the claim orwhen the "party seeking the payment should have viewed the claim as having beenconstructively rejected" Helmer-Cronin Constr. v Beacon Community Dev. Agency, 156AD2d 543, 544 [1989]; see alsoMainline Elec. Corp. v East Quogue Union Free School Dist., 46 AD3d 859 [2007]).
Unlike the school district's letter in Matter of Mahopac Cent. School Dist. v Piazza Bros., Inc. (29 AD3d699, 700 [2006]), which advised the contractor that there would be "no useful purpose" inpursuing mediation, the February 7, 2006 letter from the School District's architect to PCC didnot unequivocally deny PCC's formal demand for payment of the claims and the conduct of theSchool District was not so unambiguous that PCC should have viewed the denial of its claims tobe a final determination (see AngeloCapobianco, Inc. v Brentwood Union Free School Dist., 53 AD3d 634, 635 [2008]; Matter of Mahopac Cent. School Dist. vPiazza Bros., Inc., 29 AD3d 699, 701 [2006]; Mitchell v Board of Educ. of City School Dist. of City of N.Y., 15AD3d 279, 280-281 [2005]). To the contrary, it is apparent from the parties' correspondenceand conduct that they contemplated engaging in voluntary mediation, and thereafter did in factproceed to mediation, pursuant to the "supplementary conditions" to the contract, as a means ofattempting to resolve their dispute (id.). Had it been the position of the School Districtthat the claim was barred by PCC's failure to serve a notice of claim within three months of theproject architect's letter of February 7, 2006, it would have been disingenuous for the SchoolDistrict to have participated in voluntary mediation.
Under these circumstances, the School District failed to establish that PCC's claim wasfinally rejected, either expressly or constructively, prior to February 12, 2007 (see Angelo Capobianco, Inc. v BrentwoodUnion Free School Dist., 53 AD3d 634, 635 [2008]; Matter of Mahopac Cent. School Dist. v Piazza Bros., Inc., 29 AD3d699, 701 [2006]; Mitchell v Boardof Educ. of City School Dist. of City of N.Y., 15 AD3d 279, 280-281 [2005]; cf.Alfred Santini & Co. v City of New York, 266 AD2d 119, 120 [1999]; Dodge,Chamberlin, Luzine, Weber Architects v Dutchess County Bd. of Coop. Educ. Servs., 258AD2d 434, 435 [1999]). Accordingly, the School District's motion for summary judgment wasproperly denied. Skelos, J.P., Fisher, Dillon and Eng, JJ., concur.