Opinion
# 2015-015-057 Claim No. 125470 Motion No. M-86299
05-27-2015
JEDA CAPITAL-LENOX, LLC v. THE STATE OF NEW YORK
Camardo Law Firm. P.C. By: Justin T. Huffman, Esq. 127 Genesee Street Auburn, New York 13021 Hon. Eric T. Schneiderman, Attorney General By: Brett R. Eby, Esq. Assistant Attorney General The Capitol Albany, NY 12224
Synopsis
Breach of contract cause of action was dismissed for failure to state a cause of action. Cause of action for de facto taking was dismissed for failing to meet pleading requirements of Court of Claims Act § 11 (b).
Case information
| UID: | 2015-015-057 |
| Claimant(s): | JEDA CAPITAL-LENOX, LLC |
| Claimant short name: | JEDA CAPITAL |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | The caption is amended sua sponte to reflect the only properly named defendant. |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 125470 |
| Motion number(s): | M-86299 |
| Cross-motion number(s): | |
| Judge: | FRANCIS T. COLLINS |
| Claimant's attorney: | Camardo Law Firm. P.C. By: Justin T. Huffman, Esq. 127 Genesee Street Auburn, New York 13021 |
| Defendant's attorney: | Hon. Eric T. Schneiderman, Attorney General By: Brett R. Eby, Esq. Assistant Attorney General The Capitol Albany, NY 12224 |
| Third-party defendant's attorney: | |
| Signature date: | May 27, 2015 |
| City: | Saratoga Springs |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Defendant moves to dismiss the instant claim pursuant to CPLR 3211 (a) (1), (2) and (7) on the grounds the claim was untimely filed and served, fails to state a cause of action, and fails to meet the pleading requirements of Court of Claims Act § 11 (b). The claim allegedly "arises from the acts or omissions of the defendant relating to a contract and/or permits for highway improvement work for NYS Route 365A in the City of Oneida, New York" (Claim at ¶ 6).
According to the claim, filed on January 2, 2015, "[t]he place where the acts took place is Route 365A, Madison County, Oneida, New York, in the vicinity of 1200 Lowe's Drive, under various permits issued by the New York State Department of Transportation" (id. at ¶ 5). Claimant alleges that a performance bond in the total penal sum of $450,000 was issued by National Grange Mutual Insurance Company (National Grange). One bond was initially issued in the amount of $250,000 and a rider increasing the total penal sum to $450,000 was later issued (claimant's Exhibit 5). According to the allegations in the claim, the Department of Transportation (DOT) required either a second bond or a rider to the first bond "as a prerequisite for revising the construction schedule necessitated by delays in the issuance of highway work permits by the DOT and the subsequent shutdown of the asphalt concrete plants for winter" (Claim at ¶ 7 [A]). The claim states:
"That on August 19, 2008, the DOT gave [claimant] a Notice of Default with respect to Permit Number 02-06-0726, and represented that a demand has been tendered for the completion of the work, and for payment in full for actual costs incurred to secure such completion. It must be noted that the permit against which the Notice of Default was served was not the Highway Work Permit for which the Bond was required" (id.).
Claimant alleges that the Notice of Default was improper in that it related to work for which no bond was required. Nevertheless, claimant alleges that it reimbursed National Grange for the amounts it paid the State under the bonds ($450,000) plus attorneys' fees ($32,000) in the total amount of $482,000.
The claim next alleges that the claimant "entered into an 'Inspection and/or Supervision Payment Agreement for Highway Work Permits' with the DOT" in which it agreed to pay the DOT the amount of $370.00 per day for an estimated 60 work days of inspection time. According to the allegations in the claim, although the DOT Engineer's Daily Contract Diary reflects that only 44 work days were actually expended, it was charged $87,689.00 for this work in violation of the inspection agreement (Claim at ¶ 7 [A] [i]).
The claim also alleges the following: (i) by invoice dated September 24, 2009, DOT improperly charged claimant $87,369.98 for work it performed at a location 20 miles from the work site that was the subject of the permits (id. at ¶ 7 [A] [ii]); (ii) the DOT required claimant to pay employees prevailing wage rates that were not in effect at the time the permits were issued (id. at ¶ 7 [B]); (iii) the DOT required it to construct 1,800 lineal feet of roadway for the Lowe's project when only 1075 lineal feet of roadway should have been required (id. at ¶ 7 [C]); (iv) "the DOT's failure to maintain its drainage system resulted in frequent flooding to approximately 4 acres of [claimant's] land, resulting in such land being delineated wetlands. The DOT's failures to maintain constitute negligence . . . and/or improper permitting [which] directly caused the downstream flooding . . . [and] [t]he resulting wetland delineation constitutes a de facto taking by the DOT" (id. at ¶ 7 [D]); (v) the DOT refused to allow claimant to open-cut Route 365A for sewer and water extensions which necessitated claimant's additional expenditure of $67,385.00 in costs to bore under the road to complete the work (id. at ¶ 7 [E]), and (vi) "[t]he DOT unilaterally demanded changes to the scope of work, amounting to $433,561.15" (id. at ¶ 7 [F]). Based on the foregoing, claimant seeks damages in the sum of $1,992,098.15.
Notwithstanding that the DOT issued a Notice of Default with respect to the bond on August 19, 2008, claimant alleges the claim did not accrue until January 4, 2013 when DOT failed to respond to its "Condition Precedent Claim" within 90 days after it was filed as required by the dispute resolution provisions of § 105-14 of the DOT's standard specifications (id. at ¶ 2).
In support of its motion, defense counsel asserts in an attorney's affirmation that claimant, in fact, had no contract with the State of New York. Rather, according to defense counsel, three highway work permits were issued in connection with the construction of a Lowe's store in Oneida, New York. When claimant failed to complete the highway work which was the subject of the permit, even after an extension of time to do so had been granted (defendant's Exhibit B, letter from DOT dated June 11, 2008), the DOT issued a Notice of Default and requested the surety, National Grange, to complete the work or DOT would hire an emergency contractor to complete required asphalt work before the end of the construction season (defendant's Exhibit C). National Grange declined to complete the work and DOT completed it at a cost of $558,137.58 (defendant's Exhibit D).
According to an allegation in the claim and the papers submitted in opposition to the instant motion, in May 2012 the State of New York commenced an action against the claimant in the Supreme Court, Albany County (Claim, p. 1, second unnumbered paragraph). In its complaint (claimant's Exhibit 1), the State alleges that three highway work permits were issued in connection with the Lowe's construction project; that claimant signed an Inspection and/or Supervision Payment Agreement on or about September 20, 2006 in which it agreed to reimburse the DOT for certain inspection and/or supervision; that claimant procured a bond and rider to the bond in the total sum of $450,000; that claimant defaulted in its obligations under the highway work permits; that on August 19, 2008 DOT notified claimant that it was in default on its obligations under the highway work permits and that National Grange declined completion of the work on behalf of its principal and paid the State the penal sum of $450,000 in exchange for a release and partial assignment of its claim. The State further alleges in the Supreme Court action that it was damaged in the sum of $108,137.60, the difference between the cost of completing the work ($558,137.60) and the amount paid on the bonds ($450,000), and additionally claims entitlement to $87,689.00, representing costs expended for inspection and/or supervision of the work under its Inspection and/or Supervision Payment Agreement with the claimant. Defendant also asserts that another action against the claimant brought by National Grange is pending in Onondaga County Supreme Court.
On a motion to dismiss a claim pursuant to CPLR 3211 (a) (7) the court is required to "accept the facts as alleged in the [claim] as true, accord [claimant] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see also Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]). "When evidentiary material is considered, the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one" (Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]; see also Dee v Rakower, 112 AD3d 204, 208 [2d Dept 2013]). Giving claimant the benefit of every possible favorable inference, the facts alleged in the claim fail to state a cause of action.
CPLR 3013 requires that a pleading give the Court and the parties notice of the transactions and occurrences to be proven and the material elements of each cause of action. The material elements of a breach of contract claim are the formation of a contract between the claimant and defendant, performance by claimant, failure to perform by defendant and resulting damages (Torok v Moore's Flatwork & Founds., LLC, 106 AD3d 1421, 1422 [3d Dept 2013]; McCormick v Favreau, 82 AD3d 1537, 1541 [3d Dept 2011], lv denied 17 NY3d 712 [3d Dept 2011]). General allegations of the existence of a contract and a breach thereof are insufficient to state a breach of contract cause of action. Rather, the pleader must specify the provisions of the contract it claims were breached (Sutton v Hafner Valuation Group, Inc., 115 AD3d 1039, 1042 [3d Dept 2014]; Trump on the Ocean, LLC v State of New York, 79 AD3d 1325 [3d Dept 2010]).
Here, claimant failed to allege in the claim or otherwise establish in opposition to the instant motion the material elements of a breach of contract cause of action. With respect to the work for which the highway permits were issued, neither the existence of a contract, claimant's performance thereunder nor the specific provisions of the contract claimant asserts were breached are set forth in the claim. Instead, it appears the thrust of claimant's allegations arise from the issuance of highway work permits for the performance of work that claimant alleges it was unable to complete through no fault of its own. Review of these permits fails to reveal any obligations on the part of the State which could give rise to the instant breach of contract claim.
To the extent claimant alleges that it was overcharged by the DOT for the inspection services it provided pursuant to an " 'Inspection and/or Supervision Payment Agreement' "(Claim, ¶ 7 [A] [i]), it too fails to form the basis for a breach of contract action. First, the inspection and supervision agreement was not submitted on the motion. Furthermore, while such an allegation may bear upon the merits of the State's action against the claimant in Supreme Court, it affords claimant no independent basis for recovery in the Court of Claims. Critically absent are the necessary allegations that defendant's failure to abide by a specific contract provision resulted in damages to the claimant. Indeed, it appears claimant has incurred no damages as it declined to pay for the DOT's inspection services. Thus, the claim fails to state a breach of contract cause of action and the proof submitted on the motion fails to establish the existence of a viable breach-of-contract claim.
Claimant's allegations of a de facto taking based upon defendant's alleged failure to properly maintain its drainage system, resulting in claimant's land being designated as wetlands (Claim at ¶ 7 [D]), fail to comply with the pleading requirements of Court of Claims Act § 11 (b). Depending upon the circumstances, "water and debris cast upon the lands of another "by the act of a governmental entity can be actionable either as a trespass or a de facto appropriation (Stewart v State of New York, 248 AD2d 761 [3d Dept 1998]). However, the claimant herein has failed to identify the property allegedly affected by the trespass/de facto taking. Nor has claimant set forth the date when the alleged flooding occurred. "Pursuant to Court of Claims Act § 11 (b), a claim must set forth the nature of the claim, the time when and place where it arose, the damages or injuries and the total sum claimed" (Morra v State of New York, 107 AD3d 1115, 1115 [3d Dept 2013]; see also Hogan v State of New York, 59 AD3d 754, 754 [3d Dept 2009]). The allegations in the claim here did not "provide a sufficiently detailed description of the particulars of the claim to enable [defendant] to investigate and promptly ascertain the existence and extent of its liability" (Morra v State of New York, 107 AD3d at 1115-1116 [internal quotation marks and citations omitted]; accord Sinski v State of New York, 265 AD2d 319, 319 [2d Dept 1999]). The reference to elevation and station numbers of a drain pipe used by DOT to drain its property (otherwise not identified) and liber entries for an easement owned or possessed by DOT in materials attached to the claim are wholly inadequate. It is axiomatic that the sufficiency of a claim rests solely upon the assertions contained therein, and defendant is not required to go beyond the claim in order to investigate an occurrence or ascertain information that should have been provided pursuant to the Court of Claims Act § 11 (Lepkowski v State of New York, 302 AD2d 765, 766 [3d Dept 2003]). Given the critical nature of information regarding the location of the property allegedly subject to either a de facto taking or trespass to land, the failure to identify the location of the affected property is fatal. Because the "statutory requirements conditioning suit must be strictly construed" (Kolnacki v State of New York, 8 NY3d 277, 280 [2007]), the claim seeking compensation for the alleged flooding of claimant's land must be dismissed in that it fails to comply with the pleading requirements of Court of Claims Act § 11 (b).
Accordingly, defendant's motion is granted and the claim is dismissed.
May 27, 2015
Saratoga Springs, New York
FRANCIS T. COLLINS
Judge of the Court of Claims Papers considered: 1. Notice of Motion dated February 10, 2015; 2. Affidavit of Brett Eby sworn to February 10, 2015; 3. Affirmation in opposition of Justin T. Huffman dated March 11, 2015 with Exhibits 1-5; 4. Memorandum of Law by Justin Huffman dated March 11, 2015; 5. Defendant's Reply Memorandum of Law dated March 18, 2015.