Opinion
June 19, 2000.
CAMARDO LAW FIRM, Auburn (315) 252-3846 (Kevin M. Cox of counsel), for petitioner.
Michael B. Risman Corporation Counsel OF BUFFALO, for respondents.
DECISION AND ORDER
Petitioner Montco Construction Company ("Montco") entered into a contract with Respondents Joseph N. Giambra and the City of Buffalo ("City") to construct a new police precinct building at Fillmore and Ferry Streets in the City of Buffalo. The contract specifically sets a retention amount of ten percent (10%), but also states that all current and future State Laws and City Ordinances shall govern the construction of the contract.
Montco asserts that the latter provision requires adherence to General Municipal Law Section 106-b, which limits the retention amount in municipal constructin contracts to 5% when a performance and payment bond are required. The contract expressly provides for a performance bond. In a separate section entitled "Bond to Accompany Contract," the contract requires Montco to pay for all materials used and services rendered, which, according to Montco, amounts to a performance and payment bond and led Montco to secure such a bond in the amount of $2,600,000. Additionally, Montco argues that the contractual reference to the laws of New York encompasses, by reference, State Finance Law Section 137, which requires a payment bond on municipal construction contracts.
The City counters that: the contract specifications do not include a labor and material bond and therefore the requirements for a 10% retention in General Municipal Law Section 106-b have been met; this case is a dispute over contractual obligations and is thus not appropriate for an Article 78 Proceeding; and, if the case is appropriate for an Article 78 proceeding, then the action is time barred because it was not brought within the four month statute of limitations period in CPLR 217.
The legislative history of General Municipal Law Section 106-b reveals its clear intent to protect contractors from the undue burden of excessive retention percentages being placed on municipal contracts. See Governor's Legislative Bill Jacket, Chapter 769 of the laws of 1978. That the special interests representing the construction groups aggressively supported this legislation while the municipalities actively opposed it is testament to its intent and significance as a protective measure for construction companies doing business with municipalities. As a result. all companies entering into municipal construction contracts that are governed by the laws of New York do so with the security and expectation that they will not be subject to retention amounts greater than those contained in General Municipal Law Section 106-b.
With this in mind, any reference to the laws of the State of New York must encompass the protections in Section 106-b and supercede contractual provisions to the contrary. Similarly, this general reference invokes the requirement in State Finance Law Section 137 that a payment bond be provided on all City contracts, thus satisfying the requirement of General Municipal Law Section 106-b limiting the retention amount to five percent (5%) rather than ten percent (10%).
Despite the City's characterization of this case as a contract dispute, this action seeks to compel the City to abide by applicable State municipal law in limiting its retention to the statutorily prescribed amount of five percent (5%). As a result, the nature of this case places it within the ambit of a mandamus to compel in that the petitioner is seeking to compel a municipality to perform a duty that is enjoined by law. In such cases, the four month statute of limitations in CPLR 217 begins to run on the date that the municipality refuses to perform the alleged duty. See Peters v. Langford-New Oregon Volunteer Fire Company, 181 A.D.2d 1034 (4 Dept. 1992); Sarf v. Grinker, 185 A.D.2d 890 (2 Dept. 1992).
After repeated communications from Montco to the City to reduce the retention amount from 10% to 5% pursuant to General Municipal Law Section 106-b, the City sent a letter dated May 15, 2000 advising the plaintiff of their refusal to adhere to this request, thus beginning the statute of limitations. This action was then brought on May 30, 2000. Therefore, this action was commenced within the four month statutory period for Article 78 proceedings in CPLR 217.