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Garrison Protective Services, Inc. v. The Office of the Comptroller of the City of New York, 1999 N.Y. Int. 0024 (Feb. 23, 1999).

CONTRACTS - ADMINISTRATIVE LAW - MUNICIPAL AGENCY DISCRETIONARY ACTS - MANDAMUS


ISSUE & DISPOSITION

Issue

Whether a municipality's Comptroller can be compelled to register and make payment on a city agency service contract.

Disposition

No. The Comptroller's determination is discretionary and there is no duty to automatically register a contract presented to it. To grant mandamus and compel the Comptroller to register and pay the contract would eliminate the Comptroller's statutory discretion and its ability to protect public funds.

SUMMARY

Garrison, a security services provider, entered a service contract with the New York City Department of Environmental Protection ("DEP") that expired in August 1992. Pursuant to the original contract, DEP unilaterally extended the contract as its expiration neared. Later both parties agreed to extend the contract a second time through May 1993. In accordance with the city charter, all city contracts must be registered with the Comptroller before they commence. After the second contract extension had been completed, the Comptroller determined that the extension was not registered properly. Garrison was paid through December 9, 1992, but provided services until May 23, 1993. After several attempts to comply, the DEP finally submitted the proper contract renewal form in July 1993. Shortly after the proper form was filed, City and Federal authorities seized Garrison records in connection with a broader city contract investigation. DEP immediately withdrew the renewal request.

In January 1994, Garrison filed a notice of claim for the outstanding contract value of its unpaid services. The Comptroller preformed an audit to determine if an "illegal but equitable" claim existed and found that Garrison's claim was not supported without certain documents that were seized and then missing. In December 1994, Garrison filed an Article 78 proceeding to compel the Comptroller to register the contract and make payment or, alternatively, to convert the proceeding to an action for contract damages. The Supreme Court granted the mandamus petition and ordered the Comptroller to pay the contract claim. The Appellate Division affirmed.

The Court of Appeals reversed because mandamus can not be granted "to compel the performance of a discretionary act." See Matter of Mullen v. Axelrod, 74 N.Y.2d 580 (N.Y. 1989). Because the act of registering a proffered contract is discretionary, the Comptroller is under no obligation to do so. The lower court's decision was improper because it stripped the Comptroller of its statutory discretion and impinged on its ability to safeguard public resources. Accordingly, DEP's repeated misfiling of the renewal form does not estop the City from denying the contract's enforceability. See Seif v. City of Long Beach, 286 N.Y. 382 (N.Y. 1941). However, because it was not addressed below, the "illegal but equitable" claim is remitted to the trial court for an arbitrary and capricious review.


Prepared by the liibulletin-ny Editorial Board.