Yonkers Contracting v. Port Authority Trans-Hudson Corp., 1999 N.Y. Int. 0074 (May 11, 1999).

CIVIL PROCEDURE - STATUTORY TIME REQUIREMENT


ISSUE & DISPOSITION

Issue

Whether a statutory time requirement within which actions against the Port Authority must be commenced may be tolled pursuant to CPLR 205(a).

Disposition

No. Sec. 7107 conditions the waiver of sovereign immunity with respect to the Port Authority on timely suit. The statutory time requirement is not tolled because its compliance is a condition precedent of the right to relief under § 7107.

SUMMARY

Plaintiff was a general contractor on a construction project of the defendant, Port Authority. The instant action was based upon a disputed claim for damages by plaintiff against defendant. Plaintiff sues under Unconsolidated Laws § 7107, which waives the Port Authority's sovereign immunity and exposes it to civil liability.

The Appellate Division, Second Division, dismissed the first action because plaintiff failed to comply with a condition precedent in its construction contract's Alternate Dispute Resolution provision requiring it to plead that it had submitted the disputed claim to the project's Chief Engineer for resolution before instituting litigation. Although the Chief Engineer had already made a determination with respect to the plaintiff's claim, the plaintiff opted not to seek the limited review of the Chief Engineer's decision available under the contract, but to seek de novo adjudication of its breach of contract claims. The Appellate Division rejected plaintiff's contention that the provision violated public policy, and dismissed plaintiff's complaint "with prejudice".

Plaintiff then commenced a second action on August 1, 1996, this time pleading that it had sought review by the Chief Engineer, but that the Chief Engineer's decision was fraudulent and in bad faith.

The Court of Appeals affirmed the Appellate Division's dismissal of plaintiff's second action, in which the Appellate Division held that the toll of CPLR 205(a) could not obviate the requirements of a statutory condition precedent to suit. Section 7107, which waives the Port Authority's sovereign immunity, permits a suit against the Port Authority only when the action is commenced within one year.

The Court distinguished § 7107's statutory time restriction from a statute of limitations, which may be tolled under CPLR 205(a) in certain circumstances. The statutory time requirement functions as a condition precedent to a right to remedy under Sec. 7107, and cannot be tolled. Since the second suit was not filed within the one year statutory time requirement, the plaintiff did not fulfill the condition and no longer had a § 7107 remedy.

The Court further stated that the time requirement could not be tolled after the Appellate Division had dismissed the first action on its merits. The Court frowned upon the plaintiff's attempt to circumvent through tactical maneuvering the bargained-for Alternate Dispute Resolution provisions. Thus, the Court concluded that because Yonkers refused to amend and seek the limited review available with the Chief Engineer, the Appellate Division's dismissal of the first action was on the merits, and a final disposition of the plaintiff's claim thus preventing tolling under CPLR 205(a).