John J. Kassner & Co. v. New York

46 N.Y.2d 544 *; 389 N.E.2d 99 **; 415 N.Y.S.2d 785 ***; 1979 N.Y. LEXIS 1875 ****

John J. Kassner & Co., Inc., Respondent, v. City of New York, Appellant

Prior History:  [****1]  Appeal, by permission of the Appellate Division of the Supreme Court in the First Judicial Department, from an order of said court, entered April 11, 1978, which affirmed an order of the Supreme Court at Special Term (Manuel A. Gomez, J.), entered in New York County, (1) granting plaintiff's motion to dismiss the defense of the Statute of Limitations, and (2) denying defendant's cross motion for summary judgment. The following question was certified by the Appellate Division: "Was the order of the Supreme Court, as affirmed by this Court, properly made?"

In 1967 the plaintiff, a professional engineering corporation, entered into a contract with the City of New York. The contract provided for percentage installment payments as the work progressed subject to audit by the city comptroller. The agreement also provided that no action could be maintained against the city unless commenced within six months after the filing in the office of the comptroller of the certificate for final payment. In December, 1967, plaintiff submitted an itemized statement indicating that it had completed its work and claiming that there was a balance due of $ 39,523.69. Upon audit, the comptroller [****2]  authorized a final payment of only $ 1,100. The plaintiff was aware of the results of the audit by July 1, 1968 when it sent a letter of protest demanding payment of the full amount. For over six years the plaintiff did nothing further to collect any part of the final payment. In September, 1974, plaintiff submitted a requisition for final payment of the undisputed balance of $ 1,100, and in November, 1974, a check for that amount was sent to the plaintiff, a certificate of final payment having been filed in the comptroller's office at the same time. Plaintiff commenced an action in April, 1975 by service of a summons and complaint seeking $ 39,523.69, which amount was later reduced to $ 38,423.69 after plaintiff accepted the city's check for $ 1,100. In its answer, the city asserted the Statute of Limitations as an affirmative defense. The plaintiff, relying on the limitations provision in the contract, moved to dismiss the defense and the city cross-moved for summary judgment on the defense.

The Court of Appeals reversed the order of the Appellate Division, denied plaintiff's motion to dismiss the defense of the Statute of Limitations, granted the defendant's cross motion [****3]  for summary judgment, and answered the question certified in the negative, holding, in an opinion by Judge Wachtler, that the action was not timely since commenced more than six years after the audit was completed and plaintiff was informed of its results, and that although the contractual limitation provision was a standard clause undoubtedly included to shorten the Statute of Limitations, and to that extent, enforceable, it was doubtful that the parties intended to postpone the accrual of the cause of action or anticipated that the provision would be employed to extend the expiration of the statutory period, and in any event, since it was adopted at the inception of the contract, it could not serve to extend the Statute of Limitations inasmuch as an agreement to extend the Statute of Limitations in contract actions is valid only if in writing and signed by the promisor after the accrual of the cause of action.

 Kassner & Co. v City of New York, 62 AD2d 1184.

Disposition: Order reversed, etc.

CORE TERMS

statute of limitations, final payment, accrued cause of action, cause of action, accrued, waive, certificate, audit, motion to dismiss, statutory period, parties

Governments, Local Governments, Claims By & Against, Legislation, Statute of Limitations, Time Limitations, Contracts Law, Defenses, Affirmative Defenses, Statute of Limitations, General Overview, Extensions & Revivals, Waivers, Civil Procedure, Waiver, Contract Conditions & Provisions, Waivers, Responses, Defenses, Demurrers & Objections, Waiver & Preservation of Defenses, Pleadings & Proof