CONTRACTORS MUST COMPLY WITH THE SCA'S NOTICE OF CLAIM PROVISION
Updated: Mar 12, 2022
In February 2022, an Appellate Court in New York dismissed a contractor’s complaint against the SCA for alleged unpaid extra work and retainage in excess of $3,000,000.00 on various projects. One Ten Restoration, Inc. v. New York City School Construction Authority, 2022 NY Slip Op 01032 (2nd Dept. 2022).
The complaint was dismissed due to the contractor’s failure to timely file a verified notice of claim under Section 1774 of the Public Authorities Law. This law provides that:
"No action or proceeding for any cause . . . relating to the design, construction, reconstruction, improvement, rehabilitation, repair, furnishing or equipping of educational facilities, shall be prosecuted or maintained against the [SCA] unless . . . a detailed, written verified notice of each claim upon which any part of such action or proceeding is founded was presented to the board within three months after the accrual of such claim" (Public Authorities Law § 1744 [emphasis added]).
In plain terms, Public Authorities Law § 1744 states that a contractor must file a verified notice of claim with the SCA within three months of the accrual of the claim as a condition precedent to filing a lawsuit. Even giving the contractor the benefit of the doubt that its extra work claims may not have accrued until substantial completion of each project, the complaint was dismissed because the contractor filed its notice of claim years after the projects were completed.
The Court also rejected any argument that the SCA waived the requirement of a notice of claim by lulling the contractor into taking no action to file one, as no such evidence existed.
When performing work for the SCA or other public agencies in New York, a contractor must be aware of the various statutes and contract provisions that require the filing of notices of claims prior to filing a lawsuit. Failing to comply with a statutory or contractual notice of claim will most likely result in the dismissal of your complaint, regardless of the merit of your extra work or other claims.
About the author: George Marco is an attorney practicing in the field of construction law. He also holds a Bachelor of Science in Mechanical Engineering and was previously employed as a Project Manager for a public improvement contractor.
Disclaimer: This article is for informational purposes only and not intended to serve as legal counsel.