Afsco Specialties, Inc. v. Maryland Casualty Co.

37 Misc. 2d 641, 235 N.Y.S.2d 147, 1962 N.Y. Misc. LEXIS 2125
CourtNew York Supreme Court
DecidedDecember 13, 1962
StatusPublished
Cited by1 cases

This text of 37 Misc. 2d 641 (Afsco Specialties, Inc. v. Maryland Casualty Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Afsco Specialties, Inc. v. Maryland Casualty Co., 37 Misc. 2d 641, 235 N.Y.S.2d 147, 1962 N.Y. Misc. LEXIS 2125 (N.Y. Super. Ct. 1962).

Opinion

Clarence J. Henry, J.

This is a motion by the defendant for summary judgment under rule 113 of the Buies of Civil Practice.

The facts, agreed upon in the main, appear as follows from the submitted affidavits and documentary proof:

On April 1, 1957, the Board of Education, Central School District No. 1, Massena, New York, entered into a contract with the James J. Waters Corporation (hereinafter referred to as the “ Contractor ”) whereby the latter agreed to perform several million dollars worth of construction. On the same date the Contractor entered into a land and material payment bond agreement with the defendant casualty company whereby the latter became surety for the payment of all unpaid subcontractors. That agreement contained the following provisions: “3. No suit or action shall be commenced hereunder by any claimant (a) Unless claimant shall have given written notice [643]*643to any two of the following: The Principal, the Owner, or the Surety above named within ninety days after such claimant did or performed the last of the work or labor, or furnished the last of the materials for which said claim is made * * * by registered mail * * * (b) After the expiration of one (1) year following the date on which Principal ceased work on said Contract.”

On June 27, 1957, the Contractor entered into a subcontract with the plaintiff whereby the latter agreed to furnish and install certain materials for the contract sum of $10,400. The plaintiff substantially completed its work under the subcontract on May 20, 1958 (last item of material furnished, however, in Feb., 1959), but not until January 7,1960, did it notify the defendant, by ordinary letter, of a balance of $1,973 unpaid thereon since 11 May 20,1958.” On March 14,1960 the defendant requested a formal proof of claim, which was forwarded by the plaintiff on March 30, 1960. On June 29, 1960, the defendant informed the plaintiff of rejection of the claim on the ground that “ it does not come within the coverage of our bond”. The plaintiff’s action was commenced on or about January 3, 1962, and an answer in the form of a general denial was interposed.

The Contractor completed the entire work under the contract on October 14,1959 — a fact of significance in view of a portion of the controversy which has arisen on this motion.

The defendant’s motion for summary judgment is based upon two grounds: (1) that the action herein was not commenced (Jan. 3, 1962) within a year after the Contractor had finished its work (Oct. 14, 1959); and (2) that the notice of claim was not timely, i.e., that the date of furnishing the last of the materials for which claim was made (Feb., 1959) was more than 90 days prior to the date the notice was received (Jan. 7„ 1960).

The plaintiff has countered the first position of the defendant with the contention that the defendant, having failed to plead the one-year commeneement-of-aetion requirement as an affirmative defense in its answer (Civ. Prac. Act, §§ 242, 261) or moved for dismissal of the complaint within 20 days following service on the ground that the action is barred by time limitation (Bules Civ. Prac., rule 107, subd. 5), may not now raise the requirement on this motion for summary judgment — the requirement being, in the view of the plaintiff, a contractually-erected limitation and, as such, subject to the rules generally applicable to statutory and contractual limitations, barring an action only when properly raised. To this the defendant responds with a claim that the requirement is not a limitation but rather a condition precedent to action, which must be strictly observed, [644]*644and that the rules applicable to limitations are inapplicable, citing in support thereof the case of Balzano v. Port of New York Auth. (N. Y. L. J., Sept. 10, 1962, p. 14, col. 7). Examination of that case satisfies that it is not in point on the instant circumstances. There the Supreme Court, Kings County, held that a time-limitation clause (L. 1950, ch. 301, § 7) contained in the suits against New York Port Authority Act was a condition precedent to action to which the rules applicable to limitations did not apply — in recognition of the somewhat isolated rule that where a new legal right is created by a statute that also includes a time limitation for enforcement “ the limitations of the remedy are therefore, to be treated as limitations of the right” (see Kaplan v. Uribe, 286 App. Div. 156) — and also, apparently, because the consent of the State of New Jersey in joining in the act was specifically based upon the time limitation, by its terms. In simpler terms, under such peculiar circumstances, observance of the time requirement is a condition precedent to the commencement of action. A similar rule has been applied when the time requirement was contained in a so-called “proviso” or “provided that” clause (see Hill v. Supervisors, 119 N. Y. 344; Johnson v. Phoenix Bridge Co., 197 N. Y. 316), as in the original statute prescribing the time in which actions to recover damages for death caused by wrongful act could be brought — but not after that statute was changed to provide that such an action “ must be commenced within two years” (Decedent Estate Law, § 130), the courts then holding that the limitation was upon the remedy only and not upon the right, and was subject to rules governing Statutes of Limitation (Sharrow v. Inland Lines, Ltd., 214 N. Y. 101). The provision of the surety agreement involved herein is distinguished from the unusual conditions which gave rise to the rule in the Balzano, Hill, Johnson and Kaplmi cases. Here there is a simple time limit established by contract during which action may be commenced. This, if not unreasonably exercised, is a recognized contractual privilege (Civ. Prac. Act, § 10; Sapinkopf v. Cunard S. S. Co., 254 N. Y. 111; Planet Constr. Corp. v. Board of Educ., 7 N Y 2d 381), which constructs a limitation — not “ indissolubly hound up with the right ” (see Sharrow v. Inland Lines, Ltd., supra) — as opposed to a condition precedent, which is. To be taken advantage of, the former must be advanced by motion or pleading in the same manner as though it had been constructed by statute (see Califano v. Citizens Ins. Co., 163 Misc. 542; Robert Reiner, Inc. v. Hamburg-Amer. Line, 145 Misc. 592; Ferres v. Linea Sud Americana, 149 Misc. 335; Longe’s Estate v. Assurance Co. of America, 107 N. Y. S. 2d 961). Contractual [645]*645limitations are on a “ parity with corresponding statutory provisions ” (City of New York v. Alpha Contr. Corp., 182 Misc. 115; Amex Asphalt Corp. v. City of New York, 263 App. Div. 968, affd. 288 N. Y. 721). Not having been pleaded affirmatively in the answer, and not attacked by motion, therefore, the one-year limitation is not available to the defendant on this motion.

In connection with the defendant’s second position the plaintiff has countered with the contention that the defendant has waived and is estopped from asserting the 90-day notice requirement by accepting the claim with knowledge (from its face) that it was late, by thereafter requesting proofs of claim, and by failing to notify the plaintiff of rejection within a reasonable time, during which time the plaintiff lost its right to file a mechanic’s lien. Here the defendant is in a stronger position.

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Bluebook (online)
37 Misc. 2d 641, 235 N.Y.S.2d 147, 1962 N.Y. Misc. LEXIS 2125, Counsel Stack Legal Research, https://law.counselstack.com/opinion/afsco-specialties-inc-v-maryland-casualty-co-nysupct-1962.