117 Misc. 2d 435 | New York Court of Claims | 1983
OPINION OF THE COURT
In an action seeking to recover damages for the alleged breach of two highway construction contracts, the parties have moved for partial summary judgment. (CPLR 3212, subd [e].) The claimant has moved in the alternative for an immediate trial to resolve any issue of fact that is found to exist. (CPLR 3212, subd [c].)
Both contracts
The State seeks to avoid liability by raising two defenses. The first is that its right to delete the remaining work was expressly reserved by the “Alterations and Omissions” clause set forth in the subject contracts. The second is founded upon the contracts’ executory clause which, it is claimed, was triggered by the unavailability of funds to complete the project.
The papers on these motions reveal that the parties have engaged in extensive discovery. The transcripts of the various witnesses examined, together with more than 100 exhibits, have been submitted on this application. The parties have agreed that in the event that the evidence submitted is found to raise triable issues of fact, which ordinarily would be sufficient to defeat the motions for summary judgment (see Phillips v Kantor & Co., 31 NY2d 307; Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439; Exchange Leasing Corp. v Bundy, 29 AD2d 828; 4 Weinstein-Korn-Miller, NY Civ Prac, par 3212.12), the court may resolve such issues without setting the matter down for an immediate trial (CPLR 3212, subd [c]) and without the necessity of a formal hearing.
Turning to the second defense, the State asserts that it was excused from performing the remainder of the contracts, suggesting that once Federal funds had been cut off, State moneys were likewise unavailable. This, it contends, rendered performance impossible and triggered the contracts’ executory clause.
In the present case, a review of the papers discloses that ordinary budgetary procedures were followed with regard to the funding of the subject contracts. In 1972, the State Legislature appropriated $253.3 million for the construction, and reconstruction of interstate highways. (L 1972, ch 34, § 5.) Of this sum, $214.2 million represented the Federal share and were advanced in anticipation of Federal reimbursement. Thereafter, the Federal Highway Administration (hereinafter referred to as FHWA) approved the contract work and the State Director of the Budget filed with the State Comptroller the requisite certificate of approval of availability. (State Finance Law, § 93, subd 3.) This encumbered the funds that had been appropriated to the extent of the moneys necessary to complete the contract work. Specific account numbers were assigned to each account and as work progressed, moneys were withdrawn from the accounts. On the date the State terminated the contracts, there were in each account sufficient moneys to pay for the remaining contract work.
Before addressing the question of the effect of the preliminary injunction on the availability of State first instance funds, consideration must be given to the possible use of State funds, other than first instance funds. In this regard, a procedure existed whereby the State could trans
With respect to the State’s first instance funds, there is no doubt that the preliminary injunction interrupted their immediate use and justified a suspension of the contract work. It cannot be said, however, that the effect of the preliminary injunction was to make such funds unavailable so as to warrant a termination of the contracts. The latter would necessarily depend on the issuance of a permanent injunction, a possibility that was foreclosed by the State’s premature termination of the contracts. Until such time, the Federal commitment,
Even had we concluded that a preliminary injunction and a permanent injunction were to be accorded the same effect, the executory clause could not be asserted as a
In passing, we note that the same result would have been reached had we been urged to excuse the State’s default on the ground of impossibility of performance. Under this theory, a party restrained by judicial order will not be excused for the performance if the party contributed to the issuance of the order. (Studio 54 Disco v Pee Dee Jay Amusement Corp., 81 AD2d 911; 18 Williston, Contracts [3d ed], § 1939, p 49; Restatement, Contracts, §§ 457, 458; 10 NY Jur, Contracts, § 373, p 362.) In the present case, we have found that the conduct of the State led to the issuance of the preliminary injunction. Moreover, the injunction was temporary and it cannot be said that such suspension or interference was so far material and substantial that the State ought in justice and of right to be held discharged of its obligation. (See Schoelkopf v Moerlbach Brewing Co., 184 NYS 267, affd 198 App Div 965.)
Finally, any suggestion that the State’s performance of the contracts should be excused on the grounds that its decision to delete the remaining work was immune from review must be rejected. At the time, the State was acting in its proprietary capacity, not in its governmental capacity, and must perform its contractual obligations in the
Accordingly, the State’s motion for partial summary judgment is denied, and the claimant’s motion for partial summary judgment is granted to the extent that the defenses predicated on the contracts’ “Executory Clause” and the “Alterations and Omissions” clause are stricken as insufficient, and that an interlocutory judgment in favor of the claimant against the State on the issue of liability is to be entered.
. FISH 72-1, D58247, PIN 9357.00: Advertised, July 5, 1972; PSE approval by the Federal Highway Administration, July 5, 1972; Let, Aug. 10, 1972; Attorney General approval, Aug. 31, 1982; Comptroller approval, Sept. 6, 1972; Final estimate, Feb. 18, 1976; Amount of contract: $15,681,570.30.
FISH 72-2, D58553, PIN 9357.01: Advertised, Aug. 16, 1972; PSE approval, Aug. 16, 1972; Let, Sept. 21, Í972; Attorney General approval, Oct. 6, 1972; Comptroller approval, Oct. 16, 1972; Final estimate, Sept. 17, 1975; Amount of contract: $12,834,000.
. At that time, contract No. FISH 72-1 was 50% completed and contract No. FISH 72-2 was 36% completed.
. “The Contractor specifically agrees that the contract shall be deemed executory only to the extent of the moneys available, and no liability shall be incurred by the State beyond the monies available for the purpose.” (Standard Public Works Specifications, Jan. 2,1962, p 10.) Parenthetically, it is noted that the State did not raise such a defense in claims that had been previously brought on behalf of the claimant’s subcontractors. (See Harrison & Burrowes v State of New York, 87 Misc 2d 637.)
. In this regard, it need not be established that there were no funds at all which could theoretically be used. Such an interpretation would render the executory clause meaningless, since the State is never without some funds.
. The word “available” has been interpreted as meaning available in the course of ordinary budgetary procedures and implies a request made by the responsible head of the department only for those items which are necessary to the proper and efficient administration of the department and the approval of those items by the final budgetary authority. (Starling Realty Corp. v State of New York, 286 NY 272, 278.)
. The funds remained in the accounts for over a year following the State’s termination of the contracts, at which time the unexpended balance remaining in each account was drawn down to zero. (FISH 72-1 [Jan. 19, 1975]; FISH 72-2 [Aug. 22, 1975].)
. This commitment became binding as of the date of PSE approval by the FHWA.