Court Opinion

ID: 5858357
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:11:07.670081+00
Date Added: 2024-06-11T08:44:20.980613
License: Public Domain

OPINION OF THE COURT
Casey, J.
This action arose out of the alleged defective design and construction of the marble curtain wall on the Swan Street Building in the Governor Nelson E. Rockefeller Empire State Plaza in Albany. The State commenced the action, seeking damages for alleged breach of contract and negligence, by service of a summons with notice on the various defendants in July, August and September, 1979. Defendants are the architectural partnership and two individual partners, the general contractor and various insurers who had issued performance bonds in connection with the construction. Several subcontractors were impleaded by defendants. After the State served its complaint, defendants and third-party defendants moved to dismiss upon the ground that the actions were barred by the three-year Statute of Limitations governing negligence actions and the six-year Statute of Limitations governing breach of contract actions. Special Term granted the motions and this appeal ensued.
In support of their motions, defendants and third-party defendants submitted affidavits and documents establishing that most, if not all of the actual work on the Swan Street Building was completed prior to July 31, 1973, which was six years before the first of the defendants was served in this action. For example, the building was dedicated in January, 1972 and by April, 1972 the burden of security had been assumed by the Capitol Police. By June, *3451972, the building was 100% occupied by the State and it was described as complete except for minor items. In June of 1972, the general contractor was authorized to cancel its fire insurance policy on the building, and as of July, 1973, the general contractor had not been on the project for some 10 months.
The State, on the other hand, contends that although most of the physical work had been completed by July 31, 1973, a substantial contractual relationship between the State and the general contractor and the State and the architect continued after that date. Indeed, the State contends that this relationship continued until the issuance of the final certificate of payment in July, 1977, which, the State argues, should be the accrual date for its causes of action.
The general rule in contract cases is that “the cause of action accrues and the Statute of Limitations begins to run from the time of the breach” (Kassner & Co. v City of New York, 46 NY2d 544, 550). The rule is somewhat different, however, in construction contract cases involving an owner’s claims against an architect arising out of alleged defective construction of buildings. In such cases, the owner’s causes of actions “however verbally classified, accrue for purposes of all Statutes of Limitations on completion of construction” (Sears, Roebuck & Co. v Enco Assoc., 43 NY2d 389, 394). The rationale for using as the accrual date the completion of construction, rather than the actual date of the defective construction, appears to lie in the theory that the architect’s duty to design a proper building is a continuous one that does not end until the building is completed (see Sosnow v Paul, 43 AD2d 978, affd 36 NY2d 780, citing Siegel v Kranis, 29 AD2d 477). Given the architect’s expertise and the owner’s need to rely on that expertise to see that the building” is properly constructed, it would be unreasonable to require the owner to resort to litigation while construction is in progress and curative steps could be taken to remedy the defect (County of Broome v Vincent J. Smith, Inc., 78 Misc 2d 889, 892).
This court has applied the completion of construction accrual date to construction contract cases involving engineers who design the construction project (State of New *346York v Ehasz, 80 AD2d 671). Although general contractors are not professionals like architects and engineers, the contractual duty assumed by them continues until completion of construction, and the owners rely on their expertise to see that the project is completed according to the plans. We conclude, therefore, that completion of construction is also the accrual date for an owner’s claims of defective construction against a general contractor (Excelsior 57th Corp. v 303 Assoc., NYLJ, Sept. 7, 1978, p 6, col 2, affd 73 AD2d 849, mot for lv to app den 49 NY2d 705).
The point in time when construction was completed, of course, depends upon the facts and circumstances of each case. The courts have generally looked to the completion of the actual physical work (see, e.g., Sears, Roebuck & Co. v Enco Assoc., 43 NY2d 389, supra; State of New York v Ehasz, 80 AD2d 671, supra; Sosnow v Paul, 43 AD2d 978, affd 36 NY2d 780, supra), but in Board of Educ. v Celotex Corp. (88 AD2d 713, affd 58 NY2d 684), an action by the owner against the architect, this court used the issuance of the final certificate of payment as the completion date, despite the fact that the physical work was finished some three years earlier. Since the contract therein “required the architect to conduct inspections to determine the dates of substantial and final completion and to issue a final certificate of payment”, we concluded that “the final certificate [of payment] was not merely a ministerial act but represented a substantial contractual right of plaintiff owner and a concommitant contractual responsibility of defendant architect in completing the project” (supra, at p 714; emphasis added). Here, none of defendants had the contractual responsibility for issuing the final certificate. Rather, that responsibility lay with the State itself. The State’s project manager, a third-party defendant, was obligated by its contract with the State to “conduct, in conjunction with the designing architects and engineers, final inspection of all units of construction, preliminary to acceptance, to ensure the conformance of all aspects of the work to contract requirements”. The State’s issuance of the final certificate of payment was, in our view, nothing more than the State’s formal acceptance of an already completed project. Such acceptance served to trigger the running of *347the contractual guarantees and signified the end of the period for making equitable adjustments in the contract prices. It cannot, however, serve to extend the completion date of the project for those parties whose contractual obligations concerning the construction itself had ended some five years earlier when the physical work was substantially completed and the building was fully occupied by the State.
The State points out that for a substantial period of time after the physical construction work was complete there were ongoing negotiations between the State and its general contractor concerning equitable adjustments to the contract prices based upon such factors as delays and changes in specifications. These negotiations, however, did not relate to the construction itself. Rather, they were concerned solely with the prices to be paid by the State for work that was already completed, and they occurred long after the general contractor had left the work site.
Although the parties’ proof does not firmly establish a fixed date for the completion of the actual construction of the building, it does establish that the work was completed and the building occupied by the State before July 31, 1973. Since the State’s actions were not commenced until July 31, 1979, more than six years have passed following completion of construction and, therefore, the State’s causes of action, whether grounded in negligence or breach of contract, are barred.
The order should be affirmed, without costs.