Court Opinion

ID: 6014571
Source: CourtListenerOpinion
Date Created: 2022-01-13 11:10:45.707608+00
Date Added: 2024-06-11T08:50:29.631009
License: Public Domain

Balio, J. (dissenting in part).
I respectfully dissent in part. I disagree with the majority’s analysis of Davidson Pipe Supply Co. v Wyoming County Indus. Dev. Agency (85 NY2d 281) and with the majority’s conclusion that the construction of the public parking garage was not a public improvement within the meaning of State Finance Law § 137 (1).
Section 137 provides that, in any contract involving the construction of a public improvement, the municipal corporation must require each contractor to post a labor and material payment bond. The purpose of that requirement is to provide "alternative protection for projects determined to be 'public improvements’ by requiring the posting of a bond to guarantee payment” to those who furnish labor and materials (Davidson Pipe Supply Co. v Wyoming County Indus. Dev. Agency, supra, at 285 [emphasis added]). Section 137 does not define "public improvement”. The majority, relying upon the definition of "public improvement” in Lien Law § 2 (7), concludes that the land where the work is to be performed must be owned by the State or a public corporation at the time the contract is executed. There is no support for that proposition in Davidson. To the contrary, the Court in Davidson stated that, in determining whether a particular project constitutes a public improvement within the meaning of section 137, the fact of temporary ownership is not controlling (see, Davidson Pipe Supply Co. v Wyoming County Indus. Dev. Agency, supra, at 286). Further, the Court observed that, because Lien Law § 2 (7) defines "public improvement” solely in the context of ownership, the characterization of a "public improvement” in that section is inconsistent "with [the Court of Appeals’] characterization of [a public improvement under] section 137 of the State Finance Law as focused upon [public]-sponsored work” (Davidson Pipe Supply Co. v Wyoming County Indus. Dev. Agency, supra, at 287; see also, Chittenden Lbr. Co. v Silberblatt & Lasker, 288 NY 396, 402). Consequently, because the analysis of the majority is based upon its misplaced reliance on the definition of "public improvement” in Lien Law § 2 (7), the majority’s holding with respect to State Finance Law § 137 is fatally flawed.
Instead, the Court of Appeals has determined that the definitions of "public improvement” in General City Law § 20-e (2) (b) and County Law § 850 (2) (b), which include a public garage, are consistent with the focus of section 137 on public-sponsored work (see, Davidson Pipe Supply Co. v Wyoming County Indus. Dev. Agency, supra, at 286-287). There is no question that the *886construction of the subject parking garage was public-sponsored. Defendant City of Syracuse (City) authorized and funded the entire project. Further, upon completion, ownership of the parking garage was to be transferred to the City’s industrial development agency, thereby indicating that the intended beneficiary of the project is a public benefit corporation. Thus, contrary to the majority’s view, the Court’s analysis in Davidson unmistakably indicates that State Finance Law § 137 applies where, as here, the project is public-sponsored, involves the construction of a public facility and the intended beneficiary is a public corporation, irrespective of whether the land is temporarily owned publicly or privately.
Plaintiff contends that, because the parking garage is a public improvement, a private right of action may be maintained against the City for its failure to require HGPC to post a labor and material payment bond. Although State Finance Law § 137 does not explicitly create a private right of action for the failure to require contractors to post a payment bond, I conclude that such a right of action may be implied. To determine whether the Legislature intended to create a private right of action, the court must consider " '(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme’ ” (Carrier v Salvation Army, 88 NY2d 298, 302, quoting Sheehy v Big Flats Community Day, 73 NY2d 629, 633). The City concedes that the first two criteria have been met in this case but contends that the third has not. With respect to the third criterion, the City contends that, because the statute provides for claims against payment bonds but does not provide for claims based on the failure to require the posting of a bond, the Legislature expressed an intent to exclude such a private right of action. I disagree. Had the Legislature intended to preclude a private right of action against municipalities, it could have so stated, as it did in General Municipal Law § 106-b (2) and Lien Law § 2 (7). The purpose of section 137 is to protect subcontractors and materialmen in situations in which contractors default on public improvement projects (see, Chittenden Lbr. Co. v Silberblatt & Lasker, supra, at 402), by providing additional protection above and beyond that afforded by the Lien Law (see, Pennex Aluminum Co. v International Fid. Ins. Co., 818 F Supp 772). "By the enactment of the additional bond scheme, the Legislature sought to remedy the lack of protection given by the Lien Law to those who furnish materials in connection with State contracts” (Davidson Pipe Supply *887Co. v Wyoming County Indus. Dev. Agency, supra, at 285). Recognition of a private right of action is therefore consistent with the legislative intent to protect subcontractors when the contractor defaults (see, Davidson Pipe Supply Co. v Wyoming County Indus. Dev. Agency, 156 Misc 2d 989, 993-996, revd on other grounds 196 AD2d 240, affd 85 NY2d 281, supra).
Thus, I dissent in part and vote to modify the order by denying the City’s cross motion for summary judgment in its entirety and granting in part plaintiffs motion, dismissing the City’s affirmative defenses and counterclaim and awarding partial summary judgment to plaintiff on its contractual retainage and State Finance Law § 137 causes of action. (Appeal from Order of Supreme Court, Onondaga County, Hayes, J.— Summary Judgment.) Present—Denman, P. J., Green, Lawton, Balio and Fallon, JJ.