Construction contract claims against NY school districts

Education Law §3813 sets forth strict requirements for a contractor, or any other party, to secure its claim against a school district.  This statute creates a condition precedent in maintaining an action against a school district: a notice of claim must be presented to the governing body of the school or district within three months following the accrual of the claim.  The contractor must present a verified claim to the governing body within three months of the accrual of the claim to a person who has the power to, but neglected or refused to, make an adjustment or payment within 30 days of the presentation.

The accrual of the claim, i.e. the start point for the countdown of the allotted three months, begins on the date that the payment was denied.  The severity of this requirement means that should the contractor fail to serve the verified claim before the allotted three month requirement expires, the contractor will be barred from bringing an action or special proceeding against the school district.  Furthermore, the statute of limitations to commence such a claim is one year, beginning after the cause of action arose, unless otherwise stated or agreed upon.

A saving provision for a contractor within this statute is the possibility of an extension of the time to serve a notice of claim upon the school district, granted upon the court’s discretion.  The statute sets forth factors for the court to consider, including

 “whether the claimant was an infant, or mentally or physically incapacitated…whether the claimant in serving a notice of claim made an excusable error concerning the identity of the district or school against which the claim should be asserted and whether the delay in serving the notice …substantially prejudiced the district or school in maintaining its defense on the merits.”

It is important to note that this statute is limited to contract and tort claims, and does not extend to the governance of mechanic’s liens.  As made clear by the Court in Rure Associates, Inc. v. DiNardi Const. Corp., Education Law §3813 does not create a prerequisite to commencement of an action to foreclose on a mechanic’s lien.  917 F.2d 1332, 1336 (2d Cir. 1990).  §3813 governs claims regarding district property and/or school property and requires notice of the claim to be given within three months after the accrual of the claim.  The Court made it clear that it does not interpret such claims to include mechanic’s liens, which are not filed against the school district but rather the actual property.  Id.

Therefore, when working with a school district, be aware of this statute and the three month requirement to serve a notice of claim upon the governing body of the school district, as failure to comply may bar your claim.

 

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