Motion to Dismiss; Statute of Limitations; Doctrine of Laches; State Finance Law §123-b
By: Paulina Zaferiou | Staff Writer
Defendant, City University Construction Fund (“CUCF”), solicited proposal requests for a public works contract. CUCF awarded a public works contract to Hill International, Inc., which the parties entered into in 2011. In 2016, Plaintiff, a citizen taxpayer, commenced this action, seeking a declaration that the public works contract was illegal, null, and void under General Municipal Law §101 and §103. In response, Defendant moved to dismiss Plaintiff’s action.
Defendant made four arguments in support of their motion. First, Defendant argued that Plaintiff did not commence the action within the one-year time limit. Second, Defendant argued Plaintiff’s action was untimely under the six-year “residuary” clause pursuant to CPLR § 213(1), meaning even if the statute of limitations were six years, it was still not brought within that time. Third, Defendant argued Plaintiff’s action is barred by the doctrine of laches, in that voiding the contract would cause disorder and disruption, forcing CUCF to appoint a new manager or a new management service even though the project was mostly complete. Fourth, Defendant argued Plaintiff did not have standing to bring the action because under State Finance Law § 123-b, CUCF is not an officer or employee of the state. Defendant asserted that since CUCF is a public benefit corporation it is considered to be independent and autonomous and a citizen taxpayer cannot bring an action against it.
In opposition, Plaintiff argued the applicability of the one-year statute of limitations depended on if he was seeking a forfeiture of money, which he was not in this case. Plaintiff further argued that CUCF’s acceptance of funding from the state is sufficient to consider it a state actor, thereby giving him standing to bring this action. In response to the laches argument, Plaintiff referenced a case where the delay in action did not harm the Defendant.
Generally, on a motion to dismiss, the defendant has the initial burden of establishing prima facie that the statute of limitations has run out. Moreover, under State Finance Law § 123-b, a citizen taxpayer action must be commenced within one year after the contract was entered into.
The Court determined that Plaintiff did not present sufficient evidence to show a justification in his delay in bringing the current action. The Court held that CUCF was not an “officer or employee of the state” under State Finance Law § 123-b, reasoning that it would be poor public policy to classify CUCF as an officer of the state. Courts have occasionally allowed citizens to have standing where there is an “impenetrable barrier” to reaching judicial scrutiny of executive or legislative actions. In this case, the Court felt that there was no such barrier to judicial review. In regards to the laches argument, the Court reasoned that a clear display of harm and prejudice if the public works contract was invalidated after six years was shown.
The Court held that Plaintiff’s arguments were unpersuasive and granted the Defendant’s motions to dismiss.
Sawchuk v. City Univ. Constr. Fund, Index No. 155304/2016, 01/13/2017 (Ramos, J.)