Defendant Lincoln General Insurance Company ("Lincoln General") moves for summary judgment dismissing the claims of Carlo Lizza & Sons Paving, Inc. ("Lizza Paving") in Action No. 3.

On May 2, 2002, the Incorporated Village of Lynbrook ("Lynbrook") entered into a public construction contract with Techcon Contracting, Inc. ("Techcon") pursuant to which Techcon was to perform certain roadway improvements.

On May 6, 2002, Lincoln General issued a performance and payment bond for the work relating to that contract. Under the terms of the performance and payment bond, Techcon and Lincoln General jointly and severally agreed to pay for work, labor and/or materials provided in connection with the contract.

By contract dated June 13, 2002, Lizza Paving was retained by Techcon as a subcontractor, to perform grading and paving work. Lizza Paving alleges it performed work pursuant to its contract with Techcon beginning on June 24, 2002. Lizza Paving suspended work on the project on July 31, 2002 because Techcon had failed to pay it for any of the work it had performed prior to that date. On October 31, 2002, Lizza Paving sent an invoice to Techcon seeking payment for all the work it had performed. Techcon did not pay Lizza Paving the amount sought in the invoice.

In this action, Lizza Paving seeks to recover the amount it claims is due under Techcon under the payment bond issued by Lincoln General.

After Lizza Paving suspended its work, it was contacted by Lynbrook and advised to complete the paving work on Leamon Avenue. Lizza Paving completed this work and was paid for this work directly by Lynbrook.

Lizza claims it has not been paid for its work because Lynbrook and its engineer, Cameron Engineering & Associates LLP, ("Cameron") have not approved the work.

Lynbrook terminated Techcon on or about September 23, 2002 due to its alleged failure to perform the work in accordance with the terms of the contract and industry standards.

The performance and payment bond defines a claimant as one having a contract with the principal or with a subcontractor of the principal. The performance and payment bond designates Techcon as the principal. Lizza Paving, who had a contract with Techcon, is a claimant under the terms of the bond.

Lincoln General asserts that Lizza Paving's claim is time barred by the statute of limitations contained in State Finance Law §137 and the terms of the contract.

Paragraph 3(b) of the bond provides that no suit or action shall be commenced on the [*2]bond by any claimant "After the expiration of one (1) year following the date on which Principal ceased Work on said Contract." Lincoln General asserts that if the claim is not time barred by State Finance Law §137, it is barred by the limitation period contained in the bond.

Lizza Paving commenced its action on May 25, 2004. It was later consolidated with related actions arising from the Techcon/Lynbrook contract.

A.State Finance Law §137

State Finance Law §137(4)(b) provides:

"No action on a payment bond furnished pursuant to the section shall be commenced after the expiration of one year from the date on which final payment under the claimant's subcontract became due."

State Finance Law §137(4)(b) must be read in conjunction with State Finance

Law §137(3) which provides:

"Every person who has furnished labor or material, to the contractor or to a subcontractor of the contractor, in the prosecution of the work

provided for in the contract and who has not been paid in full therefor before the expiration of a period of ninety days after the day the last

labor was performed or material was furnished by him for which the claim is made, shall have the right to sue on such payment bond in his

own name for the amount, or the balance thereof, unpaid at the time of the commencement of the action."

The provisions of State Finance Law §137 apply to all bonds furnished in connection with the statutory obligation to obtain payment and performance bonds. A.C. Legnetto Const., Inc. v. Hartford Fire Ins. Co., 92 NY2d 275 (1998). State Finance Law §137(3) and (4)(b), when read in tandem, establish the earliest date upon which a claim can be brought against the surety and the final date upon which such a claim can

be brought. See, Windsor Metal Fabricators, Ltd. v. General Accident Ins. Co. of America, 94 NY2d 124 (1999).

The issue which is determinative of Lincoln General's motion to dismiss based upon the limitation period contained in State Finance Law §137(b)(4) is the date upon which Lizza Paving's final payment became due. Neither party truly addresses this issue in their motion papers.

Lincoln General asserts that the date upon which Lizza Paving's final payment became due is the date upon which Techcon was terminated by Lynbrook. Lynbrook terminated Techcon on September 23, 2002. If this is so, then Lizza Paving would have had to commence its action by September 23, 2003. Since Lizza Paving did not commence this action until May 25, 2004, the action would be time barred.

Lincoln General offers no factual basis for its determination of the date upon which Lizza Paving's final payment was due.

The Court cannot determine from the papers the date upon which Lizza Paving's final payment was due. Lizza Paving's contract with Techcon incorporates by reference Techcon's [*3]contract with Lynbrook. Where the terms of one agreement are incorporate by reference into another agreement, the court must review both agreements. See, Peter Scalamandre & Sons, Inc. v. Village Dock, Inc., 187 AD2d 496 (2nd Dept. 1992), lv. den., 81 NY2d 710 (1993). The Court has not been provided with a full copy of the agreement between Lynbrook and Techcon. Therefore, the Court cannot determine if there are any conditions precedent to Lizza Paving receiving payment and, if so, whether those conditions have been met. See gen'ally, Swing Staging, Inc. v. Hartford Fire Ins. Co., 269 AD2d 193 (1st Dept. 2000); and Gill Const. & Builders, Inc. v. Bellmore Fire Dist., 12 Misc 3d 1175(A) (Sup.Ct. Nassau Co. 2006).

The contract between Techcon and Lizza Paving provides that all work is subject to the approval of Lynbrook's engineer, Cameron. Lizza Paving claims Cameron has never approved its work. If Cameron's approval is a condition precedent to Lizza Paving being entitled to receive its final payment and such approval has not been provided, Lizza Paving's right to bring the action may not yet have accrued. Id.

The party seeking summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); and Zuckerman v. City of New York, 49 NY2d 557 (1980). If the party seeking summary judgment fails to make a prima facie showing of entitlement to judgment as a matter of law, the motion must be denied. Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851; Widmaier v. Master Products, Mfg., 9 AD3d 362 (2nd Dept. 2004); and Ron v. New York City Housing Auth., 262 AD2d 76 (1st Dept. 1999).

Since Lincoln General has failed to make a prima facie showing of entitlement to judgment as a matter of law on this basis, its motion for summary judgment premised upon State Finance Law §137 must be denied.

B.Contractual Limitation Period

Lincoln General further asserts that if Lizza Paving's claim is not barred by State Finance Law §137, it is barred by the contractual limitations period. Paragraph 5(b) of the bond indicates that no claim may be maintained more than one year after the principal, Techcon, ceased work on the project. This paragraph provides that if the limitation provided therein is barred by statute or case law, the bond provides for the shortest period permitted by law.

New York permits parties to shorten the statute of limitations established by statute provided the shorter time is reasonable. Planet Construction Corp. v. Board of Education of the City of New York, 7 NY2d 381 (1960); Protter v. Nathan's Famous Systems, Inc., 246 AD2d 585 (2nd Dept. 1998); and CPLR 201.

Lizza Paving does not assert the limitation period established by the bond is unreasonable. It argues that since the reasons for Techcon's termination

are in dispute, factual issues exist as to when the limitation period in the bond began to run.

Lizza Paving's argument is without merit. The bond contains a one year limitation period running from the date upon which Techcon "..ceased Work on said Contract." (Lincoln General Ins. Co. Performance and Payment Bond, Bond No. -LNS000753, ¶ 3[b]). The date upon which the limitation period contained in the bond began to run was not dependent upon whether Techcon was terminated or whether the termination was with or without cause. The limitation period contained in the bond began to run on the date Techcon ceased work on the contract, regardless of the reason. Techcon ceased work on the project in September 23, 2002. Lizza Paving commenced its action on May 25, 2004. Lizza Paving's action was commenced [*4]more than one year from the date upon which Techcon ceased work on the contract. Therefore, its claim against Lincoln General is time barred and the motion for summary judgment dismissing Lizza Paving's action must be granted.

Accordingly, it is,

ORDERED, that Lincoln General's motion for summary judgment dismissing the action of Lizza Paving is granted; and it is further,

ORDERED, that Action No. 3 is severed as to Lincoln General Insurance Company and continued as to the remaining Defendants.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY_____________________________

February 23, 2007Hon. LEONARD B. AUSTIN, J.S.C.