There are two separate claims joined in this action arising from the same MTA-New York City Transit Authority (NYCTA) public works project. Defendant, Hartford Insurance Company ("Hartford") seeks summary judgment dismissing this action and summary judgment on its counterclaim against Plaintiffs, Shroid Construction, Inc. ("Shroid") and The Manhattan Company of New York ("Manhattan"). The two different actions will be addressed herein consecutively.

Alternatively, Hartford further claims that, even if this contractual provision does not bar the action, it is time barred by State Finance Law § 137(b), which provides that no action on payment bond furnished pursuant to the statute shall be commenced more than one year from the date upon which final payment on the subcontractor's contract became due.

Shroid's notice of lien indicates its final payment became due on January 31, 2004. Shroid's final application for payment indicates it is for work performed through January 23, 2004. Shroid was not paid for its work. In October 2005, Shroid made a demand upon Hartford for payment.

Hartford asserts the one year statute of limitations in the Gottlieb contract or the State Finance Law bars this action. Paragraph (e) of the payment bond states, "In no event shall the Surety be subject to any suit action or proceeding hereon that is instituted later than two (2) years after the complete performance of said Contract and final settlement thereof." Shroid asserts that this provision gave, at a minimum, two years from the completion of its work to commence the action.

DISCUSSION

A.Shroid

Contrary to Hartford's position, the provisions of State Finance Law § 137 can be superseded by the provisions of the bond. The position Harford takes in this case was argued and rejected in A.C. Legnetto v. Hartford Fire Ins. Co., 92 NY2d 275 (1998); Swing Staging, Inc. v. Hartford Fire Ins. Co., 269 AD2d 193 (1st Dept. 2000); and Scaffold-Russ Dilwork Ltd v. Shared Management Group, Ltd., 289 AD2d 734 (4th Dept. [*2]2001). These cases hold that State Finance Law § 137 made payment bonds mandatory in public works projects and shortened the applicable statute of limitations on claims on such bonds from the contractual six year statute of limitations to one year unless superseded by more liberal provisions in the bond. Thus, the motion to dismiss the complaint on Statute of Limitations grounds must be denied.

B.The Manhattan Company

By written agreement dated April 27, 2004, Gottlieb retained Manhattan to provide labor and materials in connection with the Project. Manhattan also performed work for Gottlieb in connection with the Project.

Hartford asserts the defense of receipt and release (Truitt Aff. Ex. 9). Manhattan asserts it signed a Partial Waiver and Release of Liens to obtain partial payment of the money due it on the contract. Manhattan argues that despite the terms of the partial release, its course of conduct with Gottlieb was that Manhattan would submit a request for payment and Gottlieb would insist upon a partial release and waiver. Upon the execution of the partial release and waiver, Gottlieb would pay Manhattan. Manhattan points to the letter from Gottlieb to Manhattan dated October 26, 2005 in which Gottlieb acknowledges that Manhattan is due $315,000 for its work (Friedlander Aff. Ex. D).

When dealing with the issue of waiver or release, the court must look to the parties' course of conduct and the intent of the document. See, E-J Eletronic Installation Co. v. Brooklyn Historical Society, 43 AD3d 642 (1st Dept. 2007); and West End Interiors, Ltd. v. Aim Construction & Contracting, Corp., 286 AD2d 250 (1st Dept. 2001). Under the circumstances evidenced herein, these cases hold that questions of fact exist regarding whether an executed release is in fact a binding release or simply an acknowledgment of payment. As a result, summary judgment must be denied.

C.Hartford's Counterclaims

Several of Hartford's counterclaims are based upon State Finance Law §137(4)(c) which allows an award of counsel fees under a bond where the claim or defense is without substantial basis in law or fact. Since no final determination as to the merits of the claims herein has been made, a summary award of counsel fees under the bonds is inappropriate.

Thus, both the Defendant's motion for summary judgment dismissing the complaint and summary judgment on the counterclaim must be denied.

Accordingly, it is,

ORDERED, that Defendant's motion for summary judgment is denied.This constitutes the decision and Order of the Court.

Dated: Mineola, New York_____________________________

May 6, 2008Hon. Leonard B. Austin, J.S.C.