This action arises from a construction project undertaken by the parties in late 2005 and early 2006, involving the excavation and paving work for a new parking lot on defendant's premises. The parties signed a contract in November 2005 whereby plaintiff was to perform the excavation for a price of $34,000. After the excavation work was done, a slope that had been cut back failed, resulting in a dispute between the parties about the cause of the failure and payment of the contract price. Plaintiff ultimately brought this action for breach of contract, seeking the portion of the contract price that has not been paid ($16,750), together with $5,900 that it alleges defendant agreed to pay for remedial work that was performed. A second cause of action seeks the same amounts on a theory of quantum meruit.

Plaintiff moves for an order striking the fifth affirmative defense, which seeks dismissal of the complaint on the ground that the parties agreed to arbitrate any dispute arising from the contract, or, alternatively, for an order staying this action so that arbitration may proceed. Defendant cross-moves for dismissal of the complaint, arguing that while arbitration was the sole method for resolving contractual disputes, plaintiff's failure to comply with the contractual preconditions to arbitration - to wit, the filing of a claim for resolution by the architect - precludes it from seeking relief in that forum, as well as in this judicial one.

It has now been definitively established, by the parties' submissions in support of their respective motions, that the portions of the standard form contract requiring arbitration were deleted from the parties' agreement (Affidavit of Wayne P. Hall, dated January 2, 2008, Exhibit 2 [Contract], Supplementary Conditions, ¶¶ 4.4, 4.5, 4.6). There being no valid agreement to arbitrate this dispute, the fifth affirmative defense is clearly unsupportable, and the motion to strike that defense shall therefore be granted.

Turning to the cross-motion, defendant suggests that plaintiff is precluded from proceeding with this action, because it failed to timely file a notice of claim, which is a contractual condition precedent to litigation. Plaintiff contends that its letter of February 6, 2006, demanding payment as allegedly agreed by all parties at a meeting on January 11, 2006, satisfied the contractual notice requirement. The February letter was sent to both the architect and the owner, and plainly set forth the nature and extent of plaintiff's "claim" - to wit, that he had not been paid the second installment' of the contract invoice, as agreed to on January 11th, amounting to $16,750, and was demanding payment of that amount as well as $5,900 owed for the "initial slope repair as authorized by [the owner's] site engineer" (Affidavit of Alfred Gorick, Jr., dated January 9, 2008, Exhibit A [Letter of February 6, 2006]).

Although defendant's principal, Wayne Hall, argues that he, personally, never agreed to make the payments now demanded by plaintiff, the record proves that an agreement was reached between plaintiff, a representative of the architect (who was also defendant's "authorized representative" for the purpose of, inter alia, determining whether the contract work had been completed), and an individual sent by defendant and apparently acting on its behalf. There is no dispute that the parties present at that meeting reached an agreement that plaintiff would be paid the remainder of the contract price ($33,500), in two installments of $16,750 each, on January 13, 2006 and January 20, 2006; that the individual attending on defendant's behalf, Phil Saporito, telephoned Hall the same day, to inform him of this agreement and ask that the first payment be disbursed; or that defendant actually tendered the check for the first installment of $16,750, on or about January 13, 2006. As of that date, plaintiff did not have a "claim" to interpose, as its owner reasonably believed that the matter had been resolved and plaintiff would be paid all of the [*2]amounts to which he believed it was entitled, including the remaining $16,750 of the contract price, and the $5,900 sought for completed repair work.

Only when Hall thereafter made it known that he did not intend to pay the second installment of the contract price (due on January 20, 2006), or the additional $5,900, could plaintiff have reasonably been expected to realize that it had a claim that should be asserted. Within 21 days of that time, it sent the letter demanding payment. Thus, if that letter of February 6, 2006 can be deemed a "notice of claim," it was timely sent.

As noted, the letter clearly set forth the nature and extent of plaintiff's claim. The architect - the only entity with a duty to act on any notice of claim' - refers to the letter as a "claim letter," and notes that he provided a "determination" of that claim to the owner about 90 days after the letter was received (finding that plaintiff "did what he was contracted to do" and therefore that "the balance [of the] contract" was owed to plaintiff at that time (Affidavit of Kenneth D. Ellsworth, P.E., dated January 8, 2008, ¶ 3). The only arguable deficiency in the notice is the absence of the word "CLAIM," as mandated by the contract (Contract, Supplemental Conditions, § 4.2, modifying § 4.7.1).

Under these circumstances, it would be unconscionable to bar plaintiff from any avenue of relief from defendant's alleged failure to satisfy its express contractual obligations, merely because of the absence of the word "CLAIM" on a document that was intended as a claim, was recognized as a claim by the recipient architect, and was clearly sufficient to apprise defendant and the architect of the nature and amount of the claim. To the extent that plaintiff is seeking payment of the unpaid portion of the initial contract price, this case is distinguishable from situations where a contractor is seeking to recover for extra work, not contemplated by the original contract, such that the owner is being asked to pay more than originally agreed. In that circumstance, strict construction of contractual notice requirements serves the salutary purpose of making sure that the owner receives timely notice of the potential for an increase in its obligations (see, A.H.A. General Constr., Inc. v New York City Housing Auth., 92 NY2d 20, 33-34 1998]). Here, however - at least with respect to the portion of plaintiff's claim that relates to the $16,750 allegedly owed under the original contract - a notice of claim was in no way necessary to put defendant on actual notice of what was being demanded, or the basis for that demand. The contract itself provided ample notice to defendant of what its obligations would be, with respect to payment for the contracted work.

The only possible purpose of a notice of claim, in this situation, would be to advise the owner (and the architect, insofar as it was his duty to resolve the dispute) that the contractor continued to believe that the work had been completed satisfactorily, and that final payment was due. This purpose was amply served by the letter of February 6, 2006. To deprive plaintiff of his day in court' over the simple absence of the word "CLAIM" would truly serve to elevate form over substance to a degree that cannot be sanctioned by this court.

Arguably, the gravamen of this dispute (insofar as it relates to the $16,750 balance of the contract price) is not even properly viewed as the subject of a "claim," as it is merely a request for "final payment" which, according to the contract, is to be made by forwarding to the construction manager "a final Contractor's Application for Payment" (Contract, § 9.10.1). Upon receipt of such application, the construction manager is to forward the application, together with a "notice that the Work is ready for final inspection," to the architect, who will "promptly make such inspection" (id.). If the architect finds the work acceptable, a "final Certificate for [*3]Payment" is to be issued.

Given the generally informal manner in which this small project was apparently administered, the February 6, 2006 letter could certainly be viewed as a final "Application for Payment," and the architect's e-mail of June 6, 2006 a certification that the work was satisfactorily completed and payment due. The contract provides no explicit procedure to be followed in the event of the owner's failure to make final payment, but clearly, where an application has been made and a certificate issued, there is no need for an additional "notice of claim," as there would be nothing to be decided by the architect, and the owner would have already been notified - via the certificate - of the nature and extent of the contractor's request.

Accordingly, the court finds that insofar as a "notice of claim" may have been a condition precedent to bringing suit for the remainder of the contract price ($16,750), plaintiff's letter of February 6, 2006 satisfied that requirement, and the cross-motion must be denied.

In addition to the contract price, plaintiff also seeks to recover $5,900 for additional "repair" work allegedly done after the slope failed. There is no indication that this work was contemplated by the contract, or that any valid "change order" or contract modification was executed, that brought it within the scope of the parties' agreement (see, Contract, § 4.7.7 [increase in contract sum requires written notice prior to commencement of work]). Accordingly, the portion of the first cause of action (breach of the parties' original contract dated November 15, 2005) that relates to this additional work must be dismissed. The additional work may, however, remain the subject of plaintiff's second cause of action, which sounds in quantum meruit, with respect to which the contract's notice requirements are inapplicable.^[FN1]

Plaintiff's motion is therefore granted, insofar as it seeks dismissal of the fifth affirmative defense; the cross-motion is denied; and upon searching the record, the first cause of action is limited to the unpaid portion of the original contract price ($16,750), and the second cause of action is limited to the amount sought for additional work ($5,900), beyond the scope of the parties' written contract.

This decision shall constitute the order of the court.

Dated:June 2, 2008

Cortland, New York

ENTER

________________________________

Hon. Phillip R. Rumsey

Supreme Court Justice