Upon the foregoing papers, defendant Arnell Construction Corp. moves for an order, pursuant to CPLR 3211(a)(3) and Tax Law 203-a, dismissing the complaint on the ground that the Court previously determined that plaintiff M & R European Construction Corp. lacks the capacity to sue, and pursuant to CPLR 3211(a)(5), dismissing the complaint on the ground it is barred by the applicable statute of limitations, and/or barred by res judicata.

Isamu Noguchi Foundation (Noguchi) (not a party herein) entered into a construction contract with the New York City Department of Design and Construction pursuant to which Noguchi agreed to furnish labor materials and services for the Isamu Noguchi Museum project in Long Island City, New York. In or about August 2001, defendant Arnell entered into a contract agreement (Prime Contract) with Noguchi whereby Arnell agreed to perform general construction work for the project. In or about October 2001, Arnell entered into a subcontract with plaintiff M & R pursuant to which the plaintiff agreed to perform certain masonry concrete excavation work at the project. Arnell and M & R also entered into a second subcontract whereby plaintiff agreed to furnish materials to the project.

On April 13, 2004 Arnell commenced an action in this Court against Noguchi entitled Arnell Construction Corp. v The Isamu Noguchi Foundation, Inc, (Index 11821/04) alleging, breach of contract and seeking the balance of approximately $2,500,000.00 under the Prime Contract. Noguchi asserted counterclaims against Arnell [*2]based upon improper work and damages due to delays in the completion of the work. Arnell subsequently commenced a third-party action against M & R seeking common-law and contractual indemnity (hereinafter, the third-party action). The third-party action was eventually resolved pursuant to a stipulation of discontinuance with prejudice executed by Arnell and M & R on or about April 8, 2009. On or about April 30, 2009 Arnell and M & R entered into a Stipulation of Settlement agreement, which was so ordered by the court (Schmidt, J.) on May 1, 2009.M & R subsequently commenced an action against Arnell on February 9, 2010 alleging breach of contract seeking the unpaid balance of $377,797 of subcontract for masonry work. Arnell moved to dismiss the complaint on the ground that M & R lacked the capacity to sue pursuant to CPLR 3211(a)(3), that the action was barred by the statute of limitations and the doctrine of res judicata. This court (Dabiri, J.) granted Arnell's motion and dismissed the complaint on the ground that M & R lacked the capacity to maintain the action since it had been dissolved by proclamation by the New York Secretary of State on January 26, 2011. At the time of the motion, M & R represented that it had applied for reinstatement and, therefore, was not in the process of winding up its affairs. Based upon this admission, the court held that M & R lacked the capacity to sue and granted Arnell's motion to dismiss the complaint by order dated April 23, 2012.

M & R subsequently commenced the within action asserting the same breach of contract claim and seeking to recover the alleged unpaid balance ($ 377,797.74) of the subcontract between the parties. Defendant now moves to dismiss the within action on the ground that in the identical prior action this court has already determined that M & R lacked the capacity to sue since it has been dissolved by proclamation of the Secretary of State and is not winding up its affairs. Defendant further argues that the within action is untimely inasmuch as the plaintiff failed to commence this action (or the prior action) within the applicable 6-yr statute of limitations period. Further, defendant argues that the action is barred by res judicata since a stipulation discontinuing with prejudice a third-party action between Arnell and plaintiff concerning the identical transaction or series of transactions upon which the within action is based was executed and filed with this court.

Under Tax Law 203(a), the New York Secretary of State may dissolve a corporation that fails to pay taxes (Tax Law 203[a][7]). Once a corporation has been dissolved by proclamation for failure to pay taxes, absent subsequent reinstatement, the corporation is legally dead, and is no longer permitted to sue or be sued, except as specifically permitted by statute (see DeGeorge v Yusko, 169 AD2d 865 [1991]; Moran v Hurst, 66 AD3d 972 [2009]; Metered Appliances, Inc. v 75 Owners Corp., 225 AD2d 338 [1996]; Vantrel Enters. v Vantage Petroleum Corp., 270 AD2d 412 [2000]; De George v Yusko, 169 AD2d 865 [1991]; Brandes Meat Corp. v Cromer III, 146 AD2d 666 [1989]; Lorisa Capital Corp. v Gallo, 119 AD2d 99, 110—111 [1986]). Specifically, pursuant to statute, the dissolved corporation may only institute a suit, if related to the winding up of the affairs of the corporation (Business Corporation Law §§ 1006, 1009). Indeed, a corporation dissolved as a delinquent corporation under the Tax Law is authorized to conduct business only to the extent necessary to wind up its affairs (see Brandes Meat Corp., 146 AD2d at 667).

Business Corporation Law § 1005 defines "winding up" as the performance of acts directed toward the liquidation of the corporation, including the collection and sale of [*3]corporate assets (see Business Corporation Law § 1005 [a][2]; 172 East 122 Street Tenants Assn. v Schwarz, 73 NY2d 340 [1989]). Business Corporation Law § 1006 provides, in relevant part:

"(a) A dissolved corporation, its directors, officers and shareholders may continue to function for the purpose of winding up the affairs of the corporation in the same manner as if the dissolution had not taken place, except as otherwise provided in this chapter or by court order. In particular, and without limiting the generality of the foregoing:

"(4) The corporation may sue or be sued in all courts and participate in actions and proceedings, whether judicial, administrative, arbitrative or otherwise, in its corporate name, and process may be served by or upon it.

"(b) The dissolution of a corporation shall not affect any remedy available to or against such corporation, its directors, officers or shareholders for any right or claim existing or any liability incurred before such dissolution, except as provided in sections 1007 (Notice to creditors; filing or barring claims) or 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation)."

In the present case, M & R was dissolved by proclamation of the New York Secretary of State on January 26, 2011. In the complaint, the plaintiff alleges that it is currently winding down its affairs and seeks to bring the action pursuant to BCL 1006 and 1009.

Plaintiff has also submitted an affidavit by its co-principal, Benjamin Reid, wherein he avers that M & R is in the process of winding up its affairs and has commenced this action in furtherance of that objective. It is undisputed that the claim underlying this suit is an alleged breach of contract which occurred while the plaintiff was an active New York Corporation in good standing, prior to the plaintiff's dissolution. Defendant, however, notes that when the plaintiff commenced the prior action (in July 2011), it represented that it had "applied for reinstatement". Thus, defendant contends that the plaintiff cannot now assert the inconsistent position that it is winding down its corporate affairs.

Contrary to defendant's assertion, nothing in this court's prior order precluded the plaintiff from later undertaking to wind up its affairs and pursue claims related thereto. Moreover, Business Corporation Law § 1006 does not include any time limit for winding up the dissolved corporation's affairs. When a statute is silent, the courts will imply a reasonable period of time (see e.g. Spiegelberg v Gomez, 44 NY2d 920, 921 [1978]; Matter of Jonathan Neil Corp. v State Liq. Auth., 112 AD2d 70, 72 [1985]). Here, as noted above, plaintiff was dissolved in January 2011. Although M & R initially represented that it intended on seeking reinstatement in July 2011, the representation that it is now (over two years later) winding up its corporate affairs does not appear to be an unreasonable period of time. Thus, since the claim underlying this suit is an alleged breach of contract which occurred prior to the plaintiff's dissolution, the plaintiff is permitted to pursue said claim in the course of winding up its affairs (see Business Corporation Law § 1006[b]; Tedesco v A.P. Green Indus., Inc., 8 NY3d 243 [2007]). Accordingly, that branch of defendant's motion which was pursuant to CPLR 3211(a)(3) to dismiss the complaint on the ground that the plaintiff, as a dissolved corporation, lacks the legal capacity to sue is denied.

Res Judicata /Stipulation of Discontinuance [*4]

Next, defendant argues that the Stipulation of Discontinuance executed by the parties precludes the plaintiff's breach of contract claim in the instant action under the doctrine of res judicata. "Under the doctrine of res judicata, a disposition on the merits bars litigation between the same parties or those in privity with them of a cause of action arising out of the same transaction or series of transactions as a cause of action that either was raised or could have been raised in the prior proceeding" (Goldstein v Massachusetts Mut. Life Ins. Co., 32 AD3d 821 [2006]; see Matter of Hunter, 4 NY3d 260, 269 [2005]).

In the prior litigation (third-party action), in which defendant Arnell impleaded the plaintiff seeking indemnity for the Noguchi litigation, the third party action was resolved via a stipulation of discontinuance with prejudice executed by Arnell and M & R dated April 8, 2009. Arnell and M & R also entered into a Stipulation of Settlement which was so-ordered by the court on May 1, 2009. Based upon these documents, defendant maintains that the plaintiff's breach of contract claim is barred.

In opposition, the plaintiff argues that it was under no obligation to counterclaim in the Noguchi litigation in which it was a third party defendant, and that the stipulation of discontinuance in that litigation specifically preserved M & R's rights with respect to the instant action. In this regard, the court notes that pursuant to the terms of the settlement agreement, M & R's insurance carrier agreed to pay $70,000 in full and final settlement of "all of Arnell's claims against M & R arising out of the project known as the Noguchi Museum" (Emphasis added). The settlement agreement did not state that it was full and final settlement of all of M & R's claims against Arnell. Nor does the agreement prohibit M & R's claims, but rather appears to have contemplated the event in which M & R did assert such a claim against Arnell. In particular, the court notes that paragraph 4 of the Settlement Agreement states as follows: "In the event M & R asserts any claim (in any action or proceeding) against Arnell . . . arising out of or relating the (i) Noguchi Museum, (ii) any construction project or labor, materials, equipment, work and/or services furnished at the premises . . .Arnell shall have the right, but shall not be required, to vacate this Stipulation of Settlement and any stipulation of discontinuance, by making a motion to the Court . . . and returning the entire portion of the $70,000 Settlement Sum received on or before the return date of the Vacate Motion."

Defendant's argument that the plaintiff should have asserted the breach of contract claim as a counterclaim in the third-party action is also without merit. It is well settled that

"New York's permissive counterclaim rule allows counterclaims to be raised through separate litigation even if interposed as a defense in prior litigation, as long as a party defendant does not remain silent in one action, then bring a second suit on the basis of a pre-existing claim for relief that would impair the rights or interests established in the first action" (Classic Automobiles, Inc. v Oxford Resources Corp., 204 AD2d 209, 209 [1994]; see Henry Modell & Co. v Minister of Refm. Prot. Dutch Church, 68 NY2d 456 [1986]; Batavia Kill Watershed Dist. v. Charles O. Desch, Inc., 83 AD2d 97 [1981], affd. 57 NY2d 796 [1982]).

Here, there was no adjudication in a prior action between the parties of M & R's breach of contract claim for nonpayment (see Sweet Constructors, LLC v Wallkill Medical Development, LLC, 106 AD3d 810 [2013 ]). Nor would consideration of M & R's breach of contract claim require the reconsideration of the issues raised in the prior third-party action or otherwise impair defendant's rights that were established in the prior action. Accordingly, the doctrine of res judicata does not bar the instant action (see Batavia Kill Watershed Dist. v Charles O. Desch, Inc., 83 AD2d 97 [1981], affd. 57 NY2d 796 [*5][1982]; Skolnick v Skolnick, 262 AD2d 395, 396 [1999]; cf. 67—25 Dartmouth St. Corp. v Syllman, 29 AD3d 888, 890 [2006]).

Furthermore, dismissal of the prior action insofar as asserted by Arnell on the ground that M & R lacked the capacity to sue was not a determination on the merits and thus res judicata does not apply to bar M & R's commencement of the within action (see Sclafani v Story Book Homes, 294 AD2d 559 [2002]; Matter of Farkas v New York State Dept. of Civ. Serv., 114 AD2d 563 [1985]).

Timeliness

Defendant further argues that the plaintiff's action is time-barred. In moving to dismiss a cause of action pursuant to CPLR 3211(a)(5) as barred by the applicable statute of limitations, a defendant bears the initial burden of demonstrating, prima facie, that the time within which to commence the action has expired (see Jalayer v Stigliano, 94 AD3d 702, 703 [2012]; Fleetwood Agency, Inc. v Verde Elec. Corp., 85 AD3d 850 [2011]; Rakusin v Miano, 84 AD3d 1051 [2011]). The burden then shifts to the plaintiff to raise an issue of fact as to whether the statute of limitations was tolled or was otherwise inapplicable, or whether it actually commenced the action within the applicable limitations period (see Jalayer v Stigliano, 94 AD3d at 703; Williams v New York City Health & Hosps. Corp., 84 AD3d 1358 [2011]). To make a prima facie showing, the defendant must establish, inter alia, when the plaintiff's cause of action accrued (see Swift v New York Med. Coll., 25 AD3d 686, 687 [2006]).

Here, plaintiff's action to recover for breach of a construction contract accrued on the last date work was performed (see Phillips Constr. Co. v City of New York, 61 NY2d 949, 951 [1984]; Stewart v Stuart, 262 AD2d 396 [1999]; Matter of Donaldson Acoustics, Inc. v New York Inst. of Tech., 249 AD2d 391 [1998]). In support of its motion, the defendant has submitted a sworn affidavit by Harold Zarember, dated September 2011, wherein he stated that the plaintiff last worked at and/or furnished materials for the Noguchi project in 2003, more than 6 years prior to the commencement of plaintiff's first action on February 9, 2010 (Asselta Affirmation, Exhibit I). The burden now shifts to the plaintiff to raise an issue of fact as to whether it actually commenced the action within the applicable limitations period (see Jalayer, 94 AD3d at 703).

In opposition, the plaintiff contends that this action was timely commenced inasmuch as the plaintiff was entitled to the six-month extension of the statute of limitations provided under CPLR 205(a) (see Carrick v Central Gen. Hosp., 51 NY2d 242, 249 [1980]; George v Mt. Sinai Hosp., 47 NY2d 170, 174—175 [1979]; Egan v Neghavi, 84 AD3d 1014, 1014 [2011]). CPLR 205(a) "permits a plaintiff to commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after termination of a prior action, provided that the prior action was timely commenced and was not terminated, inter alia, by a final judgment upon the merits" (Sabbatini v Galati, 43 AD3d 1136, 1138 [2007]). The fundamental purpose of the statute is served when the defendant is given timely notice of the cause of action when asserted by or on behalf of the injured party (see Mendez v Kyung Yoo, 23 AD3d 354 [2005]).

Plaintiff contends that the last date it performed work on the project was February 9, 2004, and therefore the prior action, which was commenced on February 9, 2010 (6 years later), was timely commenced. Since the parties do not dispute that the within action was commenced within six months after the prior action was terminated, plaintiff maintains that the within action was timely commenced. In support of this contention, the plaintiff has submitted an affidavit of its co-principal, Benjamin Reid, in which he avers [*6]that the last date that M & R personnel performed work for Arnell at the Noguchi site was on February 9, 2004. Plaintiff has also submitted a copy of a letter dated February 2, 2004 from Arnell to M & R, in which Arnell advised M & R that it received notice that its contract had been terminated and specifically directed M & R to complete the remaining concrete and masonry work over the 10 day period from its receipt of the notice. Plaintiff has also submitted a purported daily work log, which Reid claimed reflects that M & R's workers were working at the site as late as February 9, 2004. Base upon a review of the record, the court finds that the plaintiff has sufficiently raised an issue of fact as to whether it timely commenced the within action pursuant to CPLR 205(a). As such, that branch of defendant's motion seeking to dismiss the complaint pursuant to CPLR 3211(a)(5) as untimely is denied.

Accordingly, defendant's motion to dismiss the plaintiff's complaint is denied in its entirety.

The foregoing constitutes the decision and order of the court.

E N T E R,

J. S. C.