On December 17, 2012, the New York Legislature passed bill S. 7641-B, also known as the "Uniform Notice of Claim Act" to become effective June 15, 2013. The Legislature stated that the purpose of the Act is to establish a uniform process for filing a Notice of Claim against any state or municipal entity, public authority, or public benefit corporation. However, the title and purpose of the Act is, in fact, misleading, as it applies solely to tort claims and does NOT apply to contract claims.
The act seeks to accomplish its purported goal by incorporating the Notice of Claim requirements set forth in General Municipal Law § 50-e to every action for damages or injuries to real or personal property, or for the destruction thereof, or for personal injuries or wrongful death against a public entity entitled to a notice of claim as a condition precedent of any such action and allowing service of such Notice of Claim on the Secretary of State as the agent of each such public entity. This change purportedly removes any confusion created by differing Notice of Claim requirements in the different statutes concerning public entities such as the Education Law, Town Law, Environmental Conservation Law and Public Authorities Law. However, because the requirements of General Municipal Law § 50-e relate solely to tort actions, the statute's requirements do not apply to contract claims against public entities.
Thus, contrary to what may be the common belief, the Notice of Claim labyrinth remains intact when it comes to contract actions against a public entity. For example, the Town Law creates Notice of Claim requirements for contract claims against a Town which differ from those contained in the Education Law for contract claims against a governing body of a school district or certain state supported schools. In addition to statutory Notice of Claim requirements for contract claims against public entities, the specific terms of the contract likely include additional claim requirements, adding layers of complication and confusion to the Notice of Claim process for contract claims.
In the end, a company contracting with a public entity will be well served by contacting its construction attorney to discuss the applicable contractual and statutory Notice of Claim provisions to avoid forfeiting claims.
If you have any questions about the information set forth in this Legal Alert, call us at 914-428-2100.