New York State Association of Plumbing-Heating-Cooling Contractors, Inc. v. Egan

on a weekly basis during the course of each project. As noted in our previous decision, “[a] contractor who has performed work pursuant to a noncomplying contract may be denied recovery, either under its agreement or on the basis of quantum meruit, even when the unit of government has received the benefit of performance” (Matter of New York State Assn, of Plumbing-Heating-Cooling Contrs. v Egan, supra p 103). Where, as here, payment has been made, the State may be entitled to full recovery (see S. T. Grand, Inc. v City of New York, 32 NY2d 300 , 305; Elia Bldg. Co. vNew York State Urban Dev. Corp., 54 AD2d 337 ). At a minimum, petitioner argues for a partial forfeiture of respondent contractors’ interests. The gravamen of this case, however, is whether Special Term correctly found that petitioner is barred by either the Statute of Limitations or laches from seeking such relief. Uln view of this court’s previous decision ordering petitioner to join respondent contractors in the instant proceeding, petitioners were authorized to serve a supplemental petition including the claims not previously made for monetary relief against the contractors. Since the supplemental petition did not add any causes of action against the original State respondents, it does not constitute an “amended petition” within the parameters of CPLR 3025. Moreover, petitioner was obligated to include all claims against respondent contractors arising from the subject transactions to avoid the risk of preclusion from maintaining these claims at a later date (see Smith v Russell Sage Coll., 54 NY2d 185 ,192-193). H We conclude, nonetheless, that the Statute of Limitations precludes petitioner’s demand for relief. Contrary to petitioner’s suggestion, this court’s direction that petitioner join respondent contractors as parties did not preclude respondents from raising all available defenses. CPLR 217, in pertinent part, requires a CPLR article 78 proceeding to be commenced within four months “after the respondent’s refusal, upon the demand of the petitioner * * * to perform its duty”. Here, petitioner’s order to show cause and petition, which was served on the State respondents on October 20,1981, clearly constituted a demand to discontinue the bidding process. The State respondents’ answer dated October 29,1981, refusing the demand, may properly be deemed to mark the commencement of the statutory four-month period. Significantly, an affidavit accompanying the State respondents’ answer stated that both Kennedy and Alonzo had been awarded construction contracts, which had been approved by the Comptroller on October 27 and 28, 1981, respectively, and that work was in progress. The fact that petitioner’s attorney directed a certified letter, dated October 30,1981, to each contractor does not serve as an acceptable substitute for service. While petitioner amended its petition in November of 1981 to add the Comptroller as a respondent party, no attempt was made to name respondent contractors as parties. These circumstances prevailing, petitioner’s attempts at service of the supplemental petition on April 29, 1982, and again on July 14, 1982, were beyond the four-month statutory period and thus ineffective (see, e.g., Passonno v County of Rensselaer, 87 AD2d 693 , app dsmd 59 NY2d 970 ; TaboltvKMZ Enterprises, 52 AD2d 995 , affd 43 NY2d 687 ; 2 Weinstein-Korn-Miller, NY Civ Prac, par 1003.08). Nor can we accept petitioner’s attempt to circumvent this result on the basis of a “continuing wrong” theory. Periodic progress payments made by the State to each contractor during construction does not serve to extend the limitations period. Matter of Posner v Rockefeller (60 Mise 2d 597, revd on other grounds 33 AD2d 683 , affd 25 NY2d 720 ), relied upon by petitioner, is distinguishable in that the objectionable conduct involved the ongoing expenditure of funds in accordance with specific provisions of certain State budgets. H We further agree with Special Term’s conclusion that petitioner is precluded from relief on the basis of laches. Petitioner was aware of the contractors’ identities as early as October 30, 1981 and yet elected not to take any action against them. We

cannot agree with petitioner that the burden was on respondent contractors to intervene. The attempt to join each of these contractors as parties after completion of the project is unreasonable in view of such early notice (see Matter of General Bldg. Contrs. v Board of Trustees, 42 AD2d 660 , 661). Since the laches doctrine employed here is not that of equitable laches, respondent contractors were not required to demonstrate prejudice from the delay (Matter of Central School Dist. No. 2 v New York State Teachers Retirement System, 27 AD2d 265 , 268, affd 23 NY2d 213 ; see McLaughlin, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 217:1, p 508). 11 Finally, we find no abuse of discretion in Special Term’s denial of an award for counsel fees to petitioner, which neither alleged nor proved it was a taxpayer seeking relief pursuant to article 7-A of the State Finance Law (cf. Gerzof v Sweeney, 22 NY2d 297 ; Elia Bldg. Co. v New York State Urban Dev. Corp., 54 AD2d 337 , supra). | Judgment affirmed, without costs. Kane, Casey and Weiss, JJ., concur; Mahoney, P. J., and Levine, J., concur in the result only.