MEMORANDUM.
The orders of the Appellate Division should be affirmed, with costs.
This litigation arises out of defendants' construction of a sewer system throughout Nassau and Suffolk Counties (the
Defendants completed their sewer construction work at various points in the 1970s and 1980s. Sometime thereafter, the areas surrounding the sewer lines settled, causing damage to plaintiffs' adjacent roadways, sidewalks, and curbs.
Plaintiffs commenced these 10 related actions in July 2009 alleging a single cause of action in continuing public nuisance. Plaintiffs claimed that defendants "committed faulty workmanship under [the] contracts" by, among other things, "failing to properly excavate and backfill the sewer trenches" and "failing to provide adequate subjacent support to plaintiffs['] roadways, curbs, gutters and other facilities both during and after actual construction operations." This "faulty workmanship," plaintiffs alleged, "created a continuing public nuisance."
Supreme Court dismissed the complaint in each action, and the Appellate Division affirmed in 10 separate decisions. In its lead decision, Village of Lindenhurst v J.D. Posillico, Inc. (94 A.D.3d 1101 [2d Dept 2012]), the court held that, viewing the complaint as asserting the Village's rights as a third-party beneficiary to the sewer construction contract, "the action is barred by the six-year statute of limitations for a cause of action alleging breach of contract" (94 AD3d at 1102). Noting the rule from City School Dist. of City of Newburgh v Stubbins & Assoc. (85 N.Y.2d 535 [1995]) (Newburgh) that a cause of action arising out of defective construction accrues upon completion of the contractual work, the court stated that this rule applies to actions commenced by a third-party beneficiary to the contract (see id.). The court also rejected the Village's argument that "the conduct giving rise to the alleged nuisance is ongoing, thereby giving rise to successive causes of action" (id.).
The Appellate Division held that the other nine actions were "time-barred for the reasons stated" in Village of Lindenhurst (see Town of Oyster Bay v Lizza Indus., Inc., 94 A.D.3d 1094, 1094 [2d Dept 2012]; Town of Oyster Bay v J.D. Posillico, Inc., 94 A.D.3d 1093, 1093 [2d Dept 2012]; Town of Oyster Bay v Hendrickson Bros., Inc., 94 A.D.3d 1092, 1092 [2d Dept 2012]; Village of Babylon v Hendrickson Bros., Inc., 94 A.D.3d 1100, 1100
A breach of contract action must be commenced within six years from the accrual of the cause of action (see CPLR 203 [a]; 213 [2]). "In cases against architects or contractors, the accrual date for Statute of Limitations purposes is completion of performance" (Newburgh, 85 NY2d at 538, citing Sosnow v Paul, 36 N.Y.2d 780 [1975]). This rule applies "no matter how a claim is characterized in the complaint" because "all liability" for defective construction "has its genesis in the contractual relationship of the parties" (Newburgh, 85 NY2d at 538, citing Sears, Roebuck & Co. v Enco Assoc., 43 N.Y.2d 389, 396 [1977]). Even if the plaintiff is not a party to the underlying construction contract, the claim may accrue upon completion of the construction where the plaintiff is not a "stranger to the contract," and the relationship between the plaintiff and the defendant is the "functional equivalent of privity" (Newburgh, 85 NY2d at 538-539 [internal quotation marks omitted]).
Here, the gravamen of the complaints is that defendants, through their alleged faulty construction, breached their duty to plaintiffs under the protection clauses in the public works contracts. In fact, plaintiffs specifically allege that defendants "committed faulty workmanship under said contracts." Although characterized as "continuing public nuisance" causes of action, plaintiffs' "claim[s] aris[e] out of defective construction" and thus "accrue[d] on date of completion" (Newburgh, 85 NY2d at 538).
The Appellate Division properly applied Newburgh to these actions commenced by third-party beneficiaries to the construction contracts. Newburgh extended the completion of performance accrual rule to actions against architects or contractors brought by "intended beneficiar[ies]" of construction contracts (id.). Here, the Counties contracted with defendants to install the sewer system for the benefit of municipalities like plaintiffs, a fact which was surely "known to all parties at the time the contracts were negotiated" (id.).
Accordingly, Newburgh controls and plaintiffs' causes of action accrued upon defendants' completion of performance under the public works contracts. According to plaintiffs, defendants completed construction of the sewers, at the latest, by 1987. Assuming plaintiffs' claims accrued in 1987, plaintiffs had until 1993 to timely commence these actions. Because they waited until 2009 (16 years too late), plaintiffs' actions are plainly time-barred.
Even if plaintiffs' continuing nuisance claims could be considered independent causes of action that do not arise from the contracts — thus avoiding dismissal under Newburgh — the actions were still properly dismissed as time-barred. An action to recover damages for injury to property must be commenced within three years of the date of the injury (see CPLR 214 [4]). It is well-settled, however, that injuries to property caused by a continuing nuisance involve a "continuous wrong" and, therefore, generally give rise to successive causes of action that accrue each time a wrong is committed (see e.g. Jensen v General Elec. Co., 82 N.Y.2d 77, 85 [1993]; 509 Sixth Ave. Corp. v New York City Tr. Auth., 15 N.Y.2d 48, 52 [1964]; see also Covington v Walker, 3 N.Y.3d 287, 292 [2004], cert denied 545 U.S. 1131 [2005]).
While plaintiffs assert that the continued presence of roadway defects caused by defendants' faulty construction constitutes a continuing public nuisance, the Appellate Division
SMITH, J. (concurring).
These are tort actions — specifically, lawsuits based on damage to plaintiffs' property by allegedly negligent construction — and are barred by the statute of limitations applicable to such cases, for the reasons explained in the last two paragraphs of the majority's memorandum. The rest of the memorandum, which treats these cases as arising out of construction contracts and governed by the rule of City School Dist. of City of Newburgh v Stubbins & Assoc. (85 N.Y.2d 535 [1995]), is a misapplication of the Newburgh rule.
Newburgh was an action by an owner against a builder for the defective construction of a school library. We applied in that case the previously-established rule that "the accrual date for Statute of Limitations purposes is completion of performance" (id. at 538). The plaintiff, the school district that owned the library, argued that this rule was inapplicable because the school district had no contract with the builder. The contract had been entered into by the school district's predecessor as owner of the building, the Urban Development Corporation. We rejected the school district's argument, saying:
The differences between this case and Newburgh are glaring. Plaintiffs here never owned the sewers and the Counties were not building them on plaintiffs' behalf. So far as the record shows, plaintiffs had no involvement at all with their construction — much less a representative at the construction site. The majority concludes that plaintiffs here, like the plaintiff in Newburgh, are not strangers to the contracts, but that is true only in the most attenuated sense. The contracts between the Counties and the contractors are not in the record, but the only clause that anyone claims has anything to do with plaintiffs is the so-called "protection clause," quoted in an affidavit submitted to Supreme Court. It says:
This clause generally protects nonparties to the contract, including plaintiffs, from damage to their "buildings or other... structures ... on the line of the work, and adjacent
Because the contracts have nothing to do with this case, the governing accrual rule is the usual one in tort cases: the cause of action accrued when injury was inflicted (Schmidt v Merchants Despatch Transp. Co., 270 N.Y. 287, 300 [1936]). That occurred when defendants' alleged negligence caused plaintiffs' roadways to be without sufficient support (see Macrose Realty Corp. v City of New York, 49 A.D.2d 847 [1st Dept 1975]). It does not matter, under Schmidt, that plaintiffs did not know of the injury at the time, or that consequential damages resulted from the injury years later. Because, as the majority correctly says, there was no "continuing public nuisance" or other continuing tort in this case, the actions are time-barred.
Thus, the majority's error in applying a construction-contract, rather than a tort, analysis in this case does not alter the result. It may alter the results in future cases, however, and, perhaps ironically, may be a boon to future plaintiffs. The majority seems to hold that, if a tort plaintiff happens to be a potential third-party beneficiary under the protection clause of a construction contract, the tort statute of limitations does not begin to run until construction is complete — a time that will usually be later, and sometimes many years later, than the time when injury is inflicted. Thus the result of today's decision may be to permit the litigation of many stale claims against allegedly negligent contractors.
In each case: Order affirmed, with costs, in a memorandum.