A.C. Legnetto Construction, Inc. v. Hartford Fire Insurance Co., 1998 N.Y. Int. 0115 (Oct. 15, 1998).

MUNICIPAL CONSTRUCTION BONDS - CONSTRUCTION PERFORMANCE - STATE FINANCE LAW § 137

ISSUE & DISPOSITION

Issue

Whether the statute of limitations for a contractor's performance bond depends upon the bond's classification as a common law bond or a statutory obligation bond.

Disposition

No. Where there is one bond, that bond must be deemed to be a bond required by State Finance Law § 137 and § 137's limitations must apply.

SUMMARY

Issue arose from subcontracting agreement between A.C. Legnetto Construction, Inc. and Lawman Construction Co., Inc. in which Legnetto subcontracted to do landscaping as part of an elementary school renovation project. As required by State Finance Law Section 137, Lawman obtained from Hartford Fire Insurance Co. a "Contractor's Performance Bond." Dispute arose as to whether Legnetto adequately performed the contract. Lawman failed to pay the $212,700 agreed upon and Legnetto commenced this action twenty months after the payment from Hartford became due.

Because this bond was the only bond issued, the Court determined that even though the bond did not expressly state that it was a § 137 bond, the bond must have been issued under § 137 and that the one year statute of limitations must therefore apply.

Prepared by the liibulletin-ny Editorial Board.