Parochial Bus System, Inc. v. Board of Education of the City of New York, 60 N.Y.2d 539 (1983)

A verified claim against a municipality in a contract action must include a monetary demand and some indication of how the sum is calculated to facilitate settlement, absent circumstances demonstrating impracticability.

Summary

Parochial Bus System, Inc. sued the Board of Education of the City of New York. The Board moved to dismiss based on failure to comply with Education Law § 3813, requiring a verified claim to be presented before commencing an action. Parochial Bus argued that an order to show cause with accompanying papers filed in a previous injunction action satisfied this requirement. The Court of Appeals reversed the Appellate Division’s order, holding that the papers were defective because they lacked a specific monetary demand and any explanation of how damages were calculated, thus failing to meet the statutory requirements for a valid claim.

Facts

Parochial Bus System, Inc. initiated an action against the Board of Education of the City of New York. Prior to this action, Parochial Bus had filed an order to show cause and accompanying papers in an injunction action related to the same dispute.

Procedural History

The Board of Education moved to dismiss the complaint, asserting that Parochial Bus failed to comply with Education Law § 3813, which mandates the presentation of a verified claim before initiating an action against the Board. The lower courts ruled in favor of Parochial Bus, but the Court of Appeals reversed, granting the motion to dismiss.

Issue(s)

Whether an order to show cause and accompanying papers filed in a prior injunction action, lacking a specific monetary demand and explanation of damages, satisfy the requirements of Education Law § 3813 for presenting a verified claim against a Board of Education before commencing a contract action.

Holding

No, because a verified claim in a contract action must include a monetary demand and some suggestion of how the sum is arrived at or the damages incurred to facilitate settlement, absent circumstances demonstrating impracticability.

Court’s Reasoning

The Court of Appeals emphasized the importance of including a monetary demand in a verified claim to facilitate settlement and adjustment of disputes. The court stated, “In the absence of circumstances demonstrating impracticability, the critical element in a verified claim in a contract action is the monetary demand and some suggestion at least on how the sum is arrived at or the damages incurred (23 Carmody-Wait, 2d, New York Practice, § 144:85, compare forms at pp. 364-372). Without such statement adjustment and settlement of the dispute are rendered unlikely.” The court reasoned that without a specified amount, the Board could not properly evaluate and potentially settle the claim. The Court acknowledged that while technical defenses are disfavored, courts cannot disregard positive statutory mandates. The Court further clarified that bringing an action within the time limit for filing a claim does not excuse the failure to file a proper claim as the statute distinguishes between an action and the filing of a claim, with the filing being a precondition to the bringing of an action. “The controlling statute distinguishes between an action and the filing of a claim, and the filing is a precondition to the bringing of an action. It is, therefore, no answer that the action or another action was brought within the time limit for the filing of a claim, and the action papers provide all the requisite detail and more (cf. Matter of Board of Educ. [Heckler Elec. Co.], 7 Y 2d 476, 483-484).”