Arnell Construction Corp. v. New York City School Construction Authority, 249 A.D.3d 657 (2d Dep’t May 2026).
Brief Facts
Arnell Construction sought approximately $2.44 million in compensation for allegedly unpaid change-order work performed on a renovation project for the New York City School Construction Authority. The contractor submitted a notice of claim in January 2021 and later commenced an action for breach of contract. The SCA moved to dismiss the action because the contractor had not timely satisfied the applicable notice-of-claim requirement.
Holding
The court affirmed the dismissal of the contractor’s breach-of-contract claim. Under New York Public Authorities Law § 1744(2), a contractor must present a notice of claim to the SCA within three months after the claim accrues.
A contractor’s claim generally accrues when its damages become ascertainable. Depending on the circumstances, that may occur when the contractor substantially completes its work or submits a sufficiently detailed invoice identifying the work performed and the amount owed.
The court found that Arnell Construction served its January 2021 notice of claim more than three months after its claim had accrued. The contractor therefore failed to satisfy a statutory condition precedent to maintaining the lawsuit.
The court also rejected the contractor’s waiver argument. Mere acknowledgment or consideration of a late claim does not excuse a contractor’s failure to comply with the statutory deadline.
👉 Takeaway: Contractors performing public work must separately track statutory claim deadlines, even when change orders remain under review or the owner continues discussing payment. Ongoing negotiations, correspondence, or administrative review may not extend the deadline or establish waiver. Contractors should identify when damages become ascertainable, provide the required verified notice immediately, and avoid relying solely on contractual change-order procedures.
