A legal battle over construction defects at SUNY Broome Community College’s student housing has taken a decisive turn, as a New York appellate court ruled against efforts by contractors and their insurer to have a breach of contract claim dismissed on statute of limitations grounds.
The dispute stems from a 2013 contract between the college and LPCiminelli, Inc., a construction firm, for the development of new student housing. As part of the contract, LPCiminelli secured a performance bond from Liberty Mutual Insurance Company, ensuring the project’s completion and compliance with contractual obligations.
The building was substantially completed in August 2014 and opened to students for the 2014-2015 academic year. Final payment under the contract was made in June 2015. However, soon after occupancy, construction defects were discovered. LPCiminelli began corrective work to address the issues, but that work ceased in September 2017 before all necessary repairs were completed. In response, Broome County officials sent default notices to the defendants in November 2017, but no agreement was reached regarding further repairs.
With negotiations at a standstill, Broome County filed a lawsuit in August 2019, citing breach of warranty and breach of contract. The county also sought to hold Liberty Mutual accountable under the performance bond. In response, LPCiminelli and Liberty Mutual moved for partial summary judgment, arguing that the lawsuit was filed beyond the two-year contractual deadline specified in the performance bond, which required any legal action to be initiated within two years of when construction work ceased.
The legal debate centered on defining when construction work officially ended. LPCiminelli and Liberty Mutual argued that substantial completion in 2014 or final payment in 2015 marked the cessation of work. However, Broome County countered that under the contract terms, corrective work was an ongoing obligation, and since LPCiminelli continued performing such work until September 2017, the lawsuit was timely.
The Appellate Division, Third Department, sided with Broome County, affirming the lower court’s decision. The ruling emphasized that the contract broadly defined "work" to include all labor necessary to meet LPCiminelli’s obligations. Since the company had been actively making repairs until September 2017, the court determined that work had not ceased until that date, making the county’s 2019 lawsuit timely.
The ruling also pointed out that by beginning and then abandoning the corrective work, LPCiminelli effectively misled Broome County, potentially delaying the county’s legal response. Citing precedent, the court found that plaintiffs should not be penalized when a defendant’s actions cause them to "sleep on their rights."
With this decision, Broome County’s claims under the performance bond remain intact, and the lawsuit against LPCiminelli and Liberty Mutual can proceed. The outcome is a significant win for the county, ensuring that it can seek compensation for alleged construction defects and enforce contractual obligations.
