E.W. Howell Co., LLC, et al., Plaintiffs-Appellants,
The City University Construction Fund, et al., Defendants-Respondents.
Gibbons P.C., New York (Robert J. MacPherson of counsel), for
Holland & Knight LLP, New York (Timothy B. Froessel of
counsel), for the City University Construction Fund, Philip
A. Berry, Wellington Z. Chen, Noel N. Hankin, Robert Megna,
Benno C. Schmidt, Jr., Michael M. Walsh and Dr. Marcella
Seglias Pallas Greenhall & Furman, P.C., New York
(Kathleen M. Morley of counsel), for Hill International, Inc.
and Westchester Fire Insurance Company, respondents.
Sweeny, J.P., Andrias, Moskowitz, Kahn, Gesmer, JJ.
Supreme Court, New York County (Charles E. Ramos, J.),
entered on or about May 9, 2016, which granted
defendants' motions to dismiss the complaint, unanimously
affirmed, with costs.
case involves the bidding process on public works contracts
associated with the construction of a new performing arts
center at Brooklyn College. Defendant City University
Construction Fund (CUCF), a public benefit corporation under
Education Law § 6273, was responsible for providing the
City University of New York (CUNY) with facilities in support
of the latter's educational mission. In 2008 CUCF issued
a request for proposals to provide construction management
services for the planned performing arts center. Plaintiff
E.W. Howell Co. and defendant Hill International, Inc. (Hill)
bid on this contract, which was ultimately awarded to Hill.
As construction neared in 2012, Hill put out a public
solicitation for bids on performing the general construction.
It awarded the resulting subcontract to plaintiffs which
performed under it during the three years preceding the
commencement of the instant action.
complaint was properly dismissed because plaintiffs lacked
citizen taxpayer standing to pursue their claim against CUCF
and the individually named board of trustees defendants.
State Finance Law § 123-b may not be used against public
benefit corporations such as CUCF, which "enjoy an
existence separate and apart from the State, even though it
[may] exercise a governmental function" (Matter of
Plumbing, Heating, Piping & A.C. Contrs. Assn. v New York
State Thruway Auth., 5 N.Y.2d 420, 424 ; see
John Grace & Co. v State Univ. Constr. Fund, 44
N.Y.2d 84, 87 ; Matter of Madison Sq. Garden, L.P.
v New York Metro. Transp. Auth., 19 A.D.3d 284, 286 [1st
Dept 2005], appeal dismissed 5 N.Y.3d 878');">5 N.Y.3d 878 ).
State Finance Law § 123-b did apply to public benefit
corporations, it would not encompass plaintiffs' claim
against the CUCF defendants because "the essence of
the... lawsuit concerns how the procurement was
conducted" and did not challenge the actual expenditure
of money (Matter of Transactive Corp. v New York State
Dept. of Social Servs., 92 N.Y.2d 579, 589 
[internal quotation marks omitted]; see Saratoga County
Chamber of Commerce v Pataki, 100 N.Y.2d 801, 813
). Plaintiffs could not establish common-law taxpayer
standing because they did not show that "the failure to
accord such standing would be in effect to erect an
impenetrable barrier to any judicial scrutiny of" the
challenged contract (Matter of Colella v Board of
Assessors of County of Nassau, 95 N.Y.2d 401, 410 
[internal quotation marks omitted]).
court did not err in dismissing plaintiffs' claim seeking
to invalidate the alternate dispute provision of the
subcontract because Hill's dual role as arbiter and Lien
Law article 3A trustee did not present an inherent conflict.
Hill was not the sole arbiter of all disputes, which were
also subject to review by officials from the CUNY, and
ultimately to a proceeding under CPLR article 78 (see
Westinghouse Elec. Corp. v New York City Tr. Auth., 82
N.Y.2d 47, 54 ; American Architectural, Inc. v
Marino, 109 A.D.3d 773, 775 [2d Dept 2013]).
light of the foregoing, because plaintiffs have not fully
availed themselves of the valid alternate dispute procedures,
their remaining claims, all of which were predicated on
Hill's alleged breach of the subcontract, should also be
dismissed (see MCC Dev. Corp. v Perla, 81 A.D.3d 474');">81 A.D.3d 474
[1st Dept 2011], lv denied17 N.Y.3d 715');">17 N.Y.3d 715 ...