You are here: / / “Notwithstanding Clause” in Contract Insulated Town from Liability...
,

“Notwithstanding Clause” in Contract Insulated Town from Liability for Bond Payments Re: a Waste Disposal Facility

The Second Department determined Supreme Court properly resolved conflicting contract provisions by reference to General Municipal Law 109-b (2) which governs installment contracts entered into by municipalities.  The contract concerned the operation of a waste disposal facility which closed before the bonds used to fund it were paid off.  The insurance company sought payment from the town’s sanitary district. The court held that the clauses in the contract which insulated the district from liability for the payments (if the funds were not appropriated) were enforecable:

Consistent with the requirements of General Municipal Law § 109-b(2)(f), which applies to installment contracts entered into by municipalities, section 24 of the lease between the District and NCIDA states that:

“Notwithstanding any other provision of this Agreement, (i) this Agreement shall be deemed executory only to the extent of the moneys budgeted and appropriated and available for the purpose of this Agreement, and no liability on account thereof shall be incurred by the District beyond the amount of such moneys, and (ii) it is understood that neither this Agreement nor any representation by any public employee or officer creates any legal or moral obligation to request, budget, appropriate or make available moneys for the purpose of this Agreement.”

Such clauses are intended to be utilized as a shield against the imprudent use of taxpayers’ dollars, and not as a sword to divorce the State, for purposes of its own convenience, from a contract fairly entered into and honestly performed … . Nevertheless, “even though a municipality may possess sufficient funds to satisfy a particular obligation, such funds cannot be deemed available’ if the expenditure thereof would be improvident” … .

Here, although in its lease with the NCIDA the District promised to seek appropriations sufficient to make the lease payments, the lease also repeatedly stated that the District’s liability for payments was conditioned upon the appropriation of funds. Indeed, the District’s promise to seek appropriations was tempered by the provision stating that it was required to do so only “subject to the provisions of Section 24 hereof.” Since “trumping language such as a notwithstanding’ provision controls over any contrary language’ in a contract,” the Supreme Court properly relied upon this section as the basis for its determination … . Frankenmuth Mut Ins v Waste Mgt of NY LLC, 2014 NY Slip Op 07624, 2nd Dept 11-12-14

 

You might also like
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED IN THIS TRAFFIC ACCIDENT CASE, DEFENDANT PULLED IN FRONT OF PLAINTIFF AFTER TURNING ON HIS TURN SIGNAL BUT PLAINTIFF ONLY HAD ONE OR TWO SECONDS TO REACT (SECOND DEPT).
WIFE’S MOTION TO BE SUBSTITUTED FOR HER DECEASED HUSBAND TO ENFORCE THE PAYMENT OF THE SETTLEMENT IN HER HUSBAND’S SLIP AND FALL CASE SHOULD HAVE BEEN GRANTED (SECOND DEPT).
“Big Apple” Map Provided City with Written Notice of a Tree-Well Defect in a Sidewalk/Notice of Claim Was Sufficient Even Though It Did Not Specifically Mention the Tree-Well Defect
Father’s Petition to Relocate to North Carolina Properly Denied
COURT REJECTS ARGUMENT DEFENDANT DID NOT CONSENT TO THE RELEASE TO THE PROSECUTION OF RECORDINGS OF HIS PHONE CALLS FROM JAIL.
BURGLARY SECOND IS AN INCLUSORY CONCURRENT COUNT OF BURGLARY SECOND AS A SEXUALLY MOTIVATED FELONY (SECOND DEPT).
PLAINTIFF DID NOT SUBMIT PROOF IT HAD THE FINANCIAL ABILITY TO CLOSE ON THE PURCHASE OF REAL PROPERTY, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT ON ITS ACTION FOR SPECIFIC PERFORMANCE OF THE REAL ESTATE PURCHASE AGREEMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).
Dismissal of Labor Law 240, 241 and 200 Actions

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Plaintiff Entitled to Damages from the City—Plaintiff Had a “Special... Question of Fact Raised About Defendant’s Comparative Negligence in Striking...