New York Civil Practice Law and Rules § 9802 is a condition precedent that imposes a strict notice-of-claim requirement on parties pursuing contractual claims against the State’s incorporated villages. Notice of claim (CPLR 9802) is a formal, verified written claim filed with the village clerk within a specified time. It is a prerequisite to maintaining a contract-based claim against a village not a technicality. Missing it typically ends the claim. When a party fails to comply with these notice requirements, a village can assert that failure as a defense against the party’s claim.
A recent 5:2 divided opinion issued by the New York Court of Appeals, Incorporated Village of Freeport v. Freeport Plaza West, LLC, 2026 NY Slip Op 03906 (Jun. 18, 2026), is instructive and spells out the consequence of missing this deadline in blunt terms. The Court held that “no action shall be maintained” against a village contract unless the verified claim is filed within one year. Failure is “a bar” that yielded a harsh result. This decision reinforces strict application of CPLR 9802’s notice requirements, even when a party asserts a contractual counterclaim in a lawsuit filed against a village for breach of contract provisions.
Pursuant to CPLR 9802, “…no action shall be maintained against the village upon or arising out of a contract of the village …unless a written verified claim shall have been filed with the village clerk within one year after the cause of action shall have accrued…[t]he omission to present a claim or to commence an action thereon within the respective periods of time above stated applicable to such claim, shall be a bar to any claim or action therefor against said village…”
In Incorporated Village of Freeport v. Freeport Plaza West, LLC, the Village of Freeport and Freeport Plaza West, LLC (“FPW”) entered into a contract in March 2017 to develop several parcels that FPW agreed to purchase from Freeport. The contract called for closing 30 days after FPW received all required approvals. Less than a year later, in February 2018, Freeport filed suit against FPW, alleging that FPW breached the contract by obtaining all required approvals by November 16, 2017, but refusing to close within 30 days.
FPW answered and asserted a counterclaim for anticipatory breach of contract, alleging that Freeport attempted to force FPW to close prematurely and breached the parties’ agreement by refusing to allow FPW to file the necessary development documentation. However, FPW did not file a notice of claim with Freeport before asserting its counterclaim.
After months of discovery and motion practice, the trial date was set. Freeport then moved to dismiss FPW’s counterclaim for failing to file a notice of claim under CPLR 9802. FPW opposed the motion, arguing that after nearly a year and a half of litigation, Freeport should be equitably estopped from invoking the notice-of-claim requirement. In support, FPW asserted that Freeport initiated the suit, had actual knowledge of the contractual dispute regarding FPW’s counterclaim, and deliberately delayed raising the notice of claim requirement until after the notice deadline for the counterclaim had expired.
The trial court agreed with FPW and denied Freeport’s motion, characterizing the Village’s use of this statutory defense as more of a “sword” than a “shield.” The court noted that Freeport chose to wait until virtually the eve of trial to file the motion. Thus it was “far from prejudiced from the lack of a formal notice of claim.”
The Appellate Division reversed the trial court’s decision, granting Freeport’s motion to dismiss. The court found that Freeport had merely attempted to litigate its breach-of-contract claim, rather than lull FPW to sleep on its rights to pursue its counterclaim and found no evidence that FPW was precluded from sending a timely notice of claim. The Appellate Division held that the trial court erred in applying estoppel principles.
On appeal, the Court of Appeals, in a majority decision, agreed with the Appellate Division that equitable estoppel was not warranted on the facts of the case, as the doctrine is generally not applied against the government except in the rarest of cases. The majority concluded that Freeport did not engage in wrongful or misleading conduct, endorsing the Appellate Division’s determination that “participation in litigation, without more, does not constitute action calculated to mislead or discourage a party from filing a notice of claim.”
Judge Rivera, in a dissenting opinion joined by Chief Judge Wilson, agreed with the trial court’s application of equitable estoppel to deny Freeport’s motion to dismiss FPW’s counterclaim for failure to comply with CPLR 9802. The dissent noted that Freeport had filed its motion to dismiss with no prior notice to the trial court despite the over ten court conferences Freeport appeared at, and in contravention of the court’s pre-motion practice conference rules. The dissent characterized Freeport as misleading the Supreme Court and argued that because the facts underlying FPW’s counterclaim were the same as those of Freeport’s breach of contract claim, the statutory purposes of CPLR 9802 in providing Freeport with an opportunity for pre-suit investigation and settlement would not be served by enforcing the notice of claim requirement in this case.
This case serves as a warning to villages and their contractual counterparts. Is CPLR §9802 a shield or a sword? Answer: Maybe both.
When parties assert contract-related claims against a village, whether as claims or counterclaims, courts will hesitate to excuse failure to provide the notice of claim demanded by CPLR 9802, unless the village engages in wrongful or misleading conduct. Thus, a party with contract-related claims against a village must comply with CPLR 9802’s notice requirements regardless of the village’s litigation conduct. Failure to file a notice of claim will likely bar contract claims.
For villages, the lesson from Incorporated Village of Freeport is that judges will scrutinize their litigation tactics and conduct, which could give them grounds to prevent villages from asserting CPLR 9802’s statutory defense. If a village’s conduct during the pleadings, discovery, or pre-trial phases crosses the line from typical litigation strategy to wrongful or misleading conduct, the village risks undermining its ability to assert CPLR 9802’s powerful defense and may be forced to defend itself on the merits of a claim or counterclaim where a party has not complied with CPLR 9802’s notice requirements.
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