A state appeals court has reinstated a contractor’s bid for roughly $2.5 million in damages against the entity responsible for building schools in New York City in a case regarding disputes over cost overruns for projects in Brooklyn and Queens.

In 2001, contractor AMCC Corp. entered into two design-build contracts with the New York City School Construction Authority to build a school in Queens with a $32.7 million base price and a school in Brooklyn with a $42.8 million base price.

According to court papers, while construction on both sites was underway, the construction authority asked AMCC to complete extra work on both projects, which increased costs.

But in 2012, the contractor sued the entity, accusing it of failing to pay out the full amounts specified in the contracts and seeking almost $10 million combined in damages.

Queens Supreme Court Justice Phyllis Flug issued two rulings in the construction authority’s favor dismissing damages claims on the grounds that the contractor didn’t serve the construction authority with notices of claim in a timely fashion.

According to state statute, notices of claims for lawsuits involving the design and construction of new schools must be served within three months after damages are ascertained.  

But on Wednesday, a unanimous panel of the the Appellate Division, Second Department, issued rulings to reverse Flug’s decision.

The panel said while the contractor was obliged to serve notice of claims within three months, parties had agreed to extend that deadline. But the court found the agreement ambiguous.  

Vincent Torna, who is of counsel to Pepper Hamilton, represented the contractor. Assistant Corporation Counsel Scott Shorr and Jonathan Popolow of the city’s Law Department appeared for the construction authority.

The panel was composed of Justices Reinaldo Rivera, Cheryl Chambers, Joseph Maltese and Betsy Barros.