United A.C., Corp. v Wu/Lighthouse 100 William St. LLC
Annotate this CaseDecided on June 7, 2006
Supreme Court, Nassau County
United Air Conditioning, Corp., Plaintiff,
against
Wu/Lighthouse 100 William Street LLC, Defendant,
8095-05
COUNSEL FOR PLAINTIFF
Gutman & Gutman, LLP
19 Roslyn Road
Mineola, New York 11501
COUNSEL FOR DEFENDANT
Barry B. LePatner & Associates, LLP
600 Lexington Avenue
New York, New York 10022
Leonard B. Austin, J.
Defendant Wu/Lighthouse 100 William Street LLC ("Lighthouse") moves for summary judgment dismissing the complaint or, alternatively, to dismiss the complaint pursuant to CPLR 3211(a)(7) and/or (10) and for sanctions.
BACKGROUND
In 2004, Lighthouse undertook to construct a new parking garage at its premises located at 100 William Street, New York, New York.
In March 2004, Lighthouse entered into a contract with IDI Construction Company ("IDICC"). Pursuant to that contract, IDICC undertook to construct the new parking garage as the general contractor. Under the terms of the agreement, IDICC was to construct the garage and provide all of the work, labor, materials and services necessary to complete the construction.
By agreement dated July 9, 2004, IDICC retained Plaintiff United Air Conditioning, Corp. ("United") to install the heating, ventilating and air conditioning ("HVAC") system for the garage.
In or about July 2004, IDICC began to experience financial difficulties. As a result of these financial difficulties, IDICC was unable to promptly pay its subcontractors.
By letter dated July 23, 2004, counsel for Lighthouse advised United that Lighthouse would be paying the subcontractors directly for work performed in connection with the project. The letter required the United to submit its requests for payment through IDICC . The request for payment would have to be accompanied by a partial release of lien for the work performed to the date of the request for payment. The release of lien indicated the work was being performed pursuant to the contract between IDICC and United.
Lighthouse's letter further indicated that United agreed to perform the work for the price established by the contract with IDICC. All future change orders would be paid only if approved in writing by Lighthouse. Notwithstanding IDICC being bypassed in the payment process, the letter stated that IDICC would continue to direct and coordinate the work of United and the other sub-contractors.
United confirmed this arrangement by letter to Lighthouse dated July 28, 2004. The letter provided that requests for payment commencing with Application No.3 dated through July 21, 2004 would be made directly to Lighthouse. All amounts due the sub-contractors on Applications #1 through 3 were to be paid in connection with Application #4. In its letter, United confirmed IDICC's on-going supervisory involvement in the job and that job-related communications were to be directed to IDICC; not Lighthouse.
That is, IDICC was to receive the requests for payment and forward to Lighthouse a list for payments to be made to the sub-contractors.
In December 2004, IDICC filed for bankruptcy.
United claims that it completed its work on the project. Thus, the balance due under United's is the sum of $173,234.30. United asserts that it has duly demanded payment of this sum from Lighthouse and Lighthouse has failed and refused to pay the claimed balance due.
[*2]
Lighthouse moves to dismiss the breach of contract claim because Lighthouse is
not in privity with United and on the ground that IDICC is a necessary party to the action which cannot be joined.
DISCUSSION
A. Summary Judgment and CPLR 3211(a)(7)
1.CPLR 3211 (a)(7)
CPLR 3211(a)(7) permits the court to dismiss a complaint that fails to state a cause of action.
When deciding a motion made pursuant to CPLR 3211(a)(7), the court must accept as true all of the facts alleged in the complaint and any evidentiary submissions made in opposition to the motion. 511 West 232rd Street Owners Corp. v. Jennifer Realty Co., 98 NY2d 144 (2002); and Sokoloff v. Harriman Estate Development Corp., 96 NY2d 409 (2001). The court must also give the pleader the benefit of every inference which may be drawn from the pleadings. Leon v. Martinez, 84 NY2d 83 (1994). See also, Dye v. Catholic Med. Ctr. of Brooklyn & Queens, Inc., 273 AD2d 193 (2nd Dept. 2000).
When considering a 3211 (a)(7) motion to dismiss, the court must read the pleading to determine if the pleader has a cause of action and not whether the cause of action has been properly plead. Guggenheimer v. Ginzburg, 43 NY2d 268 (1977); and Rovello v. Orofino Realty Co., 40 NY2d 633 (1976). See also, Kenneth R. v. Roman Catholic Diocese of Brooklyn, 229 AD2d 159 (2nd Dept. 1997); and Goldman v. Goldman, 118 AD2d 498 (1st Dept. 1986). The court must determine from the facts as plead and the inferences which can be drawn from those facts whether the pleader has any legally cognizable cause of action. (Morris v. Morris, 306 AD2d 449 [2nd Dept. 2003]; and Frank v. DaimlerChrysler Corp., 292 AD2d 118 [1st Dept. 2002]) even of not artfully drawn. Guggenheimer v. Ginzburg, supra.
All factual allegations contained in the complaint are deemed true and afforded every favorable inference while legal conclusions or facts contradicted in the record are not entitled to such a presumption. In re Loukoumi, 285 AD2d 595 (2nd Dept. 2001); and Doria v. Masucci, 230 AD2d 764 (2nd Dept. 1996).
2.Summary Judgment
Summary judgment is a drastic remedy which will be granted only when the movant establishes that there are no triable issues of fact. Andre v. Pomeroy, 35 NY2d 361 (1974). See also, Mosheyev v. Pilevsky, 283 AD2d 469 (2nd Dept. 2001); and Akseizer v. Kramer, 265 AD2d 365 (2nd Dept. 1999).
The party seeking summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); and Zuckerman v. City of New York, 49 NY2d 557 (1980).
Once the party seeking summary judgment has made a prima facie showing of entitlement to judgment as a matter of law, the party opposing the motion must either come forward with proof in evidentiary form establishing the existence of triable issues of fact or demonstrate an acceptable excuse for its failure to do so. Zuckerman v. City of New York, supra; and Davenport v. County of Nassau, 279 AD2d 497 (2nd Dept. 2001); and Bras v. Atlas Construction Corp., 166 AD2d 401 (2nd Dept. 1991). [*3]
When deciding a motion for summary judgment, the court must determine if triable issues of fact exist. Matter of Suffolk County Dept. of Social Services v. James M., 83 NY2d 178 (1994); and Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957). The motion must be denied if the court has any doubt as to the existence of a triable issue of fact. Freese v. Schwartz, 203 AD2d 513 (2nd Dept. 1994); and Miceli v. Purex Corp., 84 AD2d 562 (2nd Dept. 1984).
When deciding a motion for summary judgment, the court must view the evidence in a light most favorable to the non-moving party and must give the non-moving party all of the reasonable inferences which can be drawn from the evidence.
Negri v. Stop & Shop, Inc., 65 NY2d 625 (1985); and Louniakov v. M.R.O.D. Realty Corp., 282 AD2d 657 (2nd Dept. 2001).
B.Summary Judgement and Dismissal on Defendant's Motion
In order to adequately allege a cause of action for breach of contract, the complaint must plead the existence of a contract the provisions of the contract upon which the cause of action is based, performance, breach and damages. Furia v. Furia, 116 AD2d 694 (2nd Dept. 1986); and PJI 4:1. See also, Rattenni v. Cerreta, 285 A.D.2d2d 636 (2nd Dept. 2001); and Atkinson v. Mobil Oil Corp., 205 AD2d 719 (2nd Dept., 1994).
A subcontractor cannot recover from the landowner for work done on the property pursuant to a contract between its general contractor and a subcontractor unless the landowner has specifically agreed to pay the subcontractor. Faist v. Garslip Construction Corp., 220 AD2d 718 (2nd Dept. 1995); and Sybelle Carpet & Linoleum of Southampton, Inc. v. East End Collaborative, Inc., 167 AD2d 535 (2nd Dept. 1990). See also, E & M Hardwood Flooring Corp. v. Chlupsa, 179 Misc 2d 828 (App. Term, 2nd Dept. 1999).
The July 23, 2004 letter from Lighthouse's counsel to United evidences a clear intent on the part of Lighthouse to assume IDDICC's obligation to pay the subcontractors directly for the work being performed in connection with the construction of the garage at 100 William Street. United avers that pursuant to this agreement it received payments directly from Lighthouse in the sum of $76,750 in October 2004 and in the sum of $56,390 in November 2004. These payments were made based upon payment requisitions submitted by United as directed by the July 23, 2004 letter.
The July 23, 2004 letter from Lighthouse's counsel to the subcontractors pursuant to which Lighthouse undertook the obligations to pay the subcontractors, can be read as an agreement pursuant to which Lighthouse undertook the obligation to pay the sub-contractors for the work performed. Therefore, the complaint states a cause of action upon which relief can be granted. Thus, the motion to dismiss pursuant to CPLR 3211(a)(7) must be denied.
Since there are questions of fact regarding the extent of the obligations undertaken by Lighthouse to pay for the work performed by the subcontractors, summary judgment must also be denied.
C. Necessary Party
CPLR 3211(a)(10) requires the dismissal of an action when "the court should not [*4]proceed in the absence of a person who should be a party." Lighthouse asserts that the action cannot proceed in the absence of IDICC. IDICC cannot be joined as a party because its bankruptcy petition. The bankruptcy law prevents United from commencing an action against IDICC in any court other than an adversary proceeding the bankruptcy court. See, 11 U.S.C. 362.
The court should grant a 3211(a)(10) motion to dismiss only when the unnamed party is not subject to the jurisdiction of the court and will not appear voluntarily, no remedy is available under CPLR 1001(b) and the party which is not named is so essential to the litigation that the action cannot proceed in the absence of the party. Siegel, Practice Commentaries C3211:34; (McKinney's 2005); 1 New York Civil Practice: CPLR ¶ 1003.04 and 1 New York Civil Practice: CPLR ¶ 3211.39.
The question is whether the litigation cannot fairly proceed in the absence of IDICC. Put another way, is IDICC an indispensable party?
In determining whether IDICC is an indispensable party, the court must consider whether "...(1) the Plaintiffs have another effective remedy if the action is dismissed for nonjoinder, (2) prejudice to the Defendants or the person not joined, (3) whether and by whom prejudice might have been avoided, (4) feasibility of protective orders, and (5) whether an effective judgment may be rendered in the absence of the person not joined. (See, CPLR 1001[b])." Saratoga County Chamber of Commerce, Inc. v. Pataki, 275 AD2d 145 (3rd Dept. 2000). See also, Spector v. Toys "R" Us, Inc., 12 A.D. 358 (2nd Dept. 2004). Based upon these factors, IDICC is not an indispensable party.
Plaintiff does not have another effective remedy if this action is dismissed. There is presently no forum available in which Plaintiff can obtain redress against both IDICC and Lighthouse. Furthermore, Plaintiff's claim is not premised upon IDICC's obligation to pay its subcontractors for work performed. United's action is premised upon the representation contained in a letter from Lighthouse to the subcontractors indicating that from July 23, 2004 and thereafter, Lighthouse would pay the subcontractors directly and United's reliance and performance pursuant to that letter.
Lighthouse does not indicate what prejudice would result should the claim proceed in the absence of IDICC. To the extent that any prejudice might result, the prejudice is not an outgrowth of any action on the part of United. United cannot name or join IDICC as a party in this litigation because IDICC is bankruptcy. However, since IDICC continued to supervise the job after its default and Lighthouse's agreement to undertake payments to United, there is nothing which prevents employees of IDICC from being called as witnesses herein. Thus, no prejudice can be ascribed to IDICC's not being a party in this action.
Finally, an effective judgment can be rendered in the absence of IDICC. If the finder of fact ultimately determines that the Lighthouse undertook an unconditional obligation to directly pay the subcontractors for work performed in connection with the construction of the garage at 100 William Street, then United can obtain an effective judgment for the full amount due for the work it performed against Lighthouse..
Thus, IDICC is not an indispensable party. The motion to dismiss made pursuant to CPLR 3211(a)(10) must be denied.
D. Sanctions
Lighthouse seeks sanctions pursuant to 22 NYCRR 130-1.1 which permits the [*5]court to award sanctions for the commencement of this action claiming it is frivolous. An action is frivolous if it is completely without merit in law and fact or cannot be supported by a reasonable argument for the extension, modification or reversal of existing law. 22 NYCRR 130-1.1(c)(1).
Inasmuch as, Defendant's motion to dismiss this action is being denied, it ipso facto has merit. Since the action has merit, the request for sanctions must be denied.
Given the nature of Plaintiff's claim and Lighthouse's letter, Defendant's application for sanctions borders on the frivolous. Counsel is reminded that a frivolous request for sanctions is frivolous itself. 22NYCRR 130-1.1(c). Knee jerk requests for sanctions must be avoided
Accordingly, it is,
ORDERED, that Defendant's motion for summary judgment, to dismiss pursuant to CPLR 3211(a)(7) or CPLR 3211(a)(10) and for sanctions is denied; and it is further,
ORDERED, that counsel for the parties are directed to appear for a preliminary conference on June 30, 2006 at 9:30 a.m.
This constitutes the decision and Order of the Court.
Dated: Mineola, NY _____________________________
June 7, 2006 Hon. LEONARD B. AUSTIN, J.S.C.
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