Curtis Partition Corp. v HRH Constr., LLC

[*1] Curtis Partition Corp. v HRH Constr., LLC 2009 NY Slip Op 50272(U) [22 Misc 3d 1124(A)] Decided on February 19, 2009 Supreme Court, New York County Fried, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 19, 2009
Supreme Court, New York County

Curtis Partition Corporation, Plaintiff,

against

HRH Construction, LLC, NEW YORK UNIVERSITY, et al., Defendants.



604039/05



For Plaintiff Curtis Partition

Corporation:

Litwin & Tierman, P.A.

292 Madison Ave., 6th Floor

New York, NY 10016

(Robert D. Tierman)

For Defendant New York University and

Third-Party Plaintiff NYU Hospitals Center:

Holland & Knight, LLP

195 Broadway

New York, NY 10007-3189

(Henry A.H. Rosenzweig; Frederick R. Rohn)

For Defendant/Third-Party Defendant

HRH Construction, LLC:

Herrick, Feinstein LLP

2 Park Avenue

New York, NY 10016-9301

(William R. Fried, John Oleske)

Bernard J. Fried, J.

Defendant New York University and third-party plaintiff NYU Hospitals Center (collectively, NYU) are the owners of medical facilities located in Manhattan. NYU engaged defendant/third-party defendant HRH Construction, LLC (HRH) as the contractor to perform renovation work in NYU's radiology center pursuant to a construction agreement dated October 21, 2003 (the Construction Agreement). Plaintiff Curtis Partition Corporation (Curtis) was one of the subcontractors engaged by HRH.

Motion Sequence Nos. 001, 002 and 003 are consolidated for disposition. In Motion Sequence No. 001, HRH moves for summary judgment on all of the causes of action in its counterclaim to the third-party complaint, and for an order dismissing the third-party complaint.

In Motion Sequence No. 002, Curtis moves for partial summary judgment against NYU for damages in the amount of $642,393.84 for construction work performed by it pursuant to its subcontract with HRH, and accepted by NYU and, in the event that HRH is determined to have acted as a principal and general contractor, against HRH for damages in the amount of $642,393.84 for construction work performed by it pursuant to the subcontract and accepted by NYU. Curtis also seeks an order foreclosing its mechanic's lien to the extent of $642,393.84 for work performed and improvements made by it and accepted by NYU.

In Motion Sequence No. 003, NYU moves for partial summary judgment dismissing Curtis's third cause of action for quantum meruit, and fourth cause of action pursuant to General Business Law (GBL) § 756 as against NYU, on the ground that there is no privity of contract.

As set forth below, HRH's motion for summary judgment is denied, Curtis's motion for partial summary judgment is denied, and NYU's motion for partial summary judgment is granted.

The following statement of facts is derived from the affidavit of Debra S. Berger, NYU Hospitals Center's vice president of construction, as well as deposition testimony submitted by the parties. Of note, HRH fails to submit the affidavit of anyone with personal knowledge of the facts at issue, and thus, its motion is based primarily on the affidavit of its attorney.

This action is a dispute between NYU and HRH regarding the complete renovation of NYU's radiology facilities located on the second floor of Tisch Hospital (the Project). HRH was the contractor for the Project, and committed to performing the work for a guaranteed maximum price of $8,520,000, pursuant to the Construction Agreement (Aff. of John Oleske, Esq., Exh A). A key aspect of the Project was the requirement that the renovation work be performed in six separate phases in order to permit the radiology department to remain in operation during the course of construction (Berger Aff., ¶ 3; see construction schedule [Construction Agreement, Exh C]; list of drawings and specifications [Berger Aff., Exhs A and B]).

Prior to entering into the Construction Agreement, HRH worked closely with NYU in developing the design, scope of work, and plans to perform the renovation work in phases. HRH's pre-construction services included the review of all existing site conditions, review of design documents as they were developed, consultation with NYU and its architects with respect to the [*2]selection of building systems and equipment, preparation of a phasing analysis for the work, preparation of site logistics and mobilization plans, and preparation of a master schedule for the work (id., ¶ 4; see Construction Agreement, Article 3.2).

Pursuant to the Construction Agreement, HRH entered into subcontracts with various trades to perform certain aspects of the work, including a subcontract with Curtis for drywall, carpentry work and acoustical ceilings, dated as of November 12, 2003 (Aff. of Sudarshan K. Narula, Exh 2]). There is no contract between NYU and Curtis in connection with the work performed by Curtis on the project (Berger Aff., ¶ 5).

The Construction Agreement required HRH to complete the various phases of work as follows: Phases 0 and 1 by March 30, 2004; Phase 2 by October 30, 2004; Phase 3 by January 26, 2005; Phase 4 by June 24, 2005; and Phase 5 by November 2, 2005 (id., ¶ 7; see construction schedule). As of May 2005, however, HRH had failed to complete any phases of the work (id., ¶ 8), and it became clear to the parties that Phases 0 and 1 of the Project could not be completed within the time frame set out in the agreement (Dep. of Kenneth Egeberg, NYU's former senior vice president and head of the Facilities Department, at 165-167 [Oleske Aff., Exh B]; Dep. of Frank Ross, Jr., HRH's senior vice president, at 34-35 [Oleske Aff., Exh C]).

In an effort to address HRH's delays in completing the work, as well to schedule certain payments by NYU to HRH which had not been made within the time frame set forth in the Construction Agreement, the parties entered into a Phase 0/1 Completion and Payment Agreement, dated as of May 11, 2005 (the Completion Agreement [Oleske Aff., Exh D]) (Berger Aff., ¶ 10). Under the Completion Agreement, HRH was required to obtain substantial completion of Phases 0 and 1 by a new target date of June 15, 2005, which included the performance of all work necessary to obtain New York State Department of Health approval for full use and occupancy of those phases (id., ¶ 11). In return, NYU agreed to make payments, on dates certain, of all requisitions from HRH that were outstanding at the time the Completion Agreement was executed (Completion Agreement, at 1). The parties also agreed that once Phases 0 and 1 were substantially complete, they would negotiate a plan for the commencement of work on Phase 2 of the project (id. at 4).NYU asserts that, however, in the weeks leading up the targeted completion date for Phases 0 and 1, HRH was again falling behind in its work, and it was clear that it was not going to be able to complete the work on time. In order not to miss the scheduled inspection by the Department of Health, NYU assigned approximately 20 persons from its maintenance department to do work required to be performed by HRH, including painting and finishing work, and the installation of doors, curtains, cabinets, shelving and flooring (Berger Aff., ¶ 12).

NYU alleges that it made all payments to HRH under the Completion Agreement, totaling nearly $2 million, in a timely manner (id., ¶ 26), but that HRH failed to achieve substantial completion of Phases 0 and 1 until June 21, 2005, one week late under the Completion Agreement, and nearly 15 months after the originally scheduled completion date of March 30, 2004, for these phases (id., ¶ 12).

NYU further alleges that, after substantial completion of Phases 0 and 1, HRH failed to commence work on the next phase of the project, and no further work was performed, except for minor clean-up work on the existing work in place (id., ¶ 13; see HRH's daily construction reports from 6/26/05 to 8/5/05, indicating no more than one superintendent or one or two laborers at the Project on any particular day [Exh C]). NYU also notified HRH in writing of its failure to [*3]commence work, and demanded that HRH proceed with the work immediately. In addition, NYU informed HRH that further payments to it had been put on hold pending resumption of work on the project, and again demanded that HRH cure its default (Berger Aff., ¶ 17; see NYU's letters to HRH dated August 5, 2005 and August 17, 2005 [Oleske Aff., Exhs N, and O]).

HRH never resumed work on the Project despite NYU's demands. NYU contends that, instead of proceeding with work, HRH submitted a proposal to increase the contract price by over $4 million for its own general conditions work and delay claims asserted by three of its subcontractors. Furthermore, HRH refused to proceed with work unless NYU agreed to pay those monies as a condition to commencing work on Phase 2 (Berger Aff., ¶ 18; see HRH's proposed change order [Oleske Aff., Exh M]).

The proposed change order was denied by NYU on the grounds that there had been no compliance with the notice and documentation requirements of the Construction Agreement, and the various subcontracts. NYU also took the position that the claims were barred by the no-damages-for-delay provisions of the agreements, and also appeared to duplicate matters covered by previous change orders (id., ¶ 20; see Oleske Aff., Exh N). Article 14.1 of the Construction Agreement contains a strict requirement of timely written notice from HRH as a condition precedent with respect to any claim by HRH for increased compensation or damages, and provides that failure to comply with this requirement operates as a waiver. Paragraph 4 of the rider that HRH was required to include in all subcontracts (Construction Agreement, ¶ 4) requires timely written notice and documentation of subcontractor claims and contains similar condition precedent and waiver clauses. NYU asserts that no such notice and documentation was ever provided by HRH (see Berger Aff., ¶ 20).

In any event, pursuant to section 13.1 of the Construction Agreement, HRH was expressly required by the Construction Agreement to continue work regardless of disputes, such as claims for extra work:

The Contractor shall proceed with the Work promptly as instructed, directed or ordered by the Owner regardless of any dispute. The Contractor shall have no right to suspend all or any part of the Work or to refuse to comply with any written instruction, direction or order of the Owner pending resolution of any dispute or for any other reason, provided that the Owner continues to make payments of undisputed amounts as provided in this Agreement. Any such suspension or refusal will be a material breach of this Agreement

(Construction Agreement, Section 13.1). NYU asserts that HRH failed to comply with this provision, and decided to halt work on the Project until paid (Berger Aff., ¶ 22).

Finally, after waiting over five weeks for HRH to begin work on the next phase of the Project with no action, NYU began to explore the possibility of replacing HRH as the contractor for the Project. On August 3, 2005, Bovis Lend Lease LMB, Inc. (Bovis) was requested to present a proposal for completing the Project, and Bovis was eventually hired to complete HRH's work pursuant to a contract dated January 10, 2006 (id., ¶ 25).

HRH sharply disputes NYU's version of the events. HRH contends that, following substantial completion of Phases 0 and 1 on June 15, 2005, NYU made no effort to conduct the negotiations in anticipation of Phase 2 construction contemplated by the Completion Agreement (Egeberg Dep., at 211-212). HRH further contends that the subcontractors' "slowdown" following [*4]the completion of Phases 0 and 1, and the eventual cessation of the work, was entirely due to NYU's failure to pay HRH on previously-approved requisitions.

Specifically, HRH contends that, in accordance with the Completion Agreement, it submitted at least four new requisitions for work completed in connection with Phases 0 and 1, which new requisitions were not covered by the specific payment deadlines in the Completion Agreement. The first new requisition was submitted in April 2005, and the last was submitted in July 2005 (see Oleske Aff., Exhs E, F, G and H). Three of those requisitions, numbers 14, 15 and 16, were submitted to NYU and subsequently approved for payment by NYU (see Berger Dep., at 82-85 [Oleske Aff., Exh I). A fourth requisition, number 17, had not been approved by the time the parties' relationship broke down. Between them, the four requisitions totaled nearly $2 million. None of those four requisitions was ever paid (Egeberg Dep., at 143; Berger Dep., at 316-317), and requisition numbers 14, 15 and 16 were formally removed from NYU's accounting system in November 2005 (Berger Aff., ¶ 27, Oleske Aff., Exh R).

As such, on August 22, 2005, HRH responded to NYU's August 17 letter, stating that NYU was the party in default, by virtue of its non-payment, and that it was suspending all work (Oleske Aff., Exh P).

On October 27, 2005, NYU sent HRH a letter terminating HRH for default, pursuant to Section 17.3 of the Construction Agreement, on the ground of HRH's "continuing lack of progress" (id., Exh Q). NYU informed HRH that it would withhold all payments to it, pending a determination of damages to NYU (id.). NYU also stated that it anticipated that its damages would exceed any amounts owed to HRH, and that NYU "intend[ed] to hold HRH fully liable for the difference" (id.).

HRH's Motion for Partial Summary Judgment (Motion Sequence No. 001)

In the third-party complaint, NYU seeks damages in excess of $1,000,000 as a result of HRH's alleged default. NYU claims that HRH breached the Construction Agreement by failing to motivate its subcontractors to begin work on Phase 2 of the Project. It further alleges that HRH's eventual decision to cease work completely constituted a separate breach. On the basis of those alleged breaches, NYU withheld all payments to HRH. NYU not only claims a right to withhold payment, but also claims a right to a complete offset against those amounts, plus additional money damages from HRH, plus attorney's fees, on the ground of HRH's alleged breach.

HRH seeks summary judgment on the three counterclaims asserted in its answer to the third-party complaint quantum meruit (first counterclaim), unjust enrichment (second counterclaim) and breach of contract (third counterclaim). HRH also seeks summary judgment dismissing the third-party complaint.

In its third counterclaim for breach of contract, HRH denies that it breached the Construction Agreement, and instead alleges that NYU breached the Construction Agreement by failing to pay HRH for work performed prior to NYU's termination of HRH. HRH seeks $3,949,288.49 in damages for NYU's alleged breach of contract.

In support of its motion for summary judgment, HRH contends that it has provided documentary and testimonial evidence that the work was, in fact, performed. According to HRH, NYU's own documents show that at least three of its requisitions for payments on this work were approved by NYU officials, and had been sent to NYU's accounts-payable department for disbursement. HRH contends that NYU admits that it never made any payments on those requisitions, and indeed, that it specifically instructed the accounts-payable department not to pay [*5]HRH on those requisitions. Thus, HRH argues, NYU is liable as a matter of law for its breach of contract in not paying HRH for work already performed and properly invoiced to NYU.

HRH further contends that NYU cannot establish a viable defense that excuses its breach. While NYU asserts that it denied payment because HRH and its subcontractors slowed down and eventually ceased performance of the work necessary to launch Phase 2 of the Project, HRH contends that the slowdown and cessation were entirely NYU's fault. HRH agues that the slowdown among subcontractors following the completion of Phases 0 and 1, and the eventual cessation of work were due to NYU's failure to pay HRH on the previously-approved requisitions. HRH also asserts that section 13.1 of the Construction Agreement entitled it to suspend its work due to the lack of timely payments.

However, in opposition to the motion, NYU submits evidence raising triable issues of fact as to whether NYU's refusal to pay the requisitions submitted by HRH was justified on the grounds that HRH had ceased work and abandoned the Project. NYU argues that it did not improperly refuse to pay HRH's payment requisitions, and that HRH had no right to stop its work. NYU asserts that it stopped payments to HRH as a direct result of HRH having stopped work on the Project in June 2005, despite NYU's repeated demands that it recommence work.

Specifically, NYU alleges that it made all payments required of it under the Completion Agreement, totaling nearly $2 million, in a timely manner (see Berger Aff., ¶ 26). NYU further alleges that after HRH finally finished Phases 0 and 1, it failed to commence work on the next phase of the work (id., ¶ 13). After being confronted with HRH's own construction daily reports, Medhi Behrouzian, HRH's construction manager for the Project, admitted at his deposition that HRH performed no meaningful work after substantial completion of Phases 0 and 1 in June 2005, that it only had a laborer at the site doing punch list items, and the workload it was performing was "very minimal" even after June 5, 2005 (Behrouzian Dep., at 101-102 [Berger Aff., Exh D]).

In addition, HRH refused to proceed with the work on the next phase unless NYU caved to its demands for a $4 million price increase to its contract for HRH's own general conditions work and delay claims asserted by three of its subcontractors (see Berger Aff., ¶¶ 18-19). NYU asserts that it disputed the validity of these claims, stating that there had been a complete lack of compliance with the notice and documentation requirements set forth in section 14.1 of the Construction Agreement, and of the various subcontracts. Furthermore, NYU contends that it pointed out that the claims were barred by the no-damages-for-delay provisions of the subcontracts, and also appeared to duplicate matters covered by previous change orders. HRH never offered NYU evidence to the contrary (see Berger Aff., ¶ 20).

Moreover, HRH was required under section 13.1 of the Construction Agreement to proceed with work, pending disputes with the owner, such as its claims for a price increase due to alleged delays. NYU contends that HRH failed to do so (see Berger Aff., ¶ 22).

NYU further asserts that it was not delinquent in paying any of HRH's payment applications subsequent to the Completion Agreement, and HRH had no right to stop work. Rather, NYU had simply refused to pay the new payment applications as a direct result of HRH having stopped work on the project in June 2005, despite NYU's repeated demand that HRH recommence work. HRH's requisitions were required to be approved by NYU staff after being signed off by the architect. NYU contends that, while it had taken steps internally to approve two of HRH's new requisitions not [*6]covered by the Completion Agreement after receiving them from the architect, such approval was done only in anticipation that HRH would continue work (see Berger Aff., ¶¶ 20, 27). HRH's final payment application was never approved internally at NYU after its receipt from the architect (id., ¶ 28).

While HRH argues that the Construction Agreement entitled it to suspend its work due to the lack of timely payments, NYU asserts that it was entitled to do so only after giving NYU 10 days' written notice in the event that it felt that NYU was untimely with its payments (see Construction Agreement, § 10.3). NYU asserts that HRH gave no such notice until August 22, 2005, and thus, had no right to suspend its work prior to 10 days after that time, i.e., September 1, 2005, assuming that NYU's payments were not timely. NYU contends that HRH had stopped its work in June 2005, which had already caused NYU to withhold further payments to HRH (Berger Aff., ¶ 30).

HRH's motion for partial summary judgment on its counterclaim for breach of contract and for an order dismissing the third-party complaint is denied, as the evidence submitted by NYU raises material issues of fact as to which party breached the Construction Agreement, and whether HRH unjustifiably abandoned or stopped construction work, thereby justifying NYU's denial of payments to HRH (see Belrose Fire Suppression, Inc. v Stack McWilliams, LLC, 51 AD3d 485 [1st Dept 2008] [genuine issues of material fact as to validity and timeliness of defendants' notice of termination of contract, and whether plaintiff had abandoned project, precluded summary judgment on issue of liability in plaintiff's breach of contract action]).

HRH also moves for summary judgment on its first and second counterclaims for quantum meruit and unjust enrichment. HRH asserts that it incurred at least $670,000 in costs following the submission of its last requisition to NYU, and that any costs incurred by it in performing uninvoiced work is fully recoverable under theories of quantum meruit or unjust enrichment.

However, HRH's admission that its work on the Project is governed by the Construction Agreement with NYU precludes a claim for quantum meruit or unjust enrichment because, under New York law, the existence of a written contract covering the particular subject matter of the claims asserted precludes recovery in quasi contract (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 388 [1987] ["The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter"]; see also Goldstein v CIBC World Markets Corp., 6 AD3d 295, 296 [1st Dept 2004] ["A claim for unjust enrichment, or quasi contract, may not be maintained where a contract exists between the parties covering the same subject matter"]). Thus, because HRH has alleged the existence of a written contract governing its work, it may only recover for such work under that contract, and thus, its motion for summary judgment on these causes of action must be denied (see e.g. Sheiffer v Shenkman Capital Mgt., Inc., 291 AD2d 295, 295 [1st Dept 2002] ["the existence of a valid and enforceable written contract governing the disputed subject matter precludes plaintiffs from recovering in quantum meruit"]; Scavenger, Inc. v GT Interactive Software Corp., 289 AD2d 58, 59 [1st Dept 2001] ["since the matters here in dispute are governed by an express contract, defendant's counterclaim for unjust enrichment was properly found untenable"]).

HRH also argues that NYU's allegedly bad faith conduct in its dealings with HRH following the completion of Phases 0 and 1 justifies an award of punitive damages and attorneys' fees to it. However, HRH is not entitled to punitive damages. " [R]ecovery of exemplary damages in an action for breach of contract is not authorized where only a private wrong and not a public right is involved' [*7][citations omitted]" (Cross v Zyburo, 185 AD2d 967, 968 [2d Dept 1992]). The transaction at issue here was merely a private one between HRH and NYU. " Allegations of breach of a private agreement, even a breach committed willfully and without justification, do not establish such willful fraud or other morally culpable behavior to a degree sufficient to justify a recovery of punitive damages' [citations omitted]" (id. at 968).

Accordingly, HRH's motion for summary judgment is denied.

Curtis's Motion for Partial Summary Judgment and NYU's Motion for Partial Summary Judgment (Motion Sequence Nos. 002 and 003)

In Motion Sequence No. 002, Curtis moves for partial summary against NYU for damages in the amount of $642,393.84 for construction work performed by it pursuant to its subcontract with HRH, and accepted by NYU, on the theory of quantum meruit. In Motion Sequence No. 003, NYU moves for partial summary judgment dismissing Curtis's third cause of action for quantum meruit.

In the performance of its work under the Construction Agreement, HRH entered into a subcontract with Curtis for drywall, carpentry and acoustical ceilings (the Subcontract [Berger Aff., Exh B]). There is no contract between NYU and Curtis in connection with the work performed by Curtis on the Project. The only contract that exists with respect to the work that Curtis performed on the Project is the Subcontract.

In support of its motion for partial summary judgment, Curtis asserts that it fully performed its obligations under the Subcontract, and that NYU accepted the work, but has failed to pay for it without any justification or excuse. Curtis further asserts that HRH, acting as NYU's agent, consistently approved Curtis's requisitions for the work performed, and the approved requisitions show that Curtis is entitled to payment in the amount of $642,393.85 for labor and materials actually provided.

There is no dispute that Curtis has no contract with NYU for the work Curtis performed. Because there is no contract between NYU and Curtis, as a matter of law, NYU may not be held liable for breach of contract, and Curtis may not seek recovery against NYU in quantum meruit:

Where there is an express contract, as here, between the general contractor and the subcontractor, the owner of the subject premises may not be held directly liable to the subcontractor on a theory of implied or quasi-contract, unless he has in fact assented to such an obligation; the mere fact that he has consented to the improvements provided by the subcontractor and accepted their benefit does not render him liable to the subcontractor, whose sole remedy lies against the general contractor

(Contelmo's Sand & Gravel, Inc. v J & J Milano, Inc., 96 AD2d 1090, 1091 [2d Dept 1983]; see also Perma Pave Contr. Corp. v Paedegat Boat & Racquet Club, Inc., 156 AD2d 550, 551 [2d Dept 1989] ["it is a firmly established principle that a property owner who contracts with a general contractor does not become liable to a subcontractor on a quasicontract theory unless it expressly consents to pay for the subcontractor's performance"]).

In accordance with these principles, Curtis's cause of action for quantum meruit must be dismissed as against NYU.

In support of its motion, and in opposition to NYU's motion, Curtis attempts to preserve its claims against NYU by arguing that HRH entered into the Subcontract as an agent for NYU, and that [*8]NYU is therefore directly liable to Curtis as the principal. Curtis's argument, however, is directly contrary to the clear language of the written agreements at issue here. Specifically, Curtis's argument ignores the express language in the governing agreements stating that none of HRH's subcontracts with its subcontractors shall create any contractual relationship between NYU and those subcontractors, ignores the fact that NYU was not a party to the subcontract between HRH and Curtis, and misrepresents that HRH acted as nothing more than an advisor on the Project.

The Construction Agreement sets forth HRH's role as contractor to construct the Project for a guaranteed maximum price of $8,520,000 (Construction Agreement, at 1, 25). HRH was permitted under the Construction Agreement to enter into subcontracts with various trades to perform certain aspects of the work (id. at 3). While Curtis points out that NYU's approval of proposed subcontracts was required under the Construction Agreement, and that NYU required that a certain form be utilized by HRH for its subcontractors, these facts do not suggest that HRH entered into the subcontract with Curtis as NYU's agent, or that NYU otherwise assumed direct liability to Curtis. Indeed, Curtis fails to mention key provisions of the Construction Agreement that demonstrate that HRH was not NYU's agent. For example, the Construction Agreement expressly provides that:

All Trade work, and certain General Conditions Work as approved by the Owner in advance, shall be performed or furnished by trade contractors and suppliers under subcontracts entered into by the Contractor [HRH] directly as principal

(Construction Agreement, §3.3 [a]). Further:

no provision of either this Agreement or the Subcontracts shall in any way be construed or inferred as creating any contractual relationship, obligation, responsibility, duty or obligation to pay between the Owner and any Subcontractor. ... The Contractor shall include this provision in each and every Subcontract and any other instrument by which the Contractor procures labor, material, goods or services for the Project

(id., § 2.13.).

Likewise, while Curtis points out that NYU required that certain subcontract forms be used by HRH when contracting with subcontractors, Curtis ignores the language in the Supplemental Provisions required by NYU to be attached to each subcontract, stating that:

No provision of the Contract Documents shall be deemed to create privity of contract between the Owner [NYU] and the Subcontractor or to give rise to any cause of action by the Subcontractor against the Owner

(id. at Exh D [supplemental provisions to subcontract form, ¶ 2). Thus, the Construction Agreement makes it clear that HRH was an at-risk contractor required to complete the project for a guaranteed maximum price, that HRH was required to contract directly with Curtis as the principal, not as agent for NYU, and that Curtis has no privity of contract with NYU in connection with its work on the Project.

Curtis is unable to point to any language in the Construction Agreement setting forth HRH's role as agent for NYU. Instead, Curtis refers to several provisions in the Construction Agreement which detail NYU's rights to approve subcontractors proposed by HRH, the requirement that HRH [*9]use certain subcontract forms, the requirement that subcontractors deliver "as built" drawings to NYU's architect for approval, and the requirement that HRH review monthly requisitions from Curtis, and submit them regularly along with HRH's acquisitions. Curtis then makes the conclusory statement that these provisions demonstrate that NYU "retained all decision making authority" in connection with the project, and that HRH really acted as NYU's agent. However, a plain reading of the Construction Agreement reveals that Curtis's argument completely lacks merit, and that Curtis's self-serving conclusion that HRH was merely NYU's agent is not supported by the written agreements.

Consistent with the Construction Agreement, the Subcontract makes clear on the first page and the signature page that the agreement is, by and between Curtis and HRH. There is no language in the Subcontract that HRH signed the agreement "as agent" for NYU, or that HRH was merely acting as agent for NYU. To the contrary, the Subcontract consistently sets forth HRH's role in controlling and coordinating Curtis's work. Indeed, the Subcontract reinforces the requirement set forth in the Construction Agreement that NYU not be a party to any subcontracts. For example, with respect to Curtis's purchase of any materials, merchandise, goods or products for the Project, the Subcontract expressly requires that Curtis include language in any agreement with a supplier stating that "[n]othing herein shall be construed to make this an agreement between the Owner [NYU] or the supplier ... and the supplier acknowledges that it has no Contractual rights, expressed or implied, that it can assert against the Owner" (Subcontract,

§ 14.1 [a] [d]).

Thus, according to the unambiguous terms of the agreements Curtis is not in privity of contract with NYU. "A familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms" (W.W.W. Assocs., Inc. v Giancontieri, 77 NY2d 157, 162 [1990]). There is no language contained anywhere in the agreements which supports Curtis's allegation that HRH acted as NYU's agent when entering into the Subcontract with Curtis. Rather, these agreements state the opposite that HRH was the principle under the Subcontract, and NYU was to have no liability to Curtis.

Curtis also misrepresents NYU's deposition testimony. Curtis contends that NYU admitted in deposition testimony that HRH was a "construction manager," as opposed to a "contractor," and concludes that this establishes that HRH was NYU's agent. Specifically, Curtis argues that Ms. Berger made it clear during her deposition testimony that HRH was a construction manager for the project at issue in this action (see Curtis Opp Br., at 3, quoting Berger Dep., at 12, lines 6-8). However, upon close reading of Ms. Berger's testimony, it is clear that Ms. Berger was talking about HRH's role on the "day surgery project", not the project at issue here (see Berger Dep., at 11-12, lines 11-14).

Curtis further contends that Mr. Egeberg consistently referred to HRH as construction manager in his deposition, and quotes from page 323, lines 3-5 of Mr. Egeberg's deposition transcript in support of that representation. However, Curtis has selectively picked a few lines from the transcript, and ignores the following exchange between the questioner and Mr. Egeberg immediately following the quotation selected by Curtis:

Q. They [HRH] were a construction manager at risk, isn't that what you told me yesterday, or contractor at risk? [*10]

A. I came up with a better one. They are a builder at risk

(see Egeberg Dep., at 323, lines 6-20). Indeed, a close reading of the transcript reveals that the focus of this entire exchange clearly had to do with Mr. Egeberg's attempt to distinguish a contractor with a "lump-sum" contract, and a contractor with a "guaranteed maximum price," and the differences this meant for the contractor in having to show or not show owners or projects what was being requisitioned by the subcontractors (id. at 323, lines 11-18).

Therefore, NYU's motion for partial summary judgment dismissing Curtis's cause of action for quantum meruit is granted, and Curtis's motion for summary judgment on this cause of action is denied.

In Motion Sequence No. 002, Curtis also alternatively seeks partial summary judgment against HRH, arguing that if NYU is not liable, then HRH "would then be liable to Curtis for the work performed by Curtis" (Curtis Mem., at 10). Curtis's motion for partial summary judgment against HRH is denied. In order to be granted summary judgment, plaintiff must demonstrate a prima facie right to such relief (Ayotte v Gervasio, 81 NY2d 1062 [1993]; Whelan v GTE Sylvania, Inc., 182 AD2d 446 [1st Dept 1992]; CPLR 3212 [b]). Curtis completely fails to meet this burden, relying primarily on the conclusory statement that "it is incontrovertible that HRH accepted the work performed by Curtis and approved each of Curtis's requisitions" (Curtis Mem., at 11).

In Motion Sequence No. 002, Curtis also moves for an order allowing it to foreclose its mechanic's lien against NYU in the amount of $642,393.84. However, it is well established that a subcontractor's mechanic's lien will attach only to funds due and owing to the general contractor at the time of its filing, or which may thereafter become due and owing. Lien Law § 4 (1) states, in part, that "[i]f labor is performed for, or materials furnished to, a contractor or subcontractor for an improvement, the lien shall not be for a sum greater than the sum earned and unpaid on the contract at the time of filing the notice of lien, and any sum subsequently earned thereon." Thus, unless and until it is determined that NYU owed money to HRH at the time that Curtis filed its mechanic's lien, summary judgment is premature.

In Electric City Concrete Company, Inc. v Phillips (100 AD2d 1 [3d Dept 1984]), the Court denied an attempt by a subcontractor, similar to that of Curtis's attempt here, to foreclose upon its lien. The Court explained that "[i]n the case of a subcontractor, a mechanic's lien will attach only to those funds due and owing to the general contractor at the time of its filing, which may thereafter become due and owing. Indeed, it is well established that the rights of lienors are derivative of those of the general contractor and are restricted to satisfaction out of the amount established to be due and owing from the owner to the general contractor'" (100 AD2d at 4 [citations omitted]; accord Timothy Coffey Nursery/Landscape, Inc. v Gatz, 304 AD2d 652 [2d Dept 2003]). The Court then found that it was unclear what amount, if any, the owner owed the general contractor, and ruled against the subcontractor.

Likewise, here, Curtis must await the outcome of the action between NYU and HRH, which will determine if there is any "lien fund" upon which Curtis may foreclose its lien. As previously determined, genuine issues of material fact exist with respect to whether NYU owed any funds to HRH at the time that Curtis filed its mechanic's lien, and Curtis's motion for summary judgment with respect to this cause of action must be denied.

In Motion Sequence No. 003, NYU also seeks dismissal of Curtis's action pursuant to GBL [*11]§ 756. NYU's motion is granted. That statute simply provides that certain provisions with respect to payments shall be incorporated into existing construction contracts to the extent that they are not inconsistent with the terms and conditions of such contracts (see Hugh O'Kane Elec. Co., LLC v MasTec N. Am., Inc., 19 AD3d 126 [1st Dept 2005]). The statute does not create privity of contract or create a cause of action between a subcontractor and the owner of property where no construction contract exists between the parties. As such, Curtis's cause of action pursuant to GBL § 756 must be dismissed as a matter of law.

Accordingly, NYU's motion for partial summary judgment dismissing Curtis's third and fourth causes of action as against NYU is granted, and Curtis's motion for partial summary judgment is denied.

I have considered the remaining arguments, and I find them to be without merit.

Accordingly, it is

ORDERED that the motion of defendant/third-party defendant HRH Construction, LLC for summary judgment (Motion Sequence No. 001) is denied; and it is further

ORDERED that the motion of plaintiff Curtis Partition Corporation for partial summary judgment (Motion Sequence No. 002) is denied; and it is further

ORDERED that the motion of defendant New York University for partial summary judgment (Motion Sequence No. 003) is granted, and the third cause of action for

quantum meruit, and fourth cause of action pursuant to General Business Law § 756 are severed and dismissed as against defendant New York University; and it is further

ORDERED that the remainder of the action shall continue.

Dated: ___________

ENTER:

_______________________

J.S.C.