Lona & Sons, Inc. v Raposo

[*1] Lona & Sons, Inc. v Raposo 2012 NY Slip Op 51177(U) Decided on June 19, 2012 Supreme Court, Queens County McDonald, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 19, 2012
Supreme Court, Queens County

Lona & Sons, Inc., and Baldwin Construction Corp., Plaintiffs,

against

Octavio Raposo d/b/a RAPOSO HOMES, AMANDA R. LLC, GREG R. LLC, INTERNATIONAL FIDELITY INSURANCE COMPANY, "JOHN DOE ONE" THROUGH "JOHN DOE TEN," Defendants.



14064/2010

Robert J. McDonald, J.

The following papers numbered 1 to 15 were read on this motion by the defendants for an order pursuant to CPLR 3212 and Lien Law § 11 granting summary judgment and dismissing the first cause of action asserted by plaintiff LONA & SONS, INC., to foreclose a mechanic's lien and discharging the lien and surety bond filed against defendants OCTAVIO RAPOSO and AMANDA R. LLC on the ground that the lien was not served properly pursuant to statute; and for an order pursuant to CPLR 3212 and Lien Law § 19(6) granting summary judgment and dismissing the complainant of plaintiff Baldwin Construction Corp., on the ground that Baldwin did not enter into a contractual relationship with or furnish labor and materials to the defendants:

Papers Numbered [*2]

Notice of Motion-Affirmations-Exhibits...............1 - 8

Affirmation in Opposition............................9 - 12

Reply Affirmation...................................13 - 15

_________________________________________________________________

Plaintiffs, LONA & SONS, INC. (Lona) a subcontractor, and BALDWIN CONSTRUCTION CORP., (Baldwin), commenced this action against the defendants to foreclose on three mechanic's liens and for damages for breach of contract and quasi-contract. Defendant Octavio Raposo, d/b/a Raposo Homes, a developer and manager of real property, retained plaintiff, Lona, to perform excavation and drainage work and to remove construction and demolition debris from two properties in Queens County, one owned by Amanda R. LLC, located at 94-25 Alstyne Avenue, Corona, and the other owned by Greg R. LLC., located at 4705-4709 104th Street, Corona. Raposo was engaged in a project to develop both properties as multiple dwellings. After Lona performed the work, it removed the construction and demolition debris from both sites to a landfill in Kings Park, Long Island, owned by Anthony Santilli, the owner of Baldwin. Raposo paid Lona a total of $266,000 for work performed. However, a dispute arose over the amount of dirt which Lona excavated, and as a result, Lona filed two mechanic's liens, one against the property owned by Amanda R. LLC, in the amount of $78,664.00, dated September 14, 2009, and one against the property owned by Greg R. LLC, dated June 4, 2009, for $44,309.00, asserting that said sums for labor and materials are still due and owing to Lona. Baldwin, a subcontractor retained by Lona, filed a separate mechanic's lien dated June 15, 2009, against the property owned by Amanda R. LLC in the amount $12,700.00 for dumping of demolition materials removed from the Alstyne Avenue project.

On April 18, 2011, this Court signed a consent order pursuant to Lien Law § 37 discharging the mechanic's liens filed by Lona against the Alstyne Avenue property in consideration of a surety bond issued by International Fidelity Insurance Company in the amount of $86,532.00 for the payment of any judgment which may be rendered against the property in the within action. The plaintiffs were granted leave to serve an amended complaint naming International Fidelity Insurance Company as a party-defendant. On November 29, 2011, this Court granted a consent order releasing the mechanic's lien filed by Lona against the 104th Street property in consideration of a surety bond issued by International Fidelity Insurance Company in the amount of $48,740.00. Amanda R. LLC also executed a bond from International Fidelity Insurance Company in the sum of $13,970.00 to discharge Baldwin's mechanic's lien.

Plaintiffs, Lona and Baldwin, initially commenced an action [*3]to foreclose the mechanic's liens and for breach of contract by filing a summons and complaint on June 3, 2010. Plaintiffs served an amended complaint dated February 3, 2012, adding International Fidelity Insurance Company as an additional defendant.

Defendants now move for an order pursuant to Lien Law § 59 canceling and discharging the surety bond of International Fidelity and for an order pursuant to CPLR 3212 and Lien Law § 11 dismissing the first cause of action brought by Lona to foreclose its mechanic's lien in the amount of $78,664.00 against the Alstyne Avenue property on the ground that the mechanic's lien was not properly served on Amanda R. LLC, the owner of the Alstyne Avenue property or on Octavio Raposo, the general contractor.

There is no dispute that the mechanic's lien referred to in Lona's first cause of action was served by Lona's counsel, Marshall M. Stern, Esq., on September 21, 2009, by affixing a true copy of the "Notice of Mechanic's Lien" to the premises located at 94-25 Alstyne Avenue. Defendants contend that said service was improper as Lien Law § 11 provides for service by posting only if the owner cannot be found within the State. Specifically Lien Law § 11 states:

"§ 11. Service of copy of notice of lien

Within five days before or thirty days after filing the notice of lien, the lienor shall serve a copy of such notice upon the owner, if a natural person, (a) by delivering the same to him personally, or if the owner cannot be found, to his agent or attorney, or (b) by leaving it at his last known place of residence in the city or town in which the real property or some part thereof is situated, with a person of suitable age and discretion, or (c ) by registered or certified mail addressed to his last known place of residence, or (d) if such owner has no such residence in such city or town, or cannot be found, and he has no agent or attorney, by affixing a copy thereof conspicuously on such property, between the hours of nine o'clock in the forenoon and four o'clock in the afternoon; if the owner be a corporation, said service shall be made (I) by delivering such copy to and leaving the same with the president, vice-president, secretary or clerk to the corporation, the cashier, treasurer or a director or managing agent thereof, personally, within the state, or (ii) if such officer cannot be found within the state by affixing a copy thereof conspicuously on such property between the hours of nine o'clock in the forenoon and four o'clock in the afternoon, or (iii) by registered or certified mail addressed to its last known place of [*4]business."

Defendants maintain that the plaintiffs knew that Raposo and Amanda R. LLC maintained their place of business at 102-30 47th Avenue, Corona, New York as plaintiffs set forth said address in their complaint and sent bills and invoices to said address. The President of Lona, Giusseppi Minnici, also stated in his deposition testimony that he knows where Raposo maintains his office. The address for Amanda R. LLC at 102-30 47th Avenue, Corona, New York, is also available as a public record on ACRIS. Therefore, counsel maintains that because there is no statement contained in Mr. Stern's affidavit of service as to what attempts he made at personal service prior to posting the notice of lien, that service of the notice of lien on the Alstyne Street property is invalid and that Lona's bond should be cancelled and discharged of record, and as a result, the first cause of action based upon said bond must be dismissed.

Defendants also move to dismiss all three causes of action asserted by Baldwin on the ground that Baldwin was not a subcontractor of Mr. Raposo and is not entitled to file a mechanic's lien against the defendants. Defendants contend that Baldwin was owed $12,000 by Lona for dumping fees and that Baldwin was not under contract with defendants, did not do any work for defendants and therefore is not entitled to file a mechanic's lien nor to sue for breach of contract. Defendants submit that Baldwin is not a materialman nor a worker as that term is defined in the Lien Law and did not improve any real property as that term is defined in the Lien Law. Defendants assert that Baldwin only received construction and demolition debris at its location in Kings Park, NY, and did not make any improvements on real property which would entitle the landfill operator to file a mechanic's lien.

In support of the motion, the defendants annex an affidavit of Octavio Raposo, dated February 23, 2012, stating that he is the manager of Amanda R. LLC and Greg R. LLC. He states that neither he nor Amanda R. LLC retained or contracted with Baldwin. He states that Baldwin's dumping fee was part of the service for which he paid Lona. He states that none of the defendants entered into any agreement with Baldwin. He states Baldwin's mechanic's lien should be cancelled because Baldwin did not perform any work, labor or services at either of the properties in question. His affidavit also states that the purported service by Lona of the notice of mechanic's lien by posting at the property is invalid because he personally maintained and operates his principal place of business in Corona for over twenty years out of 102-30 47th Avenue. He states that [*5]Amanda R. LLC and Greg R. LLC also maintain their principal place of business at the same address.

In opposition, plaintiff's counsel Marshall Stern Esq. States that in June 2009 he attempted to serve Mr. Raposo, Amanda R. LLC and Greg R. LLC separately with a mechanic's lien by certified mail at their business address. He states that five certified letters were returned by the post office. Counsel states that on September 15, 2009 Lona filed a corrected lien in the amount of $78,664.00 which is the basis of Lona's first cause of action. With respect to the service of said lien, counsel states: "because five mailings to defendants' last known place of business had all been returned, this office resorted to the service provision of Lien Law § 11(ii) which permits the affixing of the notice on the real property between the hours of nine o'clock in the forenoon and four o'clock in the afternoon, if such officer or managing agent cannot be found within the state..' Thus, on September 21, 2009, at 11:30 a.m., I personally affixed a Notice of Mechanic's Lien to the front of the building located at 94-24 Alstyne Avenue Corona, New York (the improved real property) as provided for in Lien Law § 11(ii)."

With respect to defendants' motion to dismiss the causes of action asserted by Baldwin, plaintiffs' counsel states that as Baldwin, the recipient of demolition materials, did not perform any work, labor, or services for the improvement of real property, "Baldwin is willing to discontinue its claims against defendants" (citing Claudio Perfetto, Inc. v. Waste Mgmt., L.L.C., 274 AD2d 389 [2d Dept. 2000]).

Upon review and consideration of the defendants' motion, plaintiff's affirmation in opposition and defendants' reply thereto, this court finds as follows:

"Pursuant to Lien Law § 11, a party is required to serve a notice of lien on a corporation by one of three specified methods. Strict compliance with the statutory requirements is mandated and the court does not have discretion to excuse noncompliance" (HMB Acquisition Corp. v. F & K Supply, 209 AD2d 412 [2d Dept. 1994]; also see Sanco Mech., Inc. v. DKS Gen. Contrs. & Constr. Mgrs., Inc., 34 AD3d 271 [1st Dept. 2006]). Lien Law § 11 clearly states that service of a lien on a corporation shall be made by personal delivery of a copy of the lien to an officer, cashier, treasurer, director or managing agent of the corporation or if such officer cannot be found within the state by affixing a copy to the property in question, or by registered or certified mail. Here, plaintiff attaches copies of envelopes indicating that certified mail service of [*6]prior liens was attempted on Octavio Raposo, Amanda R. LLC and Greg R. LLC in June 2009 and all five were returned by the postal service to the sender. No reason was provided for the return of the mailings. Counsel states that in September 2009, Lona realized that it had overlooked an additional invoice and a payment requiring an adjustment of the lien amount. Therefore, on September 15, 2009, Lona released the original lien in the amount of $51,341.00 and filed the subject lien in the amount of $78,664.00. As stated above, counsel served the corrected lien by posting on the property because the previous five mailings were returned. Stern's affidavit of service filed on September 24, 2009 states that on September 21, 2009 he served the notice of mechanic's lien on Amanda R. LLC and Octavio Raposo d/b/a Raposo Homes by posting it on the Alstyne Avenue Property.

This Court finds that Lona failed to comply with the provisions of Lien Law § 11 with regard to serving the notice of lien. It should be noted that the undertaking filed to discharge the lien does not admit the validity or of the lien (see Tri-City Electric Co. v People, 96 AD2d 146 [4th Dept. 1983]). The law is clear that service of the notice of lien must be made by made by either mailing by certified mail or by personal service to statutorily designated officials of the corporation. Posting may be used in only were an officer of the corporation cannot be found within the State. Here, Mr. Stern posted the notice without attempting personal service on an officer of the Amanda R. LLC and without attempting certified mail service of the particular lien in question. His affidavit of service does not indicate whether service was attempted on an officer of Amanda R. LLC within the state or by any other method. The evidence shows that Amanda R. LLC and Octavio Raposos's principal place of business in Corona was a matter of public record. Merely, because the notice of a prior discharged lien was returned by the post office three months earlier is not a sufficient basis to prove that an officer cannot be found within the state or to excuse the failure to attempt personal delivery or mail service of the subject lien prior to resorting to posting (see Mahan Constr. Corp v 373 Wythe Realty, Inc., 31 Misc 3d 252 [Sup. Crt. Kings Co. 2011][where lienor has not provided any evidence or even alleged that service of the notice of lien was attempted by any method other than by posting the notice at the Property, the service method did not comply with Lien Law § 11]). Therefore, as the plaintiff failed to substantially comply with the service provisions delineated in Lien Law § 11, this court finds that the notice of lien, improperly served on the Alstyne Avenue property, is invalid.

Accordingly, for all of the aforesaid reasons, it is hereby [*7]

ORDERED, that the plaintiff's motion for an order granting summary judgment dismissing Baldwin's three causes of action is granted, and it is further,

ORDERED, that the mechanic's lien filed by Baldwin in the amount of $12,700 against the property located at 94-25 Alstyne Avenue is cancelled and the Queens County Clerk is directed to discharge the surety bond issued by International Fidelity Insurance Company in the amount of $13,970, filed on March 18, 2010, and it is further,

ORDERED, that the defendants' motion for an order granting summary judgment dismissing Lona's first cause of action to foreclose on the mechanic's lien in the amount of $78,664.00 filed by Lona against the property located at 94-25 Alstyne Avenue is granted on the ground that the notice of mechanic's lien is invalid, and it is further

ORDERED, that the mechanic's lien filed by Lona on September 15, 2009, in the amount of $78,664.00 against the property located at 94-25 Alstyne Avenue is cancelled and the Queens County Clerk is directed to discharge the surety bond issued by International Fidelity Insurance Company in the amount of $86,531.00, filed on April 7, 2011.

Dated: June 19, 2012

Long Island City, NY

______________________________

ROBERT J. MCDONALD

J.S.C.