Graciano Corp. v Lanmark Group, Inc.

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Graciano Corp. v Lanmark Group, Inc. 2017 NY Slip Op 30325(U) February 17, 2017 Supreme Court, New York County Docket Number: 652750/2014 Judge: Eileen Bransten Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 1] INDEX NO. 652750/2014 NYSCEF DOC. NO. 83 RECEIVED NYSCEF: 02/21/2017 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART THREE ---------------------------------------------------------------------)( GRACIANO CORPORATION, Index No. 652750/2014 · Plaintiff, Motion Seq. No. 001 -against:·' LANMARK GROUP, INC. and FEDERAL INSURANCE COMP ANY, Defendants. · -------------------------------------------------------------------~-)( LANMARK GROUP, INC., T.P. Index No. 595017/2015 Third-Party Plaintiff, -againstLIBERTY MUTUAL INSURANCE COMPANY, Third-Party Defendant. ------------------------------------------------------------~--------)( BRANSTEN, J. Defendants Lanmark Group, Inc. ("Lanmark") and Federal Insurance Company move to consolidate this case (hereinafter "Graciano Action") with Lanmark Group, Inc. v. New York City School Construction Authority, Index No. 650060/2015 (Sup. Ct. N.Y. Cnty.) ("SCA Action 1") andLanmark Group, Inc. v. New York City School Construction Authority, Index No. 653952/2015 (Sup. Ct. N.Y. Cnty.) ("SCA Action 2"). New York ' . City School Construction Authority ("SCA") is not a par_ty to the Graciano Action. Both Plaintiff Graciano Corporation ("Graciano") and non-party SCA oppose the consolidation of the Graciano Action and SCAActions 1and2. For the reasons that follow, Defendants' motion is denied. 2 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 2] NYSCEF DOC. NO. 83 RECEIVED NYSCEF: 02/21/2017 Graciano Corporation v. Lanmark Group, Inc. I. INDEX NO. 652750/2014 Index No. 652750/2014 Page 2 of9 Background A. Factual Background All three actions relate to construction work at P.S. 204(K) in Brooklyn, New York. In or about June of 2013, the SCA, as owner of the Project, entered into a contract with Lanmark, as general contractor (the "Prime Contract"), to perform construction work on a project known as "Exterior Masonry, Parapets, Roof, Flood Elimination, Paved Areas at PS 204(K) in Brooklyn, New York" (the "Project"). Affirmation of Joseph J. Cooke ("Cooke Affirm.")~ 3. On or about August 26, 2013 Lanmark entered into an agreement with Graciano to perform work at the Project (the "Subcontract"). Id. ~ 4. During the course of work on the Project, on or about August 27, 2014, Lanmark issued an addendum to the Subcontract that deleted a substantial portion of Graciano' s masonry work. Affidavit of Glenn Foglio ("Foglio Aff.") ~ 12. In response, Graciano notified Lanmark by letter dated September 8, 2014 that it was stopping work on the Project. Cooke Affirm. ~ 6. Lanmark took over the remaining work and notified Graciano that the Subcontract was terminated. Id. B. ~~ 7-8. Graciano Action On November 5, 2014, Graciano commenced this action against Lanmark and its surety, Federal Insurance Company, to recover damages. Id. ~ 13. In the Complaint, Graciano alleged Lanmark delayed and interfered with Graciano's work and wrongfully 3 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 3] NYSCEF DOC. NO. 83 INDEX NO. 652750/2014 RECEIVED NYSCEF: 02/21/2017 Graciano Corporation v. Lanmark Group, Inc; Index No. 652750/2014 Page 3of9 deleted a substantial portion of the masonry scope work from the Subcontract. Compl. iii! 10-18. Issue was joined by Defendants' service of an Answer and Counterclaim on December 9, 2014. Cooke Affirm. ii 14. In the Counterclaim, Lanmark alleged Graciano had breached the Subcontract by failing to perform work in accordance with the Subcontract requirements, performing defective work, delaying completion of its work, and abandoning performance of the Subcontract in September of 2014. Answer and Countercl. ii 51. On January 12, 2015, Lanmark filed a Third-Party Complaint against Liberty Mutual Insurance Company ("Liberty") and Liberty served its answer to the ThirdParty Complaint on February 17, 2015. The parties are currently engaged in discovery, with an April 31, 201 7 deadline for all discovery. C. SCA Actions 1 and 2 On January 8, 2015, Lanmark commenced SCA Action 1 against SCA. By the Complaint, Lanmark alleged that subsequent to the start ofLanmark's work on the Project, SCA requested Lanmark perform "extra work" beyond the scope of the Prime Contract. Lanmark sought compensation for seven items of "extra work" involving: (1) installation of waterproofing membrane; (2) ductwork and plaster removal; (3) remov~l of lead paint; (4) installation of custom-made brick; (5) removal of steel framing from a decorative cornice; (6) removal of existing plates and (7) removal of existing loose.and hung lintels. SCA filed a pre-answer motion to dismiss all of Lanmark's claims. Cooke Affirm. 1120. 4 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 4] NYSCEF DOC. NO. 83 INDEX NO. 652750/2014 RECEIVED NYSCEF: 02/21/2017 Index No. 652750/2014 Page 4 of9 Graciano Corporation v. Lanmark Group, Inc. This action was assigned to Justice Scarpulla and the motion to dismiss was fully submitted on April 6, 2015. Justice Scarpulla granted SCA's motion to dismiss Lanmark's fourth cause of action and denied the motion as to all other claims. Id. ii 21. Lanmark filed a notice of appeal on February 2, 2016 and SCA cross-appealed on February 29, 2016. As of the return date of this motion, the appeal is currently pending before the First Department. After SCA Action 1 was filed, Lanmark identified two additional "extra work" claims under the Prime Contract involving back-up brick work and the installation of door jambs, frames, saddles, and hinges. Lanmark commenced SCA Action 2 by ser-Ying SCA with a summons with notice on December 1, 2015. SCA filed a demand for the complaint and Lanmark served the complaint on March 14, 2016. Id. ii 24. SCA then filed a pre- answer motion to dismiss all claims, which was fully submitted on July 5, 2016. SCA Action 2 was assigned to Justice Scarpulla and, as of the return date of this motion, the motion to dismiss is currently sub judice. II. Discussion Lanmark now seeks to consolidate the Graciano Action with SCA Actions 1 and 2 pursuant to CPLR 602. 5 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 5] NYSCEF DOC. NO. 83 RECEIVED NYSCEF: 02/21/2017 Graciano Corporation v. Lanmark Group, Inc. A. INDEX NO. 652750/2014 Index No. 652750/2014 Page 5of9 Standard ofLaw for Consolidation "When actions involving a common question of law or fact are pending before a court, the court, upon motion, ... may order the actions consolidated, and may make such other orders concerning proceedings therein as may tend to avoid unnecessary costs or delay." CPLR 602(a). "A motion to consolidate is directed to the sound discretion of the court, and the court is given wide latitude in the exercise thereof." Inspiration Enters., Inc. v. Inland Credit Corp., 54 A.D.2d 839, 840 (1st Dep't 1976). Consolidation is disfavoredwhere the party opposing the motion demonstrates that consolidation will prejudice a substantial right. See Raboy v. McCrory Corp., 210 A.D.2d 145, 147 (1st Dep't 1994). The party opposing consolidation has the burden of demonstrating prejudice to a substantial right. Sokolow v. Lacher, 299 A.D.2d 64, 74 (1st Dep't 2002). When considering the issue of substantial prejudice, courts may consider the totality of the circumstances that consolidation would engender. Skelly v. Sachem Cent. Sch. Dist., 309 A.D.2d 917, 918 (2d Dep't 2003). B. Consolidation is Not Warranted 1. Common Questions of Law and Fact Here, there are no common questions of law or fact between the Graciano and SCA Actions. The Graciano and SCA Actions arise out of different instruments and involve different parties. See JM Mech. Corp. v. Washington Fed. Sav. & Loan Assoc., 80 A.D.2d 6 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 6] NYSCEF DOC. NO. 83 INDEX NO. 652750/2014 RECEIVED NYSCEF: 02/21/2017 Graciano Corporation v. Lanmark Group, Inc. Index No. 652750/2014 Page 6 of9 884, 886 (2nd Dep't 1981) (finding no common question oflaw where suits presented three distinct legal claims, each based on a separate contract). In the Graciano Action, Graciano seeks to recover the costs associated with the work it performed at the Project and Lanmark counterclaims to recover damages arising from the breach of the Subcontract. On the other hand, in SCA Actions 1 and 2, Lanmark seeks to recover costs from SCA for specific items of "extra work" that Lanmark alleges fell outside of the scope of the Prime Contract. The Prime Contract governs Lanmark and SCA's relationship as general contractor and owner. The Subcontract governs Lanmark and Graciano's refationship as general contractor and subcontractor. SCA is not a party to the Subcontract and Lanmark has failed to establish privity between SCA and Graciano. 1 Although the Graciano and SCA Actions involve the same construction project, the actions arise out of different contracts, and involye different parties and different factual issues. See H H Robertson Co. v. NY Convention Ctr. Dev. Corp., 160 A.D.2d 524, 524 (1st Dep't 1990) (denying consolidation of actions arising from same construction project). Therefore, there is no common issue oflaw or fact in the Graciano and SCA Actions. Lanmark has argued that it is entitled to pass onto SCA the costs of "extra work" under the Subcontract that Lanmark performed after the Subcontract was terminated. Reply Memo. at 4-5. However, Lanmark has not provided legal support for this contention in its briefing. Lanmark cites to Kleinberg Electric, Inc. v. E-J Electric Installation Company, which provides the contractor's right to recover from a subcontractor who abandons the contract. 111 A.D.3d 410, 411 (1st Dep't 2013). However, Kleinberg does not establish a contractor's right to pass through costs to the owner of the project. 7 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 7] NYSCEF DOC. NO. 83 INDEX NO. 652750/2014 RECEIVED NYSCEF: 02/21/2017 Graciano Corporation v. Lanmark Group, Inc. 2. Index No. 652750/2014 Page 7 of9 Prejudice of a Substantial Right Furthermore, the non-moving parties have shown the totality of circumstances resulting from a consolidation would prejudice a substantial right. First, consolidation would prejudice SCA by imposing additional costs and involving SCA in a trial' that it has nothing to do with. See Sokolow, 299 A.D.2d at 74. The Graciano Action is a dispute between the general contract9r and subcontractor at a Project owned by SCA. SCA is not liable for any breaches of the Subcontract because SCA was not a party to the Subcontract and any determination in the Graciano Action would have no bearing on the resolution of the SCA Actions. See id. (finding consolidation inappropriate where issues dominating one trial had "little bearing" on defendants in the other case). Thus, consolidating the SCA Actions with the Graciano Action would prejudice SCA. Second, jury confusion would occur after the realignment of parties because Lanmark would be the plaintiff and defendant in the consolidated case. See Geneva Temps, Inc. v. NY Communities, Inc., 24 A.D.3d 332, 335 (1st Dep't 2005) (holding that an action should not b1;: consolidated if it results in a party being plaintiff and defendant). In addition, as noted above, the Prime Contract and Subcontract are separate instruments. A determination that Graciano performed "extra work" that fell outside of the scope of the Subcontract would not necessarily give Lanmark the right to recover from SCA under the Prime Contract. Therefore, to try these actions together may cause confusion. See Dean Witter Reynolds, Inc., 85 A.D.2d at 552 (finding prejudice would be caused by 8 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 8] NYSCEF DOC. NO. 83 INDEX NO. 652750/2014 RECEIVED NYSCEF: 02/21/2017 Graciano Corporation v. Lanmark Group, Inc. Index No. 652750/2014 Page 8 of9 consolidating action by an underwriter against a real estate investment trust with an action by the trust against an insurer where a determination in favor of the underwriter against the trust did not necessarily give the trust a right to recover from the insurer). Finally, the consolidation of the three cases would cause significant delay. See Inspiration Enters., 54 A.D.2d at 840 (finding prejudice of substantial right where issue had recently been joined and pretrial procedures would entail delay of trial). The decision on SCA's motion to dismiss in SCA Action 1 is currently on appeal to the First Department and the motion to dismiss in SCA Action 2 is currently pending before Justice Scarpulla. Consolidation of SCA Action 2 would be inappropriate at this time because issue has hot yet been joined. See Luks v. NY Life Ins. Co., 213 A.D. 623, 625 (lstDep't 1925)(finding I i that court should not consolidate when issue was not joined). In addition, ifthe Graciano Action and SCA Actions were consolidated, the trial would be delayed until there was a determination on the SCA motions to dismiss. Therefore, consolidation would result in I I substantial prejudice to Graciano. I l t 9 of 10 [*FILED: NEW YORK COUNTY CLERK 02/21/2017 11:29 AM 9] NYSCEF DOC. NO. 83 Graciano II. INDEX NO. 652750/2014 RECEIVED NYSCEF: 02/21/2017 Corpor~tion Index No. 652750/2014 Page 9 of9 v. Lanmark Group, Inc. Conclusion Accordingly, it is ORDERED Defendants' motion to consolidate (motion sequence 01) is denied. Dated: New York, New York February \ 2017 ·-=:r, ENTER: c·.~~~I\~ Hon. Eileen Bransten, J.S.C. 'L 10 of 10 ~

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