Ward v Melis

[*1] Ward v Melis 2004 NY Slip Op 51915(U) [18 Misc 3d 1130(A)] Decided on August 25, 2004 Supreme Court, Sullivan County Ledina, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 25, 2004
Supreme Court, Sullivan County

Edward M. Ward, III and Emw Construction LLC, Plaintiffs,

against

Dennis Melis and Theresa Melis, Defendants.



1207-03



APPEARANCES:Sobo & Sobo, LLP

(Gary M. Sobo, Esq., of counsel)

Attorneys for Plaintiffs

1 Dolson Avenue

Middletown, NY 10940

Joseph E. Ruyack III, Esq.

Attorney for Defendants

3 Twin Brooks Drive

Chester, NY 10918

Burton Ledina, J.

For the purpose of this decision, plaintiffs seek judgment in the amount of five thousand ($5,000.00) dollars pursuant to the terms of an agreement between the parties.[FN1] Plaintiff (unless otherwise noted, reference to "plaintiff" hereinafter refers to the individual plaintiff) had contracted to sell to defendants a parcel of real property for a purchase price of $46,500. A rider to the contract provided that the plaintiffs would build the foundation for the home to be built on the property for $14,000.00. In the event the defendants had someone other than plaintiff company construct the foundation, the price for the property would be an additional $5,000.00. The plaintiffs claim that the foundation was put in by someone other than plaintiff company, and that they are therefore owed $5,000.00.

The defendants contend that the contract is unenforceable as a matter of law, and that the plaintiffs are barred by laches as well as equitable estoppel from proceeding with this suit. Defendants also counterclaim, alleging a cause of action against the plaintiffs for abuse of process, [*2]claiming that they were damaged by reason of the plaintiffs having improperly filed a notice of pendency herein. The damages are based upon the extra charges and expenses incurred because of the delay in construction occasioned by notice of pendency having been improperly filed. Defendants also seek the imposition of sanctions against plaintiffs' counsel for the improper filing of the notice of pendency.

Findings of fact

The defendants were interested in purchasing a parcel of land for the purpose of building a home. A mutual acquaintance, Gary Knebel, referred them to plaintiff Ward, the sole owner, officer and shareholder of plaintiff EMW Construction LLC. The parties contracted for Ward to sell the defendants parcel 1 of land described on a subdivision map entitled "Subdivision of Lands of Ward." The parcel was located in a wooded area two lots distant behind the location of Ward's own home. The original asking price for the property was $55,000.00 but negotiations brought that down to $46,500.00 with the aforementioned added contingent amount of $5,000.00. The agreement, prepared on a construction proposal form (plaintiff's Exhibit "1"), was written and signed. Its salient operative provisions are as follows:

Lot 1 of Ward subdivision 72-1-7.1 consisting of 6.89 Ac. For the sale of as is with map of House Location and septic desighn(sic).

deposit Refundable only if buyer is not able to get Bank Loan.

Sale of Land only sold with agreement to Rider No.1.

We propose hereby to furnish material and labor complete in accordance with above specifications, for the sum of: Payment to be made as follows: 1000.00 Deposit & 45,500 within 3 weeks dollars ($46,500.00)

Fourty(sic) six thousand six hundred & 00/100

Rider #1

Sale of land contingint(sic) on foundation only Built by EMW Const. LLC. With no Responsibities(sic) of Excavation, Water proofing or Foundation Drwgs(sic). If purchaser has another company do said foundation, a Additional cost of the Total sale of the Land of section Lot 72-1-7.1 will be a cost of 5,000.00 and if not paid by purchaser their(sic) will be a lein(sic) on the land consisting of these items.

foundation will have 9' walls, frost wall at Gable end of home, 3 36" Basement windows X 16" high with floor of 4" thick with a to(sic) total of 8" thick walls with 2 #4 Rebar Horizontal in Bottom & Top of walls and 2 #4 Rebar in footing consisting of a size 20" wide X 10" deep.

price will change at cost of concrete prise rissing(sic) as of this date 03-09-02 due to Home possibly not built for 1 year.

We propose hereby to furnish material and labor complete in accordance with above [*3]specifications, for the sum of: Payment to be made as follows: 1/3 at start 1/3 after footings 1/3 when floor poured dollars ($14,000.00) Fourteen thousand & 00/100.

Pursuant to said agreement the property was conveyed by Ward to the defendants upon payment of $46,500.00. The additional amount of $5,000 was payable only if the plaintiffs were not given the contract to install the foundation for the house.

In addition to the specifications set out in the purchase contract, the defendants, with the assistance of Gary Knebel, who became the general contractor for the construction, had plans and estimates for the foundation prepared. Ultimately, the contract for the foundation was awarded to someone other than the plaintiff company.

Gary Knebel testified credibly that he is a neighbor to both parties. He had a business relationship with plaintiff beginning in 2001 when he built a home and a deck for him. He became involved in the defendants' project when they sought his services in building them a house, ultimately including the foundation. Knebel became the general contractor for the job, in charge of everything except the foundation, including hiring and coordinating the trades and supplying a modular home.

Work started at about Thanksgiving 2002. First a driveway was constructed; then a pole barn for storage; then the foundation, which at that point was to be installed by the plaintiff company. The land was leveled for positioning and forms were brought to the property for use in pouring the foundation. However, the excavator needed the forms to be moved from where they were obstructing his efforts to begin excavating. To that end, conversations ensued among Knebel, Ward and the defendant. Knebel described plaintiff's demeanor as incoherent, yelling, screaming, cursing and getting it (the subject of the discussion) all wrong. The following morning, Ward called him, apologized, and admitted having been drinking.

Days later, Knebel called Ward and told him the projected start date and when he needed the forms to be out of the way of the excavation. Although Ward stated he would move them, he failed to do so. Another telephone exchange involved plaintiff's yelling and screaming, followed by plaintiff picking up Knebel and driving him to defendants' property, where he stopped, lit a cigarette and asked where the forms were to be moved to. An argument ensued and they drove away and then stopped. Knebel claims that Ward then struck him, got out of the vehicle and pulled him out of it as well and continued to hit him. Knebel fought back, afraid and bleeding from the face. He later swore out a supporting deposition in connection with pressing criminal charges. He also saw a doctor for treatment of his bumps and bruises. Ward filed countercharges. Ultimately, claiming that Ward presented a veiled threat that he would interfere with Knebel's job with the Department of Corrections if Knebel pursued criminal charges, Knebel agreed with the plaintiff to drop the charges made against each other and the Mamakating Town Justice told them to stay away from each other and for the plaintiff to stay off the Melis property.

Thereafter, Knebel and defendants decided on a prefabricated foundation, which defendants arranged for without Knebel's involvement. The foundation was poured and set. Knebel had no contact with the plaintiff, but could see him passing and he would wave to Knebel, who [*4]continued on the defendants' job. Knebel relied on the order of protection as a reason for not notifying plaintiff when the foundation went in or was completed; he believed plaintiff knew the foundation was going in because the trailer with the crane and concrete had passed before plaintiff's watchful eyes in reaching the work site.

Defendant Dennis Melis testified that the agreement on the purchase price of the premises was $46,500 and that there were no other negotiations on the price. When he went to give plaintiff a deposit, he was presented with the rider with the contingent $5,000.00 cost, in connection with the foundation. Defendant told plaintiff he could do the foundation and gave him no description or plans. The figures as to the foundation costs were not discussed.

Following the altercation between plaintiff Ward and defendants' general contractor, the job had proceeded to the point where the foundation was to be installed. Knebel and the defendants discussed the contractual option for plaintiff to do the foundation and continued the project in regard to preparatory work, but the point was reached where construction could not go forward without the foundation, and the defendants were forced to make a choice between delay and getting another contractor for the foundation. The defendants followed the advice of Knebel, their general contractor, and contracted with another subcontractor for the foundation.

The project was financed by a bank loan for the land and a construction loan for the improvement which was rolled into a permanent mortgage on completion. The construction loan proceeds were drawn in five stages, depending on degree of completion and required that the project be completed in six months. Each advance on the loan required inspection, title search and bank approval. When this action was commenced and the notice of pendency filed, the bank refused to make further advances on the construction loan. Defendants sought legal advice and incurred expense and services to remedy the problem, eventuating in a motion to vacate the notice of pendency, which was granted by the IAS Judge on the grounds that the action did not affect title to, possession or use of real property. They also had to resort to credit card advances in order to make the payments which were intended to be covered by drawing on the construction loan, in order that the subcontractors be paid and not cease work. The delay took them past the date for which their interest rate had been locked and they suffered a 1% higher rate at the closing after the removal of the notice of pendency by court order.

Additionally, defendants claim, as damages, expenses incurred for storage of household items necessitated by the delay which prevented them from moving into the new home when anticipated. They also suffered increased interest expense for the time encompassed by the delay as well as rent for interim housing and legal fees.

During construction and prior to the lifting of the notice of pendency, defendant saw plaintiff whenever passing plaintiff's house and testified that he endured plaintiff's cursing and obscene gestures, made as plaintiff sat on his porch drinking with his friends. Although admitting waving in a non-obscene manner, plaintiff denied yelling and cursing and denied receiving any complaints from defendants regarding the same.

Defendant claims he did not understand some of the language in the contract; that the size of the foundation was not left to the general contractor but to both the general contractor and the defendant; that the decision on size and specifications was made later. The filing of the notice of pendency caused a construction delay from June to October, part of which was occasioned by defendant's lawyer's vacation. [*5]

Defendant Theresa Melis also testified. She confirmed the understanding of the parties that the price for the land was $46,500, the engagement of the plaintiffs to do the foundation, and if plaintiff was not so engaged that the price of the property would be an additional $5,000.00. She also confirmed that as a result of a fight between plaintiff and the general contractor, defendants were left in a quandary as to how to build the house if the plaintiff could not come to the property to work on the foundation.

Conclusions of Law

a. Defendant's action for contract damages

The agreement of the parties, as expressed in the contract was mutual and supported by adequate consideration. In exchange for a conditional discount in the purchase price of the property, plaintiffs obtained the right and obligation to do defendants' foundation for the price specified for that work, and defendants gave up the right to said discount if they chose plaintiff as their contractor to do the foundation.

Had defendants decided to use another contractor for the foundation, without more, they would have obligated themselves to pay plaintiff the discount amount. However, had plaintiff decided not to do the foundation for defendants, not only would he have forfeited the right to the discounted amount, but he would have been liable to defendants for any excess price they might have incurred in obtaining another contractor to perform that contract.

Here, an altercation took place between plaintiff and Knebel which resulted in a court order which had the effect of keeping plaintiff away from Knebel and the defendants' property. It is basic contract law that one who prevents or makes impossible the performance of a contract cannot take advantage of its non-performance. The Court finds that the plaintiff's own actions prevented him from installing the foundation, and therefor, his claim for compensation under the terms of the agreement are without merit. The defendants had reasonable cause to seek other contractors for the foundation, as their time was limited by the conditions of the mortgage lender's commitment.

Accordingly, the plaintiff may not recover.

Defendants' counterclaim

The defendants' sole counterclaim is a cause of action for abuse of process. New York Jurisprudence 2d, Vol. 86, Sec. 155, page 501 et seq. describes the tort of abuse of process: In its broadest sense, abuse of process may be defined as the misuse or perversion of regularly issued legal process for a purpose not justified by the nature of the process. Abuse of process has three essential elements: (1) regularly issued civil or criminal process; (2) an intent to do harm without excuse or justification; and (3) use of the process in a perverted manner to obtain a collateral objective. . . .

The defendants have not met their burden of proof to establish the second and third of these elements. Notwithstanding the decision of the IAS Justice in this case, granting the motion to cancel the notice of pendency and determining that the use of said remedy was inappropriate since plaintiff was seeking money damages in this action, which would not affect the title, possession, use or enjoyment of real property, the language of the contract does recite that a lien may be imposed in the event of a breach, carrying with it the implication that the remedy of foreclosure which might include the filing of a notice of pendency, would be available. The failure of plaintiff or counsel to foresee that the court would interpret the contract, as well as this action to enforce it, in a different [*6]manner does not give rise to an abuse of process. That is, the plaintiffs' attempt to foreclose a contractual lien was a reasonable excuse and justification for the filing of the notice of pendency, even though there was an eventual interlocutory ruling that the notice was not properly filed. Nor did the defendants prove intent on the plaintiffs' part to harm them by the filing as opposed to the filing being part of an action to enforce a lien.

Finally, the defendants did not prove that the notice of pendency was filed in a perverted manner to obtain a collateral objective aside from being part of the action to foreclose a lien.

Accordingly, defendants' counterclaim for abuse of process is dismissed as is their request for sanctions against plaintiff's counsel for bringing a frivolous claim.

In accordance with the foregoing decision, it is

ORDERED AND ADJUDGED that the plaintiffs' complaint herein be and the same is hereby dismissed; and it is further

ORDERED AND ADJUDGED that the defendants' counterclaim herein be and the same is hereby dismissed; and it is further

ORDERED, that neither plaintiffs nor defendants shall be entitled to costs.

The foregoing constitutes the decision, order and judgment of this Court.

Dated:Monticello, New York

August 25, 2004

E N T E R:

s/Burton LedinaBURTON LEDINA, Acting J.S.C. Footnotes

Footnote 1: Plaintiffs had sought a declaration that it had a lien and to foreclose their lien, which application for relief was amended on motion prior to the commencement of this trial to one for damages only.