William Somerville, Inc. v A.J. Group, Inc.
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William Somerville, Inc. v A.J. Group, Inc. 2004 NY Slip Op 30379(U) July 1, 2004 Supreme Court, New York County Docket Number: 101084/2004 Judge: Carol R. Edmead 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. [* 1] \ \ I I SUPREME COUR~ OF THE STATE OF NEW YORK I COUNTY OF NEf YORK: PART 35 ------------1------------------------ WILLIAM SOMERVILLE, INC., I Plaintiff, x Index No.101084/2004 DECJ:SJ:ON/ORDER \. -against\: r' \ THE A.J. GROUP, INC., 1114 AVENUE OF THE AMERICAS, LLC and EUROHYPO, \ _____________l______::::::::::~-----\ x In this \ction for, inter alia, foreclosure of a mechanif's lien, defendani Eurohypo ("Eurohypo•) moves for an order pursuant to CPLR (1) · 3211 [a] [10],dismissing plaintiff William § Somerville, rnl.'s ("Somerville") complaint for failing to join necessary part~es as required by New York Lien Law § 44; (2) pursuant to Ne1 York Lien Law§ 19 [6], discharging Somerville's Notice of Mechanic's Lien as facially defective under New York Lien Law § 9; atd (3)dismissing Somerville's complaint pursuant to CPLR § 3211 [a] [7] for failing to state causes of action,for breach of contr~ct and for a deficiency judgment. Background I According th the affidavit of Eurohypo's U.S. Legal Director, Larry tandido ("the Candido affidavit•), Eurohypo hired defendant The A.J. Group, Inc. ' ("the A.J. Group") on or about \ November 18, 2002\ to serve as general contractor for the construction of Eurohypo's new office space on the 29th floor of the building loca ed at 1114 Avenue of the Americas, New York, [* 2] I 1 New York and more commonly known as the Grace Building ("the I I Grace Building"). Candido claims that during the years 2002 and 2003 the A.J. Group hired various subcontractors, including plaintiff Som rville, to complete the construction of the new office space. Candido further claims that Eurohypo never engaged i . or con t racte d wit h any o f t h e sub contractors h' ire d b y t h e A.J. Group and that it never had a contractual relationship with Somerville in ~onnection I the Grace Building. with the construction work being done at Candido also states that all payments for work performed and materials furnished pursuant to the contract between Eurohyp\° and it general contractor, the A.J. Group, were made by Eurohypi directly to the A.J. Group. According to Candido, these ionies were paid in trust to the A.J. Group for payment to the l.J. Group's subcontractors. According to the affirmation of Somerville's attorney, Stuart ZisholtzJ Somerville is in the business of furnishing and installing panelling, partitions and walls for commercial construction proijects throughout the New York metropolitan area. Zisholtz claims lhat Somerville was engaged and hired by the A.J. Group on or abou\ November 18, 2002 to perform certain work and furnish certain ~terials at Eurohypo's new office space. Zisholtz contend, that Somerville performed that work and furnished those aterials and is presently owed a sum of $53,792. Zisholtz further claims that as a result of this non-payment, 2 [* 3] I Somerville file\ a notice of mechanic's lien against the Grace Building on or ibout January 12, 2004 with the Clerk of the Court of New York County for $16,292, the full amount Somerville claims was lienable. the work Jomerville's notice of mechanic's lien describes perfo~ed by Somerville at the Grace Building as I "installation ofi paneling, partitions, walls, doors, frames and related constru~tion work." The notice of mechanic's lien similarly describes the materials Somerville furnished as "paneling, partirions, walls, doors, frames and other related construction matlrials" and states that Somerville perfonned its first item of work and furnished its first item of material at the Grace Building on November 18, 2002. 3 0 , 2 003 as the I ~ast The lien lists December . . . date Somerville furnished material at t h e I Grace Building, but no date is given as to the time Somerville perfonned its lalt item of work there. Somerville conunenced the instant action tl foreclose its mechanic's lien on January 22, 2004 .somerville'l Complaint I In assertin~ its claim for foreclosure of a mechanic's lien against all defebdants, 1 Somerville alleges in its complaint that on or about Noverl er with Eurohypo an 1 18, 2002, in furtherance of its agreement defendant 1114 Avenue of the Americas, LLC, the Somervillejs complaint also asserts breach of contract and account stated causes of action solely against defendant the A.J. Group, Inc. 3 [* 4] I A.J. Group hired and engaged Somerville to perform certain work, labor and servijes and to furnish certain materials in connection with the constr ction and i~provement of the 29th floor of the Grace Building. Somerville further alleges that from on or about November 18, 2012 to on or about December 30, 2003 it duly performed all tne work, labor and services to be performed on its part and duly fjrnished all the materials it was required to furnish. The cdmplaint alleges that the agreed upon price and I fair and reasonable value of the work, labor and services performed by Sojerville, as well as the materials furnished, was Accor~ing to the complaint, Somerville has only been total of ~499,000, leaving a balance due and owing to $552,792. paid a Somerville of $5B,792. The complaint goes on to allege that (1) on or about Janulry 12, 2004, Somerville duly filed a notice of mechanic's lien retting forth the lienable sum of $16,292; (2) all the work, labor and services performed and all the materials furnished by Somtrville for the amount claimed in the mechanic's lien were delivered to and incorporated into the 29th Floor of the Grace Buildilg· and (3) Somerville's mechanic's lien has not I I been paid, cancelled or discharged and is presently a valid lien against the Graci Building. Somerville concludes the foreclosure cause of action tortion of its complaint by alleging that at the time Somerville filed its notice of mechanic's lien, defendants Eurohypo and 1111 Avenue of the Americas, LLC owed defendant the 4 [* 5] A.J. Group sums of money in excess of the amount allegedly owed to Somerville. Moreover, I 'i ~n the complaint's "wherefore" clause, Somerville not only demand1 judgment on its foreclosure cause of action, but also demands a Jeficiency judgment against the defendants, jointly and seve rally, and, in the event its mechanic's lien is 1 declared invalij, judgment against the defendants, including Eurohypo, jointl1y and severally, for the sum of $16,292. I . . . Euro h ypo's Motion to Dismiss In moving tr dismiss Somerville's complaint Eurohypo first contends that Sorerville, in violation of New York Lien Law § 44, has failed to join as defendants in this foreclosure action any of the nine other entities which Eurohypo contends have also filed notices of\ mechanic's liens against the Grace Building. Eurohypo argues fhat these ten notices of mechanic's liens total approximately $6rs,ooo in claims against the Grace Building and argues that any ruling or judgment rendered in the absence of the other nine lienols would have an adverse impact upon those alleged lienors lnd their claims. Under these circumstances, Eurohypo argues, dismissal of Somerville's complaint is warranted under CPLR § 3211 [a] [10] on the ground that "the court should not proceed in tte absence of a person who should be a party.• Eurohypo alio contends that Somerville's notice of mechanic's lien ("the notice")is facially defective and should be 5 [* 6] discharged as ofj record. Specifically, Eurohypo contends that I i the mechanic's llien' s references to "installation of paneling, I partitions, wa11js, doors, frames, and related construction work" and "paneling, plarti tions, walls, doors, frames and related construction mat\erials" are too vague to adequately identify the work performed ~nd the materials furnished by Somerville in connection with rhe construction and improvement of the 29th floor of the Gra ce Building. Eurohypo claims that these 1 "meaningless rec!itations" are wholly inadequate for compliance I with Lien Law § ~ [4] and warrant the lien's discharge of record pursuant to Lien Law § 19 [6]. Eurohypo also argues that Somerville's notQce should be discharged as of record pursuant to Lien Law § 19 performed its (61) because it fails to state when Somerville lart item of work at the Grace Building, as required by Lien Law § 9 [6]. Finally, Eurohypo argues that Somerville's complaint should be dismissed pur~uant a cause of actioh. to CPLR § 3211 [a] (7) for failing to state Specifically, Eurohypo contends that Somerville has fliled to state a breach of contract cause of action against il because Somerville's complaint does not allege that (1) a contrl ct was formed between Somerville and Eurohypo; (2) Somerville p rformed its obligations under the contract; Eurohypo failed (3) o perform its contractual obligations; and (4) Somerville suffe ed damages as a result of Eurohypo's breach. 6 [* 7] Eurohypo argues !that Somerville's failure to plead such facts is fatal to the deJand for money damages contained in the "wherefore" claJse of Somerville's complaint. Moreover, Eurohypo argues that Somjrville's failure to plead any facts establishing a relationship olf contractual privity between it and Eurohypo means that Somerwille is not entitled to the deficiency judgment against Eurohypo also demanded in the "wherefore" clause of Somerville's complaint. Somerville' js 0DJ:lOSi tion In addressibg Eurohypo's contention that it failed to name all of the lienors who filed notices of mechanic's liens against the Grace Buildirg as defendants in this action, Somerville argues that Eurorypo has not properly established the existence of these alleged nine other mechanic's liens because it has not attached copies of these liens to its motion to dismiss. In alternative, Somlrville contends that it is willing to amend its I summons and compiaint to add all necessary parties as defendants in this action and argues that dismissal of its complaint at this early stage woul\ be extremely prejudicial. Somerville states that while the A.J. Group, through its counsel, has consented to allow Somerville to amend its complaint to add all necessary parties, Eurohyp has not, despite the fact that Eurohypo, which Somerville claim has not yet answered the complaint, would not be prejudiced if Somerville were permitted the opportunity to 7 [* 8] serve an amended! complaint naming all ten mechanic's lienors as defendants. With respect to the alleged defects in its notice of mechanic's lien, Somerville argues that while Lien Law § 9 requires a lienof to indicate on its mechanic's lien the work performed and thb materials furnished by the lienor, the statute does not require a mechanic's lien to contain each and every detail regarding the work performed and the materials furnished. Therefore, Some1'ille argues, the description of the work performed and the materials furnished set forth in its notice of mechanic's lien fs requirements of more than sufficient to satisfy the ien Law § 9. Somerville further contends that, contrary to Euro ypo's claim, its notice of mechanic's lien does in fact indicate the time when Somerville performed its last item of work at the Grace Building. Somerville argues that paragraph six of the notici of mechanic's lien, which requires Somerville, as lienor, to indicate on one line the time when its last item of work was performld and, on an entirely separate line, the time when its last itlm of material was furnished, should be read as one continuous s ntence, despite the fact that the two lines are not joined by th word "and. " 2 Under this interpretation, 2 In listing November 18, 2002 as the time when it both performed its fi st item of work and furnished its item of material, Somerv'lle combined these two distinct sections of its notice of mechan'c's lien into one continuous sentence through the use of thew rd "and" which causes the notice of mechanic's 8 [* 9] December 30, 2003, the date listed by Somerville as the time when it furnished its last item of material, would also be read as the time when Somer~ille performed its last item of work at the Grace Building. As to its demand for a deficiency judgment, Somerville argues that it Jas the right, pursuant to Lien Law § 58, to seek a deficiency agalnst any party liable after the sale of the Grace Building and thar it therefore has the right to demand in its complaint a defiriency judgment against all defendants, including Eurohypo. Somer~ille also contends that its lack of contractual privity with Eurlhypo is irrelevant because it is the funds Eurohypo allegedly owes the A.J. Group, pursuant to their contract, which ~orm the basis of Somerville's mechanic's lien. Because Eurohypo has failed to establish that it paid the A.J. Group in full, Somerville contends that it has a valid mechanic's lien against the monies being withheld by Eurohypo. Finally, in response to what it describes as Eurohypo's attempt to dismi[s its complaint based upon "super technicalities," Somerville argues that Eurohypo's motion to dismiss is a bla[ant violation of the Lien Law because Eurohypo's application for rn order sununarily discharging Somerville's lien has not been madr upon a verified petition, which Somerville [footnote 2 contlnued] lien to read "[t]he time when the first item of work wasjperformed and the time when the first item of material was fur ished was November 18, 2002" [emphasis added]. 9 [* 10] argues is required by Lien Law § 19 [6]. Somerville also claims that because its mechanic's lien is valid, and because Eurohypo's motion is frivolJ°us and defective, Eurohypo should be sanctioned pursuant to 22 ~CRR 130.1-1. Eurohypo's Reply As part of l~he reply affidavit of its U.S. Legal Director, Larry Candido ("the Candido reply affidavit"), Eurohypo submits copies of the ni e additional notices of mechanic's liens it claims were fileld against the Grace Building prior to the date Somerville file1 its notice of mechanic's lien. reiterates its a~itional a~gument that Somerville's failure to name these def~dants lienJ s as Eurohypo also in this action is a fatal defect under Lien Law § 44 [1] warranting dismissal of Somerville's complaint affidavit t to CPLR § 3211 [a] furthe~ [10]. The Candido reply claims that in letters dated April 6, 2004 and April 8, 2004, Wrich are also attached to the Candido reply affidavit as exhibits, Eurohypo's counsel consented to Somerville's joi~der of the other nine lienors on the condition that Somerville irovide Eurohypo with proof of service of a supplemental s~ons and amended complaint. Candido claims that Eurohypo's counsi.l also agreed to withdraw the portion of its motion seeking dismissal of Somerville's complaint for failure to join necessary prrties. affidavit, Somer~ille However, according to the Candido reply never responded to either of these letters. 10 [* 11] i Eurohypo al)so uses its reply papers to reiterate its arguments that s~omerville' s mechanic's lien is facially defective under Lien Law §I1 9 and that Somerville has failed to allege the contractual pritty necessary to entitle Somerville to a deficiency jud~ent against Eurohypo. Eurohypo also addresses Somerville's conlltention that Eurohypo' s motion to discharge the notice of mechanic's lien is defective under Lien Law § 19 (6) because it was nlt made upon a verified petition by arguing that there is no legall basis which supports Somerville's contention. According to Eu4ohypo, the language of Lien Law § 19 (6) is permissive, not randatory and the Court has full authority to rule on a motion! to dismiss a mechanic's lien made in the course of a foreclosure action. Moreover, Eurohypo argues that it would make no sense to require a defendant in a mechanic's lien foreclosure actijn who wishes to challenge the validity of the mechanic's lien Ito do so by commencing an entirely separate action. Eurohypo concludes its reply by arguing that sanctions should be imposeb upon Somerville and its attorney on the ground that Somerville'l motion for sanctions against Eurohypo, itself, constitutes frivblous conduct. Analysis At the outs t, the Court notes that it will not impose sanctions on eit er the parties to this action or their attorneys. 22 CRR § 130-1.1 permits a court, in its 11 [* 12] ! I discretion, to atard sanctions for frivolous conduct. In determining whether the conduct undertaken was frivolous, the court considers,lamong other things, the circumstances under which the conduc took place, including the time available for 'nvest1'gat1'ng thlj legal or factual basis of the conduct, and 1 whether or not the conduct was continued when its lack of legal or factual basislwas apparent, should have been apparent, or was brought to the a tention of counsel or the party (22 NYCRR § 1301.1). As neither party has made a showing that the other's conduct on this motion was intentional, willful or frivolous, the Court is of the I pinion that the drastic remedy of sanctions is unwarranted in t is case. As for the ufficiency of Somerville's notice of mechanic's line, the groundi for the discharge of a mechanic's lien interposed againrt a nonpublic improvement are provided for in Lien Law§ 19. According Lien Law§ 19 (6), a lien may be discharged "wherl . . . the notice of lien is invalid by reason of failure to cohwly with the provisions of section nine of this article II The provisions of Lien Law § 9 pertinent to the instant notice o, mechanic's lien are Lien Law§ 9 (4), which requires a notic of lien to indicate "the labor performed or materials furnis ed and the agreed price or value thereof . . . ,"and Lien Law 9 (6), which requires that a notice of lien include the when the first and last items of work were 12 [* 13] performed and ma terials were furnished." When determining 1 whether a notice! of lien adequately describes the information required by Liej Law§§ 9 (4) & (6), the Court must be mindful of the fact that wJile a valid lien is created when a lienor files a notice of lien tlat substantially complies with the provisions of Lien Law§ 9, .t!l failure of a notice of lien to comply with a material requir I ent of Lien Law § 9 voids the lien (Fibernet Telecom Group, I~c. v East Coast Optical Services, 195 Misc 2d 461, 462, 760 Js2d 621 [Sup Ct NY County 2002]; Corina Associates, Inc. v McManus, Longe, Brockwehl, Inc., 613,614, 330 NYSi2d 847 [3d Dept 1972]). 39 AD2d Moreover, the Court must "construe liberjlly" the requirements of Lien Law § 9 "to secure the beneficial iLterests and purposes" of the Lien Law as a whole (Lien Law § 23; rM Contr. Co. v 32 AA Assocs. LLC, 4 AD3d 198, 199, 772 NYS2d 2 69 [pt Dept 2004]) . At the same time however, 1 this liberal construction of Lien Law § 9 must be balanced against the oveJall purpose of that section, which is to provide owners, purchasels and lien creditors with the notice that is essential for tJeir security (Fibernet Telecom Group, Inc., 195 Misc 2d at 463). Applying these principals to the instant case, the Court finds that Somerrille's notice of mechanic's lien substantially complies with the requirements of Lien Law § 9 (4) and adequately apprises all inti rested parties of both the materials furnished 13 [* 14] I I and the work performed by Somerville. Somerville's description I of the work it p jrformed at the Grace Building, i.e. , 1 "installation of[ paneling, partitions, walls, doors, frames and related construclion work," is more than adequate in light of the fact that descriptions as vague as "supervision and superintendence," "carpenter work and floor laying," and "plumbing and gas fitting" have all been deemed sufficient (8-8 warren's weed Ner York Real Property§ 3.0ll. Moreover, the description contiined in Somerville's notice of mechanic's lien is much more detailed than the work performed descriptions held to be insufficieLt in the two cases cited by Eurohypo (compare Charles Hyman, )re. v Olsen Industries, Inc., 227 AD2d 270, 277, 642 NYS2d 306 [lrt Dept 1996] [plaintiff's liens were properly discharged for failing to identify the labor supplied or the materials providld to defendants]; San Marco Constr. Corp. v Gilbert, 15 Misc 2d 208, 211, 178 NYS2d 137 [Sup Ct Westchester County 1958] [norice of lien is insufficient insofar as it states that the labor plerformed was "equipment and machinery"]) . Somerville's description of the materials it furnished at the Grace Buildi g, i.e., frames and "paneling, partitions, walls, doors, related construction materials," is similarly sufficient for t e purposes of Lien Law "merely suffice as long § 9 (4) given that the nature of the material . supplied will s it is sufficient to apprise the owner of the 14 [* 15] I material . fior which the lien claimed" (id.). Because Eurohypo has admitted in the Candido affidavit that Somerville was hired as a slbcontractor to complete the construction of Eurohypo' s officl space on the 29th floor of the Grace Building, Somerville's deslcription of the materials furnished gives Eurohypo adequatle notice that Somerville's mechanic's lien is claimed for the ~paneling, partitions, walls, doors, frames and other related colstruction materials" furnished at the 29th floor of the Grace Bui~ding. It is the fLilure of Somerville's notice of mechanic's lien to indicate the rime when the Somerville's last item of work was performed, however, which not only renders the notice of lien facially invali1, but which also warrants its discharge of record. As disc6ssed supra, Lien Law § 9 (6) requires a notice of lien to state "time when the first and last items of work were performed and malterials were furnished.• While approximate dates or unintentional[y erroneous dates will generally not be considered fatal jurisdictional defects, "[a] failure to set forth any date as to when the first or last item of work was performed . . . lonstitutes a jurisdictional defect rendering the lien invalid" (8 8 Warren's Weed New York Real Property § 3.01 [emphasis added]). and the time whe Had Somerville intended December 30, 2003 to it furnished its last item of material, 15 [* 16] i Somerville could have combined these two independent sections of its notice of mjchanic's lien by using the word "and," just as it did when indica,ing November 18, 2002 as both the time when it first performed ~ork at the Grace Building and the time when it first furnished , aterials there. Having failed to do so, the Court cannot, aj Somerville urges, read these separate and distinct portio, s of the notice of mechanic's lien as one 1 continuous sentence. of Lien Law § Thus, notwithstanding the general principal 23, that the requirements of the Lien Law are to be "construed libe,ally," Somerville's failure to indicate on its notice of lien 9he time when its last item of work was performed at the Grace Bu1lding is a fatal jurisdictional defect that requires that Somerville's notice of mechanic's lien be discharged of r~cord pursuant to Lien Law § 19 (6). Moreover, domerville's contention, in support of which Somerville citej no case law, that Eurohypo's motion to discharge the notice of m,chanic's lien is defective because it is not supported by a lerified petition is without merit. While an application to summarily discharge a mechanic's lien made pursuant to Lie1 Law § 19 (6) "must be made upon a verified petition accomp nied by other written proof showing a proper case therefor . . . ,"it would be a drastic and nonsensical waste of the Court's res urces to require Eurohypo, as a defendant in an already commenc d lien foreclosure action, to commence an 16 [* 17] I entirely separat e proceeding to discharge the very same lien 1 Somerville is s,eking to have foreclosed. Therefore, it was procedurally proper for Eurohypo to move in this foreclosure action to dischal.ge Somerville's notice of mechanic's lien. Having detjrmined that Somerville's notice of lien should be discharged of rjcord for failing to comply with the requirements of Lien Law§ 9 (6), the only remaining issue to be resolved is whether Somerville is entitled to demand in the "wherefore" clause of its complaint "that in the event Plaintiff's Mechanic's Lien be declare I invalid, that Plaintiff have judgment against the Defendants, any or all of them, jointly and severally, for the sum of $16,292." 3 While Somerville's attorney has argued in his affirmation in opposition that Somerville's lack of privity with Eurohypo is irrelevant for the purposes of Somerville's mechanic's lien, Somerville has not advanced any argument why, in the event its m,chanic's lien is declared in valid, it should be entitled to a jjdgment, which sounds in breach of contract, against Eurohypl for $16, 292. While it is true that a subcontractor need not be in contractual privity with a property owner to in ordjr to foreclose on a mechanic's lien, (Warlock Paving Corp. v 1amperlino, 222 AD2d 1097, 1098, 636 NYS2d 510 3 Cour~s The mechanic's lien regarding Somer lienors as defe deficiency jud determination that Somerville's notice of is facially invalid renders moot the issues lille's failure to join the other nine mechanic's dants in this action, and its entitlement to a ent against Eurohypo. 17 [* 18] I (4th Dept 1995]) .1 it is equally well settled that "a I subcontractor ma¥ not assert a cause of action which is contractual in nlture against parties with whom it is not in privity• (Delta ~lectric, Inc. v Ingram & Greene, Inc., 123 AD2d 369, 370, 5061S2d 594 [2d Dept 1986]; quoting Martirano Constr. Corp. v Briar Ct.tracting Corp., 104 AD2d 1028, 1030, 481 NYS2d 105 [2d Dept 1984]; see also Eastern States Electrical Contractors, In . v William L. Crow Construction Company, 153 AD2d 522, 523, 544 NYS2d 600 [1st Dept 1987] ["a subcontractor may not assert lcontractual claim against an owner with whom it is not in privij "]). As Somerville has asserted a breach of contract claim jgainst defendant the A.J. Group, Inc., there is nothing pleaded_lin Somerville's complaint to indicate that it was in privity of contract with Eurohypo. cannot demand i Therefore, Somerville its "wherefore" clause that, in event its mechanic's lien is declared invalid, it have judgment against Eurohypo and th, other defendants, jointly and severally, for the sum of $16,292 oecause such relief is simply not available as against EurohypJ. Accordingl1, it is hereby ORDERED th t plaintiff William Somerville, Inc.'s complaint is dismissed in its entirety as to defendant Eurohypo; and it is further 18 [* 19] ORDERED that plaintiff Williams Somerville, Inc., and defendants the AlJ. Group, Inc. and 1114 Avenue of the Americas, I I LLC, are to appear for a Preliminary Conference before Justice I Carol Edmead at 60 Centre Street, New York, New York, Room 543 on August 24, 2004 kt 2:15 p.m.; and it is further ORDERED thal defendant Eurohypo is directed to serve a copy of this order wilh notice of entry upon all parties within 20 days of entry. This constitutes the decision and order of the Court. Dated: July 1, 2004 19
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