Voodoo Contr. Corp. v Ahava Med. & Rehabilitation Ctr., LLC

[*1] Voodoo Contr. Corp. v Ahava Med. & Rehabilitation Ctr., LLC 2009 NY Slip Op 52135(U) [25 Misc 3d 1215(A)] Decided on October 19, 2009 Supreme Court, Kings County Demarest, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 19, 2009
Supreme Court, Kings County

Voodoo Contracting Corp., D/B/A UNIVERSAL CONTRACTING, Plaintiff,

against

Ahava Medical & Rehabilitation Center, LLC, BROOKLYN COMMUNITY MANAGEMENT, LLC, AND LEBGUTT REALTY LLC, Defendants.



25453/2008



Attorney for Plaintiff:

Leon Borstein, Esq.

Borstein & Sheinbaum

420 Lexington Avenue - Suite 2920

New York, NY 10170

Attorney for Defendant:

Jon A. Lefkowitz, Esq.

1222 Avenue M - Suite 204

Brooklyn, NY 11230

Carolyn E. Demarest, J.

Upon the foregoing papers, plaintiff Voodoo Contracting Corp. (Voodoo) moves for an order granting it summary judgment on the issue of liability against defendants Ahava Medical & Rehabilitation Center, LLC (Ahava), Brooklyn Community Management, LLC (BCM), and Lebgutt Realty LLC (Lebgutt) (collectively defendants or ABL), pursuant to CPLR 3212(b); for an immediate trial on damages, pursuant to CPLR 3212 ( c ) and for dismissal of all counterclaims and defenses, pursuant to CPLR 3211(a)(7) and 3212(b). ABL cross-moves, pursuant to CPLR 3212, to dismiss the action in its entirety.

The Instant Action and Parties

Plaintiff Voodoo Contracting Corp. d/b/a Universal Contracting (Voodoo), a New York [*2]contracting corporation, commenced the instant action seeking payment for construction and renovation work, labor and services it performed for defendants ABL at their rehabilitation center located at 2555 Nostrand Avenue in Brooklyn. Lebgutt owns the building at 2555 Nostrand Avenue and Ahava owns the rehabilitation center which leases space at the building. BCM also leases space at the building. Mr. Yisroel Lebovits is manager of BCM and owner of Ahava and Lebgutt. Mr. Alexander Berkovitch has an interest in Voodoo or otherwise controls it. Nachman Kramer, principal of Kramer Company, Inc., is a long-time acquaintance of Mr. Berkovitch. Mr. Berkovitch, Mr. Kramer, and Kramer Company are not parties to the instant action.

Facts and Procedural History

The prior history involving the above-named individuals and entities is as follows: In 2003, ABL sought to renovate their medical facility in compliance with Article 28 of the Public Health Law in order to receive a higher rate of compensation by New York State for visits by Medicaid patients.. Mr. Lebovits and Mr. Kramer conferred about the project. Having worked with Voodoo on a prior construction project, Mr. Kramer introduced Mr. Berkovitch to ABL. Thereafter, Mr. Kramer arranged for Voodoo, Mr. Berkovitch's firm, to perform the renovation work on the building. Voodoo began construction and renovation work on the building in January, 2005. After months of work on the building, disputes arose as to the cost of the renovations, as well as Mr. Kramer's role in the project.

In or about July or August, 2005, Voodoo and Mr. Berkovitch filed a mechanic's lien against the building in the amount of $129,530.00. In January, 2006, ABL commenced an action (via a third amended complaint) against Mr. Berkovitch, Voodoo and Kramer Company alleging, among other things, deceptive business practice (General Business Law § 349), breach of contract against Mr. Berkovitch and Voodoo, and fraudulent and negligent misrepresentation. Specifically, ABL alleged, in substance, that Voodoo had fraudulently induced it to hire Voodoo based upon Voodoo's false claim that it had expertise in performing construction in compliance with Article 28 of the Public Health Law, and that Voodoo had breached its contract with ABL to perform the renovation. ABL also sought rescission and restitution of the money it paid Voodoo (Ahava Med. & Rehabilitation Ctr, LLC et al v Berkovitch et al, Sup Ct, Kings County, August 21, 2006, Demarest, J., Index No. 26230/05).

In April, 2006, Voodoo and Mr. Berkovitch moved to dismiss the third amended complaint pursuant to CPLR 3211 (a)(1) and (7) insofar as asserted against them. The court granted the motion to the extent of dismissing the first (violation of General Business Law §349), third (fraudulent representation), fourth (negligent misrepresentation), fifth (rescission and restitution), and seventh (tortious interference) causes of action by decision and order dated August 21, 2006 (Ahava Med. & Rehabilitation Ctr, LLC et al v Berkovitch et al, Sup Ct, Kings County, August 21, 2006, Demarest, J., Index No. 26230/05). The court denied that branch of the motion to dismiss the second cause of action for breach of contract against Mr. Berkovitch, finding that the allegations of the complaint were sufficient to make out a claim against him sounding in breach of an oral agreement (id. at 7). The court also denied that branch of the motion to dismiss the sixth cause of action for breach of contract against Voodoo, holding that "[t]he allegations in the amended complaint [were] sufficient to state a cause of action for breach of contract against Voodoo" (id. at 14). In this regard, the court stated that "[t]he request for approval for the start of construction' annexed to the complaint, which [ABL] contend[s] [*3]constitutes the contract at issue, doesn't negate the allegations that [Voodoo, Mr. Berkovitch and Kramer Company] were hired by [ABL] to perform certain construction and did perform certain work, pursuant to an oral agreement between the parties" (id. [emphasis added]). Lastly, the court denied that branch of the motion to dismiss the eighth cause of action, which sought discharge of the mechanic's lien.

In February, 2007, Mr. Lebovits, owner of Ahava and Lebgutt and manager of BCM, was deposed. He testified that he was "president" and in control of ABL, and that Voodoo had performed work, labor and services and had purchased goods for the building.

Thereafter, a bench trial on the above-noted remaining causes of action was held before this court (Demarest, J.) on February 25, 29, March 3, 4, 6 and 10 of 2008. At the conclusion of the bench trial, upon the evidence adduced from all parties, this court dismissed the second and sixth cause of action as to Mr. Berkovitch and Voodoo upon the failure of ABL to sustain its burden to prove a breach of contract. The court also held that there was no evidence to support a finding that Mr. Berkovitch or Voodoo were in partnership with Mr. Kramer. As such, Kramer moved to dismiss the sixth cause of action (breach of contract) insofar as asserted against it. Voodoo and Mr. Berkovitch then moved to dismiss the eighth cause of action (discharge of mechanic's lien), ABL moved to dismiss Mr. Kramer's counterclaim for breach of contract, Kramer moved to amend its counterclaim to conform to the proof, and ABL moved to vacate the lien.

The court reserved decision on ABL's sixth cause of action for breach of contract against Kramer, ABL's motion to discharge the mechanics' lien, and Kramer's counterclaim, and directed the parties to submit post-trial memoranda. As relevant here, Voodoo and Mr. Berkovitch did not cross claim or make a motion to amend their answer to demand a judgment against ABL and the court declined to permit such a motion at the conclusion of trial.

By decision and order dated August 27, 2008 (Ahava Med. & Rehabilitation Ctr, LLC et al v Berkovitch et al, Sup Ct, Kings County, August 27, 2008, Demarest, J., Index No. 26230/05), this court dismissed the sixth cause of action for breach of contract against Kramer and Kramer's counterclaim for breach of contract, and granted ABL's motion to vacate the mechanic's lien. It appears that a final judgment has not been entered in this action.

As noted above, in September, 2008, Voodoo commenced the instant action against ABL seeking payment of $129,530.00 for construction and renovation work, labor and services it performed for ABL at its rehabilitation center. The complaint alleges causes of action for breach of contract, an account stated, unjust enrichment and quantum meruit. ABL interposed an answer in which it generally denied the allegations of the complaint, alleged twelve affirmative defenses, and two counterclaims.

The first counterclaim for fraudulent misrepresentation alleges, in substance, that Voodoo misrepresented its expertise in Article 28 construction and its ability to complete the construction work according to a contract and schedule, that ABL relied upon these representations to their detriment, and that construction was not completed because of Voodoo's failure to fulfill its promises, which prevented ABL from obtaining their anticipated funding from the State of New York. The second counterclaim for rescission and restitution alleges, in effect, that Voodoo left the building in worse condition than that in which it found it, that in order to fix the foundation of the building, on which Voodoo did not perform work, it was necessary to destroy the work [*4]Voodoo performed on the first and second floors of the building, that at Voodoo's direction, ABL paid it $601,779.00 and did not receive the bargained-for performance, that Voodoo kept the money despite demands for its return, and that ABL advised Voodoo that it did not accept its work and that it should restore the building to the previous condition, and return ABL's money to them.

Subsequently, Voodoo moved for summary judgment on the issue liability, and for dismissal of the counterclaims and defenses, and ABL cross-moved to dismiss the complaint in its entirety. These motions are presently before the court.

Arguments

Voodoo first argues that it should be granted summary judgment on the issue of liability and that a trial should be ordered on damages because it is undisputed that it performed work, labor and services for ABL for which it was not paid in full. In support of this branch of its motion, Voodoo argues that in its complaint, ABL alleged that Voodoo had entered into a written contract with it to perform renovations on the building; that during the bench trial, this court found that an agreement existed between Voodoo and ABL "to perform in accordance with certain plans;"[FN1] that the work Voodoo performed is evidenced by detailed invoices sent to and received by ABL; that ABL paid Voodoo $500,000.50 for the work performed as set forth in the annexed invoices; and that Mr. Lebovits, President of ABL, admitted that Voodoo performed work at the building and made purchases detailed in the final invoice provided to ABL. Voodoo further argues that it is undisputed that after receiving the final invoice of $179,530.50, ABL engaged in a discussion and agreed to pay it, and then paid an additional $50,000.50, but failed to pay the balance of $129,530.00. Thus, Voodoo contends that it has made a prima facie showing of its entitlement to summary judgment on the issue of liability on its claims for breach of contract, unjust enrichment, quantum meruit, and an account stated, and that an immediate trial on damages should be ordered.

Voodoo next argues that ABL is collaterally estopped from reasserting their counterclaims because they are essentially the same as the claims which were asserted and dismissed in the prior action. Voodoo also argues, in detail, that each affirmative defense should be dismissed.

In its cross motion, ABL argues that settled principles of res judicata bar Voodoo from litigating matters which were fully embraced in the prior action.Specifically, ABL asserts that because Voodoo merely elected to defeat ABL's recovery on the contract in the prior action, without seeking affirmative relief either by asserting an affirmative defense or counterclaim, Voodoo's right to bring a new action for damages arising out of the same contract has been lost. ABL also maintains that Voodoo's present claims are barred by the prior adjudication of a claim which arose out of the same "factual grouping" even if its present claims "call for different measures of liability or different kinds of relief" (O'Brien, 54 NY2d 353, 358 [1981]). ABL [*5]further notes that the doctrine of res judicata bars claims that were actually litigated and those relevant issues which could have been litigated in the prior lawsuit, since they arose out of the same transaction. In this regard, ABL states that Voodoo concedes in its memorandum of law that in the prior action ABL claimed that Voodoo breached a contract by failing to complete the construction in compliance with Article 28 and in accordance with the alleged schedule and that therefore, Voodoo owed ABL its money back. In this action, ABL notes that Voodoo is attempting to enforce an oral contract, as evidenced by the assertion of Mr. Berkovitch, President of Voodoo, that "VooDoo was to perform construction related work, labor and services and deliver goods at the [p]remises, and bill [ABL] on a unit pricing' basis;" that [t]he agreement was that construction work was to be performed in accordance with architectural plans developed by [ABL's] architects;" and that "[t]o date [ABL] ha[s] not paid VooDoo the remaining $129,530.00." According to ABL, "the prior case was [ABL's] claim that VooDoo did not perform its part of the contract, and this case is VooDoo's claim that [ABL] did not perform its part of the contract."

In opposition to ABL's cross motion, Voodoo argues that its motion should be granted because ABL has failed to submit any proof which raises any material issues of fact to rebut its prima facie showing on the issue of liability.Voodoo also asserts that ABL's counterclaims and affirmative defenses should be dismissed as unopposed. As to ABL's argument to dismiss on res judicata grounds, Voodoo contends that the doctrine does not apply to successive actions arising out of the same course of conduct where the requisite elements of proof and evidence necessary to recovery in the subsequent action differ from the prior action (Julien J. Studley, Inc. v Lefrak, 48 NY2d 954 [1979]).

Specifically, Voodoo argues that the prior action involved a written contract entered into between ABL and Mr. Berkovitch which was to be performed between August 2004 and March 2005, consistent with Article 28 of the Public Health Law, for a fixed price, wherein ABL sought damages for "alleged failure to perform renovation pursuant to Article 28." On the other hand, Voodoo states that "[t]his [a]ction does not involve Article 28[;] the claims in the [p]rior [a]ction were dismissed because there was no contract between the parties as alleged by [ABL] [;] and therefore the scope, quality or value of the work [] at issue in this [a]ction [] were never litigated in the [p]rior [a]ction." According to Voodoo, this action alleges that Voodoo performed work, labor and services between Fall 2004 and July 1, 2005, and therefore the alleged contracts in issue in the two actions are not the same. Further, Voodoo asserts that in the prior action, ABL sought return of the amounts paid plus damages, whereas in the present action, it (Voodoo) is seeking $129,530.00 as specifically agreed upon in May/June 2005 and evidenced by the above-referenced invoices. In conclusion, Voodoo argues that its claims in this action require materially different proof on the elements and damages than do ABL's claims in the prior action, and thus the doctrine of res judicata does not bar its claims or require dismissal of this action.

In reply to Voodoo's opposition to its cross motion, ABL asserts that the prior action involved both a written and oral contract, that ABL in fact asserted a claim for breach of contract against Voodoo (sixth cause of action), and that ABL's complaint alleged that Voodoo "claimed that there was a contract between the parties." Accordingly, ABL argues that the issue of the contract or lack thereof was fully embraced in the prior action. ABL also notes that Voodoo correctly asserts that "the scope, quality or value of the work, at issue in this action, were never [*6]litigated in the prior action" because Voodoo failed to raise its claims as an affirmative defense or counterclaim, and thus is barred from raising its claims now.

In any event, contrary to Voodoo's claim, ABL notes, and it is undisputed, that the issue of whether Voodoo was entitled to additional compensation was raised in the prior action, namely: 1) in ABL's opposition to Voodoo's March 26, 2006 motion to dismiss, wherein ABL alleged that Voodoo's work was "utterly worthless," that Voodoo was paid in full, and that it [Voodoo] was not entitled to any additional payment," 2) in ABL's third amended complaint, wherein ABL alleged that on August 27, 2005, it had served upon Voodoo a demand pursuant to Lien Law § 38 to set forth within five days the items which had comprised Voodoo's claim on the mechanic's lien, as well as the terms of the contract under which those items were furnished, that four months had elapsed since the complaint was written in January 2006, and that Voodoo had failed to do so; and 3) by Voodoo itself, by filing its mechanic's lien before ABL commenced its action.

As to Voodoo's contention that the contracts at issue in the two actions are not the same, ABL asserts both actions involved an oral contract, and that the only disagreement was over the terms of that contract. In support of this argument, ABL points to Voodoo's pre-trial memorandum of law in the prior action in which Voodoo set forth its claims regarding the terms of the contract, conceded that the court in the prior action "found that [it] and [ABL] had an oral contract;" and asserted that "[ABL] is collaterally estopped by th[e] finding that the parties had an oral contract for the work in issue."

ABL also notes that Voodoo should be estopped from claiming that there was an oral contract because in the prior action, Voodoo argued that there was no agreement, oral or otherwise, between it and ABL. Finally, ABL argues that whether the prior action involved "damages for failure to perform the renovation pursuant to Article 28," or an "alleged written contract," or what damages were sought, Voodoo's current claims arise out of the same transaction or contract which was fully litigated in the prior action, barring their re-litigation.

In opposition to Voodoo's motion, ABL argues that it did not pay Voodoo the additional $129,530.00 because it was not entitled to the original amount paid, let alone any additional sums. ABL also contends that the court has already found the existence of an oral contract between the parties, and that the dispute is over the identity of the parties, its terms and which party breached it. In addition, ABL asserts that the court's finding that "the agreement that Mr. Berkovitch and his companies entered into was to perform in accordance with plans" was not necessarily an agreement with ABL.

In further opposition to the motion, ABL reiterates its res judicata claim. It also raises opposition to that branch of Voodoo's motion to dismiss its affirmative defenses.

Discussion

"The doctrine of res judicata precludes a party from litigating a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter'" (Matter of Josey v Goord, 9 NY3d 386, 389 [2007], quoting Matter of Hunter, 4 NY3d 260, 269 [2005]; see also Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347 [1999] ["Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action."]; Matter of Reilly v Reid, 45 NY2d 24, 27 [1978] [internal quotations omitted]["It is blackletter law that a valid final judgment bars future actions [*7]between the same parties on the same cause of action."]; Fitzgerald v Hudson Natl. Golf Club, 35 AD3d 533[2006][same]). Thus, " once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy'" (Fifty CPW Tenants Corp. v Epstein, 16 AD3d 292, 294 [2005], quoting O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981], citing Matter of Reilly, 45 NY2d at 29-30; see also QFI, Inc. v Shirley, 60 AD3d 656, 657 [2009]). Moreover, "a claim will be barred by the prior adjudication of a different claim arising out of the same factual grouping even if the claims involve materially different elements of proof, and even if the claims would call for different measures of liability or different kinds of relief" (Fifty CPW Tenants Corp., 16 AD3d at 294 [internal citations and quotations omitted]). In this regard, "res judicata bars not only claims that were actually litigated [to conclusion on the merits] but also claims that could have been litigated [in the prior action] if they arose from the same transaction or series of transactions" (id., quoting Marinelli Assoc. v Helmsley-Noyes Co., 265 AD2d 1, 5 [2000]; see also QFI, Inc.,60 AD3d at 657; Vedder v County of Nassau, 59 AD2d 527, 528 [2009]; Sandhu v Mercy Med. Ctr., 54 AD3d 928, 929 [2008]; Bogan v Northwestern Mut. Life Ins. Co., 292 AD2d 411, 413 [2002], appeal denied 99 NY2d 545 [2002]; Sawah v Penfield Mechanical Contractors, Inc., 119 AD2d 980 [1986], citing Smith v Sage Coll., 54 NY2d 185, 194 [1981]).

Here, the claim for breach of contract asserted by ABL in the prior action and the claim by Voodoo for the unpaid balance for construction work it performed for ABL arise out of the same facts, namely the contract ABL and Voodoo entered into pursuant to which Voodoo was to perform construction work at the building. As noted above, under the doctrine of res judicata, "a new claim constitutes the same cause of action as the formerly litigated claim if they both arise out of the same transaction or occurrence or series of transactions or occurrences, even if the new claim is based upon a different legal theory or seeks a different remedy" (Troy v Goord, 300 AD2d 1086, 1087 [2002]). Here, Voodoo concedes that the claim against it in the prior action was that it had fraudulently induced ABL to enter into a written contract for certain renovations on the premises by misrepresenting expertise in Article 28 building compliance and that it had breached the contract by failing to complete the construction with Article 28 and according to an alleged schedule, for which ABL sought restitution. In this action, Voodoo concedes that it seeks enforcement of an alleged oral contract wherein "[it] was to perform construction related work, labor and services and deliver goods at the [p]remises, and bill [ABL] on a unit pricing' basis;" that "[t]he agreement was that construction work was to be performed in accordance with architectural plans developed by [ABL's] architects;" that it performed work pursuant to the above agreement, which ABL accepted, and that an unpaid balance of $129,530.00 remains. As ABL contends, the prior action involved ABL's claim that Voodoo breached its obligations under the contract, and this action alleges that ABL did not fulfill its own obligations under the contract. Since the claims of Voodoo in this case arise out of the contract litigated in the prior action, res judicata applies to preclude Voodoo from bringing its current claims (O'Brien, 54 NY2d at 357; Schwartzreich v E.P.C. Carting Co., 246 AD2d 439, 441 [1998] [defendant precluded from asserting libel counterclaim in second action because in first action, its claim [as plaintiff] for tortious interference with contract arose from the same transaction, namely a libelous letter]; Fifty CPW Tenants Corp., 16 AD3d at 294 [the stipulated discontinuance "with [*8]prejudice" of third-party plaintiff's indemnification and contribution claims against defendant in the third-party action was correctly given res judicata effect to bar plaintiff's guarantee claims against defendant in the second action - both sets of claims arose from the same transaction or series of transactions, in that the basis of plaintiff's claims against defendant in each action was the same allegedly defective work defendant performed on the roof of plaintiff's building. Given this common factual basis, the guarantee claims asserted in the second action could have been litigated in plaintiff's third-party action against defendant]).[FN2]

Voodoo's argument that its claims in this case require materially different proof on the elements and damages than do the claims of ABL in the prior action is without merit. In this regard, Voodoo incorrectly asserts that the prior action involved a claim by ABL for breach of a written contract whereas the instant action alleges a claim for an oral contract. As noted above, in its August 21, 2006 order, the court found that ABL's third amended complaint set forth allegations that sufficiently alleged breach of an oral agreement against Mr. Berkovitch and Voodoo.Further, Voodoo has conceded in its memorandum of law that "in the prior action, Judge Demarest found that Voodoo and [ABL] had an oral contract for Voodoo to do renovation and construction work on the [p]remises." Similarly, Voodoo's contention that the claims in the two actions require different proof because ABL states that the contract at issue was with Mr. Berkovitch, and not Voodoo, it simply incorrect. ABL sued both Mr. Berkovitch and Voodoo for breach of contract. Moreover, Voodoo's assertion that the claims differ in proof because ABL's claim involved Article 28, unlike the claims asserted here, and because ABL sought their money back whereas Voodoo is seeking an unpaid balance, is also without merit. As ABL contends, the disagreement among the parties in the prior action centered upon the terms of the oral contract.Lastly, Voodoo's contention that the claims in the prior action were dismissed "because there was no contract between the parties" is also incorrect. In the court's August 27, 2008 decision and order, the court dismissed ABL's breach of contract claims because it had failed to prove a breach of contract as to Voodoo and Mr. Berkovitch, not because it failed to prove the existence of the contract. Thus, Voodoo's claims in this action and ABL's claims in the prior action arise from the same transaction, which precludes Voodoo from raising its current claims in this action (Compare Vigliotti v North Shore Univ. Hosp., 24 AD3d 752, 754 [2005][the second action commenced by plaintiff, which alleged negligence and malpractice by plaintiff's doctor and hospital in permitting an infected surgeon to operate on plaintiff without notifying plaintiff of the risks was not barred by the first action commenced by plaintiff, in which he alleged that he contracted hepatitis C through tainted blood, where doctor was not a defendant, and hospital was charged with negligence arising from the blood supplied during operation]; Scalise v Herkimer, [*9]Fulton, Hamilton & Otsego County BOCES, 16 AD3d 1059, 1061 [2005][the lease transactions that formed the basis for the second action were not the same as the alleged instances of defamation that formed the basis for the first action, and therefore the second action was not barred by the doctrine of res judicata]; Karmel v Delfino, 293 AD2d 473, 473 [2002] [the doctrine of res judicata did not bar the second petition insofar as it raised issues which were not raised in the first petition, which was dismissed on statute of limitations grounds]; Hardoon v Kalonaros, 286 AD2d 318, 318 [2001] [the doctrine of res judicata does not bar the litigation on the merits of the plaintiff's action to recover payment on a promissory note. The plaintiff's claim in that action was independent of his prior claims in a Federal action relating to the defendant's alleged tortious conduct in causing the breakup of the plaintiff's medical practice]).

In any event, as set forth above, the issue of the unpaid balance due was raised in the prior action, namely; 1) in ABL's opposition to Voodoo's March 26, 2006 motion to dismiss, wherein ABL alleged that Voodoo's work was "utterly worthless," that Voodoo was paid in full, and that it [Voodoo] was not entitled to any additional payment," 2) in ABL's third amended complaint, wherein ABL alleged that on August 27, 2005, it had served upon Voodoo a demand pursuant to Lien Law § 38 to set forth within five days the items which had comprised Voodoo's claim on the mechanic's lien, as well as the terms of the contract under which those items were furnished, that four months had elapsed since the complaint was written in January 2006, and that Voodoo had failed to do so; and 3) by Voodoo itself, by filing its mechanic's lien before ABL commenced the prior action.Moreover, as noted above, Voodoo also raised claims about the terms of the contract in the prior action. In its pre-trial memorandum of law in the prior action, Voodoo stated that it "performed . . . construction work, labor and services on the [p]remises and received payments for some, but not all of the work, labor and services performed . . . The evidence will show that in June 2005 VooDoo ceased work at the premises and $129,530.50 was due and unpaid for work, labor and services performed."Further, Voodoo conceded that in the prior action "Judge Demarest found that [it] and [ABL] had an oral contract;" and asserts in its memorandum of law in this action that "[ABL is] collaterally estopped by th[e] finding that the parties had an oral contract for the work in issue." As such, ABL correctly argues that the issue of the contract or lack thereof was fully embraced in the prior litigation (McFerran v Board of Education, 45 NY2d 729, 730 [1978]).

To the extent Voodoo argues that "the scope, quality or value of the work at issue in this action, were never litigated in the prior action," "res judicata bars not only claims that were actually litigated [to conclusion on the merits] but also claims that could have been litigated [in the prior action] if they arose from the same transaction or series of transactions" (Fifty CPW Tenants Corp.,16 AD3d at 294 [internal quotations omitted]). Here, Voodoo failed to raise an affirmative defense or counterclaim in the prior action seeking the unpaid balance. While it moved to amend its answer to assert its current claims, the court declined to permit such a motion at the conclusion of trial. Since Voodoo could have, but failed, to raise the claims as an affirmative defense or counterclaim, it is barred from asserting them now (Santiago v NY City Bd. of Health, 8 AD3d 179, 181 [2004]; Lasky v City of New York, 281 AD2d 598, 599 [2001]; Nottenberg v Walber 985 Co., 160 AD2d 574, 575[ 1990]; Musco v Lupi, 6 Misc 2d 930 [NY Sup. Ct. 1957]). Notably, ABL correctly notes that Voodoo's argument that ABL is estopped from raising its counterclaims with respect to the contract constitutes Voodoo's implicit [*10]recognition that it too is estopped from asserting its current contract claims in the instant action. Further, it should be pointed out that Voodoo does not directly address its failure to assert an affirmative defense or counterclaim in the prior action.

In summary, "[r]es judicata bars not only claims that were actually litigated [to conclusion on the merits] but also claims that could have been litigated [in the prior action] if they arose from the same transaction or series of transactions" (Fifty CPW Tenants Corp., 16 AD3d at 294). Inasmuch as the causes of action asserted by Voodoo in the instant action arise out of the same transaction which was fully litigated in the prior action, and since these claims could have been litigated in the prior action, it is barred from relitigating these claims in this action.

Accordingly, the cross motion of ABL to dismiss the complaint is granted, and the motion of Voodoo for summary judgment on the issue of liability, for an order directing an immediate trial on damages, and to dismiss the counterclaims and affirmative defenses of ABL is denied as academic.

This constitutes the decision and order of the court.

E N T E R

J. S. C. Footnotes

Footnote 1:On March 10, 2008, during the bench trial, the court stated that "I find the evidence - - credible evidence establishes beyond any doubt in my mind that the agreement that Mr. Berkovitch and his companies [Voodoo] entered into was to perform in accordance with certain plans. The plans never complied with Article 28 and that's been pretty conclusively established, even on rebuttal evidence, that there never has been any compliance with Article 28.

Footnote 2:In its reply affidavit in support of its motion for summary judgment, Voodoo states in a footnote that "no final judgment has been entered in the [p]rior [a]ction." Voodoo also argues in its memorandum of law that "[ABL does] not allege any judgment in the [p]rior [a]ction as part of their defense of res judicata." To the extent Voodoo is arguing that the doctrine of res judicata is not applicable to the decision of the court after trial dismissing ABL's breach of contract cause of action against Voodoo, it is clear that this decision was on the merits (compare Begelman v Begelman, 170 AD2d 562 [1991]).