Thurber Lbr. Co. Inc. v Marcario
Annotate this CaseDecided on October 26, 2010
County Court, Suffolk County
Thurber Lumber Company Inc., Plaintiff,
against
Joseph P. Marcario, Sr., Defendant and Third Party Plaintiff, v Don Nenninger, Defendant and Third Party Defendant.
28064/04
Lester P. Taroff Esq
Roe Taroff Taitz & Portman
Attorneys for Thurber Lumber Co Inc
One Corporate Drive, Ste 102
Bohemia NY 11716
631-475-4400
Tor Jacob Worsoe Esq
Attorney for Joseph P Marcario Sr
997 Waverly Ave
Holtsville, NY 11742
631-289-6440
Kevin Olds Reilly Esq
Attorney for Don Nenninger
1227 Main St Ste 103
Pt Jefferson NY 11777
631-331-0900
Andrew G. Tarantino, J.
NATURE OF THE ACTION
In this matter, Plaintiff THURBER LUMBER COMPANY, INC. [THURBER] sued
Defendant MARCARIO for $59,391.51, the balance and value of construction materials
delivered in connection with building a new home. MARCARIO, a general contractor, then sued
Third-party Defendant NENNINGER, the home owner, for the value of the materials.
NENNINGER merely asserted defenses and made no counterclaims against MARCARIO or
THURBER. The one day trial elicited testimony from one witness for each party. THURBER
then called a rebuttal witness, a company v.p., for a solitary question. The invoices totaling the
$59,391.51 were admitted into evidence upon stipulation of all parties. It is undisputed that the
materials were used to construct NENNINGER's new home in which he continues to reside.
There is no question that THURBER is entitled to full payment for the materials it delivered. The
issue is in determining the liabilities between NENNINGER and MARCARIO.
THE FACTS
PAGAN, THURBER's salesman, testified that MARCARIO went to THURBER before October 2003, with blueprints for NENNINGER's new home. THURBER agreed to provide the lumber and materials which would be delivered and paid for on MARCARIO's account. For each delivery of materials, THURBER immediately invoiced the shipment and faxed the invoice to MARCARIO. MARCARIO had a C.O.D. account. That is, he would pay for each shipment made; he did not have a line of credit' other than what would accrue as THURBER delivered the additional materials. The first "drop" of materials to the site was made in October 2003. It was immediately invoiced and faxed to MARCARIO. Apparently, at MARCARIO's request, NENNINGER, paid $16,282.00 directly to THURBER for that first "drop." PAGAN testified that, subsequently, NENNINGER made payments directly to THURBER for the materials invoiced to MARCARIO. The total of the checks paid by NENNINGER was about $37,180.00. PAGAN stated that when the accruing balance increased, NENNINGER informed THURBER that he was applying for additional financing so that he could make further payments for the materials. Plaintiff's rebuttal witness was called upon to verify NENNINGER's representation. PAGAN described that he repeatedly reached out to MARCARIO for payment, even speaking with MARCARIO's secretary. The secretary confirmed receipt of the invoices. However, MARCARIO never returned the calls to PAGAN. MARCARIO did, however, make payments in October 2003 to THURBER for about $15,064.00. That payment was for a special order of steel to be used by MARCARIO in building the new home. On cross examination, PAGAN indicated there were about eighty (80) deliveries to the new home site, each producing an invoice faxed to MARCARIO. There was always a running balance on the account. For example, after accounting for payments, the balance due in October 2003 was $2,467.00; on November 20, 2003 it was $8,344.00; on December 10, 2003, it was $10,577.00; and by January 5, 2004, the balance, after payments, was $19,316.00. When MARCARIO provided THURBER with the blueprints, MARCARIO informed THURBER that he authorized Phil or Matt to place all [*2]framing orders connected with the construction. PAGAN stated that NENNINGER never placed framing orders himself, all the orders were placed by Phil or Matt just as MARCARIO had authorized.
MARCARIO next testified. He initially described himself as only an excavator. That is, his original agreement with NENNINGER was to clear the property, excavate, provide the foundation, install the septic system, and set the steel framing. This work was accomplished through his company Mastic Beach Excavation. He acknowledged ordering steel from THURBER, for which he paid in advance. He also acknowledged that his THURBER account was on a C.O.D. basis and that he always paid cash for his materials. Such was his 20+ years business relationship with THURBER. Although MARCARIO delivered the blueprints to THURBER, he denied negotiating any deals on NENNINGER's behalf. He only put NENNINGER in touch with PAGAN, and all negotiating was between PAGAN and NENNINGER. Significantly, MARCARIO initially denied having any knowledge that the construction materials were being delivered and billed under his name. Then, as his testimony progressed he admitted receiving the faxes from THURBER, indicating with his fingers almost an inch-thick of faxes he received. He never returned the invoices to THURBER, nor did he dispute the quality or quantity of the materials shipped under the invoices. MARCARIO described how the sub-contractors were hired by him. He explained that the sub-contractors did not have the required workers compensation and liability coverages. By working through Mastic Beach Excavation, the subcontractors were covered under that company's workers compensation and liability policies. As construction progressed, MARCARIO accepted money from NENNINGER to pay the sub-contractors. At one point, he said, NENNINGER stopped paying him, so MARCARIO told the sub-contractors to work directly with NENNINGER. The first time that MARCARIO indicated to THURBER that he was not liable for the invoices was when he received the final August 2004 invoice for $59, 391.51. He wrote upon it that he was not responsible, then mailed it to THURBER and NENNINGER. MARCARIO's cross-examination provided scant additional testimony. The Mastic Beach Excavation company no longer exists; it was owned by him, his wife, and son. He acknowledged that he solicited the bids from and hired the sub-contractors. Although no contract existed between him and NENNINGER, he said the plan was for the two to sit down after construction and discuss what NENNINGER would owe MARCARIO for his services.
NENNINGER testified last. He explained going to Home-Depot and 84-Lumber for lumber estimates before meeting MARCARIO. MARCARIO told NENNINGER that he had an account at THURBER, and if NENNINGER ordered from THURBER, MARCARIO would pass the contractor discounts on to NENNINGER. NENNINGER understood that MARCARIO's personal work was to excavate, arrange the foundation, arrange for plumbing and electrical, and erect the steel. Once the functioning shell was completed, MARCARIO would then hire sub-contractors for the work inside. NENNINGER stated that he initially gave $10,500 cash to MARCARIO to pay the sub-contractors, but the sub-contractors never appeared. He had to hire his own workers. Through the months, NENNINGER denied that he ever received THURBER invoices from MARCARIO for payment. He did admit receiving the invoices from THURBER when THURBER could not reach MARCARIO. NENNINGER acknowledged that there were no written contracts between him and MARCARIO. A businessman, engaged as a mortgage [*3]broker at the time, he acknowledged that he never received a receipt from MARCARIO for almost $50,000.00 in cash payments he made to MARCARIO. That $50,000.00 was in addition to any payments made by check. He intimated he may have received one or two receipts for the cash, but he was unable to produce them for trial. In the Spring 2004, the sub-contractors went directly to NENNINGER seeking payment for their work.
The trial exhibits consisted of 1) the invoices from THURBER to MARCARIO totaling $59,391.51; 2) NENNINGER's check to THURBER in the sum of $16,312.00 for the first "drop"; 3) a group of NENNINGER's checks made payable to THURBER totaling $37,180.00; 4) the invoices and payments for the steel ordered by MARCARIO from THURBER in the sum of $8,464.00, plus an additional check payable to THURBER in the sum of $6,639.00; 5) THURBER's $59,391.51 statement to MARCARIO with the notations subsequently made by MARCARIO; 6) MARCARIO's November 3, 2003 statement of "Work Completed to Date" to NENNINGER; 7) the subcontracting agreement between a plumber and Mastic Beach Excavation; 8) a proposal by Nu Frame Contracting to Mastic Excavation; 9) a July 10, 2003, writing unsigned from Mastic Beach Excavation to Don with a contract price for foundation; 10) THURBER invoices which were given to NENNINGER by PAGAN totaling $42,701.46; and 11) checks made payable from Blue Sea Adventures LLC to Matti Vellenurme totaling $23,600.00
In closing statements, NENNINGER argued that the Statue of Frauds prohibits THURBER from seeking payment from NENNINGER for MARCARIO's debts. He also posited that MARCARIO owes the debt, and, in line with "buyer beware," this is a case of "seller beware." THURBER should not have let the deliveries accumulate without additional payments. MARCARIO argued that he never made one payment to THURBER for lumber. Therefore, there was no agreement by him to pay THURBER for the materials ordered and delivered on his account. THURBER argued that NENNINGER continues to live in the house which was built with THURBER's materials, that MARCARIO had the account with THURBER, and that payments were continuously demanded of both MARCARIO and NENNINGER making each liable.
The trial concluded and the Court reserved decision.
APPLICABLE LAW
This case involved reviewing credibility, the General Obligations Law (Statute of Frauds), the General Business Law, the common law claim of account stated,' and the Suffolk County Code.
In a matter such as this, it is the province and indeed the obligation of the trial court to assess and determine matters of credibility. Morgan v McCaffrey, 14 AD3d 670, 789 NYS2d 274 (2d Dep't 2005); Matter of Liccione v Michael A., 65 NY2d 826, 493 NYS2d 121 (1985). Here, the burden is upon the plaintiff to plead and prove its direct case by a fair preponderance of the credible, relevant and material evidence with the same burden imposed upon the Third-party Plaintiff respecting his claim against the Third-party Defendant. Prince-Richardson on Evidence, §3-210; Torem v Central Avenue Rest, 133 AD2d 25, 518 NYS2d 620 (1st Dep't 1987).
General Obligations Law 5-701, the Statute of Frauds states, in pertinent part, that [*4]
Every agreement, promise or undertaking is void, unless
it or some note or memorandum thereof be in writing, and subscribed by the party to be charged
therewith, or by his lawful agent, if such agreement, promise or undertaking... by its terms is not
to be performed within one year from the making thereof or the performance of which is not to
be completed before the end of a lifetime.
An alleged oral agreement to pay money in installments is an "agreement that is not
to be performed within one year," subject to the Statute of Frauds, when the installment payment
obligation exceeds one year. 72 Am.Jur.2d, §24, Statute of Frauds, July 2010. However,
where the time of payment under the agreement is indefinite or dependent upon a contingency
that may happen within one year, the agreement does not fall within the "agreement not to be
performed within one year" provision. Id. The Court of Appeals has interpreted this
section as barring those agreements that "have no possibility in fact and law of full performance
within one year." ABKCO Music v Montague, slip opinion, (SupCt, NYCounty, 2008).
As long as the agreement may be "fairly and reasonably interpreted" such that it may be
performed within a year, the Statute of Frauds will not act as a bar however unexpected, unlikely,
or even improbable that such performance will occur during that time frame. Id. Open
ended agreements with no set time for repayment do not violate the Statute of Frauds.
Constantini v Bimco Industries, 125 AD2d 531, 510 NYS2d 136 (2d Dep't, 1986).
General Business Law (GBL) § 771 states, in part, that
Every home improvement contract subject to the provisions of this article, and all
amendments thereto, shall be evidenced by a writing and shall be signed by all the parties to the
contract.
Violating this contract requirement imposes certain civil
penalties pursuant to GBL § 773, including but not limited to a one-hundred dollar fine, or
five-percent of the aggregate contract price not to exceed twenty-five hundred dollars. Pursuant
to GBL §770, "home improvement" does include construction of a custom home. The Court
found no provision in the General Business Law that would prohibit the contractor from seeking
enforcement of its contract. The Suffolk County Code, however, expressly prohibits a contractors
enforcement.
Suffolk County Code, Chapter 345, sets forth licensing requirements within the County. In
pertinent parts it states, in §345-3 A, that
It is unlawful for any person, other than those exempt under the provisions of
§ 345-4, to engage in any business in the County regulated by this chapter without obtaining
a license therefor from the Office in accordance with and subject to the provisions of this
chapter.
Suffolk County Code §345-8 sets forth the effect of not
obtaining such a license as follows:
A contract entered into after one year after the effective date of the appropriate
article of this chapter by a person who engages in a business regulated by this chapter, who on
the date of the contract does not possess a valid license to engage in such business, is
unenforceable by him and voidable at the option of any other party to the contract rendered
or to be rendered to such party. Nothing contained herein shall be construed to [*5]prevent any other party to the contract from enforcing its terms.
[emphasis added]
An "account stated" is an agreement between parties
to account based upon prior transactions between them with respect to correctness of account
items and balance due. Jim-Mar Corp. v. Aquatic Const., Ltd. 195 AD2d 868, 600
NYS2d 790 (3d Dep't,1993). For purposes of "account stated," agreement regarding correctness
of account items and balance due may be express or implied from retention of account rendered
for unreasonable period of time without objection and from surrounding circumstances.
Id.
ANALYSIS AND DECISION
The only testimony found credible by the Court is that provided by THURBER. The court finds that the MARCARIO's and NENNINGER's testimony was incredible. It is unbelievable that a mortgage broker would engage a contractor without a written contract to build a new home. Similarly, it is unbelievable that a contractor would construct a new home without a contract. The Court is compelled, in light of MARCARIO's testimony, to invoke the maxim "falsus in uno, falsus in omnibus" regarding the totality of MARCARIO's testimony.
THURBER is entitled to judgment under "account stated" as against both MARCARIO and NENNINGER, and for goods sold and delivered, but yet unpaid.MARCARIO testified that he did receive and retain, for several months, the more than 80 invoices as each delivery was made. He admittedly did not refute any of the invoices as to the quantity or quality of materials delivered, nor that the account was in his personal name, nor that the materials should not have been billed to his account. It was only the final demand for payment that MARCARIO contested, but only after months of retaining the individual invoices and accepting deliveries. NENNINGER, similarly, received and retained the invoices. He also made partial payments towards the balances due THURBER for the materials used to construct the home in which he resides.
There is no merit to any Statute of Frauds defense. There was no testimony that the construction was expected to take longer than one (1) year, nor any evidence that it did. Additionally, THURBER is not seeking payment from NENNINGER for some unrelated debt owed by MARCARIO; THURBER is seeking payment for the materials which currently exist in NENNINGER's home and for which THURBER has yet to be paid. The Court also finds that NENNINGER's testimony was incredible. As a real estate broker, NENNINGER should have been familiar with new home construction, the protections offered by written contracts, and the implications of paying large sums of cash to a contractor without obtaining a receipt. NENNINGER claimed to have paid MARCARIO more than $50,000.00 in cash bills, in addition to checks he paid to MARCARIO. Yet, not one receipt for the cash paid, nor copies of checks made, were introduced into evidence. Even if such payments were made, without the written agreement the Court is unable to determine to what the payments applied. That is, did the payments go to lumber, nails, electrical supplies, wages, etc. Further clouding the facts was the evidence that while NENNINGER was engaged in his personal capacity, paying cash to MARCARIO, his payments to the framer were drawn from a corporate holding company, Blue Sea Adventures.
MARCARIO's testimony was equally incredible. With more than 20 years in the industry [*6]he proceeded with NENNINGER on this project without a written agreement between him and NENNINGER. Additionally, although he testified that he was only the excavator, the evidence revealed more. By his own testimony, MARCARIO admitted to negotiating the contracts with the sub-contractors. The Nu Frame Contracting proposal revealed that, through MARCARIO, Nu Frame was to "build a six thousand square foot house as pertaining to plans." Moreover, on November 3, 2003, MARCARIO provided NENNINGER with a "work completed to date" bill reflecting $16,362.13 for lumber, and $25,000.00 "for labor on framing and sheathing the house." MARCARIO's denial of liability for the THURBER materials which were to be paid by NENNINGER is belied by the statement seeking payment from NENNINGER for those materials. The Court is not impressed with what appears to be a scheme where the contractor tells the homeowner to pay the lumberyard directly to create the appearance that the contractor is not liable for its account to the lumberyard.
MARCARIO offered no meritorious defense herein. No evidence was provided that MARCARIO acted in his corporate capacity, if any existed. The only indication of some other entity was the Mastic Beach Excavation November 2003 request for payment to NENNINGER. Not only did MARCARIO fail to produce proof of his individual license required by both the General Business Law and Suffolk County Code, he failed to produce such a license for Mastic Beach Excavating and none appeared on the demand for payment. In the twenty-plus years MARCARIO did business with THURBER the C.O.D. account was in MARCARIO's name individually. MARCARIO produced no evidence, testimonial or otherwise, that he notified THURBER that the account should have been in the name of any other entity.
NOW, THEREFORE, based upon the foregoing, it is hereby
ADJUDGED, that Plaintiff THURBER LUMBER COMPANY INC., should be made whole by seeking payment, wholly or partially, from each Defendant so that the full judgment is paid; and it is further
ADJUDGED, that Third-party Plaintiff JOSEPH P. MARCARIO SR., failed to provide proof of either his NY State or Suffolk County business license, and, accordingly, is prohibited from enforcing any contract he may have entered into with DON NENNINGER; and it is further
ADJUDGED that there is no reasonable interpretation of the facts to conclude that DON NENNINGER would not have been responsible for paying for construction materials either directly from the supplier or through the contractor; and it is further
ADJUDGED that DON NENNINGER has been unjustly enriched by reason of the subject materials being used and still existing in the house in which he resides; and it is further
ADJUDGED that judgment be entered in favor of Plaintiff THURBER LUMBER COMPANY, INC, and against JOSEPH P. MARCARIO, SR., and DON NENNINGER, jointly and severally, in the sum of FIFTY NINE THOUSAND THREE HUNDRED NINETY ONE DOLLARS AND FIFTY ONE CENTS ( $59,391.51), together with statutory interest thereon computed from August 31, 2004; and it is further
ADJUDGED and ORDERED that the Third-party Plaintiff's complaint is hereby dismissed.
____________________________
Judge
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