AAR-ZEE Servs., Inc. v Quantum Acquisition Partners, L.L.C.

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AAR-ZEE Servs., Inc. v Quantum Acquisition Partners, L.L.C. 2011 NY Slip Op 32183(U) August 3, 2011 Sup Ct, NY County Docket Number: 115284/10 Judge: Manuel J. Mendez Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. ANNED ON 81812011 [* 1] SUPREME COURT OF THE STATE OF NEW YORK PRESENT: HON. MANUEL J. MENDEZ - NEW YORK COUNTY PART 13 Justice INDEX NO. 116284/10 MOTION DATE AAR-ZEE SERVICES, INC., 07-13-2011 Plalntlff(S), -vMOTION SEQ. NO. 001 QUANTUM ACQUISITION PARTNERS, L.L.C., Dsfsndant(s) . QUANTUM ACQUISITION PARTNERS, L.L.C., Thlrd-Party PIalntlff(m), -v- OLYMPIC TOWER ASSOCIATES, Thlrd-Party Defendant(m). PAPERS NUMBERED Notlce of Motlonl Orddr to Show Cause Answering Affidavlts - Exhibits - Affidavits - Exhlbits ... 1-2.6-7 cross motlon Replying Affldavits Plaintiff brought thls action to recover a total of $27,017.00, asserting causa8 of action in the complaint for work, labor, services and materials rendered that remaln unpaid, account stated, unjust enrichment and for $10.00 In bank fees incurred based on a dishonored check issued by the defendant [Aff. in Opp. Exh. B]. Plalntlff s motion for summary Judgment Is based on the tender of a check by the defendant dated September 28, 2010, in the amount of $27,017.00 which was returned for lnsufflclent funds [Mot. Plaintiff claims that the defendant s failure to disprove all or a portion of the May Exh. I]. 26, 2010 invoice [Mot. Exh. 31 within twelve business days after tender as required pursuant to New York General Business Law (GBL) 5756-a [2][i], along wlth the returned check was proof of concession to the amount owed. Quantum Acqulsltion Partners, L.L.C. (Quantum), opposes the motion for summary judgment claiming that the parties had a written agreement that 90% percent of the amount owed to the plaintiff for work, labor, services and materlals would be pald upon substantial .completion, wlth the balance due on punch list sign off [Opp.Exh. A]. Defendant claims that the plaintiff was required to perform punch list work, [* 2] properly perform the work that was completed and provide all required Department of Buildings (DOB) documentation pursuant to the agreement, but failed to do so, therefore GBL 5756-a [2] does not apply. Third-party defendant, Olympic Tower Associates (Olympic),cross-motion pursuant to CPLR 3211 [a][l], [4] and [7] seeks to dismiss the action. Olympic states that Quantum s claims asserted in the third party complaint were previously adjudicated in a holdover proceeding O the appropriate forum, Civil Court. Olympic claims in the n third-party action has been rendered moot. Quantum s opposition to the cross-motion only addresses the Fourth ThirdParty Claim which seeks indemnification andlor contrlbutlon from Olympic in the event there is a finding of liability to AAR-ZEE SERVICES, INC.. Quantum claims that pursuant to CPLR 3211 [a][l J, [4] and 171, Olympic s motion does not state a bash to dismiss the Fourth Third-party Claim. 1 In order to prevail on a motion for summary judgmeqt, the proponent must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence9eliminating all material issues of fact (Klein v. City of New York, 81 N.Y. 2d 833,652 N.Y.S. 2d 723 [I9961 and Ayotte v. Gervaslo, 81 N.Y. 2d 1062,601 N.Y.S. 2d 463 [1993]). Once the moving party has satlsfled these standards, the burden shifts to the opponent to rebut that prima facie showing, by producing contrary evidence, In admissible form, sufflclent to require a trial of material factual issues (Kaufman v. Sliver, 90 N.Y. 2d 204,659 N.Y.S. 2d 250 [1997], Amatulli v. Delhi Constr. Corp., 77 N.Y. 2d 525, 569 N.Y.S. 2d 337 [1999]). in determining the motlon the Court must construe the evidence in a light most favorable to the non-moving party (SSBS Realty Corp. v. Public Dept. Service Mut. Ins. Co., 253 A.D. 2d 583,677 N.Y.S. 2d 136 [N.Y.A.D. lot 19981). Pursuant to GBL 5756-a [2], A contractor Is entitled to invoice the owner of property for interim payments at the end of a billing cycle and submit a final invoice, upon full performance of all the contractor s obligation under the contract. After the contractor delivers the Invoice and all documentation required under the contract, the owner has twelve business days to prepare and issue a written statement approving or disapproving all or a portion of an invoice or make a payment. GBL 9756-a [2] does not provide a basis for summary judgment where there are issues of fact as to breach of contract (Metro Found. Contrs., Inc. v. Marco Martelli Assoc., Inc., 78 A.D. 3d 594, 912 N.Y.S. 2d 187 [N.Y.A.D. lrt Dept., 20101). Plaintiff provides the affldavit of Serglo Tomasl, Its president, he states that an invoice for $27,017.00 was tendered to Quantum [Mot. Exh. 31 and that no objections were raised until this action was commenced. Quantum tendered a check to the plaintiff dated September 28, 2010, for the full amount indicated in the invoice. The check Plaintiff claims tendered by Quantum was returned for insufficient funds [Mot. Exh. I]. that the invoice was tendered on or about May 26, 2010, and pursuant to GBL 5756-a [2], the failure to issue a written statement objecting to the invoice within twelve business days of receipt combined with the bounced check is a basis to grant summary judgment. In opposition Quantum produced a construction contract with a handwritten amendment which indicates the plaintiff is only entitled to 99 percent payment on Substantial Completion with the balance due on the punch list sign off [Opp. Exh.. A]. [* 3] Quantum claims that plaintiff Is not entitled to payment because It did not substantially complete the work required pursuant to the parties construction contract. Quantum claims that the check for $27,017.00 was not funded when plaintlff failed to provide documentation from the Department of Buildings (DOB) or obtain a punch list sign off. Quantum states that because plaintlff did not comply with the terms of the construction agreement, GBL $756-a [2] does not apply. An executed check is an instrument for the payment of money only and defenses In the form of impropriety of the underlying contract do not alter its character. An instrument for the payment of money creates a strong presumption of merit on the claims. After concedlng to execution and default on the Instrument, the defendant Is requlred to come forward with strong evidentlary proof to ralse an issue of fact as to the defenses (Seaman-Andwall Corp. v. Wrlght Maching Corp., B.S.F., 31 A.D. 2d 136, 295 N.Y.S. 2d 752 [N.Y.A.D. 1lt Dept. 19681 and First Inter-County Bank of New York v. DeFilippis, 160 A.D. 2d 288, 553 N.Y.S. 2d 384 [N.Y.A.D. 1lt Dept. ISSO]). Substantial performance of contractual obligation entitles the party that performed the services to payment under the COhfract, less the cost of corrections or defects in performance. If there is any doubt, the determination of substantial s performance or breach of the agreement I to be made by the trier of fact (F. Garofalo Dept. Electric Co. v. New York University, 300 A.D .2d 186,754 N.Y.S. 2d 227 [N.Y.A.D. I 20021 cltlng to Jacob & Youngs v. Kent, 230 N.Y. 239, 129 N.E. 889, N.Y.S [ISZI]). .. Quantum provides the affidavit of Mlchael Komblum, a member, he staters the check for $27,017.00 was tendered contingent on plaintiffs paforming all the punch-list work and providing DOB documentation. Michael Kornblum claims the amended terms of the construction contract were agreed to In a meeting with Serge Tomasi. Quantum claims the check was not funded because plalntiff did not complete the work as lndlcated in the constructlon agreement [Opp. Exh. A]. The punch list Issued on April 13, 2010 [Opp. Exh. E] wav not slgned off and Quantum provides a fleld report from Daniel Pontecorvo, P.E., based on rnechanlcal and sprinkler inspection of February 1,2011, which Indicates that there are defects in the work performed by the plaintiff [Opp. Exh. F] In reply, plaintiff provides only the affirmation of its attorney, who has no personal knowledge of any meeting or modiflcation of the agreement. Plaintiffs attorney claims that the agreement submttted by Quantum [Opp. Exh. A] may not have been signed by both parties and therefore does not constitute 8 valid construction contract. Plaintiff states that at the very least $5,815.30 was owed on the balance of completion of 90% of the work and that the last check that bounced was made to cover the full remaining amount owed including the flnal 10% . The plaintiff met its burden of proof that an instrument for the payment of money, a check, was provlded by Quantum and returned for Insufficient funds. In opposition, Quantum sufficiently ralsed an issue of fact concerning potential lack of substantial performance of the constructlon agreement as a basis to not fund the check. Plaintiff provided no proof concerning when the invoice was delivered to Quantum and there remains an issue of fact as to when the invoice was tendered for purposes of establishing an account stated. There is an issue of fact as t o the terms of the constructlon contract and whether GBL. 9756-a [2] applies. There remain issues of fact concerning the defense to the defendant s check and the failure to have sufficient funds. [* 4] A motion to dismiss pursuant to CPLR 53211[a][l], on the ground that the action is barred by documentary evidence, requires the Court to construe every fact plaintiff has alleged as true. The party making the motion to dismiss must produce documentary evidence that, utterly refutes plaintiffs factual allegations, conclusively estabilshlng a defense as a matter of law. (Leon v. Martinez, 84 N.Y. 2d 83,638 N.E. 511,614 N.Y.S. 2d 972 [I9041 and AG Capital Funding Partners, L.P. v. State Street Bank and Trust Co., 5 N.Y. 3d 582, 842 N.E. 2d 471,808 N.Y.S. 2d 573 [2005]). Pursuant to CPLR 5321l[a][4], an action may be dismissed on the ground that the action is barred because there Is another action pending between the same parties seeking the same relief for the same causes of action in any court of the state. A motion pursuant to CPLR 5321 1[a][4] requires the relief in both actlons be the same or substantially the same (White Light Productions, Inc. v. On the Scene Productions, Inc., Dept.,1997). The characterization of 231 A.D. 2d 90, 660 N.Y.S. 2d 568 [N.Y.A.D. lrt damages in a different manner does not in and of Itself create a substantial dlfference between actions (Stanley Electrical Sewlces, Inc. v. City of New York, 26 A.D. 26 951,275 N.Y.S. 2d 222 [N.Y.A.D. 2 d Dept., 19661). Quantum commenced this third-party action on May 20,2011, the complaint r states four claims, and there were no prior stays o injunctions on the pending Civil Court holdover proceeding [Cross- Mot. Exh. J]. The flrst claim seeks a judicial determination that Quantum is not in default for failure to cure as indicated in the Notlce to Cure and a finding that the Notice to Cure and Notice of Termination are null and void. The second claim seeks an injunction permanently restraining and enjoining Olympic from taking any further actions to cancel or terminate the lease and prosecuting the holdover proceeding. The third claim seeks judicial determination and an Order compelling Olympic to complete the tenants work and obtain certificates of approval wlthin fifteen days or permit Quantum to utilize Its own contractor to complete the same. The fourth claim seeks an Order for common law indemnificatlon andlor contribution from Olympic on any judgment obtained by the plaintiff against Quantum. Olympic seeks dismissal of the first, second and third claims In the third-party cornplaint because the same relief was sought and resolved In a related Civil Court holdover proceeding. On May 23, 2011, there was a DecisionlOrder in the holdover . proceeding which awarded a Judgment of possession and a monetary judgment, based on Quantum s failure to pay Court Ordered use and occupancy [Cross-Mot. Exh. A]. Olympic claims that as a result of the May 23, 2011 Decision/Order, Quantum Is no longer entitled to possession of the premises and the claim concerning the Notice to Cure and Notice of Termination is moot. The failure of Quantum to obtain a Yellowstone injunction prior to termination of the tenancy according to Olympic renders the second claim moot and there is no showing of the requirements for any other injunctive relief. Olympic states that the third claim was resolved pursuant to a Court Ordered Stipulation In the Civil Court dated May 3, 201 I , which provides that the work would be completed by Olympic [Cross-Mot. Exh. HI. The DecisionlOrder of Hon. Arlene Bluth dated June 21, 201I , denied Quantum s motion In the Civil Court for an order vacating the judgment and granting leave to amend its answer [Reply Exh. A]. Quantum did not provide opposition to dismissal of the flrst, second and third claims in the third-party complaint. [* 5] The Civil Court has jurisdiction over landlord and tenant disputes and should decide them when it can do so [Post v. 120 East End Ave. Corp., 62 N.Y. 2d 19,464 N.E. 2d 125,475 N.Y.S. 2d 821 [1984]). Strong policy considerations favor finality in the resolution of disputes to assure that parties are not vexed by repetitious litigatlon. (Walentas v. Johnes, 120 A.D. 2d 417,510 N.Y.S. 2d 121 [N.Y.A.D. Iat 19871). The Dept. same policy considerations are implemented through the doctrine of res judicata to bar not only future litigation on the same matters but also matters that might have been litigated but were not (Walentas v. Johnes, 126 A.D. 2d 417, supra). After receipt of a notice to cure and before the termination period has expired a tenant may seek a Yellowstone injunction. The purpose of the injunction is to allow the tenant a stay of the cure period during the pending proceeding to avoid a forfeiture of the premises (Empire State Building Associates v. Trump Empire State Partners, 245 A.D. 2d 225, 667 N.Y.S. 2d 31 [N.Y.A.D. 1 Dept. 19971). A preliminary injunction requires a showing of, a probability of success, danger of irreparable injury In the absence of the relief sought, and a balance of the equities in the applicants favor (Aetna Ins. Co. v. Capasso, 75 N.Y. 2d 860, 552 N.E. 2d 166,552 N.Y.S. 2d 919 [1990]). Quantum has failed to provide a basis to proceed on the first, and third claims, which were resolved based on prevlous DecIsionlOrders rendered in the Civil Court. Quantum failed to timely seek a Yellowatone injunction and the opposition papers provide no arguments as to the basis for further Injunctive relief. The first, second . . and third claims In the third-party complaint are dismissed. A motion to dismiss pursuant to CPLR 93211[a]P], requires a reading of the pleadings to determine whether a legally recognizable cause of action can be identlfied and it is properly pled (Guggenhelmer v. Glnzberg, 43 N.Y, 2d 268,401 N.Y.S. 2d 182,372 N.E. 2d 17, [1977]). Documentary evidence that contradicts the allegations, or pleadings that consist of bare legal conclusions will not be presumed to be true and are a basis for dismissal (Morgenthow & Latham v. Bank of New York Company, Inc., 305 A.D. 2d 74, 760 N.Y.S. 2d 438 [N.Y.A.D. lmt Dept.,2003]). The fourth third-party claim seeks common law indemnification andlor contribution from Olympic for any judgment obtained by the plaintiff against Quantum. s Olympic states that there i no basis for common law indemnity because It requires no actual fault on the part of the proposed Indemnitee. Olympic claims that Quantum actually particlpated and to some degree Is liable to plaintiff for wrong-doing by writing a check to the plaintiff that bounced for insufficient funds. Pursuant to CPLR $1401, common law contribution only applies to personal injury, injury to property and wrongful death, not breach of contract or actions for economic damages. Olympic refers to 8 7.04 of the lease and states that Quantum has misinterpreted its terms and therefore would not be entitled to either indemnity or contribution. Common law indemnificatlon is vlcarious liability without the actual fault of the proposed Indemnitee. (Trustees of Columbia University v. MitchelllGiurgola Associates, 109 A.D. 2d 449,492 N.Y.S. 2d 371 [N.Y.A.D. let 19851). A party that has Dept. participated to some degree in the wrong-doing is not eligible to receive the beneflt of the doctrine (Chunn v. New York City Housing Authority 83 A.D. 3d 416,922 N . Y S 2d 3 [N.Y.A.D. 1 Dept. 2011I). [* 6] A claim for common-law contribution I not available where the only relief sought s is economic damages. Pursuant to CPLR 91401 which codified common-law contribution, relief is only available for damages in personal injury, injury to property and wrongful death (Children s Corner Learning Center v. A. Miranda Contracting Corp., 64 A.D. 3d 318, 879 N.Y.S. 2d 418 [N.Y.A.D. let 20091). Dept., The lease between the parties in section 7.04 (a) requires documentation including certificates of approval by any authorized governmental and quasigovernmental body. Section 7.04 (a) of the lease also requires that the landlord disburse funds from time to time, after receipt of Tenant s request, for that portion of contribution equal to the amount set forth In tenant s requisition; provided however, that no advance shall be made if, and for so long as there exists an Event of Default beyond any applicable notice and cure period. I Olympic has sufflciently established that common law Indemnification and Contribution would not apply to Quantum. Quantum s poorly stated claims cannot be maintained pursuant to the documentary evidence in the form of the lease. Quantum did not obtaln documentation from the DOB and an Event of Default beyond the applicable notice and cure period has occurred. Quantum has not provided a sufflclent basls to maintain or sever the Fourth Third-party Claim and it is dismissed. Accordingly, it is ORDERED that plaintiff, AAR-ZEE SERVICES, INC. s motion for summary judgment, is denied, and it is further, ORDERED that third-party defendant, OLYMPIC TOWER ASSOCIATES crossmotion pursuant to CPLR 3211 [a][l], [4] and [7], to dismiss the third-party action, is granted, and QUANTUM ACQUISTION PARTNERS L.L.C.5, third-party action is severed and dismissed. ORDERED that the action shall continue to trial with the remaining to the parties. This constitutes the declslon and order of thls court. Dated: August 3, 2011 M A N ~ E L MENDEZ J. J.S.C. WNUEL J. MEND= J.SG Check one: FINAL DISPOSITION Check if appropriate: X NON-FINAL DISPOSITION 1 LEVERENCE DO NOT POST -

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