Maverick Constr. Servs., LLC v Desford Partners, LLC

[*1] Maverick Constr. Servs., LLC v Desford Partners, LLC 2013 NY Slip Op 50554(U) Decided on March 20, 2013 Supreme Court, Kings County Schmidt, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 March 20, 2013
Supreme Court, Kings County

Maverick Construction Services, LLC, Plaintiff,

against

Desford Partners, LLC, TD Bank, N.A., Manhattan Business Interiors Inc., Hudson Insurance Company, Defendants.



501960/12



Plaintiff Attorney: PLS Law Group, P.C., 48 Wall Street, 11th Floor, New York, NY 10005

Defendant Attorney: Arthur J. Semetis, P.C., 286 Madison Avenue, Suite 1801, New York, NY 10017

David I. Schmidt, J.

Upon the following papers, defendants Desford Partners, LLC ("Desford"), TD Bank, N.A. ("TD Bank"), Manhattan Business Interiors Inc. ("MBI"), and Hudson Insurance Company ("Hudson Insurance") move for an order: (1) pursuant to CPLR 3211(a)(1) and (a)(7), dismissing the complaint in its entirety as against Desford; (2) pursuant to CPLR 3211(a)(1), dismissing the Third Cause of Action sounding in unjust enrichment and the Fourth Cause of Action for quantum meruit as against TD Bank; and (3) pursuant to CPLR 3211(a)(7), dismissing the Third and Fourth Causes of Action as against MBI.

Facts and Procedural History

According to the Verified Complaint, on or about March 8, 2011, MBI, as general contractor, entered into an agreement with TD Bank, as lessee of the premises (the "GC contract") whereby MBI agreed to perform construction and improvements to the premises described as 2940 Avenue U in Brooklyn, which was owned by Desford.[FN1] The GC contract also provided that MBI agreed to supply labor and materials to the premises for said [*2]construction and improvements. On or about June 14, 2011, MBI entered into an agreement with Eastport whereby Eastport agreed to provide MBI with labor, materials, and equipment for construction and permanent improvement of the premises in the amount of $130,000 (the "June 14, 2011 subcontract"). On or about September 16, 2011, MBI entered into another agreement with Eastport whereby Eastport agreed to furnish MBI with labor, materials and equipment for construction and permanent improvement of the premises in the amount of $435,000 (the "September 16, 2011 subcontract"). Maverick alleges that, in addition to entering into both subcontracts, MBI also directed Eastport to furnish additional construction services for permanent improvements of the premises in the amount of $328,994.37 (the "change orders").

Maverick further alleges Eastport commenced performance of its work, which was performed with the consent and approval of Desford and "duly accepted by MBI, TD Bank and Desford." The Complaint states that, subsequent to MBI's repeated failure to submit payment to Eastport, MBI directed Eastport to cease performance and prohibited Eastport from accessing the premises. Maverick alleges that $331,235.04 has not been paid.

On or about April 3, 2012, Easport caused to be filed a Notice of Mechanic's Lien ("lien") with the Kings County Clerk in the amount of $331,235.04. On or about May 24, 2012, MBI caused to be filed a Discharge of Lien Bond No. HGNE-NE-20-220-0030, issued by Hudson, as surety, in the amount of $364,358.54 (the "bond"). The Kings County Clerk subsequently discharged said lien. On or about June 19, 2012, Eastport assigned their right, title and interest in the claim as well as the lien to Maverick and subsequently filed a Notice of Assignment to Maverick.

Defendants seek to dismiss the complaint in its entirety as against Desford (1) for failure to state a claim and (2) based upon documentary evidence. First, defendants state that Lien Law the 44-b requires dismissal of the lien foreclosure cause of action as against Desford. Specifically, defendants state that Desford is not a necessary party to the lien foreclosure cause of action, as the lien at issue has been bonded. In support, defendants cite to Danica Group LLC v Atlantic Ct. LLC, 2009 Misc. LEXIS 857 [2009]), which states:

"in an action to foreclose the lien against the bond, Lien Law 37(7) supersedes Lien Law 44 in specifying the parties to be joined. Those parties to be joined as defendant include the principal and surety on the bond, the contractor and all claimants who have filed notices of claim, but not the owner of the real property."

Accordingly, defendants state that Desford, as the owner of the premises, is no longer a necessary party to a lien foreclosure action after the posting of a surety bond.

Defendants also argue that Maverick's causes of action for unjust enrichment and quantum merit as against Desford, TD Bank and MBI must be dismissed based upon documentary evidence. Defendants maintain that the subcontracts between MBI and Eastport cover the same subject matter as plaintiff's quasi-contractual claims. Further, defendants point out that Desford is not a party to the subcontracts.

In support, defendants refer to the August 23, 2012 affidavit of Edward Campanella, the President of MBI, along with the respective subcontracts annexed to the affidavit. Mr. Campanella states that, based upon his personal knowledge, (1) on or about March 8, 2011, MBI entered into a contract with TD Bank for the construction of a new TD branch at the premises; and (2) on or about June 13, 2011 and September 16, 2011, MBI entered into [*3]two written subcontract agreements with Eastport. He further states that Eastport failed to complete its work pursuant to the terms and conditions of the June 13, 2011 and September 16, 2011 subcontracts, and accordingly MBI filed a Notice of Mechanic's Lien against the property. Mr. Campanella avers that the attached subcontracts are submitted in their entirety.

Accordingly, defendants contend that the complete copies of the subcontracts establish that there is no basis for the imposition of quasi-contractual liabilty as alleged in the Third and Fourth causes of action of Maverick's complaint.

Maverick argues that defendants disregard pertinent facts and case law that render dismissal of the foreclosure cause of action against Desford is improper. According to plaintiff, the owner of a property is a proper party to a foreclosure action even if the lien that is the subject of litigation has been discharged by bond pursuant to New York Lien Law. Plaintiff states that the owner of the property is a proper party to a foreclosure action even if the lien which is the subject of the litigation has been discharged by bond pursuant to New York Lien Law.

Maverick also states that the causes of action against TD Bank and Desford pursuant to CPLR 3211(A)(1) cannot be dismissed because the authenticity of the documentary evidence proffered by the defendants is in dispute. To that effect, Maverick maintains that defendants' subcontracts do not align with the copies of the same subcontracts in it's possession and in the possession of Maverick's assignor, Eastport. Maverick also argues that, as the authenticity of the contracts between MBI and Easport is in dispute, dismissal of the quasi-contractual causes of action pursuant to CPLR 3211(a)(1) is improper.

In support, Maverick submits the September 20, 2012 affidavit of David Aviram, who is the Managing Member of Maverick. Mr. Aviram avers that his statements are made "upon information and belief" based upon (1) review of documents provided to Maverick by Eastport and (2) representations made to Maverick by Eastport. Mr. Aviram states that the copies of the June 13, 2011 and September 16, 2011 subcontracts in his possession do not conform to the copies of the purported subcontracts which are attached to Maverick's opposition papers. In this regard, he attaches the copies of the "disputed pages" as Exhibit C. Mr. Aviram states that the several pages extracted from defendants' subcontracts are lacking from plaintiff's subcontracts. For example, Maverick states that, among the disputed pages, the page heading titled "Subcontract Agreement," present on other pages of the agreements is absent, and the paragraph numbers on the disputed pages do not appear to align with the remaining paragraphs of the subcontracts. Maverick also believes that the disputed pages appear to be inconsistent with the remainder of the subcontracts, and that the disputed pages both refer to additional terms and incorporate additional contracts.

In addition, Maverick points out that the subcontracts provided by defendants reference the GC contract between TD Bank and MBI (the "GC contract"), however, defendants failed to provide the GC contract along with their the motion papers. In addition, Mr. Aviram states that Eastport has not been provided with a copy of the GC contract. Maverick contends that a copy of the GC contract is necessary to resolve all issues in the case at bar.

Maverick asserts that, if a party performs work outside of the scope of a valid contract, dismissal of that party's quasi-contractual claims is improper.Maverick states that Eastport was directed by MBI to furnish additional construction services not specified in the contracts via change orders. Mr. Aviram points out that defendants fail to even address the existence of said change orders in their motion papers. Therefore, Maverick maintains that their quasi-contractual causes of action against the defendants should not be dismissed. [*4]

Lastly, Maverick states that dismissal of the quasi-contractual claims against TD Bank and Desford is improper as defendants may have expressly consented to the responsibility for payment for services performed by Eastport. In support, Maverick cites to the electronic mail communication which allegedly directs Eastport to finish performing additional work as soon as possible and that "TD [Bank] will take responsibility if needed." Maverick argues that further discovery is necessary to determine whether TD Bank assumed payment obligations to Eastport and if so, to what extent. In this regard, Maverick maintains that evidence of any claims that Desford may have affirmatively assumed responsibility for a portion, or all, of Eastport's compensation is solely within the control of defendants, because Easport did not participate in the negotiations and discussions among defendants.

In reply, defendants contend that Maverick fails to offer an affidavit of an officer of Eastport with actual knowledge of the relevant subcontracts. To that effect, they argue that Mr. Aviram is without personal knowledge of the salient transactions and his affidavit should be dismissed as lacking probative value. Desford points out that Mr. Aviram's affidavit explicitly states that "[a]ny and all statements made herein upon information and belief' are made based upon a review of documents provided to Maverick by Eastport, Maverick's assignor and [upon] representations made to Maverick." Thus, defendants state that Mr. Aviram's affidavit is wholly without merit.

Defendants maintain that, in contrast to Mr. Aviram's affidavit, the Campanello affidavit was authenticated because Mr. Campanello represents MBI, which is a party to the subcontracts. According to defendants, they have provided the Court with complete copies of the governing subcontract agreements, and therefore there is no basis for the imposition of quasi-contractual liability as alleged in the complaint.

Defendants also object to Mr. Aviram's affidavit on the grounds that he annexes selected threads of an e-mail exchange in support his contention that TD Bank agreed to assume liability for payment of construction services allegedly provided by Eastport. They argue that (1) no foundation has been established for the introduction of the emails since Mr. Aviram was not a party to the e-mails exchanged; (2) the email exchange is out of context and only appears to be a partial exchange of email communication.

Discussion

Dismissal pursuant to CPLR 3211(a)(1) is warranted only if the movant proffers documentary evidence which resolves all factual issues as a matter of law, and conclusively disposes plaintiff's claim (see Vitarelle v Vitarelle, 65 AD3d 1034 [2009]; Weston v Cornell Univeristy, 56 AD3d 1074 [2008]; Berger v Temple Beth-El of Great Neck, 303 AD2d 346 [2003]; Guideone Specialty Ins. Co. v Admiral Ins. Co., 57 AD2d 346 [2003]). While pleadings should be liberally construed on a motion to dismiss, claims which are flatly contradicted by documentary evidence must be rejected (see Igarashi v Higashi, 289 AD2d 128 [2001]; see also Scott v Bell Atlantic Corp., 282 AD2d 180 [2001]). When a defendant seeks dismissal of a complaint pursuant to CPLR 3211(a)(1), the documentary evidence must be unambiguous and of undisputed authenticity (Fontanetta v Doe, 73 AD3d 78 [2010]).

On a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), the sole criterion is whether the pleading states a cause of action (Weiner v Lenox Hill Hospital, 193 AD2d 380 [1993]). On a motion to dismiss a complaint the court accepts the facts alleged as true and determines whether the facts alleged by the plaintiff fit within any cognizable legal theory (MRI Management Recruiters of Mohawk Valley, Inc. v Cowan, [*5]277 AD2d 921 [2000]). However, when the moving party has submitted evidentiary material, the court must determine whether the proponent of the pleading has a cause of action, not whether he or she has stated one (Congel v Malfitano, 61 AD3d 807 [2009]).

The court dismisses the first cause of action of Maverick's complaint as against Desford. In an action to foreclose a mechanic's lien on real property, the owner of said property is a necessary party to the action (Lien Law § 44(3)). However, once the lien discharge bond has been filed, there no longer exists any claim against the property (see Norden Elec. Inc v Ideal Elec. Supply Corp., 154 AD2d 580 [1989]. Once a discharge bond has been substituted for real property, the attachment is to new security rather to the property (see Danica Group LLC v Atlantic Court LLC, 885 N.Y.S.2d 711 [2009]; Milliken Bros. v City of New York, 201 NY 65 [1911]). In an action to foreclose the lien against the bond, Lien Law 37(7) supersedes Lien Law 44 in determining the parties to be joined (id.). Pursuant to NY Lien Law 37(7), the owner of the property is not included as a defendant.

Moreover, "[A] subcontractor may not assert a cause of action which is contractual in nature against parties with whom it is not in privity" (Martiriano Constr. Corp. v Briar Contr. Corp., 104 AD2d 1028. Here, Desford is not in privity of contract with Eastport or TD Bank (Delta Electric, Inc. v Ingram and Greene, Inc., 123 AD2d 369 [1986]). To that effect, the subcontracts required TD Bank to directly pay Eastport as work progressed. Desford was not a signatory on those contracts, and was not an intended third party beneficiary to the contract (see IMS Engineers-Architects, P.C. v State of New York, 51 AD3d 1355 [2008]).

The Court in Norden addressed the argument proposed by plaintiff that Desford, as the owner, should remain as a proper party based on Martirano Constr. Corp. v Briar Contr. Corp.:

Our decision in Martirano Constr. Corp. v Briar Contr. Corp. ... is not inconsistent with the foregoing analysis. In that case, unlike the situation at bar, the property owner was properly named a party defendant because it conceded that it was liable on the underlying debt, and because the lienor in that case sought recovery against the realty itself.

Therefore, Maverick's contention is unavailing in this regard. As Desford is not a proper party in the matter, Maverick's causes of action as against it are dismissed.

The Court finds that plaintiff states a cause of action for unjust enrichment and for quantum meruit as against TD Bank and MBI. The test is "whether the proponent of the pleadings has a cause of action, not whether he has stated one" (Peter Lampack Agency, Inc. v Grimes, 29 Misc 3d 1208[A], 2010 NY Slip Op 51749[U] [2010], citing v Guggenheimer v Ginzberg, 43 NY2d 268 [1977]; see also Bokhour v GTI Retail Holdings, Inc., 94 AD3d 682 [2012]; County of Suffolk v MHC Greenwood Village, LLC, 937 NYS2d 89 [2012]). Maverick alleges work that was performed by Eastport which is not encompassed by the subcontracts.

Generally, the existence of a written contract governing a subject matter precludes recovery in quasi contract for events arising out of the same subject matter (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382 [1987]). Here, however, plaintiff states that it allegedly performed significant work that was additional to work according to the terms of the subcontracts. In this regard, plaintiff refers to the existence of several change orders in defendants' possession that reflect said additional work. The Court finds that plaintiff has stated causes of action to recover in quasi contract for work it allegedly performed outside of and in addition to the subcontracts.

The Court has considered the parties' remaining contentions and finds them to be without merit.The foregoing constitutes the decision and order of this court. [*6]

E N T E R

J. S. C. Footnotes

Footnote 1: Specifically, the premises is designated as Block 7363, Lots 5 and 67.