Opinion
INDEX NO. 654926/2019
07-14-2020
WONDER WORKS CONSTRUCTION CORP., Plaintiff, v. BRIDGETON AMIRIAN 13TH STREET, LLC,BRIDGETON AMIRIAN 436 LLC,BRIDGETON AMIRIAN 442 LLC,436 AND 442 EAST 13TH STREET OWNER LLC,DAVID AMIRIAN, COD MECHANICAL CORP., G.A. WINDOWS, INC.,D/B/A ADLER WINDOWS, INC.,NCC360 LLC,NSI STONE TRADING INC.,HEIBERG ENGINEERING AND FORENSIC SERVICES, ATLANTIC SPECIALTY INSURANCE COMPANY, JOHN DOE 1 THROUGH JOHN DOE 10 Defendant.
NYSCEF DOC. NO. 110 PRESENT: HON. MARGARET A. CHAN Justice MOTION DATE __________ MOTION SEQ. NO. (MS) 001; 002; 003
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 56, 57, 76 were read on this motion to/for DISMISSAL. The following e-filed documents, listed by NYSCEF document number (Motion 002) 60, 61, 62, 63, 64, 65, 66, 67, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105 were read on this motion to/for DISMISSAL. The following e-filed documents, listed by NYSCEF document number (Motion 003) 68, 69, 70, 71, 72, 73, 74, 75, 79, 80, 81, 82, 83, 106 were read on this motion to/for DISMISSAL.
In this mechanic's lien foreclosure action, defendants 436 and 442 East 13th Street Owner LLC (13th Street Owner) and Atlantic Specialty Insurance Company (Atlantic Specialty) (collectively, movants) move in MS 1 for: (1) dismissal of plaintiff Wonder Works Construction Corp's (Wonder Works) Amended Verified Complaint dated December 5, 2019 in its entirety as against movants, pursuant to CPLR 3211[a][1] and [7]; (2) vacating and discharging each of the mechanic's liens filed by Wonder Works against the premises located at 436 and 442 East 13th Street, New York, New York 10009 (collectively, the project premises) on April 10, May 1, and August 26, 2019, pursuant to Lien Law § 13[5] and Lien Law § 19[6]; (3) cancelling the Notice of Pendency filed by Wonder Works against the project premises on October 8, 2019, pursuant to CPLR § 6514; and (4) cancelling the bonds filed by movants on November 1, 2019 to discharge the August 26 Liens from the project premises, pursuant to Lien Law § l3[5] and Lien Law § 19[6]. Wonder Works opposes the motion.
The movants' motion in MS 2 concerns the mechanic's lien in the amount of $85,100.10 filed by G.A. Windows, Inc. d/b/a Adler Windows, Inc.'s (Adler) on May 10, 2019. Adler's cross claim seeks to foreclose on this lien. The movants now seek to dismiss the cross claim on CPLR 3211[a][1] and [7] grounds; and pursuant to Lien Law § 13[5] and § 19[6], vacate and discharge Adler's Lien, and cancel the bond that the movants filed on November 1, 2019. The movants' motion is unopposed.
Additionally, in MS 2, Adler cross-moves for summary judgment against Wonder Works in the amount of $43,440.10 on its counterclaim for breach of contract pursuant to CPLR 3212. Wonder Works opposes the cross-motion.
Finally, in MS 3, the movants seek to: dismiss, on CPLR 3211[a][1] and [7] grounds, COD Mechanical Corp.'s (COD) cross-claim to foreclose on a May 10, 2019 mechanic's lien in the amount of $55,000; and pursuant to Lien Law § 13[5] and § 19[6], vacate and discharge the COD Lien, and cancel the bond that the movants filed on November 1, 2019. COD opposes the motion. BACKGROUND 133th Street Owner and Atlantic Specialty's Motions to Dismiss
The following facts are undisputed: On March 29, 2019, 13th Street Owner acquired title to the project premises from defendants Bridgeton Amirian 436 LLC and Bridgeton Amirian 442 LLC (collectively Bridgeton). The deeds were conveyed and delivered to 13th Street Owner on the same day and recorded by the New York County Clerk's Office on April 15, 2019. Wonder Works filed the mechanic's lien on the project premises with the New York County Clerk's Office on April 10, 2019. (NYSCEF ## 41-43).
On May 1, 2019 and August 26, 2019, Wonder Works filed amended liens (NYSCEF ## 44-45). Adler and COD filed their respective mechanic's liens on May 10, 2019 (NYSCEF ## 65, 73). Additionally, Wonder Works filed a Notice of Pendency with the New York County Clerk's Office on October 8, 2019 (NYSCEF # 46). The movants filed bonds to discharge the liens on November 1, 2019 (NYSCEF ## 47, 66, 74). Wonder Works, Adler, and COD all contend that 13th Street Owner is liable for the respective mechanic's liens.
Subsequent to the filing of the instant motions, the parties stipulated to cancel the October 8, 2019 Notice of Pendency by March 11, 2020 (NYSCEF # 77). As such, the branch of movants' MS1 to cancel the October 8, 2019 Notice of Pendency is moot.
COD's only allegation is that it had a conversation with 13th Street Owner on April 10, 2019, to resolve outstanding plumbing issues (NYSCEF # 80). COD alleges that a representative for 13th Street Owners asked COD to close a case number with Consolidated Edison (id.). COD alleges that during this same conversation, COD informed 13th Street Owner that it was still owed $55,000. COD claims that the 13th Street Owner representative assured COD that if COD closed the Consolidated Edison case number, then 13th Street Owner would pay Wonder Works, who, as the general contractor, would in turn pay COD the money owed (id.). COD claims that in reliance on this representation, COD abstained from filing its lien until May 10, 2019, after the deeds were recorded.
Adler's Cross-motion
For its cross-motion, Adler alleges that it entered into a subcontractor agreement with Wonder Works on January 14, 2016 to install windows at the project premises (NYSCEF # 87). Pursuant to Section 4.1 of the agreement, Wonder Works agreed to pay Adler $417,990.00 for the work (id.). Adler alleges that after accounting for the change orders, Wonder Works owed Adler $433,926 (NYSCEF # 85). Adler claims that it completed the work on February 28, 2019 and submitted an application and certificate for payment to Wonder Works (NYSCEF # 88). Adler claims that it was paid only $390,485.90 to date leaving an outstanding balance of $43,440.10.
Wonder Works counters that Adler's work on the project was deficient which resulted in Adler being paid more than the value of the materials and labor Adler supplied (NYSCEF # 95). In particular, Wonder Works claims that: (a) Adler breached the contract as the quality of the windows provided and the installation of the windows and doors were poor, and Adler failed to complete the work as required pursuant to the contract between them; (b) Adler is not owed any additional monies because Adler failed to correct problems with the materials and labor it provided, failed to complete the punch list of corrections that Wonder Works gave to Adler, and failed to provide Wonder Works with warranties as required; and (c) Adler was overpaid for the work and materials Adler provided to Wonder Works (id.). Wonder Works submits numerous contemporaneous emails detailing its objections to Adler's work on the premises project (NYSCEF ## 96-104). DISCUSSION
Motions to Dismiss
In deciding a motion to dismiss pursuant to CPLR 3211(a), the court must liberally construe the pleadings, accept the alleged facts as true, and accord the non-moving party the benefit of every possible favorable inference (see Leon v Martinez, 84 NY2d 83, 87 [1994]; Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 570 [2005]). "The court must determine only whether the facts as alleged fit within any cognizable legal theory" (Leon, 84 NY2d at 88). However, the court need not accept "conclusory allegations of fact or law not supported by allegations of specific fact" or those that are contradicted by documentary evidence (Wilson v Tully, 43 AD2d 229, 234 [1st Dept 1998]).
In particular, on a motion to dismiss under CPLR 3211(a)(1), the court is obliged "to accept the complaint's factual allegations as true" and accord to plaintiff the benefit of every possible favorable inference and determine only whether the facts as alleged fit within any cognizable legal theory (see Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 270 [1st Dept 2004]). A motion to dismiss on CPLR 3211(a)(1) grounds may be granted only where the documentary evidence "utterly refutes" the complaint's factual allegations, conclusively establishing a defense as a matter of law (DKR Soundshore Oasis Holding Fund Ltd. v Merrill Lynch Intern., 80 AD3d 448 [1st Dept 2011]). To constitute documentary evidence, the papers must be "essentially undeniable" and support the motion on its own (Amsterdam Hospitality Group, LLC v Marshall-Alan Associates, Inc., 120 AD3d 431 [1st Dept 2014]).
The movants' three motions to dismiss are granted. The mechanic's liens of Wonder Works, Adler, and COD were all filed after the conveyance of the project premises deeds to 13th Street Owner on March 29, 2019. "While the Lien Law is generally designed to protect contractors, material providers and other classes of workers who supply labor or furnish materials, [Lien Law §13(5)] is an exception which is specifically designed to protect purchasers of realty" (Leonard Engineering, Inc. v. Zephyr Petroleum Corp., 135 AD2d 795 [2d Dept 1987]).
Lien Law § 13(5) reads as follows:
No instrument of conveyance recorded subsequent to the commencement of the improvement, and before the expiration of the period specified in section ten of this chapter for filing of notice of lien after the completion of the improvement, shall be valid as against liens filed within a corresponding period of time measured from the recording of such conveyance, unless the instrument contains a covenant by the grantor that he will receive the consideration for such
conveyance and will hold the right to receive such consideration as a trust fund to be applied first for the purpose of paying the cost of the improvement and that he will apply the same first to the payment of the cost of the improvement before using any part of the total of the same for any other purpose. Nothing in this subdivision shall be construed as imposing upon the grantee any obligation to see to the proper application of such consideration by the grantor (id.).Succinctly, Lien Law § 13(5) specifically prohibits the enforcement of mechanic's liens after the recording of a deed transfer, so long as certain statutory trust language is contained in the deed.
The Wonder Works liens must be vacated and discharged. While there is no dispute that the deeds contain the statutorily required trust language, Wonder Works argues that its April 10, 2019 liens were recorded before the County Clerk recorded the 13th Street Owner's property deeds. Wonder Works argues that the plain statutory language of Lien Law § 13(5) specifies that a lien recorded before a deed transfer is recorded is valid.
However, it is the date of conveyance, not recording, that controls the disposition of a mechanic's lien subject to Lien Law § 13(5). The First Department held in V.A.L. Floors, Inc. v Marson Contr. Co., Inc. (110 AD3d 504, 505 [1st Dept 2013]) that so long as a "deed contains the statutorily required trust fund language ... and the conveyance occurred prior to the filing of plaintiff's lien, the 'lien is not valid against the deed.'" The First Department is in accord with and specifically cites to the Second Department as it relates to Lien Law § 13(5) (id. citing Leonard Engineering, 135 AD2d at 797 ["Although the statute refers to 'liens filed within four months from the recording', in order to further the underlying purpose of Lien Law § 13(5), this language must be construed to include liens filed prior to recording of a conveyance when the conveyance occurred prior to the filing of the lien."]). Therefore, Wonder Works liens must all be vacated and discharged, and the November 1, 2019 bonds canceled. As such, Wonder Works amended complaint is dismissed as against movants.
Next, there is no dispute that the Adler and COD liens were recorded after 13th Street Owner recorded the deed transfers. The Adler and COD liens are likewise vacated and discharged, and the November 1, 2019 bonds cancelled. Consequently, their cross-claims asserted against movants are dismissed.
As for COD's argument that it relied to its detriment on 13th Street Owner's representations, the alleged representation occurred on April 10, 2019, after the property deeds were conveyed. Thus, even if COD relied on 13th Street Owner's representations, it was already late in filing its mechanic's lien as the deed was conveyed prior to that date. There is no basis to accept COD's detrimental reliance argument to uphold COD's mechanic's lien. In any event, COD has not alleged that 13th Street Owner made its representation fraudulently or with the intention of avoiding the lien. Thus, there is no basis to strip the movants of the protection afforded by Lien Law § 13(5) (see Comfort-Craft Heating & A.C., Inc. v Salamone, 19 AD2d 760, 760 [3d Dept 1963] ["There is no allegation of fraud and no allegation that the conveyance was made with intent to avoid the Lien Law"]).
Adler's Cross-motion for Summary Judgment against Wonder Works
A party moving for summary judgment must make a prima facie showing that it is entitled to judgment as a matter of law (see Alvarez v Prospect Hosp, 68 NY2d 320 [1986]). Once a showing has been made, the burden shifts to the parties opposing the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material issues of fact which require a trial of the action (see Zuckerman v City of New York, 49 NY2d 557 [1980]). On a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party (see Vega v Restani Constr. Corp, 18 NY3d 499 [2012]). In the presence of a genuine issue of material fact, a motion for summary judgment must be denied (see Rotuba Extruders v Ceppos, 46 NY2d 223, 231 [1978]; Grossman v Amalgamated Haus. Corp., 298 AD2d 224, 226 [1st Dept 2002]).
Summary judgment is denied here as Wonder Works presented copious documentary evidence to demonstrate that there are material questions of fact regarding Adler's performance under the contract.
Accordingly, it is ORDERED that 13th Street Owner and Atlantic Specialty's motions to dismiss are granted and all claims and cross-claims asserted against them are dismissed; it is further
ORDERED that Wonder Work's, Adler's, and COD's respective mechanic's liens on 436 East 13th Street and 442 East 13th Street are vacated and discharged; the New York County Clerk is directed to discharge the mechanic's liens pursuant to this Order; it is further
ORDERED that pursuant to the parties' Stipulation Cancelling Notice of Pendency dated March 11, 2020 (NYSCEF # 77), the October 8, 2019 Notice of Pendency is canceled; the New York County Clerk is directed to cancel the Notice of Pendency; it is further
ORDERED that the November 1, 2019 bonds issued as surety against the mechanic's liens and notice of pendency are cancelled; it is further
ORDERED that Adler's cross-motion for summary judgment is denied; it is further
ORDERED that that the Clerk of the Court is directed to amend the caption as follows: WONDER WORKS CONSTRUCTION CORP., Plaintiff,
-v- BRIDGETON AMIRIAN 13TH STREET, LLC, BRIDGETON AMIRIAN 436 LLC, BRIDGETON AMIRIAN 442 LLC, DAVID AMIRIAN, COD MECHANICAL CORP., G.A. WINDOWS, INC., D/B/A ADLER WINDOWS, INC., NCC360 LLC, NSI STONE TRADING INC., HEIBERG ENGINEERING AND FORENSIC SERVICES, JOHN DOE 1 THROUGH JOHN DOE 10 Defendants.
It is further, ORDERED that the Clerk of the Court enter judgment as written; and it is further
ORDERED that the remaining parties participate in a telephonic preliminary conference in Part 33 to be held on August 7, 2020 at 11:00 am. The parties are directed to provide court attorney Michael Ament (mnament@nycourts.gov) with a dial-in number for the conference.
This constitutes the Decision and Order of the court. 7/14/2020
DATE
/s/ _________
MARGARET A. CHAN, J.S.C.