Altshuler Shaham Provident Funds, Ltd., Appellant,v.GML Tower, LLC, et al., Defendants, The Pike Company, Inc., et al., Respondents.BriefN.Y.May 2, 2013To Be Argued By: Thomas P. Givas, Esq. Time Reauested: 5 minutes Court of Appeals State of New York Altshuler Shaham Provident Funds, Ltd., Plain tiff-A pp ellan t, GML Tower LLC, GML Addis LLC, Ameris Holdings Inc., Levy Kushnir, and FINANCITECH, LTD., Defendants, The Pike Company, Inc., Pyramid Roofing & Sheet Metal Co., Inc., L.A. Painting, Inc., The Hayner Hoyt Corporation, The Effect Group, Inc., Syracuse Merit Electric, A Division of O'Connell Electric Co., Inc., and TAG Mechanical Systems, Inc. BRIEF FOR DEFENDANT-RESPONDENT L.A. Painting, Inc. Thomas P. Givas, Esq. Pappas, Cox, Kimpel, Dodd & Levine, P.C. 614 James Street, Suite 100 Syracuse, New York 13203 31 5-472-4481 Fax 31 5-472-8299 Attorneys for Defendant-Respondent L.A. Painting, Inc. INSIDE COVER Phillips Lytle, LLP Attorneys for Defendant-Respondent The Pike Company, Inc. 1400 First Federal Plaza Rochester, New York 14614 (585) 238-2000 Steward L. Weisman, Esq. Attorney for Defendant-Respondent Pyramid Roofing & Sheet Metal Co., Inc. 8060 Shadowrock Road Manlius, New York 13104 (315) 682-0652 Giles R.R. Abitol, Esq. Attorneys for Defendant-Respondent The Effect Group, Inc. 121 Green Acres Drive Liverpool, New York 13090 (315) 706-0159 Byrne, Costello & Pickard, P.C. Attorneys for Defendants-Respondents Syracuse Merit Electric, A Division of O'Connell Electric Co., Inc. and TAG Mechanical Systems, Inc. 100 Madison Street, Tower 1, Suite 1600 Syracuse, New York 13202 (315) 474-6448 Levi Kushnir Pro Se Defendant Levikushnir@,gmail.com mail@,dekel-1aw.co.il (service via email by agreement of the parties as Approved by the Court) D'Agostino, Levine, Landesman & Lederman, LLP 345 Seventh Avenue, 23rd Floor New York, New York 10001 (212) 564-9800 Hancock & Estabrook, LLP 1500 AXA Tower I 100 Madison Street Syracuse, New York 13202 (315) 471-3151 Attorneys for Plaintiff-Appellant Altshuler Shaham Provident Funds, Ltd. Maynard, O'Connor, Smith & Catalinotto, LLP Attorneys for Defendant Financitech, Ltd. 6 Tower Place Albany, New York 12203 (518) 465-3553 Gilberti, Stinziano, Heintz & Smith, P.C. 555 Genesee Street Syracuse, New York 13202 (315) 442-0138 Hahn, Loeser & Parks LLP 200 Public Square, Suite 2800 Cleveland, Ohio 44114 (216) 274-2210 Tulchinsky, Stern, Marciano, Cohen, Levitski & Co. Attorneys for Defendant-Respondent Attorneys for Defendants The Hayner Hoyt Corporation GML Tower, LLC, GML Addis, LLC And Addis Holdings, LLC pinib@,tslaw.co.il tuli@2tslaw.co.il (service via email by agreement of the parties as Approved by the Court) TABLE OF CONTENTS PAGE Table of Authorities- Statutes-Cases STATUTES CITED.. ................................................................................. i .. CASES CITED.. ................................................................................. II. ... QUESTIONS PRESENTED.. .................................................................. 111. ........................................................................ STATEMENT OF FACTS I ARGUMENTS Point I. THE MARCH 29,2007 AGREEMENT WAS A BUILDING LOAN CONTRACT .................................. 7 Point II. PLAINTIFF'S FAILURE TO FILE THE LOAN AGREEMENT REQUIRES THAT ITS ENTIRE INTEREST BE SUBORDINATED ..................... 13 CONCLUSION .................................................................................... 14 DISCLOSURE STATEMENT.. ................................................................ 15 STATUTES CITED P a ~ e ............................................................................ 1 . Lien Law § 23 7 2 . Lien Law 3 22 ........................................................................... .7,8 3 . Lien Law 5 2 (1 3) ......................................................................... -8 .......................................................................... . 4 Lien Law § 2 (14) 9 .......................................................................... 5 . Lien Law § 2 (5) 13 CASES CITED PAGE 1. Nanuet National Bank v. Eckerson Terrace Inc., 27 NY 2d 243 (1979. 2. Alden State Bank v. Sunrise Builders Inc., 48 A.D.2d 1162 (4th Dep't 2008) .................................................................................................................. 9 3. Pawling Savings Bank v. Jeff Hunt Properties, 225 A.D.2d 678 (2nd Dep't 1996). ................................................................................................. .9 4. Finest Investments v. Security Trust Company of Rochester, 96 A. D. 2d 227 (4'h Dep't 1983) .......................................................................................... 9 5. Atlantic Bank of New York v. Forrest House Holding, Co.,234 A.D.2d 491 (Pd Dep't 1991) ......................................................................................... 13 6. HNC Realty Co. v. Golan Heights Developers, Inc., 76 Misc 2d 696 (Rockland Co. 1974) ........................................................................................... 13 7. Yankee Bank for Fin & Sav v. Task Associates, Inc., 731 F. Supp 64 (NDNY 1990). ................................................................................................ . I 3 8. In Re Cohen, 209A.D. 2d415(1924) ......................................................... 7 9. Howard Savings Bank v. Lefcon Partnership, 209 A.D.2d 473 (2nd Dep't 1994). ................................................................................................. .8 10. Amsterdam Savings Bank v. Terra Domus Corp,. 97 A.D.2d 41 (3& DepJt 1983). ................................................................................................. . I 2 1 1. Security National Bank v. Village Mall at Hill Crest, 85 Misc.2d 1771 (1996). .............................................................................................. . I 2 Questions Presented If a Loan Agreement exists and multiple advances are made for construction pursuant to that agreement, is the Loan Agreement required to be filed? The Courts below properly answered: Yes. If the Lender fails to properly record its Loan Agreement, is the lender's entire interest in that agreement subject to subordination to Mechanics Liens? The Courts below properly answered: Yes. iii COUNTER- STATEMENT OF FACTS This action involves a foreclosure action commenced by the Plaintiff against the Defendants which relates to the 15 Floor Hotel Syracuse Tower in Syracuse, New York. The Defendant L.A. Painting, Inc. was a sub-contractor of the Defendant the Hayner Hoyt Company and provided painting services during the improvement of the Hotel Syracuse Tower pursuant to the sub-contract for the Hotel Syracuse Tower project. L.A. Painting was not paid for a portion of the work performed and filed a Mechanic's Lien against the project on or about the 2gth day of October 2008 in the amount of $1 14,208.58. This action relates to the Hotel SyracuseIGML Tower property. This property was purchased by GML Tower on or about September 7, 2005 for the sum of $7 million. (R.CA-49.41). At that time the First Bank of Oak Park provided the purchase money to finance the purchase by GML Tower and secured it with a $7 million mortgage which was recorded on September 8, 2005. (R.403). That mortgage was modified on or about the lSt day of October 2006, which modification was filed on November 16, 2006 (R.426). Thereafter, on or about March 29, 2007 the GML Tower entered into a Loan Agreement with the Plaintiff for a $10 million loan. (R. 271) The agreement is clearly identified as a Loan Agreement and not as a commitment. The Plaintiffs repeatedly misidentifies the agreement as a commitment. The loan agreement was never filed by the Plaintiff. In paragraph 2.1 of the agreement (R. 275) the Lender agreed to lend the Borrowers $10 million. Section 2.2 provided that that loan would mature on March 29, 2010. In the Loan agreement, the Borrowers agreed in section 3.1 (R. 278) to secure all existing and future claims of the Lender under any of the loan documents including payment of entire principal amount of the Loan together with accrued interest.. .to the Lender under this agreement the Borrowers hereby undertake to grant Lender a first ranking senior lien, mortgage.. .in an to all of the collateral including a first ranking mortgage. Thus, the Borrower agreed to provide a first mortgage lien in the sum of the entire principal amount of $1 0 million, which the Lender could have filed at any time. Section 4 of the agreement outlines the use of the loan proceeds. Section 4.1 provides that $5.5 million shall be used to take an assignment of the existing bank loan. (R. 281) The remaining $4.5 million was to be deposited into a restricted account and used and applied solely to finance the construction and the improvements in accordance with Section 7 of the agreement. Section 6 details the construction responsibilities of the Borrower under the agreement. The Lender is to be provided all current plans together with contractor, subcontractor and construction information. In addition, the agreement provided the Plaintiff with the ability to inspect the premises at any time. Section 7.1 of the March 29, 2007 Loan Agreement establishes the escrow account which that the proceeds of the $4.5 million dollars shall be set up in a dedicated bank account and released to finance and pay construction of the improvements. All of the transfers are to be done pursuant to a transfer request after an inspection. In addition, the agreement contains numerous other references to construction requirements. (R. 29- 30) The Borrower entered into a $10 million promissory note at that time and the Lender funded $10 million into a Trust Account. (R. CA-49.37) Thereafter, the parties entered into a Memorandum of Understanding dated May 1,2007 which stated that it was being made pursuant to the March 29,2007 Loan Agreement. (R. 355) It notes that the first transfer of the Loan would be a $5.5 million loan with instructions to the Trustee to use it to repay the existing loan to the existing bank. The closing date was extended to May 15, 2007. The agreement in Section 3b further confirms the understanding that the release of funds from the escrow account was to finance and pay construction costs pursuant to transfer requests of the Borrower under Section 7.1 of the Loan Agreement. It was noted that "All of the provisions of the prior Loan Agreement shall remain in effect." Thus, by the express terms of the Memorandum of Understanding, the Loan Agreement did not expire. Rather, it was modified. The May 1,2007 Memorandum of Understanding modifying the Loan Agreement was not filed. It is important to note that GML Tower already owned the property in question. This was not purchase or acquisition financing. The Lender simply took an assignment of an existing mortgage and thereafter consolidated that mortgage with the building loan funds used for the construction under the Loan Agreement. On May 7,2007 Plaintiff paid $5.5 million to Park National Bank which was the Successor to First Bank of Oak Park and received an assignment of the original September 8, 2005 mortgage. (R. 433-437) That assignment was recorded May 3, 2007. On April 30, 2007, Lender and Borrower entered into a Mortgage Extension and Modification Agreement which recited that a Loan had been made. (R. 439) The Mortgage Modification and Extension Agreement secured a maximum principal sum of $5.5 million and was filed on May 3, 2007. Since the mortgage was taken by assignment, no mortgage taxes were paid at that time. (R. 490) Thereafter, construction commenced on the Hotel Syracuse Tower project. This resulted in advances for construction over the next several months from the $4.5 million Trust Account as set forth in the Affidavit of Yair Lowenstein (R. CA-49.38 CIA-49.38). Those multiple advances were made pursuant to joint instructions to the trustee under the Loan Agreement from the trust account established for disbursement of advances for construction. No condominium sales or closings occurred. In March of 2008, the Plaintiff and GML Tower entered into a series of transactions which modified the outstanding Loan Agreement and changed the disbursement of funds. On or about March 4,2008 the Plaintiff entered into a $10 million replacement promissory note with GML Tower (R. 51-59). The replacement note clearly identifies that it is in accordance with the existing Loan Agreement as amended by Amendment 1. At that time, the Plaintiff also entered into an Amendment, which was not filed, which amended the existing Loan Agreement. (R. 3 13) That Amendment provided that principal amount of $4.5 million was to be used and applied strictly to finance renovations of the property owned by GML Tower as set forth in the original Loan Agreement. It further notes that the loan proceeds in the principal amount of $2.5 million were disbursed from the trust account to GML Tower pursuant to joint instructions to the Trustee given by the Lender in accordance with the Advance letters. The Plaintiff and Borrower then replaced the original plans with revised plans pursuant to which the residential apartment units and commercial units were to be developed and leased, instead of condo units developed for sale. The Plaintiff and the Borrower then amended to the original Loan Agreement to release of the remaining funds to the Borrowers, in a lump sum. Thus, the Plaintiff modified the outstanding original Loan Agreement by changing the plans from condominium sales to rentals and changed the disbursement pattern of the construction funds. The remaining funds were delivered in a lump sum. The parties entered into a March 4, 2008 Mortgage Modification (R. 60-1 19) which was filed on March 7, 2008. The Modification increased the mortgage to $10 million. In addition, the Plaintiff paid GML Tower the remaining $2 million which was being held for construction. The mortgage filed was by Plaintiff and the Mortgage Modification in Section 5.12 (R. 87) provided that the loan proceeds would be sufficient to pay the existing bank loan, and to complete the improvements in accordance with the plans and loan agreement. When the condominium sales plan proved unsuccessfil, the Plaintiff entered into material modifications of the Loan Agreement changing it to a rental plan and an additional material modification distributing the remaining construction funds in a lump sum to the owner. After having done a poor job monitoring the construction and having failed to record the Loan Agreement and Material Modifications to that agreement, the Plaintiffs action seeks to obtain a windfall by unjustly riching itself at the expense of the contractors. LA Painting was awarded judgment against Hayner Hoyt in the amount of $94,208.50 in paragraph 3 (R.CA-49.17). Upon the foreclosure of the property and confirmation of the sale, L.A. Painting was paid the sum of $94,208.50 which satisfied the judgment against Hayner Hoyt. Assuming argendo that the Court changes any priorities, the Defendant would be entitled to have its judgment reinstated. Procedurally L.A. Painting, as a Defendant, is in a slightly different position than the other Defendants. L.A. Painting filed a cross-claim against the Defendant Hayner Hoyt and made a Motion for Summary Judgment. That Summary Judgment resulted in certain provisions which are contained in the final judgment. Defendant submits that the foregoing facts clearly illustrate that the Plaintiff entered into a Loan Agreement which was Modified and amended. The Loan Agreement Modification and Amendment Agreements were never filed. The Agreements never expired and continued as stated therein. Said Agreements provided for the funding for the construction of improvements. Advances for which implements those advances were made from the construction account/trust account. As such, because Plaintiff failed to file the building loan agreement, it is subordinate to all of the mechanic's liens. The trial and appellate courts below properly decided the issues and their judgment should be affirmed. (R. CA-49.16) The judgment in paragraph 2a provides that the LA Painting's mechanic's lien was in the sum of $114,208.50. During the litigation, Hayner Hoyt paid $20,000.00 to LA Painting which resulted in the priority amount set forth in schedule 2 (R. CA-49.18). POINT I THE MARCH 29,2007 AGREEMENT WAS A BUILDING LOAN CONTRACT On March 29, 2007 Plaintiff entered into a Loan Agreement with the Owner of the property. That Loan Agreement was not filed as required by &VJ York State Lien Law, 5 22. Both the Trial Court and the Appellate Division held that Plaintiff's failure to file that building loan agreement caused Plaintiff's mortgage to be subordinate to the mechanic's liens which were filed by the Defendants. The issue in this case centers on the analysis of the March 29, 2007 Loan Agreement. It is important to note that at no time did the Loan Agreement expire. The Loan Agreement was extended and modified. It was in effect that at all times relating to this matter. The agreement was a building loan contract which was required to be filed under New York State Lien Law. New York State Lien Law provides that it is to be liberally construed to secure the beneficial interests and purposes thereof. New York Lien Law, 5 23. The Court in Nanuet National Bank v. Eckerson Terrace Inc., 27 N.Y.2d 243 (1979) noted the Lien Laws broad mandate that its provisions be liberally construed to secure the beneficial interests and purposes of the lien laws. Indeed, a Lienor is not to be deprived of his lien by any strict or technical construction of the statutes. See, In re Cohen, 209 A.D. 415 (1924). With this in mind, New York State Lien Law, § 22 provides that a "building loan contract either with or without the sale of land, and any modification thereof, must be in writing and duly acknowledged, and must contain a true statement under oath, verified by the borrower.. . showing all other expenses, if any, incurred, or to be incurred.. . connection therewith, and the net sum available to the borrower for the improvement, and, on or before the date of recording the building loan mortgage made pursuant thereto, to be that any subsequent modification of any such building loan contract so filed must be filed within ten days after the execution of any such modification. ..If not so filed the interest of each party to such contract in the real property affected thereby, is subject to the lien and claim of a person who shall thereafter file a notice of lien under this chapter." The underlying purpose of the Lien Law section 22 is to permit contractors and subcontractors to ascertain how much money will be made available to the owner in connection with the project and thus, the ability of the owner to pay for the services and materials provided. A modification of a building Loan Agreement is "'material' if it (1) alters the rights and liabilities otherwise existing between the parties to the agreement of (2) enlarges, restricts or impairs the rights of any third party beneficiary." Howard Savinas Bank v. Lefcon Partnership, 209 A.D.2d 473 (2"d Dep't 1994). The term building loan contract is defined in Lien Law in Section 2 (13) which provides that: "Building loan contract. The term 'building loan contract,' when used in this chapter, means a contract whereby a party thereto, in this chapter termed "lender," in consideration make advances to or for the account of such owner to be secured by a mortgage on such real property, whether such advances represent moneys to be loaned or represent moneys to mortgage upon such real property." Courts in interpreting the definition have held that a building loan contract is an agreement by which one undertakes to advance money to another for the purpose of erecting a building where the funds are advanced in installments as construction progresses. Alden State Bank v. Sunrise Builders Inc., 48.A.D.2d 1162 (4fh Dep't 2008); Pawling Savings Bank v, Jeff Hunt Properties, 225.A.D.2d 2d 678 (2nd Dep't 1996); Finest investments v. Security Trust Company of Rochester, 96 A.D.2d 227 (4th ~ e ~ ' t 1983). The Lien Law also provides certain related definitions. It defines a building mortgage as follows: "Building loan mortgage. The term 'building loan mortgage,' when used in this chapter, means a mortgage made pursuant to a building loan contract and includes an agreement wherein and whereby a building loan mortgage is consolidated with existing mortgages so as to constitute one lien upon the mortgaged property." Lien Law § 2 (14) In this case, the Loan Agreement entered on March 29, 2007 was clearly a building loan contract. The agreement was between the lender and the owner of the property. In the agreement the owner makes multiple promises to make improvements to the property. Some of those promises are set forth in the record on pages 29 and 30. The agreement provides floor plans for the renovation and improvement of the property. The agreement in paragraph 2.1 (R. 275) provides that the Borrowers agreed to borrow from the Lender the principal sum of $10 million which was to mature in three years. Section 3.1 (R.278) provided that to secure payment of the entire principal amount of the Loan together with all accrued interest, the Borrowers hereby undertake to grant Lender a first ranking senior lien mortgage.. .and into all the collateral including a first ranking mortgage. Section 4.4.2 provides that $4.5 million of the loan proceeds shall be held and disbursed and used solely to finance construction and the improvements in accordance of section 7 of the agreement. Section 6 of the agreement deals with the construction responsibilities of both parties and provides that the Lender will be given access to all construction information and allowed to inspect of the property. Section 7 deals with the escrow account which shall be held in a dedicated bank account and released to pay for the construction of improvements, subject to the terms and conditions of the plans. On or before the date of this agreement the Plaintiff funded the $10 million into a Trust Account. On May I , 2007 the Lender and Owner entered into a Memorandum of Understanding (R. 355) which modified the Loan Agreement. The Memorandum of Understanding clearly states that the principle amount of $10 million was deposited into a trust account. The agreement recognizes that $4.5 million will be released to finance and pay construction costs pursuant to transfer requests of the Borrower under section 7.1 of the Loan Agreement. The Lender thereafter released the sum of $5.5 million which was not used to purchase the property. Rather, the moneys were used to take an assignment of the existing mortgage on the property. (R. 434) The Loan Agreement and Memorandum of Understanding were never filed. Plaintiff filed the assignment of mortgage and thereafter filed a Mortgage Modification and Extension agreement. (R. 439) Plaintiff paid no mortgage tax as it was simply taking an assignment of an existing mortgage with an outstanding principal balance. Thereafter, construction of the improvements commenced. There were, however, no sales of the condominium units and thus no subsequent closings or proceeds from those sales. From the period of May 24, 2007 through February 2008 Plaintiff advanced $2.5 million from the remaining $4.5 million to GML Tower. The details of the dates and amounts of those disbursements are set forth in the record at CA-49.44. The disbursement of the sums of $2.5 million were made from the $4.5 million Trust Account under the Loan Agreement and were made pursuant to joint instructions that Trustee was given by the Lender as set forth in Advance Letters. In March of 2008, the Lender and the Borrower decided to materially modify the Loan Agreement. On March 4, 2008 they entered into an amendment to the existing Loan Agreement. (Amendment 1, R. 31 3) In that amendment, Plaintiff recognizes that will be no proceeds from sales and changes the plans from condominium sales to the rental of units. The agreement is further modified to set forth a lump sum disbursement of the construction trust account. Amendment 1 was not filed. Instead, Plaintiff filed a mortgage modification agreement. (R. 60) The mortgage modification agreement in paragraph 5.15 (R. 87) stated that the loan proceeds are sufficient to pay the existing bank loan and to complete the improvements as that term is defined in the Loan Agreement through completion in full, marketing, sale or leasing in accordance with the plans and Loan Agreement. The actual construction contract signed by Hayner Hoyt with the owner (R. 199, 220) sets forth a guaranteed maximum price for the work of $8,188,322.00. The owner was incurring a debt of approximately $13.7 million against which it had a loan of $10 million. The project was underfunded and was relying on the rental of units. The project was not completed and units were not rented. The contractors were not paid and were used to finance the project shortfall. An analysis of these facts clearly shows that there was an agreement between the Lender and the Owner. The Owner made express promises to make improvements. The improvements were made pursuant to the Loan Agreement. Periodic Advances were made from that agreement, which never expired. $4.5 million was held pursuant to the Loan Agreement and advances were made from those moneys for the construction of improvements. The agreement was clearly a building loan transaction and, as the court below found, it even labeled itself as a construction loan transaction which construction financing is being provided by the Lender under a Loan Agreement which never expired. As such, the agreement is a building loan contract which was required to be filed. The subsequent Modification and Amendment were material changes which also should have been filed. (Amsterdam Savings Bank v. Terra Domus Corp., 97 A.D.2d 41 (3rd Dep't 1983). See Security National Bank v. Villaae Mall at Hill Crest, 85 Misc. 2d 1771 (1976) in which a change from rental purposes to condominiums was a material modification which was required to be filed. Similarly, the change in terms for disbursement was also a material modification which altered the rights of the parties to the agreement and restricted and impaired the rights of the mechanic's lienors as third party beneficiaries. Accordingly, both changes were material and required that the agreements be filed by the Plaintiff. POINT II PLAINTIFF'S FAILURE TO FILE THE LOAN AGREEMENT REQUIRES THAT ITS ENTIRE INTEREST BE SUBORDINATED Plaintiff's failure to file the agreement requires its entire interest be subordinated. The court below properly analyzed the matter when it held as follows: "Finally, Plaintiff contends that it is entitled to priority with respect to the $5.5 million used to purchase real property. Based on Section 22's language describing a building loan contract "either with or without the sale of land," the court finds that "if a lender fails to comply with the requirements of the Lien Law, its entire mortgage, including the part securing loan proceeds advanced for the purchase of the property, would become subordinate to any subsequently filed mechanic's liens" Atlantic Bank of New York v. Forrest House Holding, Co., 234 A.D.2d 491, 492, 651 N.Y.S.2d 607 (2d Dep't 1996); see also HNC Realty Co. v. Golan Heights Developers, Inc., 79 Misc.2d 696, 702-03, 360 N.Y.S.2d 954 (Rockland Co. 1974). In Nanuet National Bank, the Court of Appeals also subjected a bank's entire interest in a building loan mortgage to that of the mechanic's lienors. 47 N.Y.2d at 248-49, 417 N.Y.S.2d 901, 391 N.E.2d 983. The court declines to follow Yankee Bank for Fin & Sav v. Task Associates, Inc. 731 F.Supp.64,71 n.2 (N.D.N.Y. 1990), which gave priority to the lender for loan proceeds used to purchase real property on the erroneous assumption that building loan contracts and building loan mortgages only concern improvements on real property. Section 22 governs building loan contracts that involve both improvements and the sale of land. It should also be noted that New York Lien Law Section 2 (5) provides that the cost of improvement includes sums paid by the owner to take an assignment of a prior existing mortgage which is consolidated with the building loan mortgage. When this applied in the instant matter its clear that an existing mortgage was taken by assignment and thereafter consolidated with the $4.5 million used for construction of the improvements on the project. As such, the $5.5 million was a cost of improvement and must be considered part of the cost of improvement for the project. The statute clearly provides that the entire interest of the owner in the loan agreement should be subordinated. Here, the entire amount expended by Plaintiff relates to the cost of the improvement. Plaintiff has no argument that this was acquisition financing which should be handled in a different manner. Accordingly, Plaintiff's appeal should be dismissed. CONCLUSION The Loan Agreement as found by the Courts below was a building loan contract. Plaintiff's failure to file that contract or any of the modifications thereto requires that its entire interest under the contract be subordinated to the liens of the Defendants in the instant action. Accordingly, the decisions below were proper and must be affirmed. evine, P.C. Attorneys for Defen ant L.A. Painting, Inc. 614 James Street, Suite 100 k Syracuse, New York 13203 3 1 5-472-448 1 COURT OF APPEALS STATE OF NEW YORK Altshuler Shaham Provident Funds, Ltd. Onondaga County Clerk's lndex No. 2008-9348 Plaintiff-Appellant, GML Tower, LLC, GML Addis LLC, Ameris Holdings Inc., Levy Kushnir, and Financitech, Ltd., 4'h Department lndex No. 10- 01 745 Defendants, The Pike Company, Inc. Pyramid Roofing & Sheer Metal Co., Inc., The Hayner Hoyt Corporation, L.A. Painting, Inc., The Effect Group, Inc., Syracuse- Merit Electric, A Division of O'Connell Electric Co., Inc., And TAG Mechanical Systems, Inc., Defendants-Respondents. DISCLOSURE STATEMENT L.A. Painting is a company organized under the laws of the State of New York which provides painting services throughout the State of New York. L.A. Painting is a privately owned corporation. A corporation is owned by an individual. No shares of the company or corporation are publicly traded and the corporation has no related or affiliated corporations. Dated: Syracuse, New York January 29,201 3 Respectfully Subm Attorneys for ~efendajd-~espondent, L.A. Painting 614 James Street, Suite 100 Syracuse, New York 13203 Tel: (31 5) 472-4481 Fax: (31 5) 472-8299