In the Matter of Navillus Tile, Inc.,, Respondent,v.LC Main, LLC, Appellant.BriefN.Y.October 10, 2013To be Argued by: BRIAN T. BELOWICH (Time Requested: 30 Minutes) Westchester County Clerk’s Index Nos. 13324/10 and 13325/10 Appellate Division–Second Department Docket Nos. 2010-08721, 2010-11676, 2011-02658 and 2011-02661 Court of Appeals of the State of New York In the Matter of the Application of NAVILLUS TILE, INC., doing business as NAVILLUS CONTRACTING, Respondent, – against – LC MAIN, LLC, Appellant. For an Order Pursuant to Lien Law Section 17 of the Lien Law continuing a Certain Notice Under Mechanic’s Lien Law against Premises known as 221 Main Street, Tower B, White Plains, New York, Section 125067, Block 7, Lot 7. REPLY BRIEF FOR APPELLANT BRIAN T. BELOWICH MICHAEL J. SCHWARZ Of Counsel DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP Attorneys for Owner-Appellant The Gateway Building One North Lexington Avenue, 11th Floor White Plains, New York 10601 Tel.: (914) 681-0200 Fax: (914) 684-0288 Date Completed: April 18, 2013 TABLE OF CONTENTS TABLE OF AUTHORITIES ....................................................................................... i PRELIMINARY STATEMENT ................................................................................ 1 LEGAL ARGUMENT ............................................................................................... 2 I. The Mere Filing of an Application to Extend a Mechanic's Lien is Insufficient to Preserve the Lien ......................................................................... 2 II. The Second Department's Reliance Upon CPLR § 2004 To Extend The Mechanic's Liens Was Improper ..................................................................... 12 III. The Second Department's Holding Leaves Uncertainty Surrounding the Efficacy of Navillus's Liens ........................................................................... 14 CONCLUSION .............................................................................. 16 1382144 0027015-069 T ABLE OF CASES Application ofLycee Francis De New York, 26 Misc.2d 374 (Sup. Ct. N.Y. County 1960) ............................................ 15 Binghamton Masonic Temple Inc. v. Armon Elevator Co., inc., 186 A.D.2d 338 (3d Dept. 1992) ................................................................ 6, 8 Carassavas v. New York State Dept. of Social Services, 90 A.D.2d 630 (3d Dept. 1982) ................................................................. 13 Contelmo's Sand & Gravel v J & J Milano, 96 A.D.2d 1090, 190 (2d Dept. 1983) ....................................................... 7 Gallo Brothers Construction Inc. v. Peccolo, 281 A.D.2d 811 (3d Dept. 2001) ................................................................ 7 Gelles-Berger Co. v. Boynwat Properties, Inc., 234 N.Y.S.2d 234 (Sup. Ct. Bronx County 1962) .................................... 7 Kellett's Well Boring, Inc. v. City of New York, 292 A.D.2d 179 (1st Dept. 2002) ............................................................... 5 Makovic v. Aigbogun, 41 A.D .3d 342 (1 st Dept. 2007) ................................................................. 9 Matter of Empress Gardens v. Smithtown Water Co., 40 Misc.2d 778 (Sup. Ct. Nassau County 1963) ........................................ 7 Matter of Powers v. Foley, 25 A.D.2d 525 (2d Dept. 1966) ................................................................. 13 Tewari v. Tsoutsouras, 75 N.Y.2d 1 (1989) ............................................................................. 2, 12, 13 Zoerb and Company, Inc. v. Young Fire Equipment Co., 134 A.D.2d 826 (4th Dept. 1987) .............................................................. 3, 7 STATUTES: CPLR § 2004 ................................................................................................. passim Lien Law § 17 ............................................................................................... . passim 11 Owner-Appellant LC Main LLC ("LC Main"),! by its attorneys, DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, respectfully submits this Reply Brief in further support of its appeal from a Decision and Order of the Appellate Division, Second Judicial Department (the "Second Department"), dated and entered on September 12, 20 12 (the "Decision and Order"), which reversed certain Orders issued by the Supreme Court, Westchester County (the "Trial Court"), denying the ex parte applications of Lienor-Respondent Navillus Title Inc. d/b/a Navillus Contracting ("Navillus") for a further extension of its Mechanics Liens, and granting Navillus' applications, nunc pro tunc, to May 19, 2010. For the reasons previously stated, and for the reasons set forth herein, the Decision and Order of the Second Department should be reversed, and the Orders of the trial court, dated August 9, 20 10 and February 14, 20 II, should be affirmed. PRELIMINARY STA TEMENT As argued previously, the Second Department committed reversible error by effectively holding that Navillus' timely filing of an application for a second (judicial) extension of the Mechanics Liens was sufficient to permit a further extension of Mechanics Liens, even though it was undisputed that no action was J Unless indicated otherwise herein, all capitalized tenns herein are intended to have the same meaning as set forth in LC Main's opening Brief. References to arguments in LC Mains opening Brief are referenced by page number, preceded by the phrase "LC Main Br." 1 1381458 commenced by Navillus, and no order granting an extension was issued, prior to the expiration of the initial one year extension period prescribed by Lien Law § 17. Furthermore, the Second Department committed reversible error in relying upon CPLR § 2004 to extend Navillus' already expired Mechanics Liens because CPLR § 2004 may only be used to extend the time period in which to complete a procedural act set in the CPLR. Tewari v. Tsoutsouras, 75 N.Y.2d 1, 9 (1989). Navillus" expired Mechanics Liens, which were not properly extended as required by Lien Law § 17, are (and were) legal nullities that could not be (and should not have been) revived andlor extended by the Second Department nunc pro tunc. It is respectfully submitted that the Decision and Order of the Second Department should be reversed, and that an Order should be entered affirming the Orders of the trial court, dated August 9,2010 and February 14,2011. LEGAL ARGUMENT I. The Mere Filing Of An Application To Extend A Mechanic's Lien Is Insufficient To Preserve The Lien Navillus argues that the ""filing of an ex parte application to extend a mechanic's lien prior to the expiration of said mechanic's lien is sufficient to preserve the lienor's mechanic's lien rights pursuant to Lien Law § 17." (See 2 1381458 Navillus Br., p 10).2 Tellingly, Navillus cites nothing to support its untenable claim, as no authority supports Navillus' claim. The plain language of Lien Law only permits a second (or further) extension of a mechanic's lien to be accomplished in one of two ways. First, the lien may be further extended through the commencement of an action to foreclose the lien within the initial one-year extension period. See Lien Law § 17 ("In the event an action is not commenced to foreclose the lien within such extended period ... such lien shall be extinguished ... "). Alternatively, the lien may be extended if "'an order [is] granted by a court of record or a judge or justice thereof, continuing such lien" within the initial one-year extension period. See ide (emphasis added). These are the only two statutorily permissible means of obtaining a second (and further) extension of a mechanic's lien. It is undisputed that neither of the statutory requirements for extending the Mechanics Liens were accomplished as prescribed by Lien Law § 17. The Mechanics Liens therefore lapsed on or about May 24, 2010 without the possibility or potential of revival. See Lien Law § 17. See also, Zoerb and Company, Inc. v. Young Fire Equipment Co., 134 A.D.2d 826, 829 (4th Dept. 1987). 2 References to arguments in Navillus' Respondents' Brief are referenced by page number, 3 1381458 The case of Zoerb and Company, Inc. v. Young Fire Equipment Co. (hereinafter, "Zoerb") is instructive. In Zoerb, the Appellate Division, Fourth Department, held that certain orders purporting to extend a mechanic's lien nunc pro tunc, which were actually issued after the April 1, 1983 expiration date of the subject mechanic's lien, were invalid. The Fourth Department also held that the mechanic's lien in question expired on April 1, 1983 because "'[ n]o further order of continuation ha[ d] been granted on or before" that date. See Zoerb, 134 A.D.2d at 826. There is no meaningful distinction or difference from this case and the Zoerb case. As in Zoerb, no order of continuation was granted by the trial court on or before May 24, 2010, the date on which Navillus' Mechanics Liens admittedly expired. (See Navillus Br., p. 2) (stating that its '''mechanic's liens were scheduled to expire on May 24, 2010). Likewise, no action to foreclose was commenced by Navillus within the statutory one-year extension period. As a result, Navillus' Mechanics Liens expired by operation of law on or about May 24, 2010. See Zoerb, 134 A.D.2d at 826. As anticipated, Navillus makes passing reference to the proposition of law that the Lien Law is to be "liberally construed to fulfill its intended purpose .... " preceded by the phrase "Navillus Br." 4 1381458 (See Navillus Br., p. 10). As discussed in LC Main's brief, however, the ~'ru]es of liberal construction and substantial compliance cannot supplant the mandatory language" of Lien Law § 17. See Kellett's Well Boring, Inc. v. City of New York, 292 A.D.2d 179, 181 (1 st Dept. 2002). (See also, LC Main Br., p. 13-14). Nothing in the Lien Law permits a second (or further) extension of a mechanic's lien merely upon the filing of an application with the county clerk's office for an extension order; the mandates of the statute are more exacting. Under the express language of the statute, a mechanic's lien which has been automatically extended by a lienor "shall be extinguished [after a period of one year] unless an order [is] granted by a court of record or a judge or justice thereof, continuing such lien" or an action is commenced to foreclose the lien is commenced. See Lien Law § 17 (emphasis added). Navillus' contention that the timely filing of an application to extend the Mechanics Liens was sufficient to permit an extension of the same is simply incorrect. Next Navillus attenlpts to draw an analogy between the commencement of actions and special proceedings, which are deemed timely commenced upon the "filing," and the alleged timeliness of its application for a second extension of the Mechanics' Liens. See Navillus Br., pp. 11-12. However, the timeliness (or untimeliness) of Navillus' application is simply not germane. The mere filing of 5 1381458 an application with the clerk of court for a second (or further) extension of a lien is not one of operative act which permit a further extension of a mechanic's lien. As Navillus concedes, only a court order granting the extension (or the commencement of a foreclosure action) "within the statutory [ extension] period" is sufficient to cause a second (and further) extension of a mechanic's lien. (See Navillus Br., p. 11). It is undisputed that neither of those things was done in this case, which caused Mechanics Liens to expire. This case should be contrasted with the case of Binghamton Masonic Temple Inc. v. Armon Elevator Co., Inc., 186 A.D.2d 338 (3d Dept. 1992) (cited by Navillus), where the court ordered extension was actually granted by the court prior to the expiration of the one year extension period, as required by Lien Law § 17. In that case, the court recognized that the operative act giving rise to an extension was not the "filing" of the order of extension with the clerk of court (the timing of which is not addressed by Lien Law § 17), but rather the "granting" of the order of extension by the trial court prior to the expiration of the one year extension period. See Binghamton Masonic Temple, Inc., 186 A.D.2d at 338 (holding that "as long as the court-ordered extension was granted within the one- year time period, the fact that it was not filed within that time does not extinguish the lien). 6 1381458 The expiration of the initial one-year extension period without a court order granting a continuation of the lien, or the commencement of an action to foreclose the lien, caused Navillus' Mechanics Liens to be extinguished by operation of law. See Gelles-Berger Co. v. Boynwat Properties, Inc., 234 N.Y.S.2d 234, 235 (Sup. Ct. Bronx County 1962) (,'The one year period set forth in the Lien Law is self- executing, and the expiration of that period, without obtaining an order continuing the lien or commencing the action to foreclose, extinguishes the lien"). See also Zoerb, 134 A.D.2d at 826; Contelmos's Sand & Gravel, Inc. v. J & J Milano, 96 A.D.2d 1090, 190 (2d Dept. 1983). Cf Gallo Brothers Construction Inc. v. Peccolo, 281 A.D.2d 811, 813 (3d Dept. 200 I) (a lien which is not properly extended prior to the end of the extension period expires by operation of law). Since there is no dispute by N avillus that more than one year lapsed without an order granting an extension of its Mechanics Liens, or an action commenced thereon, the Mechanics Liens ceased to be valid and therefore could not be extended. Cf Matter of Empress Gardens v. Smithtown Water Co, 40 Misc.2d 778, 778 (Sup_ Ct. Nassau County 1963). Navillus argues that there is "no substantive difference between the permissible gap when an ex parte order was [sic] signed but not filed until after the expiration date of the mechanic's lien it extends and the gap at issue herein." 7 1381458 Respectfully, LC Main disagrees. There is a substantive difference between a court ordered extension which is granted before the expiration of the one year extension period (but not filed entered by the court before the expiration of the period), and a court ordered extension which is granted after the one year extension period expires. By statute, the former causes an extension of the lien under Lien Law § 17,3 the latter does not.4 According to the Lien Law, it is the granting of the extension order before the expiration of the one year statutory extension period, as opposed to the docketing (or filing) of the of the extension order with the clerk, which causes a further extension of a mechanic's lien. This is so because nothing in Lien Law § 17 directs or requires the docketing (or filing) of the order to be made within any specific statutory time period. See Binghamton Masonic Temple Inc., 186 A.D.2d at 338. However, the Lien Law does require the extension order to be "granted" prior to the expiration of the one year extension period, and expressly provides that a lien not so extended "shall be extinguished." See Lien Law § 17. Citing Makovic v. Aigbogun, 41 A.D.3d 342 (1 st Dept. 2007), Navillus argues that a mechanic's lien may be extended nunc pro tunc where the application is tin1ely filed, but an order is not granted prior to the expiration of the 3 See Binghamton Masonic Temple Inc., 186 A.D.2d at 338. 8 138]458 mechanic's lien. (See Navillus Br., p. 13). This argument is completely without merit. As discussed above, it is the granting of the order prior to the expiration of the extension period which causes the extension of a mechanic's lien, not the mere filing of an application to extend the lien. Without an Order granting an extension before the expiration of the one year extension period, Navillus' Mechanics Liens lapsed by operation of law. Moreover, as discussed by LC Main in its openIng Brief, Makovic is inapposite, and lacks determinative significance. tn Makovic, unlike this case, the plaintiff moved by order to show cause to extend its expiring notice of pendency almost two and a half months before it expired (rather than on the eve 0 f expiration). Here, Navillus subtnitted its ex parte application only days before the Mechanic's Liens expired. (R. at 22, 27). Furthermore, N avillus, unlike the plaintiff in Makovic, did not to move by order to show cause seeking a temporary relief granting an extension of its Mechanics Liens to avoid expiration (R. at 7, 15), nor did Navillus advise the trial court that it required expedited relief on its applications. See id.5 4 See Zoerb. 134 A.D.2d at 826; Contelmos's Sand & Gravel. Inc., 96 A.D.2d at 1090. 5 It should be noted that Navillus claims that the clerk of the supreme court was Hadvised of the impending expiration dates at the time of filing" of its ex parte application. (See Navillus Br.~ p. 7). However, Navillus cites to nothing in the record to support this novel contention. The trial court expressly found that no such notice was given to the Court. (See R. at 7, 15). Navillus' contention that it advised the trial court of any impending deadline is dehors the records. 9 1381458 While it is true that that the Lien Law does not mandate an application be made by order to show cause (and contrary to Navillus' intimations, see Navillus Br. p. 15-16, LC Main makes no claim that an order to show cause was required), the Lien Law certainly did not prohibit Navil1us from making its application by order to show cause. Moving by order to show cause could have solved Navillus' problem through the inclusion of interim relief extending the Mechanics Liens until such time as its application was decided, as Justice Collabella alluded to in his Orders. (See R. at 7., 15). To the extent Navillus argues that the Lien Law § 17 does not prohibit "the granting of an application for an extension of the term of the lien where the application is timely filed" but not decided before the expiration period set forth in Lien Law § 17, as discussed by LC Main in its opening Brief, this argument is incorrect. (See LC Main Br., pp. 10-15). The Lien Law is clear and unequivocal on its face, and clearly prohibits a further extension of a lien where, as here, no order has been granted (or no action has been commenced to foreclose) prior to the expiration of the one year extension period. See Lien Law § 17. Where the mechanic's lien is not so extended it "shall be extinguished .... " See ida Navillus' Mechanics Liens expired on or about May 24, 2010 as no order was granted prior to or on that date so as to cause an extension of the Mechanics Liens. 10 1381458 NavilJus, citing several unreported trial court decisions, argues that courts Hroutinely" extend mechanic's liens nunc pro tunc where the application is timely filed but not delivered to a judge until after the expiration date. (See Navillus Br., 16-19). Navillus' argument is without merit. Preliminarily, it does not appear that any of those applications were opposed, unlike the underlying application which was opposed by LC Main once it learned of the application on reargument. Likewise, it does not appear that any concern was raised by the litigants in those actions (or the court) concerning the trial court's ability to grant a further extension where, as here, no order had been granted (and no action commenced) prior to the one year extension period set forth in Lien Law § 1 7. The mere fact that some trial courts may have improperly granted unopposed applications for nunc pro tunc extensions does not mean that those decisions were correct, or that the decisions comply with the express mandates of Lien Law § 17 (LC Main submits they do not). However, the propriety of those decisions is not before the Court at this time; what is before the Court is the propriety of the second extension of Navillus' Mechanics Liens without an order granting an extension (or action commenced to foreclose the liens) before the expiration of the one year extension period set forth in Lien Law § 17. LC Main submits that the Second Department 11 1381458 erred in granting a nunc pro tunc extension of Navillus' already expired Mechanics Liens, which were "extinguished" by operation of law. II. The Second Department's Reliance Upon CPLR § 2004 To Extend The Mechanics Liens Was Improper Navillus argues that the Second Department properly relied upon CPLR § 2004 in extending the Mechanics Liens nunc pro tunc because the app Ii cati ons were timely filed, but allegedly not presented to the trial court. Navillus Br., pp. 21-23. Navillus is incorrect. As noted in LC Main's brief, CPLR § 2004 "merely confers discretion upon the courts to either grant or deny a motion to extend time limits set in the CPLR." Tewari v. Tsoutsouras, 75 N.Y.2d 1, 9 (1989) (cited by Navillus).6 Clearly then, CPLR § 2004 does not confer the discretion upon courts to extend the statutory time limits set forth in Lien Law § 17. Cf Tewari, 75 N.Y.2d at 9. See also Carassavas v. New York State Dept. of Social Services, 90 A.D.2d 630 (3d Dept. 1982) (CPLR § 2004 "has no application to time limits set forth in statutes or 6 Tewari does not aid Navillus, as this Court in Tewari utilized CPLR 2004 to extend the time to complete a procedural act required under the CPLR. Similarly, in H.M. Hughes Co. v. Carmania Corp .. 187 A.D.2d 287 (I st Dept. 1992) the Appellate Division, First Department, used CPLR § 2004 to extend the time for completing a procedural act required by CPLR § 6513. In this instance, the Second Department did not use CP LR 2004 to extend the time to complete a procedural act required by the CPLR. Rather, it used CPLR § 2004 to avoid the substantive time limitations prescribed by Lien Law, which was (and is) improper for the reasons stated by LC Main in its opening Brief (which reasons are not meaningfully challenged by Navillus). J2 1381458 regulations other than those contained in CPLR"). In fact, CPLR § 2004 "only applies to extensions of time for the doing of acts in actions in actions and proceedings, and not for the doing of acts which are substantive in character and provided under other statutes." See Matter of Powers v. Foley, 25 A.D.2d 525, 525 (2d Dept. 1966). Navillus' ex parte application was neither an action, nor proceeding, so the Second Department erred in relying upon CPLR § 2004.7 Contrary to the Second Department's holding, and Navillus' argument (see Navillus Br., p. 22), the appellate court did not providently exercise its discretion in resorting to § CPLR 2004 to authorize a further extension of Navillus' already expired Mechanics Liens. The Lien Law expressly prohibits a second (and further) extension of a mechanic's lien where, as here, no order has been granted, and no action has been commenced, prior to the expiration of the initial one year extension period. See Lien Law § I 7. As discussed above, the Lien Law provides that "'[ n]o lien shall be continued by [an] extension for more than one year from the filing thereof," and that a lien so extended '''shall be extinguished [after a period of one year] unless an order [is] granted by a court of record or a judge or justice thereof, continuing such 7 While Navillus claims that Lien Law § 17 is not substantive in nature, without meaningfully disputing LC Main's argument, that is an issue properly left for the Court to decide. 13 1381458 lien ... ," or an action is commenced to foreclose the lien. See Lien Law § 17. The Lien Law does not permit an extension of a mechanic's lien merely upon the filing of an application for an order extending the mechanic's lien. The Second Department erred by impermissibly expanding the manner in which a mechanic's lien may be extended, and by resorting to CPLR § 2004 to extend the Mechanic's Liens. III. The Second Department's Holding Leaves Uncertainty Surrounding The Efficacy Of Navillus's Liens Navillus argues that the Second Department's Decision and Order leaves no uncertainty as to Navillus' Mechanics Liens, and that the Decision and Order "merely puts Navillus in the position it would have and should have been in had the Supreme Court timely signed the orders or signed the orders nunc pro tunc." Navillus is wrong. Preliminarily, as noted in LC Main's Brief, it cannot be discerned from the Decision and Order whether the Mechanics Liens were extended for a period of one year, nunc pro tunc, from May 19, 2010 through and including May 19, 20 II, or whether they were extended, nunc pro tunc, from May 19, 2010 through and including September 12, 20 13 (which amounts to an extension order of more than three years). If the former is what was intended, then Navillus' Mechanics Liens are now expired. If the latter is what was intended, then it makes no sense, and 14 1381458 clearly affords Navillus with greater rights than what may be afforded under the Lien Law, as discussed previously (see LC Main Br., pp. 25-26), and below. Furthermore, Navillus' argument assumes that the trial court would have granted its application had it determined that it had the power to do so in the first instance (which it determined it did not). However, there is no guaranty that the trial court would have actually granted the requested extension in the event it determined that it had the power to extend the already expired Mechanics Liens, nunc pro tunc. A second (and further) extension of a mechanic's lien is not automatic. See Lien Law § 17. Rather, the decision to grant or deny an extension order is a matter left to the sound discretion of the trial court. See Application of Lycee Francis De New York, 26 Misc.2d 374, 380 (Sup. Ct. N.Y. County 1960). In this instance, Navillus offered no compelling justification to the trial court in the first instance to continue burdening the subject Property with the Mechanics Liens, to the detriment of LC Main (and any intervening interest holders in the Property, such as mortgagees, lessees, or vendees), nor did Navillus explain why it had not commenced an action foreclose the Mechanics' Liens, which are clearly disputed by LC Main (otherwise they would have been paid). There is no guaranty that the trial court would have actually granted Navillus applications had it entertained the applications, a function which was usurped by 15 1381458 the Second Department. It was the trial court's province to engage in fact finding to determine whether the continuation of the Mechanics Liens may cause prejudice not only to LC Main (as alleged by it in opposition to the reargument motion), but to any other third parties who may claim an interest in the Property who were not afforded notice of Navillus' ex parte application. Finally, the Decision and Order puts Navillus in a better position than it could have occupied, if an extension was granted in the first instance. Assuming, arguendo, that the trial court should have granted an extension (which is not conceded), at most Navillus could have sought two (2) one year extensions of the Mechanics Liens, through and including Many 19, 2012 (which is two years from May 19, 2010, the date of Navillus' initial request for a court ordered extension). If the Mechanics Liens have been extended until September 12, 2013, as claimed, then Navillus received far more than what it could have sought under the Lien Law. CONCLUSION F or all the foregoing reasons, for the reasons stated in LC Main, LLC' s appeal Brief, and for the reasons that are apparent from the Record, LC Main, LLC, respectfully requests that the Court issue an Order: (i) reversing the Decision and Order of the Appellate Division, Second Department, dated September 12, 16 1381458 2012; (ii) affirming the Orders of the trial court, dated August 9, 2010 and February 14, 2011; and (iii) awarding to LC Main, LLC such other and further relief as it deems just and proper including, but not limited to, reasonable attorneys' fees, costs and disbursements. Dated: White Plains, New York April 1 8, 2013 1381458 DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP Brian T. Belowich Michael J. Schwarz 1 North Lexington A venue White Plains, New York 10601 (914) 681-0200 Attorneys for Owner-Appellant LC Main, LLC 17