Opinion
05-3543.
Decided March 20, 2007.
Paul L. Gruner, Esq., Attorney for Plaintiff.
Ganz, Wolkenbreit Friedman, LLP, By: Richard H. Friedman, Attorneys for Defendants.
This is a decision and order on a motion that seeks to dismiss all claims against defendant, Steven Aaron, and monetary sanctions; summary judgment against the remaining defendants and for leave to amend defendant's answer and counterclaim. Plaintiff opposes the motion in all respects. Annexed to the reply affidavit is a stipulation of discontinuance against Steven Aaron. As that issue has been resolved, the Court will not address it in this decision.
Birchwood Village Limited Partnership (hereinafter "the partnership") owns property in the City of Kingston, New York. The petition alleges that the general partners are Birchwood Village Associates, LLC, and Steven Aaron (hereinafter "Aaron"). According to the complaint, Rivergate Development, LLC (hereinafter "Rivergate") and Aaron entered into an agreement with plaintiff, whereby plaintiff agreed to do certain work and provide materials for the construction of all the foundations, including footings, walls, and slabs for twelve buildings and one community building at a project known as Birchwood Village Project. Plaintiff alleges that Rivergate and Aaron promised to pay $409,138.86 for the agreed upon labor and materials. Plaintiff alleges that they are owed $177,576.70 plus interest from May 3, 2005 for the work performed. Plaintiff filed a lien with the Ulster County Clerk.
In the answer and counterclaim, defendant admits that on or about December 20, 2004, Rivergate entered into an agreement with plaintiff for building foundations, concrete sidewalks and other related work at Birchwood Village. Defendants deny that they agreed to pay plaintiff $409,138.86 as a contract amount. Defendants state in their answer that plaintiff's lien was discharged by a bond posted by the Partnership and the Platte River Insurance Company. They assert that the bond was given to the Ulster County Clerk's Office as an undertaking to secure the obligations of the Partnership with respect to the lien. Defendants' affirmative defense is that plaintiff beached the contract and defendants were required to expend additional time and money to remedy the breach. Defendants have counterclaimed to recover the costs and expenses associated with plaintiff's alleged breach of the contract.
In support of the summary judgment, plaintiff submits an affirmation from counsel and correspondence among the parties and other documents. Annexed is a bid that plaintiff prepared concerning the footings, walls, slab and mechanic room and sidewalks for Birchwood Village. The bid for the sidewalks was $62,400.00 and $360,000.00 for other items. Rivergate sent
plaintiff a notice to proceed on December 20, 2004. This letter, signed by Melody DeSimone, Project Manager, required plaintiff to be responsible for all winter protection throughout the course of the construction. A second notice to proceed, dated the same day, removes this condition. It is undisputed that plaintiff began pouring concrete December 30, 2004. Plaintiff alleges that the last day material was delivered was May 3, 2005. Defendant asserts that the last day material was delivered was on or about April 22, 2005. Rivergate made payments to Atlantic on February 18, 2005, March 10, 2005 and April 14, 2005 totaling $231,561.90. Rivergate faxed the nine page contract to Atlantic on April 13, 2005, after the work had begun and payments made. The contract included labor and materials for the foundations and sidewalks. After an adjustment to the contract regarding a pump truck, Mr. Dias signed the contract for Atlantic and returned it on April 25, 2005. On April 27, 2005, Rivergate wrote a letter to Atlantic and attached a copy of a letter from the project architect, Robert Kurzon. The letter concerns testing of the concrete and notes that the contract requires the testing to be done by the subcontractor, Atlantic. This letter stated that the concrete portion of the project is "nearly complete." The letter from Mr. Kurzon stated that they have not received any test reports from Atlantic concerning the concrete. According to the affirmation of counsel, a meeting took place between Rivergate and Atlantic on May 17, 2005. A letter dated May 21, 2005, purporting to be a follow-up to that meeting, confirms Atlantic's responsibilities to complete the project. The letter stated that the architect had not received the testing data as requested and as a result of the non-compliance, the architect recommended that Rivergate make no further disbursements for the concrete work until such time as the architect is satisfied that the installed concrete meets all code compliance and specifications. Atlantic wrote a letter dated May 17, 2005 to Rivergate after the meeting. Mr. Dias proposed deducting $44,816.00 from the contract price, which he stated represented the cost of the sidewalks, and stated that Rivergate owed Atlantic $151,444.60. This figure represented the billable balance, amount due from change orders and the amount retained by Rivergate from the prior payments. Mr. Aaron wrote Atlantic a letter on May 25, 2005 concerning the May 17, 2005 meeting. He stated that a compromise was offered, which he stated that Atlantic has rejected. He stated that there was no agreement about the cost of the sidewalks being $44,816.00 and stated that no change orders were authorized. The Aaron letter revisits the issue concerning the building codes and letter from the architect and suggested that Atlantic reconsider its position. Aaron stated that if Atlantic continued to fail to perform under the contract, they may be required to hire someone else, and that this could be a costly proposition. There follows a letter dated May 27, 2005 from Rivergate concerning the alleged change orders, stating the work was not authorized. Counsel's affirmation states that another meeting was held on May 29, 2005. In a follow-up letter dated June 1, 2005, Atlantic stated it would not do the sidewalks and that they are owed $174,478.20, which includes work done pursuant to the disputed change orders. The parties met again on June 2, 2005, apparently in an effort to work out a compromise or settlement. On June 7, 2005, Mr. Dias wrote a letter to Aaron. He stated that at the meeting, Melody DeSimone of Rivergate told him that it was in his best interests to complete the sidewalks. He further stated that Tim Owen (also from Rivergate) told him that he should settle and walk away. Mr. Dias Aaron where he stands on the matter. Ms. DeSimone wrote back to Mr. Dias the next day purportedly to clarify the issues discussed at the June 2, 2005 meeting. Attached to this letter is a spreadsheet that illustrates how they propose to settle the matter. She stated that the settlement offer expires on June 10, 2005. On June 8, 2005, Mr. Dias wrote to Aaron stating that even though he signed the contract back in April, he never received a copy of the contract signed by Rivergate/Birchwood Village and that he was "withdrawing" his signature from the contract. He declares his signature to be "null and void" because of his failure to sign the contract and to make the payments called for under the contract. Aaron wrote a letter to Mr. Dias dated June 11, 2005 acknowledging the letter and Atlantic's intention "to breach our contract."
In support of the April 22, 2005 date defendant annexed exhibit 5. However, it is unclear exactly what this document is. Although it appears to dates concrete was delivered, there is no affidavit from the person who prepared this document as to what it purports to show. The dates listed in this document begin on February 3, 2005 and end on April 22, 2005.
Annexed to the motion for summary judgment is an affidavit from Robert Kurzon, the architect. He states that he contacted Aaron on April 25, 2005 concerning the concrete work and the required testing. He states that he believes that Atlantic did not retain a laboratory to perform any of the testing required under the contract.
Rivergate argues that Atlantic has no right to payment because Atlantic breached the contract and refused to complete the project. Rivergate further argues Atlantic is not entitled to recover for the work performed because they did not substantially perform under the contract as the law provides (see, Jerry B. Wilson Roofing Painting, Inc. v. Jobco-E. R. Kelly Associates, Inc., 128 AD2d 953 [3d Dept. 1987]).
Rivergate also seeks to amend their complaint to seek reimbursement for monies paid to Atlantic. Rivergate contends that motions for leave to amend should be granted in the absence of surprise or prejudice or if the amendment lacks merit. Rivergate asserts that there is no prejudice to Atlantic and that the amendment has merit. Atlantic opposes the summary judgment stating that Rivergate breached their duty to pay. Atlantic asserts they are entitled to recover for the work already done. Atlantic asserts that the contract was clearly divided between buildings and sidewalks and that the buildings portion of the contract was substantially complete. Atlantic notes that Rivergate never signed the contract. Atlantic also notes that since depositions have not yet been conducted it is premature to determine the issue of liability. Atlantic further contends that Rivergate's proposed amendment clearly lacks merit.
As the movant for summary judgment, Rivergate bears the initial burden of establishing a prima facie showing of entitlement to judgment dismissing the causes of action as a matter of law and/or tendering sufficient evidence to eliminate any material issues of fact from the case ( Zuckerman v. City of NY, 49 NY2d 557, 562). Summary judgment is a drastic remedy which should only be granted when there clearly are no triable issues of fact (see Andre v Pomeroy, 35 NY2d 361, 364). If the movant meets the burden, then it becomes incumbent upon the non-moving party to show proof, in admissible form, of the existence of triable facts ( Friends of Animals, Inc. v. Associated Fur Mfrs., 46 NY2d 1065, 1067). The Court will view the evidence in the light most favorable to the party opposing the motion, giving that party the benefit of every reasonable inference ( see Flower v. Noonan, 271 AD2d 825, 826 [3d Dept. 2000]; Greco v Boyce, 262 AD2d 734 [3d Dept. 1999]). "The function of a court upon a summary judgment motion is issue finding, not issue determination ( Sillman v Twentieth-Century Fox-Film Corp., 3 NY2d 395; Missan v Schoenfeld, 95 AD2d 198, 205). If, as here, a genuine issue of fact is found to exist, summary judgment must be denied ( Rowan v Brady, 98 AD2d 638)" ( Super v. Abdelazim, 108 AD2d 1040, 1042 [3d Dept. 1985]).
Rivergate asserts that Atlantic had a contractual obligation to test the concrete, which, it is alleged, Atlantic failed to do. Rivergate withheld payment as a result of the alleged failure to test the concrete. Atlantic claims that Rivergate breached the contract when they failed to pay Atlantic for work completed. Rivergate's motion for summary is denied because they have not established a prima facie showing of entitlement to the relief sought. Rivergate sent Atlantic the first notice to proceed on December 20, 2004. The Notice to Proceed is a bare bones document with no provisions for testing. A revision document sent to Atlantic on December 22, 2004, does not include information concerning the concrete testing requirements. The contract was never even sent to Atlantic until April 13, 2005. The assumptions under which the parties were proceeding is a question of fact. Rivergate failed to provide sufficient evidence to entitle them to a summary judgment.
We turn next to Rivergate's request to amend its answer. Leave to amend pleadings is freely granted and courts are given considerable discretion in granting such motions (see CPLR 3025 [b]; Smith v Haggerty , 16 AD3d 967 , 968, [3d Dept. 2005]). The affidavits submitted in support of Rivergate's motion to amend, which detail Atlantic's breach, established that the proposed amendment was not plainly lacking in merit. Moreover, granting a motion to amend does not cause prejudice to Atlantic as it is aware of the germane facts. Atlantic does not claim any prejudice or surprise in their reply papers.
The motion for summary judgment dismissing the action is denied. The portion of the motion that seeks leave to amend the answer and counterclaim is granted.
This constitutes the decision and order of the Court. All papers, including this decision and order, are returned to the attorneys for plaintiff. The signing of this decision and order shall not constitute entry or filing under CPLR § 2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry.