Opinion
603290/03.
Decided May 25, 2004.
HERMAN CAHN, J.
Defendant AMCC Corp. moves to direct the plaintiff, Beckhard Richlan Szerbaty Associates, L.L.P., to immediately comply with its contractual obligations regarding the public works project known and described at I.S. 77 including, but not limited to, furnishing certain outstanding items allegedly needed for the issuance of a final certificate of occupancy.
By agreement dated May 12, 2001, the plaintiff agreed to provide certain architectural services to AMCC in connection with a design build project for a public intermediate school in Queens, New York. AMCC agreed to pay plaintiff $1,075,000 for its services, excluding change orders and additional work. At some point, a dispute arose between the parties. AMCC withheld payments from the plaintiff based upon allegations of errors and/or omissions in the design drawings, and plaintiff stopped working on the project. AMCC argues that this is in violation of the explicit terms of the subcontract which provides that: "Design Professional further agrees that it shall continue its performance under this Agreement during the pendency of any dispute." Further, AMCC argues to this Court that it is in "dire need of the architectural services which [plaintiff] is refusing to perform as a method to extort funds beyond what is due" (Marino 4/5/04 Aff. ¶ 4), and that "[t]imely completion of this contract is critical because AMCC and the [New York City School Construction Authority] have commitments to deliver a complete school building with a Certificate of Occupancy to meet the City's obligations to provide adequate school facilities to local communities in need thereof" ( id. ¶ 13).
Plaintiff commenced this action against AMCC on October 21, 2003. The original complaint alleged that AMCC has paid plaintiff only $806,250.00, and that there is a balance due of $389,931.28. A Verified Amended Complaint was filed on February 9, 2004, and names as additional parties Central Enterprises, Inc., Pioneer Window, Inc., MGC Stone Company, Inc., Five Star Electric Corp., The New York City School Construction Authority (SCA), and Liberty Mutual Insurance Company.
The Verified Amended Complaint makes the same factual allegations as to the amount owed. However, in the affidavit of Michael Szerbaty sworn to on April 19, 2004, submitted in opposition to this motion, he states that the balance owed since August 2001 is $269,951.50. No explanation is offered as to why this number differs from what the plaintiff alleges is owed in its pleadings.
In April, 2004, defendant AMCC made the instant motion. Based, in part, on the representation that the plaintiff was holding up the completion of a public school facility, and the provision of the contract herein above quoted, the Court granted a temporary restraining order, pursuant to which the plaintiff was directed to fully and completely comply with its contractual obligations regarding the Public Works Project known and described as P.S. 66 and I.S. 77, including, but not limited to, furnishing certain outstanding items enumerated by the defendants. Basically, the Court restrained the plaintiffs from leaving the job and failing to perform its duties under the two contracts pending the further decision of the Court. On April 27th, plaintiff filed a Notice of Appeal of the April 26th order.
Although there appears to be a clear cut violation of the subcontract by the plaintiff, I am constrained to deny this motion and vacate the April 26th temporary restraining order for several reasons.
First, this motion, in reality, seeks a preliminary injunction under CPLR 6301. As such, in the absence of a counterclaim by AMCC for specific performance of the subcontract or for a declaratory judgement, which would provide the jurisdictional predicate for the relief sought, the Court is without power to grant a preliminary injunction. Seebaugh v. Borruso, 220 AD2d 573 (2d Dept 1995); Arvay v. New York Telephone Co., 81 AD2d 600 (2d Dept 1981); Pen Kem, Inc. v. Goetz, 75 AD2d 579 (2d Dept 1980); see also Kozlowski v. Marguilies, 25 AD2d 635 (1st Dept 1966) (temporary injunction granted on basis of unpleaded claim improper). If AMCC has interposed an answer to either the original or amended complaint, it has failed to attach a copy to its motion papers.
The County Clerk's minutes reflect that an answer was filed on March 12, 2004, but the minutes do not reflect by which defendant, and unfortunately, none of the original pleadings in this case were physically located in the file.
None of the cases cited by AMCC that involve no stoppage of work clauses in public works contracts involved a request for preliminary or permanent injunctive relief. In Kalisch-Jarcho, Inc. v. City of New York ( 72 NY2d 727), the contractor commenced an action for a declaratory judgment that it was not contractually obligated to perform the disputed work. City of Rochester v. Vanderlinde Electric Co. ( 56 AD2d 185 [4th Dept 1977]) and Incorporated Village of Philmont v. A. Colarusso Sons, Inc. ( 85 AD2d 856 [3d Dept 1981]), both involved a request by the municipality for a declaratory judgment to declare the contractor and its surety in default. In Westinghouse Electric Corp. v. New York City Transit Authority ( 794 F Supp 79 [SD NY 1991], affd 14 F3d 818 [2d Cir 1994]), the contractor's lawsuit for damages was dismissed because it had walked off the job in violation of its contract with the Transit Authority.
Second, this is not a request to maintain the status quo, but actually, a mandatory injunction, which is considered extraordinary relief, is sought. In order to be entitled to a preliminary injunction, a movant must clearly demonstrate (1) a likelihood of success on the merits, (2) irreparable injury absent granting of the preliminary injunction, and (3) a balancing of the equities in the movant's favor. Doe v. Axelrod, 73 NY2d 748, 750 (1988); Olympic Tower Condominium v. Cocoziello, 306 AD2d 159, 160 (1st Dept 2003). "A mandatory injunction should not be granted, absent extraordinary circumstances, where the status quo would be disturbed and the plaintiff would receive the ultimate relief sought, pendente lite." St. Paul Fire and Marine Ins. Co. v. York Claims Service, Inc., 308 AD2d 347, 348 (1st Dept 2003), quoting Rosa Hair Stylists, Inc. v. Jaber Food Corp., 218 AD2d 793, 794 (2d Dept 1995).
Here, AMCC would receive the ultimate relief it seeks, the completion of plaintiff's work on the school without the payment of any additional funds. While defendant AMCC represented to the Court that it was in "dire need" of the plaintiff's services to complete construction of a public school facility, I am not convinced that the situation is all that dire. According to the affidavit of Michael Szerbaty, submitted in opposition to the motion, construction on the school is essentially completed, and subject to final approvals, the SCA took beneficial occupancy of the building and has utilized the school for classes since January 2003. The only remaining work by the plaintiff that is necessary to finalize the project is the completion of closeout paperwork. In response, AMCC acknowledges that the school is operational under a temporary certificate of occupancy. Mr. Szerbaty further alleges that any assertion that plaintiff's suspension of work is holding up issuance of a permanent certificate of occupancy is disingenuous and misleading, since the list of items necessary for finalization of the project, attached to the moving affidavit of Charles Marino as Exhibit D, reveals that there are many outstanding items to be completed by others, including other subcontractors and the SCA itself.
Third, the dispute resolution provision upon which AMCC relies provides in full:
The parties agree to endeavor to obtain settlement of Disputes in an amicable manner by recourse to mediation under the Voluntary Construction Mediation Rules of the American Arbitration Association. In the event the issue cannot be so resolved, the parties shall proceed pursuant to the laws of the State of New York, by the Supreme Court of the State of New York. In the event any such dispute is the subject matter of a dispute between the SCA and Contractor [AMCC], the Contractor may require that the dispute between the SCA and Contractor be resolved prior to the resolution of this dispute between the Contractor and the Design Professional. Design Professional further agrees that it shall continue its performance under this Agreement during the pendency of any dispute.
Subcontract, Article "C" on page 3. There is no evidence that either party has attempted to mediate this dispute before the AAA. The plain contractual language suggests that AMCC is required to seek mediation prior to seeking specific performance of the agreement in court.
Finally, the proper venue of this action appears to be Queens County, pursuant to CPLR 505(a), which provides that the proper venue of an action by or against a public authority is the "county in which the authority has its principal office or where it has facilities involved in the action." The principal office of the defendant SCA is Long Island City and the SCA facility involved in this action is located in Queens. According to the County Clerk's file, sometime in late March 2004, one of the other newly added defendants, MGC Stone Company, Inc., served and filed a demand to change venue from New York to Queens County, relying on CPLR 505(a). On March 30, 2004, plaintiff filed a consent to change venue to Queens County, before AMCC filed the instant order to show cause, and thus the Queens Supreme Court may be the proper court for this application.
For the foregoing reasons, it is
ORDERED that the temporary restraining order issued on April 26, 2004 is hereby vacated in its entirety and this motion is denied; and it is further
ORDERED that the parties are directed to appear for a conference on June 10, 2004 to discuss venue, mediation, appearances and pleadings in this case.