Opinion
No. 501155/12.
2013-03-28
BEYS SPECIALTY, INC., Individually and On Behalf of all other Beneficiaries of a Lien Law Article 3–A Trust, Plaintiff, v. EURO CONSTRUCTION SERVICES, INC., et al., Defendants.
Peckar & Abramson, P.C., New York City, for Plaintiff. Canfield, Madden & Ruggiero, LLP, Garden City, for Defendant.
Peckar & Abramson, P.C., New York City, for Plaintiff. Canfield, Madden & Ruggiero, LLP, Garden City, for Defendant.
DAVID I. SCHMIDT, J.
The following papers numbered 1 to 5 read on this motion:
+-----------------------------------------------------------------------------+ ¦Papers ¦Numbered ¦ +------------------------------------------------------------------+----------¦ ¦Notice of Motion/Order to Show Cause/ Petition/Cross Motion and ¦1–3 ¦ ¦Affidavits (Affirmations) Annexed ¦ ¦ +------------------------------------------------------------------+----------¦ ¦Opposing Affidavits (Affirmations) ¦4–5 ¦ +------------------------------------------------------------------+----------¦ ¦Reply Affidavits (Affirmations) ¦ ¦ +------------------------------------------------------------------+----------¦ ¦Affidavit (Affirmation) ¦ ¦ +------------------------------------------------------------------+----------¦ ¦Other Papers ¦ ¦ +-----------------------------------------------------------------------------+
Upon the foregoing papers, plaintiff Beys Specialty, Inc. (Beys) moves, (1) pursuant to CPLR 3211(a)(1) or, alternatively, 3212, for an order dismissing the four counterclaims of defendant Euro Construction Services, Inc., and discharging a certain mechanics lien, and (2) in the alternative, granting Beys leave to file an amended complaint pursuant to CPLR 3025(b).
BACKGROUND AND CONTENTIONS
The instant motion practice arises out of a lawsuit commenced by plaintiff on or about May 16, 2012, to recover overpayments allegedly made by it to Euro.
In early 2010, STV Construction, Inc. (STV) entered into a contract with the New York City Housing Authority (N.Y.CHA) to perform construction management services in connection with a certain project involving the James Weldon Johnson Houses, Phase IIA, in Manhattan, New York (the Project). In or about March 30, 2010, STV entered into a written agreement with Beys, pursuant to which Beys agreed to perform certain construction work at the Project (the Prime Contract). Thereafter, Beys entered into a written subcontract with Euro, pursuant to which Euro agreed to perform all of the concrete and masonry work at the Project (the Subcontract), for the consideration set forth in the Subcontract and in accordance with the terms of the Prime Contract. A copy of the Subcontract is annexed to plaintiff's moving papers.
The Subcontract provided that Euro was to receive partial payments during the course of its work on the Project. Before any such payment was to be made to Euro, the Subcontract required that Euro submit a signed release stating that it had been paid all amounts claimed to date (the Release). A total of nine Releases are annexed exhibits to Beys' motion. All are identically worded, save for the amount of consideration stated and their dates of execution.
With further regard to payment, Beys, in its Amended Complaint, asserts that: (1) Paragraph 2.1 of the Subcontract states that “quantities are approximate” and that they may be adjusted; (2) Paragraph 4.1 of the Subcontract states that Euro shall be paid the quantity of work determined by Beys, and that same may be increased or decreased; and (3) Paragraph 5.1 of the Subcontract provides that the partial payments are based on estimates and are subject to adjustment. In this context, it alleges that after Euro's work was completed, STV determined that the quantities stated in the partial payment estimates were overstated, that STV recalculated the quantities of work actually completed by Euro, and Euro, in writing, acknowledged the writing. As a result of the adjustments, Beys alleges that STV reduced the amounts earned by Beys, and that Euro, which has been overpaid in the sum of $1,162,941.50, refused and neglected to reimburse Beys despite its demand. In addition, in its Amended Complaint, Beys alleges that it paid the sum of $446,894.20 to Euro's own subcontractors because Euro failed to do so.
Several months after last performing any work on the Project, Euro, on or about August 20, 2012, filed a Notice of Mechanic's Lien on account of Public Improvement, dated August 9, 2010, in the amount of $1,510,101.46 (the Lien), and served its Answer with Counterclaims and Cross Claim seeking the same amounts as set forth in the Lien. Plaintiff disputes the validity of the Lien, and asserts that at no time during the Project did Euro indicate that extra or additional amounts were due to it, or that it had not been paid the sums due under the terms of the Subcontract. It further claims that it made the aforementioned payments to Euro in reliance on the Releases, each of which contains the following language:
The Undersigned [Euro] does hereby waive and release all liens, demands, claims or rights of lien of the undersigned on the following described premises and improvements thereon or on the monies or other considerations due or to become due from the New York City Housing Authority ... or STV Construction, Inc.
The undersigned hereby acknowledges that it has received payment in full, less retainage, for all deliveries of material to and/or for all work performed in connection with the Project through....
The last release signed by Euro is dated December 29, 2011, and contains the above language. No work was performed by Euro thereafter.
Euro's Amended Answer and Counterclaims/Beys' Reply
On or about August 28, 2012, Euro filed its Amended Answer with Counterclaims and Cross Claim, asserting, as separate causes of action against Beys, (1) breach of contract; (2) foreclosure of its Lien; (3) quasi-contract/unjust enrichment, and (4) account stated. Each of said causes of action, as counterclaims, seeks the same damages against Beys, in the amount of $1,501,101.46.
On or about September 18, 2012, Beys filed its Reply to the Counterclaims. On or about October 8, 2012, it filed an Amended Reply to the Counterclaims.
The Instant Motion
On the instant motion, Beys contends that Euro knowingly and intentionally signed and submitted the Releases without any reservations or exclusions that gave Beys any notice of any open claim, and avers that its Mechanic's Lien lacks any basis in fact.
In opposition, Euro, through its attorney and the affidavit of Chaudhry Yousaf (Yousaf), an officer and principal of Euro, alleges that although Euro and Beys entered into the written contract, Beys frequently verbally directed the performance of extra and/or differing work, which Euro claims it performed “without an offset or defect,” and filed the Mechanic's Lien after Beys failed to pay it for the work it performed. In opposition to plaintiff's application for relief under CPLR 3211, Euro contends that the instant motion should be rejected as untimely, as it was filed after Beys served its responsive pleadings to the defendant's Answer with Counterclaims and Cross Claim. Further, defendant opposes summary judgment on the grounds that (1) a Statement of Material Fact, required under Rule 15 of the Kings County Commercial Division Rules, is lacking; (2) Lien Law § 21, which governs the summary discharge of a mechanic's lien on account of public improvement, is not cited in Bey's moving papers, and has not been complied with; and (3) the releases were signed before any payments were made. Finally, in addition to disputing plaintiff's arguments that the Releases are unambiguous, defendant opposes summary judgment by contending that discovery is necessary in order for it to pursue its counterclaims.
DISCUSSION
Plaintiff's Motion Pursuant to CPLR 3211(a)(1)
“In the context of New York civil litigation, CPLR 3211 is a bread and butter' statute. CPLR 3211 encompasses procedural nuances which touch upon a huge spectrum of factual and legal scenarios” (Butler v. Cantinella, 58 AD3d 145, 146 [2008] ). As provided in subdivision (e), “[a]t any time before service of the responsive pleading is required, a party may move on one or more of the grounds set forth in subdivision (a)....” However, as correctly pointed out by defendant, plaintiff's motion to dismiss the counterclaims on CPLR 3211 grounds was interposed after the filing of its responsive pleading, and is therefore not subject to the court's consideration. In any event, plaintiff has failed to make an adequate showing of entitlement to relief under CPLR 3211. Having moved for dismissal of defendant's counterclaims pursuant to 3211(a)(1), namely, “a defense ... founded on documentary evidence,” plaintiff's papers must show that the documentary evidence conclusively refutes defendant's allegations ( see AG Capital Funding Partners, L.P. v. State Street Bank and Trust Co., 5 NY3d 582, 590–591 [2005];Goshen v. Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 326 [2002];Unadilla Silo Co. v. Ernst & Young, 234 A.D.2d 754 [1996] ). Where documentary evidence flatly contradicts the factual claims, the entitlement to the presumption of truth and the favorable inferences is rebutted (Ullmann v. Norma Kamali, Inc., 207 A.D.2d 691, 692 [1994] ).Here, contrary to plaintiff's contention, the documentary evidence relied upon does not resolve all factual issues as a matter of law ( see Goldstein v. Direcktor Holdings, Inc., 85 AD3d 728, 728 [2011] ).
Plaintiff's Summary Judgment Motion
Nevertheless, it does not follow that the court is barred from considering the merits of plaintiff's motion for summary judgment, which is sought by plaintiff as alternate relief. “Contrary to the [defendant's] contention, the [plaintiff] properly framed [its] motion as one for summary judgment dismissing the [counterclaim]. Although a motion for summary judgment is usually based upon the overall merits of the case rather than on an individual defense, once issue has been joined, a motion for summary judgment may be based on CPLR 3211(a) grounds which have been asserted in the [responsive pleading]” (Fischer v. RWSP Realty, LLC, 53 AD3d 594 [2008] ). Moreover, even if plaintiff had failed to request summary judgment treatment as alternate grounds for relief herein, CPLR 3211(c) authorizes the court to convert a motion made under CPLR 3211(a) into one for summary judgment without giving the parties notice of its intention to do so, where, as here, “the respective submissions of both parties demonstrate that they are laying bare their proof and deliberately charting a summary judgment course” (Hendrickson v. Philbor Motors, Inc., 102 AD3d 251, 257 [2012] [citations omitted]; see also Hopper v. McCollum, 60 AD3d 304, 305 [2009] ).
Accordingly, the court will consider plaintiff's motion for summary judgment dismissing Euro's counterclaims.
Plaintiff's references to CPLR 3211(a)(7), raised for the first time in its Reply papers, are not stated in its original notice and will be disregarded ( see Adler v. Suffolk County Water Authority, 306 A.D.2d 229 [2003];Scott v. Albord, 292 A.D.2d 367 [2002] )
Under CPLR 3212, the burden rests initially upon plaintiff, as the moving party, to come forward with sufficient proof in admissible form to enable the court to determine that it is entitled to judgment as a matter of law. If this burden cannot be met, the court must deny the relief sought (CPLR 3212; Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ). However, if it is determined that plaintiff has made a prima facie showing of its entitlement to summary judgment, “the burden shifts to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action” (Garnham & Han Real Estate Brokers v. Oppenheimer, 148 A.D.2d 493 [1989];see also Zuckerman, 49 N.Y.2d at 562). Mere conclusory statements, expressions of hope, or unsubstantiated allegations are insufficient to defeat the motion (Gilbert Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966 [1988] ).
In the case at bar, the court, affording Euro, as the non-moving party, the most liberal construction of all facts, allegations and documents, determines that Beys has made the requisite prima facie showing.
Plaintiff supports its motion with the affidavit of its Corporate Secretary, Anna Kougentakis (Kougentakis), copies of the written releases executed by Euro between February 26, 2011 and December 29, 2011, and a copy of the Subcontract. Referring to the relevant provisions in the Subcontract, Kougentakis asserts that “Euro submitted partial payment applications to Beys during the course of the Project. Before any payments were made to Euro, the Subcontract required that Euro submit a signed release stating that Euro had been paid all amounts claimed to date.” She further alleges that “at no time during the Project did Euro indicate that extra or additional amounts were due to it, or that it had not been paid the sums due under the terms of the Subcontract,” and that “Beys made payment in reliance on the Releases.”
Article 5 of the Subcontract governed the Method, Schedule and Terms of Payment. Section 5.1 set forth Euro's entitlement to partial payment which “shall constitute advances against the Contract until final payment is made and accepted.” Section 5.3 set forth the required contents and review process of the Applications for Partial Payments, a/k/a Requisitions. Section 5.6 (“Receipts and Releases of Liens”) obligated Euro to furnish, among other things, “a certified affidavit of payment and waiver of lien for the Work performed and materials furnished through the date covered by the last preceding partial payment....” Finally, Section 5.7 (“Time of Payment”) stated that “[t]his provision does not fix a time for payment but rather establishes a condition precedent and an absolute pre-condition to the Subcontractor's right to payment under this Agreement, regardless of whether or not this Subcontractor's Work is at issue between the Owner and Contractor, and regardless of the reason for the Owner's non-payment,” and Section 5.9 both provided a detailed procedure for determining and paying the final balance due, and, in paragraph (b), stated that “[t]he acceptance of final payment shall constitute a waiver of all claims by Subcontractor.”
With regard to the legal effect of the Releases in question, “[I]t is well settled “a general release is governed by principles of contract law” (Magini v. McClurg, 24 N.Y.2d 556, 562 [1969] ) and that “absent fraudulent inducement or concealment, misrepresentation, mutual mistake or duress, a valid release that is clear and unambiguous on its face constitutes a complete bar to an action on a claim that is the subject of the release” (Diontech Consulting, Inc. v. New York City Hous. Auth., 78 AD3d 527, 528 [2010] [citations omitted] [action for delay damages barred by releases; change order did not specify that releases were not intended to encompass payment for supposed extra work] ); see also Hack v. United Capital Corp., 247 A.D.2d 300, 301 [1998];Martin Iron & Const. Corp. v. E.W. Howell Co., 242 A.D.2d 608, 609 [1997] [executed releases barred recovery for extra work] ). Unambiguous releases bar suits on causes of action arising on or prior to the date of their execution but will not bar subsequent claims “unless they are specifically embraced within the release or fall within the fair import of its terms” (Murray–Gardner Management, Inc. v. Iroquois Gas Transmission System, L.P., 229 A.D.2d 852, 854 [1996] ). Whether the language set forth in a release unambiguously bars a particular claim is a question of law appropriately determined on a motion for summary judgment based upon the entire release and without reference to extrinsic evidence ( see Zilinskas v. Westinghouse Elec. Corp., 248 A.D.2d 777, 779 [1996] ).
Upon its assertion and evidentiary submissions demonstrating that Euro, through the course of the project and in accordance with the Subcontract, executed a series of unambiguous releases, each covering the period ending as of the date stated therein, plaintiff has established, as a prima facie matter, that Euro did not show that extra or additional amounts were due to it, barring recovery for any claim accruing prior to the execution of any such release. Additionally, plaintiff has demonstrated that (1) the language of the final release, executed by Euro on December 29, 2011 and covering the period ending December 25, 2011, released any and all claims for payments due for any and all work done by it prior to that date (emphasis provided), and (2) there is no contention that Euro performed any work relating to the project after December 29, 2011.
Having made the requisite showing, the burden shifts to defendant to raise an issue of fact in order to defeat plaintiff's motion. Defendant has failed to do so.
Euro has failed to make any showing in support of its contention that the releases are ambiguous. As stated by the Court of Appeals:
“A written agreement that is clear, complete and subject to only one reasonable interpretation must be enforced according to the plain meaning of the language chosen by the contracting parties. When the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the parties' reasonable expectations. To determine whether a writing is unambiguous, language should not be read in isolation because the contract must be considered as a whole. Ambiguity is determined within the four corners of the document; it cannot be created by extrinsic evidence that the parties intended a meaning different than that expressed in the agreement and, therefore, extrinsic evidence may be considered only if the agreement is ambiguous. Ambiguity is present if language was written so imperfectly that it is susceptible to more than one reasonable interpretation”
(Brad H. v. City of New York, 17 NY3d 180, 185–186 [2011] [citations and internal quotation marks omitted; see also 131 Heartland Blvd. Corp. v. C.J. Jon Corp., 82 AD3d 1188, 1189 [2011] [“(w)hen the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the parties' reasonable expectations”] ).
Euro does not dispute that it executed the multiple releases in writing between February 26, 2011 and December 29, 2011. However, it fails to raise an issue of fact in opposition to plaintiff's showing that the releases are unambiguous and enforceable, and by their plain language bar recovery for any extra work allegedly performed ( see Diontech Consulting, Inc., 78 AD3d at 527). While it points to certain facial irregularities on some of the instruments, Euro does not address the language of the releases themselves, which is replicated throughout the entire series, but rather directs its challenge to certain dates of execution noted therein, which flaws are attributable to plaintiff and/or the notary who executed the documents.
Moreover, defendant is silent as to plaintiff's contention that, irrespective of any alleged fatal defects in earlier releases, defendant, by the terms of the final release dated December 29, 2011, unambiguously released plaintiff “from any and all causes of action ... which [Euro] ever had or now has ... by reason of delivery of material and/or the performance of work relating to the construction of the Project ... through December 25, 2011.”
Euro does not allege that it refused to accept payment on those releases which it now claims are defective.
As stated above, Yousaf alleges that Beys required Euro to execute each release prior to its making payment to Euro for the work performed. However, Euro does not indicate how, if at all, such requirement deviated from the terms of the Subcontract. In addition, while he asserts, in non-specific language, that Beys “did not always make the payment in the amount on the corresponding release,” that it verbally directed Euro to perform “extra and additional work,” and that Euro performed the work and submitted invoices, “including for work past the date of the last release,” Yousaf does not offer any non-speculative opposition to plaintiff's representation that Euro had concluded all work on the Project prior to December 25, 2011.
The court next turns to defendant's contention that it was denied payment for extra work performed. It is a well settled principle in contract law that “extrinsic evidence” may be considered only upon a finding that the writings are ambiguous ( see Boster–Burton v. Burton, 73 AD3d 671, 672 [2010] ). Euro's vague contention that it performed additional work pursuant to verbal change orders is entitled to no consideration, as it would require the court to look beyond “the four corners of the contract” ( see Critelli v. Commonwealth Land Title Ins. Co., 98 AD3d 556, 557 [2012] ). Any attempt to vary the terms of the parties' Agreement would violate the parol evidence rule ( see Salzman v. Bowyer Productions, Inc., 42 A.D.2d 531 [1973];see also Zimmcor (1993) Inc. v. Permasteelisa North America Corp., U.S. Dist Ct ND NY, 1:10–CV–1160, Slip Copy, 2012 WL 1085776, D'Agostino, J., 2012] ). Accordingly, there is no merit to said contention, and no support for defendant's counterclaims sounding in breach of contract or account stated.
Additionally devoid of merit is defendant's contention that Beys has failed to comply with the provisions of New York Lien Law § 21 and is thus not entitled to summary judgment discharging its Lien. Lien Law § 21 sets forth the means by which a lien against the amount due or to become due a contractor from the state or a public corporation for the construction or demolition of a public improvement may be discharged, and includes, as grounds, the apparent lack of a valid lien.
However, in the case at bar, Beys has not, in the first instance, initiated a proceeding for summary discharge of the defendant's lien claim, but rather seeks summary judgment dismissing defendant's counterclaim to foreclose upon said lien claim. Consequently, in the present setting, Beys is not bound by the procedural scheme set forth in the statute ( see Northern Tree Serv. v. Donovan Tree Serv., Inc., 36 A.D.2d 22 [1971] ).
.Lien Law § 21(7) provides: “7. Where it appears from the face of the notice of lien that the claimant has no valid lien by reason of the character of the labor or materials furnished and for which a lien is claimed, or where the notice of lien is invalid by reason of failure to comply with the provisions of section twelve of this article, or where it appears from the public records that such notice has not been filed in accordance with the provisions of section twelve of this article, the contractor or any other party in interest, may apply to the supreme court of this state, or to any justice thereof, or to the county judge of the county in which the notice of lien is filed, for an order summarily discharging of record the alleged lien. A copy of the papers upon which application will be made together with a notice setting forth the court or the justice thereof or the judge to whom the application will be made at a time and place therein mentioned must be served upon the lienor not less than five days before such time. If the lienor can not be found, such service may be made as the court, justice or judge may direct. The application must be made upon a verified petition accompanied by other written proof showing a proper case therefor, and upon the approval of the application by the court, justice or judge, an order shall be made discharging the alleged lien of record.
Equally without merit is defendant's opposition to that branch of plaintiff's motion for dismissal of its third counterclaim, sounding in quantum meruit, or quasi contract. “The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter. A quasi contract' only applies in the absence of an express agreement, and is not really a contract at all, but rather a legal obligation imposed in order to prevent a party's unjust enrichment” (Clark–Fitzpatrick, Inc. v. Long Is. R.R., 70 N.Y.2d 382, 388 [1987];Morales v. Grand Cru Assocs, 305 A.D.2d 647 [2003] ). Here, in admitting to the existence of the written Subcontract which governed the parties' respective rights and obligations, defendant cannot simultaneously pursue a remedy in quantum meruit, and its reliance on the inapposite holding in CNP Mech, Inc. v. Allied Bldrs, Inc. (84 AD3d 1748 [2011] ), where there was a showing that the plaintiff seeking recovery for extra work under the subject agreement waived the requirement for a written change order, is unavailing.
Finally, the court finds no merit to defendant's opposition to summary judgment based upon (1) the speculative and conclusory ground that discovery is needed, or (2) the ground that the plaintiff has failed to comply with the requirements of Rule 15 of the Kings County Commercial Division. As to the first contention, it is well settled that the mere hope that discovery will uncover evidence that will establish the existence of an issue of fact provides no basis, pursuant to CPLR 3212(f), for postponing a decision on a summary judgment motion ( see Kennerly v. Campell Chain Co., 133 A.D.2d 669 [1987];Gateway State Bank v. Shangri–La Private Club for Women, 113 A.D.2d 791 [1985],affd67 N.Y.2d 627 [1986] ).
Further, any contention based on a purported failure to comply with the requirements of Rule 15 is “a mere non-prejudicial irregularity that may be ignored” ( Hiller v. Buel, 33 Misc.3d 1213[A][2011] ).
.CPLR 3212(f) provides: “Facts unavailable to opposing party. Should it appear from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion or may order a continuance to permit affidavits to be obtained or disclosure to be had and may make such other order as may be just.”
Based upon the foregoing, the court grants plaintiff's motion for summary judgment, dismisses all counterclaims as alleged, and discharges the subject Lien.
This constitutes the decision and order of the court.