Opinion
24561/09.
Decided October 19, 2011.
In this action, inter alia, to recover damages for breach of contract and to foreclose a mechanic's lien for private improvement, the defendant 258 Devoe LLC (defendant) moves for an order: (a) pursuant to Lien Law § 19 (6), summarily discharging of record a Notice of Mechanic's Lien, dated October 23, 2007 and filed October 24, 2007 (the lien), by the plaintiff Hai Ming Construction Corp. (plaintiff), (b) pursuant to CPLR 3211, dismissing plaintiff's third cause of action for foreclosure of the lien, (c) pursuant to CPLR 6514 (a), canceling plaintiff's Amended Notice of Pendency, dated and filed February 5, 2010, and (d) pursuant to CPLR 6514 (c), awarding it costs and expenses occasioned by the filing and cancellation of such notice of pendency, in addition to any costs of this action (motion sequence No. 4). For the reasons stated below, the motion is denied in its entirety.
The Chronology of Events
June 2004: By deed, dated June 3, 2004 and recorded June 9, 2004, defendant acquired 258 Devoe Street in Brooklyn, New York (the original property). At that time, the original property consisted of one three-story apartment building (the original building) with five attached garages ( see Kristin P. Corey April 14, 2011 Affidavit [Corey Aff.], ¶ 2). At that time, the original property was designated on the New York City Tax Map as a single lot (Lot 9) on Block 2920.
December 2004: An entity called Corsim, Inc. entered into a general contractor agreement with plaintiff to construct three eight-unit residential buildings upon a portion of the original property. Corsim, Inc. subsequently assigned all of its rights under the general contractor agreement to defendant. Plaintiff has demolished all of the garages on the original property and constructed three new buildings in their place (Corey Aff., ¶ 3). The original building at 258 Devoe Street has remained intact and retained its original address (Corey Aff., ¶ 4). The three new buildings constructed by plaintiff were subsequently given the addresses of 260, 264, and 268 Devoe Street (Corey Aff., ¶ 4).
According to the Amended Verified Complaint, dated February 5, 2010, Corsim, Inc. was named as a defendant. It is unclear from the record whether Corsim, Inc. continues as a defendant in this action.
In accordance with this court's order, dated January 13, 2010, a related action, entitled 258 Devoe LLC v Hai Ming Construction Corp., index No. 31775/08 (Sup Ct, Kings County) has been joined with this action for the purpose of trial. The complaint (in ¶ 8) in the related action, as amended by this court's order, dated March 11, 2011, is used, in part, to identify the parties and recite the sequence of events.
The record is silent when the new buildings were given their street addresses.
March 2007:On March 15, 2007, Lot 9 was subdivided into Lots 15-18 as was reflected in the "alteration" book maintained by the New York City Department of Finance — Tax Map Office ( see Exhibit A to defendant's reply affirmation). As noted below, however, the effective date of the Lot 9 subdivision into Lots 15-18 was December 5, 2008, as indicated on the New York City Department of Finance Digital Tax Map ( see Exhibit B to defendant's reply affirmation).
October 2007: On October 24, 2007, plaintiff filed the lien for the alleged non-payment under the construction agreement ( see Exhibit A to defendant's motion). The lien was renewed on October 17, 2008 ( see County Clerk's Lien Records). According to the lien, the work was performed, and materials were supplied, between December 8, 2004 and June 7, 2007. The lien was for a claimed amount of $386,614.48 and the "labor performed and material furnished" were "for the construction of buildings, including . . . hardware, windows, concrete, paint, floors, doors, and electrical items." The property subject to the lien is described as "258 Devoe Street, Brooklyn, New York, Block 2920, Lot 9[.] See attached [metes and bounds] description [of the original property]."
The lien was further extended by a Notice of Pendency, dated and filed on September 29, 2009, as amended by an Amended Notice of Pendency, dated and filed February 5, 2010.
December 2008: According to the New York City Department of Finance Digital Tax Map, the subdivision of former Lot 9 into new Lots 15-18 became effective on December 5, 2008. The original building, which was not part of the construction performed by plaintiff, retained the original address at 258 Devoe Street, but was subdivided from Lot 9 and redesignated as Lot 15. The three newly constructed buildings were each assigned a new lot, i.e., Lots 16-18.
September 2009 — October 2010: Plaintiff filed a verified complaint, as amended on February 5, 2010, asserting, in its third cause of action, that it was entitled to foreclose on its lien. In October 2010, defendant interposed an answer in which, among other things, it denied the material allegations of the amended complaint.
April — June 2011: On April 15, 2011, defendant served the instant motion. By order, dated June 6, 2011, this court vacated the portion of the lien which covered the original building on that part of former Lot 9 which has been subdivided into Lot 15. The court reserved decision on the remainder of defendant's motion.
The Parties' Contentions
Defendant contends that plaintiff's lien is invalid, in toto, because it does not comply with the provisions of Lien Law § 9 ("Contents of notice of lien"), which (in subsection 7) requires that "[t]he notice of lien shall state . . . [t]he property subject to the lien, with a description thereof sufficient for identification; and if in a city . . ., its location by street and number, if known." According to defendant, the lien is defective on its face and thus invalid under Lien Law § 19 (6) ("Discharge of lien for private improvement") since it fails to adequately describe the property pursuant to Lien Law § 9 (7). Specifically, defendant points out that plaintiff used an incorrect lot number to identify the property subject to the lien, as well as included the street address and lot number of the original building that was not part of plaintiff's construction work. Referring to the "alteration book" for Block 2920 maintained by the New York City Department of Finance — Tax Map Office, defendant contends that Lot 9 had been subdivided into separate lots on March 15, 2007 before plaintiff filed the lien on October 24, 2007. Defendant points out that the Digital Tax Map for Block 2910 indicates that Lots 15-18 existed as of March 15, 2007.
Lien Law § 19 (6) provides, in relevant part, that:
"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 for any other reason the notice of lien is invalid by reason of failure to comply with the provisions of section nine of this article, . . ., the owner . . . may apply to the supreme court of this state . . . for an order summarily discharging of record the alleged lien."
Plaintiff, in opposition, contends that defendant mistakenly uses the current lot numbers (15-18) instead of the lot number (9) at the time the lien was filed (citing Lien Law § 3 ["Mechanic's lien on real property"]). Plaintiff also relies on Lien Law § 4 (1) ["Extent of lien"], which provides, in relevant part, that, "[s]uch lien shall extend to the owner's right, title or interest in the real property and improvements, existing at the time of filing the notice of lien, or thereafter acquired, except as hereinafter in this article provided" (emphasis added). Plaintiff contends that because the subdivision of Lot 9 into Lots 15-18 was not effective until December 5, 2008, plaintiff's lien, when filed on October 24, 2007, correctly identified, at that time, the subject property as Lot 9. In this regard, plaintiff relies on a certified copy of the Digital Tax Map which indicates that the effective date of the subdivision of Lot 9 into Lots 15-18 was December 5, 2008. Plaintiff also references a March 6, 2007 mortgage, which was recorded on April 20, 2007 on Lot 9, even though it covered properties located at 258, 260, 264, and 268 Devoe Street ( see Exhibit B to plaintiff's affirmation in opposition). Plaintiff further notes that, pursuant to Lien Law § 10 (2) ["Filing of notice of lien"], a misfiled lien in a block index is corrected, rather than dismissed. Finally, plaintiff points out that, in accordance with Lien Law § 23 ("Construction of this article"), "[t]his article [2 of the Lien Law] is to be construed liberally to secure the beneficial interests and purposes thereof" and that "[a] substantial compliance with its several provisions shall be sufficient for the validity of a lien and to give jurisdiction to the courts to enforce the same."
Lien Law § 3 provides, in relevant part, that:
"A contractor . . ., who performs labor or furnishes materials for the improvement of real property with the consent or at the request of the owner thereof, or of his agent, . . . shall have a lien for the principal and interest, of the value, or the agreed price, of such labor, . . . or materials upon the real property improved or to be improved and upon such improvement, from the time of filing a notice of such lien as prescribed in this chapter . . ."
Lien Law § 10 (2) provides, in relevant part, that:
"Where the county clerk indexes liens in a block index, every notice of lien presented to the clerk of a county of filing, in order to entitle the same to be filed, shall contain in the body thereof, or shall have endorsed thereon, a designation of the number of every block, on the land map of the county, which is affected by the notice of lien. The county clerk shall cause such notice of lien to be entered in the block index suitably ruled to contain the columns listed in the preceding paragraph, under the block number of every block so designated. In cases where a notice of lien shall have been filed without such designation or with an erroneous designation, the county clerk, on presentation of proper proof thereof, shall enter such instrument in the proper index, under the proper block number of every block in which the land affected is situated, and shall, at the same time, make a note of such entry and of the date thereof in every place in which such instrument may have been erroneously indexed, opposite the entry thereof, and also upon the instrument itself, if the same be in his possession or produced to him for the purpose, and the filing of such instrument shall be constructive notice as to property in the block not duly designated at the time of such filing only from the time when the same shall be properly indexed" (emphasis added).
Discussion
The sole issue is whether the inclusion of superseded Lot 9, which had previously identified the entire original property, as well as the omission of new Lots 16-18 and the new street addresses of 260, 264, and 268 Devoe Street, invalidate the lien.
As noted, by order dated June 6, 2011, this court vacated the portion of the lien that covered the original building on that part of former Lot 9 which has been subdivided into Lot 15.
(a)
Lien Law § 9 (7) ("Contents of notice of lien") requires "a description that identifies the property and that is in substantial compliance with the provisions of the statute sufficient to provide jurisdiction to the courts to enforce it" ( Dovin Constr. Co., Inc. v 7MDR of Queens, Inc., 149 Misc 2d 822, 825 [Sup Ct, Queens County 1991]). If the lien description includes more land than was directly improved by the construction work, "that fact is not necessarily fatal to the validity of the lien . . . All that is required is a description that identifies" ( Jannotta v Noslac Realty Corp., 231 App Div 864, 864 [2d Dept 1930] [internal citation omitted]).
More recently, the Second Department upheld the validity of a mechanic's lien which included in its description some property which was not directly improved by the builder's construction ( see East Coast Mines Materials Corp v Golf Course Properties Co., 228 AD2d 545, 547 [2d Dept 1996]). The Second Department, citing Jannotta, reasoned that:
"As the description included too much property, but nevertheless included and identified all the property on which the lien could properly be claimed, the defect was not fatal, as the lien would be limited and restricted only to that part against which it could properly be enforced. Clearly, the instant lien was to cover the parcels of the golf course upon which services were rendered and materials were delivered by the plaintiff. To invalidate the lien based upon such a technical defect would do violence to Lien Law § 23, which provides that such law is to be construed liberally to secure the beneficial interests and purposes thereof and that . . . substantial compliance with its several provisions shall be sufficient for the validity of a lien" ( Id. at 547 [internal quotation marks omitted]).
See Metro Masonry, Inc. v West 56th St. Assoc., 147 Misc 2d 565, 568 (Sup Ct, NY County 1990) ("Although plaintiff here filed the lien against more property than permissible, it has been held that the fact that a description includes more property than was directly benefited by the improvement is not necessarily fatal to the validity of the lien") (citing Jannotta); see also Matter of Myrtle Owner LLC, 32 Misc 3d 1221(A), 2011 WL 2991778, *4, 2011 NY Slip Op 51376(U) (Sup Ct, Kings County 2011) (Demarest, J.) (same).
This case is analogous to the decision in SGS Assoc., LLC v R.A. German Constr. Corp. ( 15 Misc 3d 1135[A], 2007 WL 1439054, 2007 NY Slip Op 51001[U] [Sup Ct, Kings County 2007] [Harkavy, J.]). In SGS, the property owner petitioned for an order, pursuant to Lien Law § 19 (6), to summarily discharge mechanic's liens filed by respondents, an architect and a contractor. The property owner had entered into separate contracts with the architect and the contractor, identifying the subject property as Block 997, Lots 24-26. Four years later and after the property owner had filed a declaration of condominium, the three lots formerly known as 24-26 were subdivided into nine new tax lots; one for each of the nine planned condominium units. The new tax lots were identified as Lots 1001-1003, 1101-1103, and 1201-1203, one for each of the new condominium units to be built (with the block number remaining the same). Three of the nine units were thereafter purchased by private homeowners. A year later, respondents filed liens against SGS, describing the property as Lots 24-26. The property owner argued that the liens were defective because, among other things, they incorrectly described the property by using obsolete lot numbers. The court rejected that argument, holding, in relevant part (at page 3), that:
"Petitioner's use of the original block and lot numbers is not a fatal flaw and does not compel the court to find that the liens at issue constitute improper blanket liens on the property. Lien Law § 23 provides that the Lien Law is to be construed liberally to secure the beneficial interests and purposes thereof. A substantial compliance with its several provisions shall be sufficient for the validity of a lien and to give jurisdiction to the courts to enforce the same. In this case, and although the liens utilize the original block and lot numbers, the language of both liens limits each on its face to only that property in which SGS still[ ] holds an interest."
In addition, pursuant to Lien Law § 12-a (2) ("Amendment"), which allows for amendment by leave of court if there is no prejudice to any other "existing lienor, mortgagee or purchaser in good faith," the SGS court (at pages 6-7) granted respondents leave to amend their liens "to make the language of the liens clearer, to make reference to the current lot numbers, and to more clearly exclude that property which is no longer owned by SGS."
(b)
In the instant case, the description of the property included in the lien is not invalid on its face and is in substantial compliance with Lien Law § 9 (7) despite plaintiff's use of superseded lot numbers and thus including excess property, as well as despite plaintiff's failure to include the new lot numbers. In accordance with Lien Law §§ 3 and 4 (1), the title or interest in the real property and improvements is measured at the time of filing the notice of lien. At the time when plaintiff filed the lien on October 24, 2007, the subdivision of Lot 9 had not yet become effective. Although defendant provides a copy of the "alteration" book and a certified Digital Tax Map of Block 2920 indicating that Lots 15-18 existed as of March 15, 2007, the Digital Tax Map expressly indicates that the effective date of the subdivision was December 5, 2008, which was after the lien had been filed. In any event, according to the SGS holding, the date when the subdivision occurs is not crucial to the lien validity. In fact, although the lots in SGS had been subdivided before the liens were filed, the SGS court nevertheless held that the use of the superseded lot numbers was sufficient to identify the property and was not fatal to the validity of the liens.
Additionally, if plaintiff here had checked the Automated City Register Information System on the New York City Department of Finance Web site, it would have found under a single Lot 9 a mortgage that was recorded on April 20, 2007 against 258, 260, 264, and 268 Devoe Street. An ACRIS search for Lots 16-18 at the time when the lien was filed may not have provided plaintiff notice of the existence of such a subdivision.
The first document recorded against Lots 16, 17, and 18 was, in each case, a mortgage, dated September 11, 2011 and recorded on October 11, 2011.
As noted, the present case is similar to SGS, in that in both cases liens were filed under the correct block number but used lot numbers that have been superseded because of a subsequent subdivision of the original lots. The properties identified were not incorrect. Rather, both plaintiff here and the architect/contractor in SGS used the original lot numbers, instead of the newly subdivided ones, to identify the property subject to the lien. As was held in SGS, the use of the original, but later superseded, lot numbers did not invalidate a lien. Likewise, a fair and liberal reading of the lien notice, as is prescribed under Lien Law § 23, would deem plaintiff's description of the property sufficient under Lien Law § 9 (7) and allow for a correction of such a mistake in this case.
As a result of this decision, the remaining branches of defendant's motion are rendered moot.
Conclusion
Accordingly, it is
ORDERED that defendant's motion is denied in its entirety; and it is further
ORDERED that, subject to the compliance with the notice provisions of Lien Law § 12-a (2), plaintiff may move for leave to amend its lien nunc pro tunc to October 24, 2007, which is the original date when it filed its lien; and it is further
ORDERED that plaintiff's counsel, Thomas D. Czik, Esq., is directed, within fourteen days after entry of this decision and order, to serve upon defendant's counsel, Ronald Francis, Esq., a copy of same with notice of entry pursuant to CPLR 2103 (b) and 5513 (a), and to file proof of service thereof with the clerk's office; and it is further
ORDERED that the parties are reminded to appear for a conference in Part COMM-2 on February 28, 2012.
This decision also constitutes the order of the court pursuant to Rule 202.8 (g) of the Uniform Rules for the New York State Trial Courts.