Opinion
Index No. 155907/2019
09-17-2019
In the Matter of the PETITION OF POP UP MOB, LLC, Petitioner, for an Order pursuant to Lien Law §59, vacating and cancelling the Notice of Lien Filed by Eboxt, Inc., as Lienor, Respondent.
NYSCEF DOC. NO. 25
DECISION and ORDER
Mot. Seq. 001 HON. EILEEN A. RAKOWER, J.S.C.
Petitioner Pop Up Mob, LLC ("Petitioner") moves pursuant to Lien Law § 59 for an Order vacating and cancelling the Notice of Mechanic's Lien filed on March 1, 2019, for failure to commence an action to enforce such lien on or before June 10, 2019, as demanded in the Notice to Commence Action dated April 26, 2019. Lienor/Respondent Eboxt, Inc. ("Respondent") opposes.
Background/Parties' Contentions
On March 1, 2019, Respondent filed a Notice of Mechanic's Lien with the Office of the Clerk of the County of New York, in the sum of "$26,450.00 claiming against 925 Madison Avenue, Inc., as owner of the property, and Petitioner as the persons, for whom the work was allegedly done, and affecting" Block 1390, Lot 15, 959 Madison Avenue "Altuzarra", New York, New York (the "Premises"). (Verified Petition at 1).
Petitioner contends that it paid the full amount due to Respondent. On April 1, 2019, Petitioner asserts it filed an application and pursuant to Sections 19(4) and 21(5) of the New York Lien Law, received a discharge of the mechanic's lien by submitting a bond for the amount of $29,095.00 (the "bond"). Petitioner contends that on May 3, 2019, it served Respondent a notice pursuant to Lien Law § 59, requiring Respondent to commence an action to enforce the mechanic's lien or to demonstrate by June 10, 2018, why the mechanic's lien should not be vacated or cancelled. Petitioner contends that to date, Respondent has not taken any action to enforce the mechanic's lien. Petitioner asserts that the Notice of Lien and the Bond "jeopardizes [it's] business". (Verified Petition at 2).
Respondent contends that on April 9, 2019, Petitioner incorrectly sent a letter to Respondent and not Respondent's counsel, requesting an itemized statement pursuant to Lien Law § 38. Respondent asserts that on May 1, 2019, it sent an itemized lien statement to Petitioner. Respondent contends that on May 29, 2019, Petitioner acknowledged Respondents itemized statement and disputed the amount of Respondent's labor and materials. On June 13, 2019, Respondent contends that prior to Petitioner filing this action, Respondent took one last attempt to resolve the dispute by sending a demand for payment letter to Petitioner. Respondent asserts that on the same day as it sent the letter, Petitioner filed this action. On July 9, 2019, Respondent filed a foreclosure action against Petitioner.
At oral argument on July 16, 2019 it was represented that such Summons and Complaint had not yet been served. --------
Legal Standards
Lien Law § 59, states:
A mechanic's lien notice of which has been filed on real property or a bond given to discharge the same may be vacated and cancelled or a deposit made to discharge a lien pursuant to section twenty may be returned, by an order of a court of record. Before such order shall be granted, a notice shall be served upon the lienor, either personally or by leaving it at his last known place of residence, with a person of suitable age, with directions to deliver it to the lienor. Such notice shall require the lienor to commence an action to enforce the lien, within a time specified in the notice, not less than thirty days from the time of service, or show cause at a special term of a court of record, or at a county court, in a county in which the property is situated, at a time and place specified therein, why the notice of lien filed or the bond given should not be vacated and cancelled, or the deposit returned, as the case may be. Proof of such service and that the lienor has not commenced the action to foreclose such lien, as directed in the notice, shall be made by affidavit, at the time of applying for such order.
"Citing Lien Law § 19(4) ...the Court may discharge a mechanic's lien where the defendant has executed a bond for 110% of the lien amount and delivered such bond to the plaintiff and the County Clerk." J.B. Custom Masonry & Concrete, Inc. v. Sutera, 990 N.Y.S.2d 437 [Sup. Ct, Queens County 2014].
"Lien Law § 19 provides that, in an action to foreclose a mechanic's lien that has been bonded, the plaintiff must still obtain a judgment to foreclose the lien, although such judgment will be enforced against the bond rather than the property." Romar Sheet Metal, Inc. v. F.W. Sims, Inc., 8 Misc. 3d 1021(A) [Sup. Ct., NY County 2005]. The mechanic's lien "no longer attaches to the real property, 'the judgment is against the property only as a matter of form. The decree may adjudge that the plaintiff has a good and valid lien for a specified amount, and that but for the filing of the bond the plaintiff would be entitled to a judgment of foreclosure." Warlock Paving Corp, 222 A.D.2d at 1098, quoting 77 N.Y. Jur.2d, Mechanics' Liens, § 318, at 52; and see Louis J. Sigl, Inc. V. Wertheimer, 223 A.D. 806 [4th Dept. 1928], aff'd 250 N.Y. 605 [1929].
"Where Petitioner proves that service of the notice to enforce the lien was made on the lienor, and that the lienor failed to commence an action to foreclose the lien, the court may vacate and cancel the lien". Lions Group II, LLC v Sampogna Contracting Corp., No. 157573/17, 2017 WL 6541843, at *1 (N.Y. Sup. Ct. Dec. 18, 2017). "The decision whether to vacate the lien rests in the discretion of the court and depends on the facts of the case." Id. "Unless good cause is shown, including why the lienor failed to prosecute the lien, the lien should be discharged". Id.
"Evidence that negotiations to settle a claim have been in progress for some time provides a ground for denying a motion to discharge a lien upon the ground that the lienor did not comply with the Lien Law § 59 notice." In re Xhema of N.Y., Inc., No. 103573-12, 2012 WL 6682187 [Sup. Ct, New York County 2012].
Discussion
Petitioner received a discharge of the mechanic's lien by submitting a bond pursuant to Sections 19(4) and 21(5) of the New York Lien Law. The Court declines to exercise its discretion to excuse Respondent from not timely commencing its action to foreclose on the bond. Respondent has not demonstrated that the parties engaged in settlement negotiations which would justify the delay in filing the foreclosure action. The correspondences between the parties submitted as part of the record do not show that the parties engaged in settlement discussion but rather demonstrates that the parties maintained their respective positions. Therefore, since Respondent's foreclosure action against Petitioner was not brought timely under Lien Law § 59, the lien is discharged.
Wherefore it is hereby
ORDERED and ADJUDGED that the Order to Show Cause is granted and the Notice of Lien filed by Respondent EBOXT, Inc., on March 1, 2019, pertaining to real property known as 956 Madison Avenue "Altuzarra", Block 1390, Lot 15, New York, New York, naming 925 Madison Avenue, Inc., as owner of the property, and Petitioner Pop Up Mob, LLC as the persons for whom the work was allegedly done, and affecting, is DISCHARGED; and it is further
ORDERED that, upon service of this order with notice of entry, the Clerk of the County of New York is directed to vacate and cancel the notice of such lien.
This constitutes the decision and order of the court. All other relief requested is denied.
Dated: September 17, 2019
/s/_________
Eileen A. Rakower, J.S.C.