Opinion
Index No. 655545/2023
12-17-2024
North Stucco Construction, Inc., Plaintiff, v. USD 142 W 19 LLC, M.I.R. CONSTRUCTION GROUP LLC, OTL ENTERPRISES LLC, and SURETEC INSURANCE COMPANY, Defendants.
DiLorenzo & Rush, Bronx, NY (Kenneth R. Rush of counsel), for plaintiff. Cordova & Schwartzman, LLP, Garden City, NY (Jonathan B. Schwartzman of counsel), for defendants USD 142 W 19 LLC, OTL Enterprises LLC, and SureTec Insurance Company.
Unpublished Opinion
DiLorenzo & Rush, Bronx, NY (Kenneth R. Rush of counsel), for plaintiff.
Cordova & Schwartzman, LLP, Garden City, NY (Jonathan B. Schwartzman of counsel), for defendants USD 142 W 19 LLC, OTL Enterprises LLC, and SureTec Insurance Company.
GERALD LEBOVITS, J.
This action arises from a dispute over payment for work performed on a construction project in Manhattan. Plaintiff, North Stucco Construction, Inc., served as a subcontractor on the project, subcontracting work from defendant M.I.R. Construction Group LLC, which in turn subcontracted from the general contractor, defendant OTL Enterprises LLC. The construction project occurred on property owned by defendant USD 142 W 19 LLC.
Plaintiff has alleged that it is owed $34,050 for labor and services it provided on the project under its subcontract. On November 3, 2022, plaintiff filed a mechanic's lien against the property. In late November 2022, USD142 filed a bond to discharge the lien. The bond was issued by defendant SureTec Insurance Company.
On November 2, 2023, plaintiff brought this action. Plaintiff is asserting a claim for lien foreclosure against SureTec and USD142, claims in contract and promissory estoppel against M.I.R., and a claim for unjust enrichment against USD142, OTL, and M.I.R.
USD142, OTL, and SureTec now move to dismiss plaintiff's lien-foreclosure claim and to discharge the bond and the underlying lien. The motion is granted.
Although the notice of motion states the motion is brought by OTL in addition to USD142 and SureTec (all of which have the same counsel), it does not appear movants seek relief with respect to plaintiff's claims against OTL.
DISCUSSION
In moving to dismiss and discharge, USD and SureTec rely on the terms of Lien Law § 17. Under § 17, a mechanics' lien expires one year after filing of the notice of lien, unless the duration of the lien is extended. As relevant here, the statute provides two methods for extending a mechanic's lien. The lienor may, within the initial one-year period, bring a lien-foreclosure action and file a notice of pendency. Alternatively, the lienor may, within the initial one-year period, file an extension of the lien with the County Clerk of the county in which the lien is filed.
An extension obtained through filing an extension-of-lien with the County Clerk will last only for one year. To obtain any further extensions, the lienholder must then either bring a lien-foreclosure action or obtain a court order extending the lien for another one-year period. (See Lien Law § 17.)
Here, plaintiff brought the current lien-foreclosure action just shy of one year from the filing of the notice of lien. It is undisputed that plaintiff did not also file a notice of pendency or file an extension of the lien with the New York County Clerk. Movants contend that the lien has therefore expired and must now be extinguished by this court. This court concludes, on constraint of Matter of Pizzarotti, LLC v New York Concrete Washout Sys., Inc. (210 A.D.3d 445, 446 [1st Dept 2022]), that movants are correct.
It is undisputed that if this court concludes the lien has expired, movants are entitled to discharge of the bond, as well. (See Matter of Flintlock Realty & Constr. Corp. (Grawer Bear Constr. Corp.), 188 A.D.2d 532, 533 [2d Dept 1992].)
Plaintiff's principal argument in opposition to the motion is that under the circumstances presented here, timely filing of this lien-foreclosure action sufficed to extend the lien even absent filing of a notice of pendency. As plaintiff contends, because USD142 bonded the lien, Lien Law § 17 expressly prohibits filing of a notice of pendency against the property-notwithstanding that § 17 also makes filing of a notice of pendency against the property a condition of the first method of extending the lien.
Plaintiff points out that in this scenario, the Court of Appeals held 90 years ago that "since the Legislature conditioned the continuance of the lien upon the performance of two acts, one of which, by its express command, was forbidden to be done, necessarily continuance of the lien must follow, if the one act permitted to be done is performed." (White Plains Sash & Door Co. v Doyle, 262 NY 16, 20-21 [1933].) In other words, if the mechanic's lien has been bonded, "the bringing of the action to foreclose is sufficient in itself to continue the lien." (Id. at 21; accord Matter of Lindt & Sprungli USA v PR Painting Corp., 292 A.D.2d 610, 614 [2d Dept 2002].) In reaching this result, White Plains Sash & Door relied in part on the respective functions of a lien-discharge bond and a notice of pendency. That is, the Court of Appeals said, filing of a lien-discharge bond in effect shifts the lien from the underlying real property to the bond, freeing the property from encumbrance; and in doing so, it eliminates the need for the notice of pendency-to warn potential purchasers of the property of the (no longer extant) encumbrance. (See White Plains Sash & Door, 262 NY at 19-20.)
The Legislature still has not amended Lien Law § 17 to address the inconsistency discussed in 1933 in White Plains Sash & Door.
The difficulty for plaintiff, as defendant emphasizes, is the First Department's recent decision in Matter of Pizzarotti. There, the Court held that whether or not a mechanic's lien has been bonded, commencement of a lien-foreclosure action is insufficient under Lien Law § 17 to extend the lien absent filing of a notice of pendency or an extension of lien. (210 A.D.3d at 446.) The Court noted that even if the presence of a lien-discharge bond precludes filing of a notice of pendency, a lienor still may obtain an extension through the other method of "extend[ing] the lien as contemplated by Lien Law § 17." (Id.)
Strictly speaking, Matter of Pizzarotti states that a lienor would be required also to obtain "an extension by court order[] in order to continue the lien." (210 A.D.3d at 446.) But the court-order requirement was removed by a 1989 amendment to Lien Law § 17, in favor of the option of merely filing an extension of lien with the appropriate county clerk. (See L 1989, ch 691, § 1.) The distinction between these two lien-extension methods is not material here.
In reaching this conclusion, though, Matter of Pizzarotti did not discuss the Court of Appeals' holding in White Plains Sash & Door. Nor did it address that the Court of Appeals treated as immaterial that a lienor at the time could extend a lien under § 17 through obtaining a court order. (Compare 262 NY at 19 [discussing the court-order-based means of extending the lien], with id. at 20-21 [holding that commencement of a lien-foreclosure action is sufficient to extend a bonded lien].)
The Court of Appeals decisions in Noce v Kaufman (2 N.Y.2d 347, 351 [1957]) and Walker v Buffalo Elec. Constr. (55 N.Y.2d 843, 844 [1982), cited by Matter of Pizzarotti, are inapposite here: No indication appears in the decisions of the Court of Appeals or Appellate Division in those cases that the mechanic's liens at issue were bonded.
Nonetheless, Matter of Pizzarotti is a squarely on-point First Department decision, issued only two years ago. This court may not disregard it. And given that decision's holding, movants here are correct that the commencement of this action did not, standing alone, extend plaintiff's lien. As a result, that lien has expired.
Accordingly, it is
ORDERED that defendants' motion to dismiss plaintiff's first cause of action is granted; and it is further
ORDERED that plaintiff's complaint is dismissed as against defendant SureTec; and it is further
ORDERED that the balance of the claims and defenses in the action are severed and shall continue; and it is further
Ordered that defendants shall serve a copy of this order with notice of its entry on all parties and on the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/1jd/supctmanh/E-Filing.shtml); and it is further
ORDERED that upon service of notice of entry, the County Clerk is directed
(i) to discharge, vacate, and cancel the mechanic's lien filed on November 3, 2022, by North Stucco Construction Inc. in the amount of $34,050.00 against the property located at 142 West 19th Street, New York, NY, 10011 Block 794, Lot 63; (ii) to discharge, vacate, and cancel Bond No. 3509163, dated November 17, 2022, in the amount of $37,455.00 executed by USD 142 W 19 LLC (principal) and SureTec Insurance Company, and to return the original bond to defendants; and (iii) to enter judgment accordingly.