Opinion
Index No. 505980/2019 Motion Seq. Nos. 10 13
01-09-2024
PARK PREMIUM ENTERPRISE INC. D/B/A PARK DEVELOPERS &BUILDERS, Plaintiff v. JOSEPH KAHAN, ESTHER KAHAN, WELLS FARGO N.A. as mortgagee, and WORLD WIDE PLUMBING Defendants
Unpublished Opinion
DECISION AND ORDER
HON. WAYNE SAITTA, JUSTICE.
The following papers read on this motion: NYSCEF Doc Nos
Notice of Motion/Order to Show Cause/ Petition/Affidavits (Affirmations) and Exhibits 173-184, 224-235
Cross-motions Affidavits (Affirmations) and Exhibits Answering Affidavit (Affirmation) 188, 268-286
Reply Affidavit (Affirmation) 212-223, 287-288 Supplemental Affidavit (Affirmation) 293-294
This action is to foreclose a mechanic's lien filed by Plaintiff on Defendants' residence located at 1124 56 Street, Brooklyn, NY.
Defendants' contracted Plaintiff to renovate their residence. The contract between the parties provides that Defendants were to pay Plaintiff (1) a general contractors fee of $210,000 above costs, (2) all construction costs, and (3) a 33% markup on all labor costs when Plaintiff uses its own employees.
Plaintiff alleges that its total charge for construction, including construction costs, the general contractors fee, and the 33% markup was $1,131,229,87. Plaintiff further alleges that Defendants paid a total of $1,075,000,00, leaving a balance of $56,229.89.
Defendants JOSPEH KAHAN and ESTHER KAHAN (KAHAN Defendants) move for an Order (1) dismissing this action and Plaintiffs mechanic lien as against them, (2) vacating Plaintiffs notice of pendency, and (3) for a judgment against Plaintiff pursuant to Lien Law §39.
Plaintiff moves for (1) leave to amend their Complaint to assert a cause of action for an account stated, (2) summary judgement on that cause of action, and (3) an Order of foreclosure on their mechanics lien.
Plaintiff's motion
Plaintiff moves to amend the Complaint to add a cause of action for an account stated. Plaintiff argues that it has pled an account stated claim independent of its breach of contract claim alleging that Plaintiff provided labor and materials which were routinely invoiced, partially paid, and never objected to.
Defendants counter that the account stated claim is duplicative of the existing breach of contract claim.
An account stated is duplicative of a breach of contract claim when both claims arise out of the same facts and seek the same damages (see Lavazza Premium Coffees Corp. v. Prime Line Distributors Inc., 575 F.Supp.3d 445 [SD NY 2021]).
Plaintiff alleges under both causes of action that it provided Defendants with invoices for labor and materials provided, and that Defendants failed to pay all of those invoices and owes Plaintiff $56,229.89.
Claims for accounts stated are intended for recovery based on conduct without a written agreement. As discussed further infra, Plaintiff s breach of contract claim is based on a fully integrated written contract that contains the entire agreement between the parties.
The validity of the contract is not contested by either side. The disputed issue is whether the 33% markup for Best Enterprise and Metro Electrical labor costs were allowed under the contract.
"[A] claim for an account stated may not be utilized simply as another means to attempt to collect under a disputed contract" (Baptist Home of Brooklyn v. Schott, 74 ADsd 849, 851 [2d Dept 2010]; Simplex Grinnell v. Ultimate Realty LLC, 38 A.D.3d 600 [2d Dept 2007]).
Nor can an account stated be used to create liability where none otherwise exists (DL Marble &Granite Inc. v Madison Park Owner, LLC, 105 ADsd 479 [1st Dept 2013], see also Gurney, Becker &Bourne, Inc. v. Benderson Development Co., Inc., 47 N.Y.2d 995 [1979]).
Here, the invoices sent to Defendants do not establish that Defendants agreed to pay a 33% markup on Best Enterprise labor costs. None of these invoices included a 33% markup, unlike the Metro Electrical invoices. The total of the invoices submitted for Best Enterprise was $277,839.19 not $365,768.66. The additional 33% markup for Best Enterprise appears in the revised itemized lien statement, not in the invoices.
It cannot be said that payment of invoices that did not include a markup provide a basis for demonstrating that Defendants consented to the markup.
Therefore, Plaintiff's claim herein for an account stated is duplicative of its breach of contract claim and Plaintiff's motion to amend must be denied.
Defendants motion
Defendants move for summary judgement arguing that the invoices submitted by the Plaintiff demonstrate that Plaintiff has overcharged Defendants for more than the amount of the lien.
Specifically, Defendants argue that the 33% markup applied by Plaintiff to the charges of Metro Electrical and Best Enterprise were not allowed under the contract, and total more than the $56,229.89 claimed in the lien.
As a preliminary matter, Defendants' motion does not violate the general proscription against successive summary judgment motions because it was based on the evidence that a 33% markup was made on the Best Enterprise charges which was not disclosed until after the date of the order denying the earlier motion for summary judgment (see La Touche v. Terezakis, 132 ADsd 956 [2d Dept 2015]; Auffermann v. Distl, 56 A.D.3d 502 [2d Dept 2008]; Staib v. City of New York, 289 A.D.2d 560 [2d Dept 2001]).
Plaintiff alleges that Metro Electrical and Best Enterprise personnel were considered employees of Plaintiff and subject to the 33% markup. Plaintiff argues that Defendants understood that laborers from Best Enterprise would be considered an employee pursuant to Paragraph 7 of the Contract and that Defendants were aware of the markup because the markup was included on Best Enterprise's invoices, and that Defendants never objected to the application of the markup to Metro Electrical and Best Enterprise.
Defendants argue that Metro Electrical and Best Enterprise were subcontractors and not Plaintiffs employees. Defendants also argue that they were unaware of any markup for Metro Electrical or Best Enterprise and that the Best Enterprise's invoices did not contain the markup.
Defendants object to the $92,643.73 markup as to Best Enterprise's employees arguing that under the Contract, the markup only applies when Plaintiff uses its own employees and Best Enterprise's employees are not Plaintiff's employees.
Defendants also object to the $93,914.43 recoded in the itemized lien as to Metro Electrical arguing that Plaintiff already added the markup to the labor costs in the Metro Electrical invoice bringing the total to $63,836.80. Defendants argue that Plaintiff incorrectly increased the amount for Metro Electrical from $63,836.80 to $93,914-43, essentially double dipping by adding a second markup. The Metro Electrical invoice does show that the actual cost was only $47,997.14 and then adds the 33% markup bringing the total to $63,836.80. Plaintiff argues that the difference between the $63,836.80 and the $93,914.43 is the cost of material, which was invoiced separately, not a second markup. Plaintiff does not submit evidence of these invoices for materials.
Pursuant to the parties' contract, Plaintiff is entitled to an additional 33% markup when it engages its own employees:
7. Labor Costs of Contractor Performed Work Contractor may engage its own employees to perform work, where necessary, including but not limited to the engagement of a foreman, with the understanding the Owner shall pay for the direct cost of said employee(s) as per the Contractor's payroll, which is to be calculated via a time sheet recording the weekly hours worked by said employees. In addition, the Contractor shall be entitled to a markup of 33% above said payroll fees to offset the cost of corresponding insurance, accounting, and other overhead expenses related to said payroll fees. Such payroll fees and corresponding markup shall be considered part of the cost of construction and payable by the Owner to Contractor as described in the payment requisition.
"[W]hen parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing" (W.W.W. Associates v. Giancontieri, 77 N.Y.2d 157,162 [1990]).
Further, the contract is a fully integrated document that specifically provides that it contains the entire agreement between the parties:
1. Contract Documents
The contract documents consist of this Agreement; Conditions of the Agreement (General, Supplemental and other Conditions); any other documents referenced to herein; and any changes or other modifications mutually agreed to in writing that may follow the execution of this Agreement. These listed form the entire and integrated agreement between the Parties and supersedes any prior negotiations, representations, settlements or agreements, either written or oral.
"Since the written agreement is clear and complete on its face, the operation of the parol evidence rule effectively bars any action to enforce the oral agreement" (Doherty v. New York Tel. Co., 202 A.D.2d 627, 628 [2d Dept 1994]).
Here, the contract between the parties is clear that the 33% markup only applies when Plaintiff utilizes its own employees. Best Enterprise is a staffing agency and a separate corporation from Plaintiff. Plaintiff s principal, Aaron Lebovits, concedes that he was neither the principal nor owner of Best Enterprise.
As Best Enterprise employees are not Plaintiffs employees, Plaintiff is not entitled to a 33% markup.
Since the $92,643.73 markup on the Best Enterprise charges is more than Plaintiffs $56,229.87 mechanics lien, this action to foreclose the lien must be dismissed.
It is therefore not necessary to reach the question of whether Plaintiff was entitled to a 33% markup on Metro Electrical's labor invoice.
WHERFORE, it is hereby ORDERED that Plaintiffs motion to amend the complaint is denied; and it is further, ORDERED that Defendants' motion to dismiss this action is granted; and it is further, ORDERED that the Kings County Clerk is directed to vacate Plaintiff's mechanics lien; and it is further, ORDERED that that portion of the motion which seeks to cancel the notice of pendency is denied with leave to renew pursuant to CPLR 6514(a).
This constitutes the decision and order of the Court.