Opinion
107110/2011
10-30-2017
Red Hook Construction Group-1, LLC, Plaintiff, v. 127 Fulton, LLC, and 140 WENDOVER II, LLC, Defendants.
Appearances: Greg Trif, Esq. Of Counsel McElroy, Deutsch, Mulvaney & Carpenter, LLP Attorneys for Plaintiff Red Hook Construction Group- 1, LLC 1300 Mt. Kembel Avenue Morristown, NJ 07962 Philip J. Campisi, Jr., Esq. Westerman Ball Ederer Miller Zucker & Sharfstein LLP Attorneys for Defendant 140 Wendover II, LLC 1201 RXR Plaza Uniondale, NY 11556 David Pfeffer, Esq. Tarter, Krinsky & Drogin, LLP Attorneys for Defendant 127 Fulton LLC 1350 Broadway, 11th Floor New York, NY 10018
Appearances: Greg Trif, Esq. Of Counsel McElroy, Deutsch, Mulvaney & Carpenter, LLP Attorneys for Plaintiff Red Hook Construction Group- 1, LLC 1300 Mt. Kembel Avenue Morristown, NJ 07962 Philip J. Campisi, Jr., Esq. Westerman Ball Ederer Miller Zucker & Sharfstein LLP Attorneys for Defendant 140 Wendover II, LLC 1201 RXR Plaza Uniondale, NY 11556 David Pfeffer, Esq. Tarter, Krinsky & Drogin, LLP Attorneys for Defendant 127 Fulton LLC 1350 Broadway, 11th Floor New York, NY 10018 Carmen Victoria St. George, J.
On June 20, 2011, plaintiff Red Hook Construction Group-1, LLC (Red Hook) commenced this action to foreclose a mechanic's lien against defendant 127 Fulton, LLC (Fulton), and HSBC Bank, USA, National Association (HSBC) by means of a summons and verified complaint. It filed a supplemental summons and amended verified complaint, which discontinued against co-defendant HSBC only, and named 140 Wendover II, LLC (Wendover) as a defendant, on December 19, 2011. According to the amended complaint, Fulton owns the property located at 127 Fulton Street, New York, New York, Block 91, Lot 12, BIN 1001266 (the property), and obtained loans from HSBC Bank USA, NA (HSBC) to build a mixed use residential building on the property (the development project). Around March 22, 2007, Red Hook contracted with Fulton to perform work, labor, and services in connection with the development project. According to Red Hook, the value of this work, labor, and services is $723,850.00. Red Hook alleges that Fulton did not pay any of this amount although Red Hook demanded such payment. Red Hook ceased its work on the project, and on September 28, 2010, it filed a notice of lien as well as a notice of pendency. The complaint asserts five causes of action, based on 1) the lien, 2) unjust enrichment, 3) recovery for work, labor, and services, 4) breach of contract, and 5) account stated. It seeks a declaration of its rights under the lien, a determination as to the amount due, a judgment of $723,850.00, a determination of the priority of this lien, and a sale of the property in order that Fulton can pay the judgment. In its answer, Fulton argues that the mechanic's lien is void and invalid because Red Hook has greatly exaggerated the debt, and it seeks damages, costs, and attorney's fees. Wendover's answer essentially echoes the contentions of Fulton, and additionally states that it has the first lien on the premises. Plaintiff's second amended complaint adds a sixth cause of action against the bond which resulted in the discharge of the lien. In addition, on July 24, 2017, by stipulation, Red Hook discontinued the first cause of action, as it was based on the discharged lien.
This change was due to an assignment of the mortgage and other documents from HSBC to Wendover.
Fulton asserts that William A. Kettler, one of the principals of Fulton, notified Red Hook that it could not pay for the work because HSBC stopped funding the development project.
Currently, Fulton moves for summary judgment seeking dismissal of two claims, the second cause of action for unjust enrichment and the third cause of action for quantum meruit. It argues that the unjust enrichment claim reiterates the allegations in its breach of contract claim. Particularly, it states that Red Hook's conclusory assertion that Fulton accepted and retained the benefits of Red Hook's work is insufficient to create a separate cause of action for unjust enrichment. Fulton contends that in support of its quantum meruit claim, Red Hook relies on the contract with the conclusory addition that some of the work was performed at Fulton's special request. In addition, Fulton notes that the breach of contract claim incorporates the paragraphs which make the allegations for the quantum meruit and unjust enrichment causes of action. Furthermore, it notes, where a party moves for breach of contract, it cannot recover in quasi contract for the same acts.
In support of its position, Fulton submits the affidavit of William A. Kettler, one of its two owners during the period in question. Kettler asserts that Red Hook has the right to compensation "for the work it performed and requisitioned pursuant to the Construction Agreements" (Kettler Aff. ¶ 14). He indicates that Red Hook performed additional work "in furtherance of the Development Project but outside the scope of the Construction Agreements" (Id. ¶ 16). He states that he believes Fulton owed Red Hook at least $723,850.00 for the work it performed "in furtherance of the Development Project" (Id. ¶ 20).
In opposition, plaintiff submits the affidavit of Christopher Lynch, one of its principals. Lynch asserts that Red Hook did everything required under the contract, and in addition performed work that was outside of the scope of the parties' agreements (the out-of-scope work), which Fulton requested partly orally and partly in writing. Other out-of-scope work consisted of modifications to the contract. He states that Fulton approved of all the extra work in question, and he insists that, contrary to the allegations in the answer, the total of the contractual and out-of-scope work is at least $723,850.00. Moreover, he contends, in June 2011, after Red Hook acquired the lien and commenced this litigation, it contacted the Debt Acquisition Group (DAG), which was purchasing the building, in hopes of resolving this debt. Instead, he states, representatives of DAG and Fulton not only refused to render payment but threatened to orchestrate a "friendly foreclosure" which would "wipe out" his company's lien (Lynch Aff. ¶¶ 11, 12, 15).
Fulton's reply challenges the statements in Red Hook's opposition. It reiterates that in the complaint, the facts underlying the unjust enrichment and quantum meruit causes of action are the same as those upon which Red Hook bases its breach of contract claim. It states that because in opposition Red Hook states it is owed at least the amount of the lien, Red Hook has made it clear that the contractual debt is all-encompassing. It contends that any subsequent work allegedly occurred after the commencement of this action and the filing of the lien, and therefore those claims are not properly raised in this action. In addition, Fulton points out that in 2014 it commenced a special proceeding in which it sought an accounting verifying the amount Red Hook seeks in its lien on the property. In opposing that petition, Red Hook stated that the mechanics lien was limited to the amount Fulton owed under the written contracts, and that Red Hook had not yet sued on the change orders representing the additional work it performed at the property. Further, Red Hook's counsel's affirmation explicitly reiterated any additional work was included neither in the lien nor the current litigation. Fulton has annexed a copy of the affirmation in question to its papers. It asserts that Red Hook has not shown the existence of a material fact and, moreover, that its prior and current statements in fact support Fulton's argument.
This matter was argued on the record before Justice Lucy Billings, who previously presided over this action, on June 1, 2017 and July 24, 2017. The Court has the transcripts from those arguments before it and has considered these documents thoroughly. After careful consideration, this Court denies the instant motion.
A claim should be dismissed as duplicative where it "seeks identical relief based upon the same facts and circumstances" (Alper v Seavey, 9 AD3d 263, 266 [1st Dept 2004]). Fulton correctly points out that the complaint, which has been amended twice, asserts that plaintiff has been damaged for unjust enrichment and quantum meruit in the amount of $723,850.00, which is identical to its alleged damages for breach of contract. The ad damnum clauses also seek $723,850.00 on each claim. Further, as Fulton notes, the three causes of action all incorporate the same preceding paragraphs of the complaint and do not make additional allegations. Thus, at first glance, Red Hook's complaint treats the claims as equivalent and based on the same facts.
The Court relies on the second amended complaint, which was filed during the pendency of this motion.
In opposition, however, counsel for Red Hook has shown that the purportedly duplicative claims may stand. "Causes of action and grounds for relief may be pleaded in the alternative and are not barred for inconsistency" (Ellis v. Abbey & Ellis, 294 AD2d 168, 170 [1st Dept 2002]; see Charney v Sullivan & Cromwell LLP, 17 Misc 3d 1105[A], 2007 NY Slip Op 51832 [U], *2 [Sup Ct NY County 2007] [citing CPLR § 3014]). Here, there was no formal approval for some of the work, and the Kettler affidavit and other of Fulton's comments suggest this work was out- of-scope and not compensable under the contract claim. Where, as here "[t]here is a dispute as to the scope of work intended by the original . . . contract and whether plaintiff is owed money outside the scope of that agreement" (Loheac v Children's Learning Center, 51 AD3d 476, 476 [1st Dept 2008] [involving oral contract]), pleadings in the alternative are proper (See Auguston v Spry, 282 AD2d 489 [2nd Dept 2001]). Thus, the second and third causes of action may stand.
Fulton's reply papers, asserting that certain portions of the work were compensable but were not covered by the agreement (Kettler Aff. ¶ 16), do not support dismissal of the quantum meruit and unjust enrichment claims as duplicative. Instead, they bolster Red Hook's argument that because the parties dispute which of its work is covered by the contract, it may plead in the alternative (See Veritas Capital Management, L.L.C. v Campbell, 82 AD3d 529, 530 [1st Dept 2011] [allowing quantum meruit claim to existed alongside contract claim where validity and terms of oral contract were in dispute]; Lax v Design Quest, NY, Ltd., 118 AD3d 490, 490 [1st Dept 2014] [alternative theory of unjust enrichment was correctly sustained where the parties disagreed as to the scope and existence of "various alleged express contracts"]). Similarly, Fulton's contention that defendants do not owe the full $723,850.00 under the agreement does not support its argument for summary judgment, but merely shows that issues of fact exist.
Therefore, it is
ORDERED that the motion is denied. Dated: October 30, 2017 ENTER: ____________________________________ Carmen Victoria St. George, J.S.C.