Source: https://www.newyorkcommercialconstructionlawyer.com/page/2/
Timestamp: 2019-04-26 00:50:23+00:00

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Subcontractors face significant challenges when they are confronted with a general contractor which fails or refuses to pay for a contract balance or extra work. For any one of innumerable reasons, general contractors can be undercapitalized such that even a victory at trial can produce a hollow result when the execution of a judgment is returned unsatisfied. A Subcontractor’s right to file a mechanic’s lien is the Subcontractor’s primary protection under these circumstances. However, where a mechanic’s lien foreclosure action is not viable, either because there is no lien fund or there is some defect in the lien, a Subcontractor is left with limited recourse against the project owner.
For example, in the recent case of Palma Realty Assoc., LTD v. BLDG Oceanside, LLC, 59 Misc.3d 1206(A) (Sup. Ct. N.Y. Co. 2018), the Supreme Court, New York County, dismissed a subcontractor’s breach of contract and quantum meruit claims against the project owner. The plaintiff, Palma Realty Associates, sued the project owner, BLDG Oceanside, LLC, and the contractor with whom it was in privity, Master Development, Inc., for breach of contract, quantum meruit, account stated and to foreclose a mechanic’s lien. For reasons undisclosed by the Court’s opinion, Palma discontinued its causes of action to foreclose upon its Mechanic’s Lien and for an account stated. The Court granted Palma’s motion to dismiss the remaining causes of action for breach of contract and quantum meruit insofar as asserted against it, and severed and continued the breach of contract and quantum meruit claims as asserted against Master.
The Palma Court dismissed the breach of contract cause of action under the well-settled and well-known rule that a subcontractor generally cannot maintain a breach of contract action against the project owner because there is no privity of contract between them, citing such authorities as Eastern States Electrical Contractors v. William L. Crow Construction Co., 53 A.D.2d 522 (1 st Dept. 1989) and Braun Equip. v. Meli Borelli Assoc., 220 A.D.2d 312 (1 st Dept. 1995). See also Perma Pave Contracting Corp. v. Paerdegat Boat and Racquet Club, Inc., 156 A.D.2d 550 (2d Dept. 1989).
Claims involving adjoining land owners have proliferated in the last several years as construction activities in the New York City area have continued to be especially active. One area of concern, especially for builders of town houses and other residences is how to deal with party walls. The First Department, in Ehrenberg v. Regier, 142 A.D.3d 765, 37 N.Y.S.3d 10 (1st Dep’t 2016), addressed various issues of note regarding these structures.
A party wall is a wall between two adjoining properties which exists for the common benefit of both owners. These walls provide for the support of structures on each property and can only be altered by one owner if they do not damage the building owned by the adjacent neighbor. Each owner of a party wall owns it to the extent the wall is on his property, and each owner has an easement of use and support over the wall to the extent it is on the neighbor’s property.
In Ehrenberg, the party wall in question dated to the 1840’s. After a bulge was found in a section of the party wall the Ehrenbergs removed and replaced a portion of the wall. After this work was performed it was discovered that the party wall was damaged. The Ehrenbergs commenced a legal action alleging that the damage was the result of the Reiger’s negligent maintenance of the Reiger’s side of the party wall. Reiger counterclaimed, alleging that the reconstruction and repair to the party wall undertaken by the Ehrenbergs had caused the damage.
Courts are increasingly being called upon to decide disputes over access to a neighboring property during construction, and their guide is RPAPL § 881, titled “Access to adjoining property to make improvements or repairs.” However, because the statue is vague, a body of cases interpreting RPAPL § 881 has developed that has expanded on concepts only implied in the statute. A recent Appellate Division case confirms that the application of RPAPL § 881 can only be understood in light of the cases interpreting the statute.
The petition and affidavits, if any, shall state the facts making such entry necessary and the date or dates on which entry is sought. Such license shall be granted by the court in an appropriate case upon such terms as justice requires.

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