Source: http://www.leagle.com/decision/In%20NYCO%2020130325302/5%20BROS.,%20INC.%20v.%20D.C.M.%20OF%20N.Y.,%20LLC
Timestamp: 2017-05-24 11:30:38
Document Index: 324831192

Matched Legal Cases: ['§ 19', '§ 19', '§ 9', '§ 12', '§ 12', '§ 9', '§ 9', '§ 9', '§ 9', '§ 9', '§ 42', '§ 310', '§ 9', '§ 9', '§ 12']

5 BROS., INC. v. D.C.M. OF N.Y., LLC | 2013 NY Slip Op 50395(U) | Leagle.com
2013 NY Slip Op 50395(U)
5 BROS., INC. v. D.C.M. OF N.Y., LLC
500824/2011.
5 BROTHERS, INC. A/K/A AVON CONTRACTORS;, Plaintiffs,
D.C.M. OF NEW YORK, LLC, D.C.M. OF NEW JERSEY, LLC, BRIAN ABBEY, ALEXANDER'S KING PLAZA CENTER, INC., ALEXANDER'S OF BROOKLYN, INC., BEST BUY CO., INC., POLO ELECTRIC CORP., C.R. LAURENCE CO, INC., JE BERKOWITZ, LP, DIAM-N-BLU MECHANICAL CORP., VINTAGE FLOORING & TILE, ANIXTER, INC., THE DAVIDSON GROUP, INC., and WELLS FARGO BANK, N.A.;, Defendants.
Vincent Pallaci, Esq. Kushnick Pallaci PLLC 445 Broad Hollow Road, Suite 124 Melville, NY 11747 Attorney for General Contractor, D.C.M. of New York, LLC:
Susan Shaw, Esq. Hoguet Newman Regal & Kenney, LLP 10 E. 40th Street, 35th Floor New York, NY 10016 Attorney for J.E. Berkowitz, L.P.
In this action, general contractor D.C.M. of New York, LLC ("DCM") moves pursuant to New York's Lien Law § 19(6), to discharge a mechanic's lien filed by subcontractor J.E. Berkowitz, L.P. ("JEB"). JEB opposes the motion, and, in the alternative, cross-moves to amend its notice.
The underlying dispute stems from a construction improvement project for Best Buy retail store at Kings Plaza Mall. DCM, the general contractor for the project, entered into agreements with various subcontractors, including Manty Metals, Inc. ("Manty") for glass and glazing work, including all labor, materials, and equipment. In turn, Manty contracted with JEB for the supply of glass, glass doors, and hardware materials to be used on the project. According to JEB, DCM entered, for the benefit of JEB, into a Joint Check Agreement with Manty, which authorized DCM to issue joint checks to Manty for the materials supplied by JEB. JEB supplied the materials as agreed, but claims that DCM did not pay Manty in full for the materials supplied by JEB, and $57,420.51 of the $105,954.22 contract amount remains unpaid to date. On April 19, 2011, JEB filed a notice pursuant to New York's Lien Law.
Before the commencement of this action, on June 8, 2011, DCM brought a petition pursuant to Lien Law § 19(6) to discharge the lien, under a different index number (see D.C.M. of New York, LLC v J.E. Berkowitz L.P., 13096/2011). On September 6, 2011, JEB opposed DCM's petition and cross-moved to amend the notice. JEB claims that, at oral argument before Justice Saitta, counsel for DCM did not appear; accordingly, DCM's Petition was denied, and JEB's cross-petition was deemed moot.
On September 23, 2011, 5 Brothers, Inc., another of the subcontractors on the Best Buy project, initiated this action against DCM seeking, inter alia, judgment for unpaid amounts or foreclosure on its mechanic's lien. 5 Brothers named, among other defendants, seven additional parties who had also filed mechanic's liens against DCM in connection with the project, including JEB. DCM filed its answer and cross-claim on October 20, 2011, and on December 14, 2011, JEB answered and cross-claimed against DCM for breach of contract, against DCM and Abbey, its managing member, for diversion of trust assets in violation of Lien Law Article 3-A, for unjust enrichment against DCM, for quantum meruit against DCM, Alexander's (the property owner), and Best-Buy (the property lessee), and for foreclosure of its mechanic's lien.
DCM and Abbey counterclaimed against JEB on February 24, 2012, claiming that its lien was willfully exaggerated. By motion dated October 10, 2012, DCM moved to vacate the lien, to dismiss JEB's cross-claim for foreclosure of its lien, and for costs. JEB, by cross-motion dated October 23, 2012, opposed DCM's motion and moved to amend the lien notice in the alternative.
"A mechanic's lien is a creation of statute[,] and if there is entirely lacking from the notice of lien one of the material provisions required by the statute, it never comes into being as a lien" (Blackman-Shapiro Co. v Salzberg, 8 Misc.2d 972 [Sup Ct, Queens County 1957])(citing Toop v Smith, 181 N.Y. 283 [1905]). Thus, to create a valid lien, one must file a notice of lien that complies with the requirements of New York Lien Law § 9, which reads:
1. The name and residence of the lienor; and if the lienor is a partnership or corporation, the business address of such firm, or corporation, the names of partners and principal place of business, and if a foreign corporation, its principal place of business within the state.
3. The name of the person by whom the lienor was employed, or to whom he furnished or is to furnish materials; or, if the lienor is a contractor or subcontractor, the person with whom the contract was made.4. The labor performed or materials furnished and the agreed price or value thereof, or materials actually manufactured for but not delivered to the real property and the agreed price or value thereof. 5. The amount unpaid to the lienor for such labor or materials. 6. The time when the first and last items of work were performed and materials were furnished. 7. The property subject to the lien, with a description thereof sufficient for identification; and if in a city or village, its location by street and number, if known. A failure to state the name of the true owner or contractor, or a misdescription of the true owner, shall not affect the validity of the lien. The notice must be verified by the lienor or his agent, to the effect that the statements therein contained are true to his knowledge except as to the matters therein stated to be alleged on information and belief, and that as to those matters he believes it to be true.
Section 23 instructs that "[t]his article is to be construed liberally to secure the beneficial interests and purposes thereof. A substantial compliance with its several provisions shall be sufficient for the validity of a lien and to give jurisdiction to the courts to enforce the same." Furthermore, the Lien Law provides, at § 12-a, for an amendment of a notice nunc pro tunc, but the provision presupposes a valid lien and "may not be construed to revive an [otherwise] invalid notice of lien" (Northeast Restoration Corp v K & J Const. Co., L.P., 304 A.D.2d 306 [1st Dept 2003])(citation omitted). Furthermore, "no amendment shall be granted to the prejudice of an existing lienor, mortgagee or purchaser in good faith" (Lien Law § 12-a). Section 19(6) allows a party in interest to move to discharge the lien for failure to comply with § 9's requirements.
It is not disputed that JEB's notice complies with subdivisions 2 through 7 of § 9. However, JEB argues that the notice is defective because it does not comply with subsections 1 and 1-a, specifically because a) JEB includes a P.O. Box in its principal place of business, b) JEB does not identify a place of business within the State of New York, c) JEB does not identify an attorney with an office within the State of New York, and d) JEB, a limited partnership, does not, list the name of its partners on the lien notice.1
One of the main purposes of Lien Law § 9's notice is to provide information to the owner so that "he may, upon inquiry, ascertain whether or not the material has been actually furnished and the services have been actually rendered, and the value thereof"(Matter of Lycee Francais de NY v Calagna, 26 Misc.2d 374, 377 [Sup Ct, NY County 1960]). Compliance with § 9 is also designed "to give notice to subsequent purchasers and encumbrancers that there is a charge on the property and that they will take subject to that charge" (Carl A. Morse v Rentar Indus. Dev. Corp., 56 A.D.2d 30, 37 [2d Dept 1977]). In furtherance of this purpose, a partnership lienor must list "[its] business address. . . the names of partners and principal place of business" (Lien Law § 9).
DCM's argument that the lien is invalid because JEB includes a P.O. Box in its place of business is misplaced. JEB contends, and the annexed notice reveals, that while it did include its P.O. Box in its business address, it also listed its complete business address as: One Gateway Blvd, Pedricktown, NJ 08067. DCM relies on Fibernet Telecom Group, Inc. v East Coast Optical Services, (195 Misc.2d 461 [Sup Ct, NY County, 2002]) to argue that the inclusion of a P.O. Box renders the lien facially defective, but the court in Fibernet objected not to the inclusion of a P.O. Box but to the omission of an actual business address. "Because a lienor cannot be physically located at a post-office box, an owner, purchaser, or lien creditor seeking to verify the lien's validity, or to serve process to vacate the lien, would not be able to do so" (Fibernet, 195 Misc 2d at 463). Here, no such concerns are created by JEB's notice, as it clearly lists a physical address where it can be located so that a creditor could verify the lien's validity or serve process.
DCM's contention that JEB's lack of a principal place of business in the State of New York invalidates the lien is similarly unavailing. At least one court has determined that when a foreign corporation lacks a principal place of business within the state, it is not required to give a fictitious address (see Garden State Brickface Co. v Artcourt Realty Corp., 40 Misc.2d 712 [Sup Ct, NY County 1963]). JEB, which, it is undisputed, does not have a principal place of business in New York, listed its business address, which was sufficient to satisfy the address requirement in subdivision (1). However, as DCM contends, as a foreign entity without a place of business or address in New York, JEB must specify an attorney upon whom service could be made in New York (see In Re New Jersey Window Sales, 190 Misc.2d 654 [Sup Ct, NY County 2002]). The lien notice was filed by Michael C. Brown, Esq., as agent for JEB, and includes an Ohio address.2 Thus, JEB's failure to include either an address for a place of business in New York or an attorney upon whom service could be made in New York is a defect that must be cured.
Finally, DCM calls for the lien's vacatur on the grounds that partnership lienors are required to list the names of its partners. DCM is correct in that the statute plainly calls for the inclusion of the names of a partnership's partners. New Jersey, like New York, provides for the creation of limited partnerships, consisting of both general partners and limited partners (see N.J.S.A.§ 42:2A). New York's CPLR § 310-a states, in part, that "[p]ersonal service upon any domestic or foreign limited partnership shall be made by delivering a copy personally to any managing or general agent or general partners of the limited partnership in this state." Thus, for the purpose of providing notice so that one could serve process or verify the lien of a limited partnership, a lien notice must include, at the least, the name of its general partners. JEB's failure to do so is a defect that must be cured (see Kane v Hutkoff, 81 App Div 105, 109 [1st Dept 1903]).
JEB's failure to include the general partners' names and an attorney upon whom service can be made in New York does not render the lien invalid so as to preclude amendment as JEB has substantially complied with § 9's requirements by including, inter alia, the name of the property owner, the lessee, and the company with whom the contract was made, the materials furnished and the value thereof, the amount unpaid, the time when the materials were furnished, and an accurate description of the property subject to the lien. The cases relied upon by DCM, which invalidated liens based on defects in compliance with § 9, are distinguishable as they involve substantial defects, such as the omission of the value of labor or materials provided, which is the "sine qua non of a valid notice" (Pascual v Greenleaf Park Land Co., 245 N.Y. 294 [1927])(see also, e.g., Empire Pile Driving Corp. v Hyland Sanitary Serv., 32 A.D.2d 563 [2d Dept 1969](notice defective for failing to state labor performed or materials furnished, the amount unpaid, the time when the work was performed and materials furnished, and because unverified); Avon Elec. Supplies v Goldsmith, 54 A.D.2d 552 [2d Dept 1976](notice of lien defective for describing adjacent property rather than the improved premises); Sullivan Contr., Inc. v Turner Constr. Co., 60 A.D.3d 1315 [4th Dept 2009](notice defective for failure to state labor performed and materials furnished, as well as the value thereof); Onorati v Testco., Inc., 204 A.D.2d 876 [3d Dept 1994](notice defective for failing to name proper lienor).
Moreover, DCM, which is not an existing lienor, mortgagee, or a purchaser in good faith, does not fall within one of the enumerated categories of § 12-a, which precludes amendment nunc pro tunc upon a showing of prejudice, and, thus, cannot oppose the amendment on the grounds of prejudice (see Commander Elec., Inc. v Lerner, 54 A.D.2d 698 [2d Dept 1976]). In any event, there can be no prejudice to DCM in light of its prior abandoned attempt to discharge the lien, which was answered by a New York attorney. None of the other parties have opposed JEB's motion to amend, and at any rate, the other lienors will be not be prejudiced by the retroactive inclusion of the general partners' names and JEB's New York attorney's address.
Accordingly, JEB is granted leave to serve and file an amended lien notice within 20 days, which notice will be deemed amended nunc pro tunc. Should JEB fail to timely serve and file such amended notice curing the defects in its original notice, DCM's motion to dismiss will be granted, and JEB's lien will be discharged.
JEB is granted leave to serve and file an amended lien notice within 20 days, which notice will be deemed amended nunc pro tunc. Should JEB fail to timely serve and file such amended notice curing the defects in its original notice, DCM's motion to dismiss will be granted, and JEB's lien will be discharged.
FootNotes 1. In its lien notice, JEB describes itself as "a New Jersey corporation," but includes the Limited Partnership (LP) designation in its name. A search of the New Jersey Business Records Service database reveals that the name of the entity is "J.E. Berkowitz, Limited Partnership." JEB, in its motion, also refers to itself as a limited partnership. Thus, the Court will treat this entity as a limited partnership and not a corporation.
2. The Court is not presented with facts concerning whether JEB's then-attorney, Michael C. Brown, Esq., was authorized to practice law in the State of New York.