Court Opinion

ID: 9959891
Source: CourtListenerOpinion
Date Created: 2024-04-12 20:11:12.98069+00
Date Added: 2024-06-11T08:18:58.708129
License: Public Domain

New York Concrete Washout Sys., Inc. v Naylor
            Concrete & Steel Erectors, LLC
               2024 NY Slip Op 31211(U)
                      April 9, 2024
           Supreme Court, New York County
        Docket Number: Index No. 157546/2018
               Judge: Alexander M. Tisch
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                 INDEX NO. 157546/2018
  NYSCEF DOC. NO. 130                                                                                   RECEIVED NYSCEF: 04/09/2024

                                SUPREME COURT OF THE STATE OF NEW YORK
                                          NEW YORK COUNTY
           PRESENT:           HON. ALEXANDER M. TISCH                                 PART      18
                                                                         Justice
           -------·-------------X                                                     INDEX NO.               157546/2018
               NEW YORK CONCRETE WASHOUT SYSTEMS, INC.,
                                                                                      MOTION DATE              01/25/2022
                                                   Plaintiff,
                                                                                      MOTION SEQ. NO.               004
                                           - V -

               NAYLOR CONCRETE & STEEL ERECTORS, LLC,
               FIDELITY AND DEPOSIT COMPANY OF MARYLAND,
               ZURICH AMERICAN INSURANCE COMPANY,                                        DECISION + ORDER ON
               PIZZAROTTI, LLC, JOHN DOES, XYZ CORPORATION                                     MOTION
               1-10 AND/OR, JOHN DOES,

                                                   Defendants.
           ----·------------------X

               PIZZAROTTI, LLC,                                                                    Third-Party
                                                                                             Index No. 595768/2018
                                                   Plaintiff,

                                            -against-

               MDB DEVELOPMENT CORP.,

                                                   Defendant.
               ----------------------------------------------------------------X

           The following e-filed documents, listed by NYSCEF document number (Motion 004) 79, 80, 81, 82, 83,
           84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99,100,101,102,103,104,105,106,107,108,
           109,110,111,112,113,114,115,116,117,118,119,120,121,122,123,124,125,126,127
           were read on this motion to/for                                      JUDGMENT-SUMMARY

                     In this action, plaintiff New York Concrete Washout Systems, Inc. (NYCWS) is seeking,

           inter alia, enforcement of a mechanic's lien. By an order dated December 14, 2021, default

          judgment was granted as against defendant Naylor Concrete & Steel Erectors, LLC. 1 The

           remaining defendants Zurich American Insurance Company, Fidelity and Deposit Company of

           1
             The judgment was in the sum of $43,334.47, inclusive of interest and attorney's fees in the amount of $6,149.86,
           as well as costs and disbursements in the amount of $600 (see NYCEF Doc. 74, 119).
               157546/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL                               Page 1 of 10
               Motion No. 004

                                                                  1 of 10
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  NYSCEF DOC. NO. 130                                                                   RECEIVED NYSCEF: 04/09/2024

           Maryland (together, the Surety), and Pizzarotti LLC (Pizzarotti) move for partial summary

          judgment pursuant to CPLR 3212(e) seeking dismissal of all claims against them brought by

          NYCWS. They also seek dismissal of claims of third-party defendant, MDB Development Corp.

           (MDB), or in the alternative, reducing the value of MD B's claims.

                                                BACKGROUND

                  On September 18, 2015, Pizzarotti entered into a written agreement with non-party WC

          28 Realty LLC in which Pizzarotti was to perform construction management services on a

          residential building (the Project) located at 527 West 27 th Street, New York, New York, a/k/a

           526 West 28 th Street, New York, New York (the Property). Pizzarotti then subcontracted with

          MDB as per a written agreement dated May 1, 2017, in which MDB was to provide concrete and

          formwork services and materials in connection with the Project. The agreed upon price and

          value was $4,000,000 (PZ/MDB Subcontract, Mazzolini aff, exhibit A, NYSCEF Doc. No. 81, ~

          4.1 ). MDB then entered into a subcontract agreement with Naylor Concrete & Steel Erectors,

          LLC (Naylor), dated May 1, 2017, LLC in which Naylor was to provide labor, materials, and

          equipment in connection with the Project. The agreed upon price and value was $3,000,000.

          Naylor then subcontracted with NYCWS as per an agreement dated May 10, 2017, in which

          NYCWS agreed to furnish and service patented, watertight, Portable Concrete Washout

           Containers in connection with the Project.

                  Less than a year later, on March 2, 2018, NYCWS filed a mechanic's lien against the

          Property in the amount of $20,306. Pizzarotti discharged the NYWCS lien ten days later, on

          March 12, 2018, by filing the Lien Discharge Bond No. 09281706 (the Bond) issued to Pizzarotti

          by the Surety. Another mechanic's lien on the Property was filed by MDB on March 27, 2018,

          in the amount of $1,035,230.97. In 2020, Pizzarotti filed a petition in a special proceeding

            157546/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL                  Page 2 of 10
            Motion No. 004

                                                        2 of 10
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  NYSCEF DOC. NO. 130                                                                      RECEIVED NYSCEF: 04/09/2024

           against MDB, captioned In The Matter of the Application of Pizzarotti, LLC For an Order

           Directing MDB Development Corp. to deliver a Proper Verified Itemized Statement as Required

           by Lien Law Section 38 (Index No. 150613/2020), to obtain a verified statement of MD B's lien.

           In response to the petition, the attorney for MOB filed an affirmation stating that on February 19,

           2020, MDB filed a Partial Satisfaction of Lien which reduced the lien amount to $400,000,

           which "only includes contract retainage, as clearly set forth in requisitions 11 and 12" (Aff of

           Puja Sharma, NYSCEF Doc. No. 89, ~ 17, Aff of Howard Blum, Sharma aff, exhibit S,

          NYSCEF Doc. No. 100, ~ 7; Aff ofMichael OeBellas, NYSCEF Doc. No. 121,116, 8).

                  On or about May 22, 2018, Pizzarotti terminated MDB for the alleged failure to discharge

          NYCWS's lien. Pizzarotti also claims that MOB breached the contract and stopped work on the

           Project on February 27, 2018, such that nothing further is due and owing. However, MDB

          alleges that it is owed payment for requisitions 11 and 12. The remaining defendants now seek

          partial summary judgment pursuant to CPLR 3212(e) as against NYCWS and MDB.

                                                  DISCUSSION

                  On a motion for summary judgment, the "movant bears the heavy burden of establishing

           'a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient

          evidence to demonstrate the absence of any material issues of fact"' (Deleon v New York City

          Sanitation Dept., 25 NY3d 1102, 1106 [2015], quoting Alvarez v Prospect Hosp., 68 NY2d 320,

          324 [1986]; see Wine grad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v

          City of New York, 49 NY2d 557, 562 [1980]). "Once this showing has been made ... , the burden

          shifts to the party opposing the motion ... to produce evidentiary proof in admissible form

          sufficient to establish the existence of material issues of fact which require a trial of the action"

          (Alvarez v Prospect Hosp., 68 NY2d at 324; Zuckerman, 49 NY2d at 562). On the motion, the

           157~46/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL
           Motion No. 004                                                                         Page 3 of 10

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                                                                                                      INDEX NO. 157546/2018
  NYSCEF DOC. NO. 130                                                                         RECEIVED NYSCEF: 04/09/2024

           "facts must be viewed 'in the light most favorable to the non-moving party"' (Vega v Restani

           Constr. Corp., 18 NY3d 499,503 [2012], quoting Ortiz v Varsity Holdings, LLC, 18 NY3d 335,

           339 [2011]).

                  In support of their motion, movants submit, inter alia, Pizzarotti's contract with MDB,

           Pizzarotti's payments to MDB, MDB's payments to Naylor, MDB's lien waivers, the lien filed

           by NYCWS, and an affidavit of Veronica Mazzoleni, General Counsel for Pizzarotti. Movants

           argue that the plaintiffs claims should be dismissed as against Pizzarotti because no cause of

           action was asserted against it, and the claims against the Surety also warrant dismissal because

           NYCWS is not a proper lienor. Movants alternatively argue that even ifNYCWS is a proper

           lienor, there is no lien fund to which the lien may attach.

                  NYCWS

                  Movants contend NYCWS is a fourth-tier sub-sub-supplier who did not provide material

           or labor to be incorporated in the improvement and is thus not a proper lienor. However, they fail

           to offer any legal support for this assertion. Pursuant to Lien Law§ 3,

                 "A contractor [or] subcontractor ... who performs labor or furnishes materials for the
                 improvement of real property with the consent or at the request of the owner thereof,
                 or of [the owner's] agent ... shall have a lien for the principal and interest, of the value,
                 or the agreed price, of such labor ... or materials ... from the time of filing a notice of
                 such lien."

                 New York Lien Law very clearly defines a subcontractor as "a person who enters into a

           contract with a contractor and/or with a subcontractor for the improvement of such real property"

           (Lien Law§ 2[10]). To the extent that the remaining defendants argue that the plaintiff is a

           materialman, a materialman is defined as someone who furnishes material or the use of

           equipment to a contractor or a subcontractor (Lien Law§ 2[12]). Both are proper lienors (Lien

           Law§ 3). Here, Pizzarotti subcontracted with MDB, \\:ho sub-subcontracted with Naylor, who

            157546/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL                        Page 4 of 10
            Motion No. 004

                                                           4   of 10
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  NYSCEF DOC. NO. 130                                                                                   RECEIVED NYSCEF: 04/09/2024

           sub-sub-subcontracted with NYCWS to "furnish and service patented, watertight, Portable

           Concrete Washout Containers" (Naylor-NYCWS Contract, Mazzoleni aff, exh B, NYSCEF Doc.

          No. 82, at 2). On their notice of lien, NYCWS described the labor performed and materials

           furnished as "Provided and serviced patented concrete washout containers to recycle all excess

           concrete, slurry, and water from the site." As New York Lien Law is to be "construed liberally

           to secure the beneficial interests and purposes thereof," NYCWS is a subcontractor and thus, a

          proper lienor (Lien Law§ 23; see also Ferrara v Peaches Cafe LLC, 32 NY3d 348, 353 [2018];

           W.-Fair Elec. Contractors v Aetna Cas. & Sur. Co., 87 NY2d 148, 156 [1995]).

                 The lienor generally has the burden of establishing "the amount of the outstanding debt by

           submitting proof of either the price of its contract or the value of the labor and materials

           supplied. The amount of the lien is limited by the contract under which it is claimed, and

           ordinarily a lienor is bound by the price term contained in the contract to which it is a party"

           (NGU, Inc. v City of New York, 189 AD3d 850, 852 [2d Dept 2020] [internal quotation marks

           and citations omitted]). On a motion for summary judgment, however, it is the movant who

           bears the initial burden of coming forward with evidence showing prima facie entitlement to

          judgment as a matter of law, and, unless that burden is met, the opponent need not come forward

           with any evidence at all (Winegrad, 64 NY2d at 853; Zuckerman, 49 NY2d at 562). Here, the

           movants bear the burden of showing prima facie entitlement to partial summary judgment.

                   "In addition to a lienor's right to recover being limited by the contract price or reasonable

          value of the materials provided, it is further limited by the principle of subrogation" (Peri

          Formwork Sys., Inc. v Lumbermens Mut. Cas. Co., 112 AD3d 171, 176 [2d Dept 2013]; see

          CCC Renovations, Inc. v Victoria Towers Dev. Corp., 168 AD3d 664,666 [2d Dept 2019]).

          Lien Law § 4( 1) states that a mechanic's lien "shall extend to the owner's right, title or interest in
           1!H~4bliU1ts   NtVV YUKI\ \;UN\;Ktl t VVA:::iHUU I vs. NAY LUK l.UNl.Kc J t IS,;:::, J tcL
                                                                                                            1-'age:, or 1u
           Motion No. 004

                                                                       5 of 10
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                                                                                                     INDEX NO. 157546/2018
  NYSCEF DOC. NO. 130                                                                      RECEIVED NYSCEF: 04/09/2024

           the real property and improvements, existing at the time of filing the notice of lien."

           Furthermore, "the lien shall not be for a sum greater than the sum earned and unpaid on the

           contract at the time of filing the notice of lien, and any sum subsequently earned thereon" (Lien

           Law § 4 [ 1]). Therefore,

              "no individual mechanic's lien can exceed the amount owed by the owner to the general
              contractor at the time of filing the lien. Money still due and owing from the owner to the
              contractor at the time of the filing of the lien, plus any sums subsequently earned thereon, is
              known as the 'lien fund.' The subcontractor's right to recover is derivative or subrogated to
              the right of the general contractor to recover. Thus, if the general contractor is not owed any
              amount under its contract with the owner, then the subcontractor may not recover ..... Where
              sub-subcontractors are involved, this rule becomes more complex, because the principle of
              subrogation applies to all tiers of subcontractor liens. Each party is subrogated to the rights
              of the contractor or subcontractor on the contracting tier above him. Therefore, in the case
              of a sub-subcontractor or a materialman to a subcontractor, it may not enforce its lien for an
              amount in excess of either (1) the amount of money owed to him by the subcontractor; (2)
              the amount of money owed by the general contractor to the subcontractor; or (3) the amount
              of money owed by the owner to the general contractor"

           (Peri Formwork Sys .. Inc., 112 AD3d at 176-177 [internal quotation marks and citations

           omitted]; see Kamco Supply Corp. v Nastasi & Assoc., Inc., 216 AD3d 458,458 [1st Dept

           2023]).

                     Here, NYCWS's right to recover from Pizzaroti and MDB is derivative of Naylor's right

           to recover from them, and if Naylor was not owed any amount under its contract with MDB at

           the time NYCWS's notice oflien was filed, then NYCWS may not recover. To meet their

           burden on summary judgment and prove that no lien fund exists, movants must show Naylor was

           not owed any amount from MDB when NYCWS's $20,306 lien was filed on March 2, 2018.

           The final evidence of payment from MDB to Naylor is dated November 30, 2017, and the final

           lien waiver from Naylor to MDB, which states that only 87% of the work has been completed, is

           dated October 17, 2017. In addition, the total payments did not meet the contract price of

           $3,000,000. Section 5 of the contract between MDB and Naylor governs changes in the work,

            157546/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL                    Page 6 of 10
            Motion No. 004

                                                          6   of 10
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           and subsections 5.3 and 5.9 respectively state that a change order or construction change

           directive is required for any price adjustments. Neither document type has been offered by

           movants to reflect any reduction in contract price. Furthermore, Naylor filed a lien on the

           Property on January 24, 2018, and Naylor' s lien remained on the Property and was not

           discharged until January 28, 2021, indicating Naylor believed it was owed money in March of

           2018. Therefore, movants failed to prove no money was owed to Naylor at the time NYCWS

           filed its lien in the amount of $20,306 on March 2, 2018.

                  Further, the remaining defendants failed to prove that when NYCWS filed its lien for

           $20,306 on March 2, 2018, that the amount sought was more than the amount Naylor owed

           NYCWS, MBD owed to Naylor, Pizzarotti owed to MBD, or non-party WC 28 Realty LLC

           owed to Pizzarotti (see Kamco Supply Corp. v JMT Bros. Realty, LLC, 98 AD3d 891 [1st Dept

           2012] [internal citations omitted]). NYCWS filed the lien against Naylor for $20,306. However,

           no final contract price was submitted. Therefore, movants have not made a prima facie case that

           the amount of NYCWS's lien is more than any amount that may be owed to it under the contract.

           With respect to the amount MDB owed Naylor, movants submit various payments from MBD to

           Naylor and subsequent lien waivers from Naylor, but all in amounts less than the contract price

           of $3,000,000. In addition, the submission of amounts paid to Naylor differs from the amounts

           on the lien waivers. Furthermore, Naylor had a lien against the Property in the amount of

           $748,581 at the time NYCWS's lien was filed, a greater amount than sought by NYCWS. Thus,

           movants fail to meet their burden on this point. As to the amount Pizzarotti owed MBD,

           movants submit evidence of various payments to and lien waivers from MDB, all of which

           demonstrate that the total payment to MBD exceeded the $4,000,000 contract price at the time

           NYCWS's lien was filed. However, MDB contends it is still owed $400,000 from Pizzarotti.

            157~46/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL                  Page 7 of 10
            Motion No. 004

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  NYSCEF DOC. NO. 130                                                                        RECEIVED NYSCEF: 04/09/2024

           MDB submits an affidavit of Michael DeBellas, the President of MDB, in which he states, inter

           alia, that the original lien amount of$1,035,230.97 was reduced to $400,000 on February 19,

           2020, as per the filing of a Partial Satisfaction of Lien (DeBellas aff, ,i 5-6). He also states that

           the remaining $400,000 consists of only contract retainage, as set forth in requisitions 11 and 12,

           and that no lien waivers exist for those amounts because the waivers are "conditioned solely

           upon the receipt of such payment" and payment was never received. The movants' submission

           of their payments to MDB show that the most recent payment to MDB was November 21, 2017.

           The lien waivers on which the movants rely are dated January 30 and February 8, 2018,

           respectively, but they failed to submit any corresponding proof of payment. Movants have failed

           to make aprimafacie case that nothing is owed from Pizzarotti to MDB. Lastly, as for what

           non-party WC 28 Realty LLC owed to Pizzarotti, movants fail to submit any proof showing

           nothing was owed from non-party WC 28 Realty LLC to Pizzarotti. Thus, the portion of the

           motion seeking partial summary judgment pursuant to CPLR 3212(e) is denied.

                  MBD

                  In its third-party complaint, Pizzarotti asserted claims of breach of contract and

           indemnity and contribution as against MDB, which responded with counterclaims. Pizzarotti

           now moves pursuant to CPLR 3212(e) seeking summary judgment dismissing MDB's

           counterclaims of quantum meruit, unjust enrichment, breach of contract, and lien foreclosure.

                  Generally, where a plaintiff seeks to recover under an express agreement, no cause of

           action lies to recover for unjust enrichment (see Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70

           NY2d 382 (1987); .JDF Realty, Inc. v Sartiano, 93 AD3d 410 [1st Dept 2012]). As it is

           undisputed that a contract between Pizzarotti and MDB exists, MDB's cause of action to recover

            157~46/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL
            Motion No. 004                                                                         Page 8 of 10

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  NYSCEF DOC. NO. 130                                                                       RECEIVED NYSCEF: 04/09/2024

           under unjust enrichment must be denied (see J T. Magen & Co., Inc. v Nissan N. Am., Inc., 178

           AD3d 466, 467 (1st Dept 2019]).

                  A breach of contract claim requires a plaintiff to establish ( l) the existence of a contract,

           (2) the plaintiffs' performance under the contract; (3) the defendant's breach of that contract, and

           (4) resulting damages (see Second Source Funding, LLC v Yellowstone Capital, LLC, 144 AD3d

           445 (1st Dept 2016]; Harris v Seward Park Hous. Corp., 79 AD3d 425 [1st Dept 2010]). As

           already noted, it is undisputed that a contract exists between Pizzarotti and MBD. In support of

           its assertion that it did not breach the contract, Pizzarotti offers the signed lien waivers from

           MDB, but fails to submit any corresponding proof of payment. Thus, Pizzarotti has failed to

           meet its burden on summary judgment to dismiss the breach of contract counterclaim. However,

           due to MDB' s filing of a partial satisfaction of lien, any recovery on the claim is limited to

           $400,000.

                  Summary judgment seeking dismissal ofMDB's counterclaim to foreclose on its

           mechanic's lien is also denied. "To establish the right to enforce a mechanic's lien, a contractor

           must make a prima facie case that the lien is valid, and that it is entitled to the amount asserted in

           the lien" (J T. Magen & Co., Inc. v Nissan N. Am .. Inc., 178 AD3d 466, 466 [1st Dept 2019],

           citing Ruckle & Guarino, Inc. v Hangan, 49 AD3d 267,267 [1st Dept 2008]). In support of its

           contention that MD B's mechanic's lien is not valid and that MD B is not entitled to the amount

           asserted in the lien, Pizzarotti once again offers the lien waivers, which are insufficient to make a

           prima facie case, without the omitted corresponding proof of payment.

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           Motion No. 004                                                                          Page 9 of 10

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                                                  CONCLUSION

                   For the reasons discussed above, it is ORDERED that the motion of Defendants Zurich

           American Insurance Company, Fidelity and Deposit Company of Maryland and Pizzarotti, LLC

           (Motion Sequence Number 004) for partial summary judgment against plaintiff New York

           Concrete Washout Systems, Inc. and third-party defendant MDB Development Corp. is hereby

           granted in part and denied in part. The motion is granted to the extent that MDB Development

           Corp.' s possible recovery is capped at $400,000, and otherwise denied.

                   This constitutes the decision and order of the Court.

                    4/9/2024
                     DATE                                                   ALEXANDER M. TISCH, J.S.C.

                                    ~
            CHECK ONE:                  CASE DISPOSED                  NON-FINAL DISPOSITION

                                        GRANTED         □ DENIED       GRANTED IN PART             □ OTHER
            APPLICATION:                SETTLE ORDER                   SUBMIT ORDER

            CHECK IF APPROPRIATE:       INCLUDES TRANSFER/REASSIGN     FIDUCIARY APPOINTMENT       □ REFERENCE

           157~46/2018 NEW YORK CONCRETE WASHOUT vs. NAYLOR CONCRETE & STEEL                       Page 10 of 10
           Motion No. 004

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