Court Opinion

ID: 3190357
Source: CourtListenerOpinion
Date Created: 2016-03-31 15:06:30.942541+00
Date Added: 2024-06-11T12:19:14.752757
License: Public Domain

State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: March 31, 2016                    520317
________________________________

NY PROFESSIONAL DRYWALL OF OC,
   INC.,
                    Appellant,
      v
                                            MEMORANDUM AND ORDER
RIVERGATE DEVELOPMENT, LLC,
   et al.,
                    Respondents,
                    et al.,
                    Defendants.

(And a Third-Party Action.)
________________________________

Calendar Date:   February 8, 2016

Before:   McCarthy, J.P., Egan Jr., Rose, Devine and Clark, JJ.

                             __________

      Marco & Sitaris, PLLC, New York City (George Sitaris of
counsel), for appellant.

      McNamee, Lochner, Titus & Williams, PC, Albany (Scott C.
Paton of counsel), for respondents.

                             __________

Egan Jr., J.

      Appeal from an order of the Supreme Court (Gilpatric, J.),
entered December 5, 2014 in Ulster County, which granted a motion
by certain defendants for, among other things, summary judgment
dismissing the complaint against them.
                              -2-                520317

      This dispute, which previously has been before us (100 AD3d
216 [2012]), involves a mechanic's lien filed regarding drywall
work at a newly constructed senior housing project. In November
2008, plaintiff subcontracted with defendant Rivergate
Development, LLC, the general contractor on the project, to
install drywall for $190,000. Rivergate terminated plaintiff in
December 2008 as a result of a small fire and a separate
sprinkler activation at the work site that allegedly were caused
by plaintiff. However, Rivergate reportedly was under intense
pressure to complete the project and sought plaintiff's advice to
quickly find another drywall contractor to finish the work.
Plaintiff allegedly referred Rivergate to Mid Hudson Drywall Co.,
which actually was plaintiff doing business under an assumed
name. Although sharply contested, plaintiff contends that
Rivergate's project director asked plaintiff to continue the work
and that Rivergate was aware that Mid Hudson was, in fact, simply
plaintiff operating under a pseudonym. Plaintiff notified
Rivergate that it would pay Mid Hudson, and it submitted bills to
Rivergate for the remaining work.

      In January 2009, Rivergate paid plaintiff $94,330.55 for
work it had completed before being removed from the project.
Although plaintiff initially signed a final lien release, later
that same day, the lien release was amended by Rivergate to a
partial release. Plaintiff sought further compensation for work
it allegedly completed either directly or as Mid Hudson and,
claiming that it had been paid only $94,330.55 of the over
$200,000 owed to it pursuant to the contract and approved change
orders, plaintiff filed a mechanic's lien for $137,531.39. This
action ensued with plaintiff alleging, among other things, breach
of contract and seeking foreclosure of its lien. Rivergate,
defendant Birches at Esopus Senior Housing, L.P. and other
related entities and/or individuals (hereinafter collectively
referred to as defendants), among others, asserted numerous
counterclaims, including claims for damages purportedly caused by
the fire and sprinkler activation at the project and to vacate
the lien as willfully exaggerated. After considerable delay
occasioned by various prior motions, the earlier appeal and
discovery, defendants made the current summary judgment motion
to, among other things, discharge the mechanic's lien as
willfully exaggerated and dismiss plaintiff's breach of contract
                              -3-                520317

claim. Supreme Court granted such relief to defendants, and
plaintiff now appeals.

      A willfully exaggerated lien is void, and the owner or
contractor may be entitled to damages from the lienor (see Lien
Law §§ 39, 39-a; Pyramid Champlain Co. v Brosseau & Co., 267 AD2d
539, 542-543 [1999], lv denied 94 NY2d 760 [2000]). The remedy
is harsh (see Saratoga Assoc. Landscape Architects, Architects,
Engrs. & Planners, P.C. v Lauter Dev. Group, 77 AD3d 1219, 1223
[2010]), and "the issue of willful and/or fraudulent exaggeration
is . . . one which ordinarily must be determined at . . . trial"
(Coppola Gen. Contr. Corp. v Noble House Constr. of N.Y., 224
AD2d 856, 857 [1996]; see Washington 1993 v Reles, 255 AD2d 745,
747 [1998]). Where, as here, the relief is sought via summary
judgment, the proponent of such relief has the initial burden to
"make 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" (Alvarez v Prospect
Hosp., 68 NY2d 320, 324 [1986]; see Creech v Rufa, 101 AD3d 1224,
1226 [2012]; L & W Supply Corp. v A.D.F. Drywall, Inc., 55 AD3d
1026, 1027 [2008]).

      Although defendants submitted proof that plaintiff acted in
a deceitful manner, defendants' submissions also included
testimony from various officers and employees of plaintiff (and
Mid Hudson) indicating that the project manager at Rivergate was
aware of, and even encouraged, plaintiff's conduct in order to
keep the project on schedule. For example, there was testimony
that the project manager instructed plaintiff to continue to work
despite the termination letter, asked plaintiff to simply use
unmarked vehicles at the work site and indicated that plaintiff
could work under a different name. To be sure, the project
manager denies such conduct, and the testimony of plaintiff's
officers is not without considerable inconsistencies. This
conflicting proof, however, raises credibility issues that should
be determined by the finder of fact at trial (see e.g. Karl v
Terbush, 63 AD3d 1359, 1360 [2009]; Pronti v Belletti, 49 AD3d
1075, 1075 [2008]). Further, there is a genuine dispute
regarding the work done by plaintiff under the contract,
including whether change orders were approved, whether plaintiff
caused damages at the work site that could serve as an offset and
                              -4-                  520317

whether any additional amounts are due for drywall work. Viewing
the evidence in the light most favorable to plaintiff as the
party opposing summary judgment (see Vega v Restani Constr.
Corp., 18 NY3d 499, 503 [2012]), defendants failed to demonstrate
the absence of material factual issues regarding their
counterclaim of willful exaggeration and plaintiff's claim of
breach of contract. Accordingly, summary judgment was not
appropriate. The remaining issues raised by plaintiff are
academic.

     McCarthy, J.P., Rose, Devine and Clark, JJ., concur.

      ORDERED that the order is reversed, on the law, with costs,
and motion denied.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court