Tag:New York

D’Angelo v. Builders Group, 845 N.Y.S.2d 814 (N.Y. App. Div. 2007)

This case involved an alleged violation of Labor Law § 240(1) and contractual indemnification.  Specifically, this decision involved an appeal brought by third-party plaintiff Builders Group from the lower court’s denial of its summary judgment motion seeking dismissal of the complaint and its cross-motion for summary judgment seeking contractual indemnification from third-party defendant Caruso Painting and Decorating Corp. Read More

Granite Broadway Dev. LLC v. 1711 LLC, 845 N.Y.S.2d 10 (N.Y. App. Div. 2007)

In this case, a contractor sued a property owner for breach of a construction contract.  After a bench trial, the court awarded the owner liquidated damages, certain offset damages, and specific performance.  The contractor appealed.

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In re Andrew Velez Constr., Inc., 373 B.R. 262 (Bankr. S.D.N.Y. 2007)

This adversary proceeding was brought by Andrew Velez Construction, Inc. (“Velez”), a general contractor on a major construction project for Con Edison Company of New York, Inc. (“Con Edison”), against Con Edison.  After substantial cost overruns, delays and changes in the scope of work, the parties each claimed that the other committed pre-petition defaults under their contract.  The parties asserted numerous causes of action, including claims for: fraudulent transfers, turnovers, declaratory relief, fraud, fraudulent inducement, quantum meruit, unjust enrichment, trust fund violations, and defamation.  Because the court was presented with Con Edison’s motion to dismiss, this decision examined the pleading standards for each claim.

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Actus Lend Lease LLC v. Integrated Bldg. Res. Dev. LLC, 2007 WL 2362389 (N.D.N.Y. Aug. 14, 2007)

Here, defendant moved to dismiss the action for breach of its subcontract with plaintiff-contractor on the basis that the action was subject to binding arbitration.  According to the subcontract, a dispute between the parties must be resolved by mandatory arbitration when the dispute (1) arises in connection with the subcontract and either party elects, by written notice, to submit the matter to binding arbitration; or (2) involves the correlative rights and duties of the owner.  The subcontract also provided that a party must provide written notice to elect binding arbitration.

In support of its motion, defendant submitted a notice of motion and an affirmation with exhibits; however, it did not submit a memorandum of law to set forth its legal arguments.  The court held, therefore, that factual disputes existed as to whether the alleged dispute was subject to arbitration under the terms of the agreement.  However, the court granted defendant leave to renew its motion to dismiss upon submission of the proper papers, reasoning that there is a strong public policy in favor of arbitration.

Klewin Bldg. Co. v. Heritage Plumbing & Heating, Inc., 840 N.Y.S.2d 144 (N.Y. App. Div. 2007)

In this case, plaintiff was the construction manager for a building project and had entered into a subcontract with defendant Heritage Plumbing & Heating pursuant to which Heritage was required to supply plumbing materials and services for the project.  Defendant Hartford Fire Insurance Company provided a performance bond to Heritage for the benefit of Klewin.   Hartford’s obligations to Klewin under the bond would only arise upon certain conditions, including, among other things, Klewin’s declaration that Heritage had defaulted and a termination of Heritage’s right to complete the subcontract.

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Harrison & Burrowes Bridge Constructors, Inc. v. New York, 839 N.Y.S.2d 854 (N.Y. App. Div. 2007)

The claimant filed suit in the Court of Claims seeking additional compensation for its rehabilitation and resurfacing of eight bridges under a unit-price contract with the State of New York.  The state offered several reasons for its refusal to pay the claimant for labor and materials supplied under the contract.

First, the contract required the state to pay the claimant for the total number of markers installed, including any markers damaged by traffic.  The state refused to pay for an additional 1,478 replacement markers installed by the claimant, arguing that the bid proposal, upon which the contract was based, only covered the installation of 868 markers.  Affirming the Court of Claims, the appellate court found that the state should pay for the additional 1,478 replacement markers.  Although the contract (which required the claimant to replace damaged markers) did not specify who would be obligated to pay for those markers, the court reasoned that the contract did not require the claimant to include the cost of replacing markers in its bid.

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Welsbach Elec. Corp. v. MasTec N. Am., Inc., 7 N.Y.3d 624 (2006)

Welsbach involved a general contractor engaged to construct a telecommunications network in New York.  The agreement between the general contractor and sub-contractor included a pay-if-paid clause and a Florida choice of law provision.  The New York Court of Appeals decided that New York’s public policy against pay-if-paid contract provisions was not so fundamental that it would override the parties’ choice of law.

The significance of this ruling is that it is now possible for a subcontractor to find that its lien rights are imported if it does business under the law of a non-West-Fair state.

Quantum Corporate Funding, Ltd. v. Westway Indus., Inc., 4 N.Y.3d 211 (2005)

In Quantum Corporate Funding, a subcontractor sold its accounts receivable to an assignee.  When the general contractor failed to pay its debts, the assignee, or factor, brought suit against the surety for the State Finance Law § 137 payment bonds that the general contractor had been required to purchase.  The surety refused payment and the factor brought suit.  Though the statute is silent on who may sue on the bond, the Court of Appeals ruled that State Finance Law § 137 allows subcontractors’ assignees to recover payment from bond sureties.

West-Fair Elec. Contractors v. Aetna Cas. & Sur. Co., 87 N.Y.2d 148 (1995)

In West-Fair, the New York Court of Appeals decided that pay-when-paid provisions in a subcontract, which transfer the risk of an owner’s default from a general contractor to a subcontractor, violate New York public policy as set forth in the Lien Law.  New York’s Lien Law provides that any contractual provision that waives the right to enforce any mechanic’s lien shall be void as against public policy.  The court reasoned that if a subcontractor’s right to be paid could be indefinitely postponed by an owner’s failure to pay the general contractor under a pay-when-paid provision, the subcontractor’s right to enforce its mechanic’s lien would be similarly frustrated and constitute an illegal waiver of lien rights.

Ossining Union Free Sch. Dist. v. Anderson LaRocca Anderson, 73 N.Y.2d 417 (1989)

In Ossining, the Court of Appeals expanded on the holding in Credit Alliance and ruled that a school district, which contracted with an architect, could sue engineers hired by the architect for damages suffered as a result of the engineers’ negligence and malpractice.  The issue addressed by the court was whether privity of contract is required in a negligent misrepresentation case that produces only economic injury.  The court held that a cause of action for negligent misrepresentation which produces only economic injury requires that the underlying relationship between the parties be one of contract or the bond between them so close as to be the “functional equivalent of contractual privity.”  The court laid out a three-prong test following the guidance of Credit Alliance:  (i) that the design professional be aware that its reports are to be used for a particular purpose; (ii) that a known person rely on the reports in furtherance of that purpose; and (iii) that there be some conduct by the design professional linking it to the reliant person and evidencing its understanding of the reliance.