Motion-Secondary: Integrated Project Delivery Partners, Inc. v. Susan L. Schuman Family Trust, Ilene Osherow, Susan Schuman

On December 02, 2016 a Motion-Secondary was filed involving a dispute between Integrated Project Delivery Partners, Inc., and Ilene Osherow, Susan L. Schuman Family Trust, Susan Schuman, for Other Real Property - Foreclosure on Mechanic's Lien in the District Court of New York County.

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FILED: NEW YORK COUNTY CLERK 10/03/2017 02:27 PM INDEX NO. 160102/2016
NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 10/03/2017

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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INTEGRATED PROJECT DELIVERY PARTNERS, INC.,

Plaintiff,
AFFIRMATION IN
-against- SUPPORT

SUSAN L. SCHUMAN FAMILY TRUST, ILENE Index. No.: 160102/2016
OSHEROW, SUSAN SCHUMAN, and “JOHN DOE 1”
Through “JOHN DOE 10,” said parties being lienors
who have yet to perfect their liens and being fictitious
and unknown to the Plaintiff,

Defendants.
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PETER MOULINOS, an attorney duly admitted to practice law in the State of

New York, hereby affirms under the penalties of perjury as follows:

1. I am the attorney of record for Defendants Susan L. Schuman Family

Trust, Ilene Osherow and Susan Schuman (collectively hereinafter the “Defendants”),

am fully familiar with the facts, claims and defenses set forth in this action and submit

this Affirmation in Support of Defendants’ instant application to dismiss, pursuant to

CPLR §§3211(a)(1) and (a)(7), the second, third, and fourth cause of action, found in the

Verified Complaint, filed by Plaintiff Integrated Project Delivery Partners, Inc.

(“Plaintiff”).

2. This dispute has arisen between the parties as a result of Plaintiff’s failure

to properly perform construction and renovation work at Defendants’ residence. After

Defendants raised substantive objections regarding the work which Plaintiff performed,

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and refused to pay Plaintiff for its defective construction work, Plaintiff filed a

mechanic’s lien against Defendants’ condominium unit and this lawsuit ensued.

3. Plaintiff commenced this action against Defendants by filing a Verified

Complaint dated December 2, 2016 (“the Complaint”). Plaintiff sets forth four (4)

causes of action in its Complaint. The first cause of action is one for breach of contract.

The second cause of action claims that Defendants have been unjustly enriched as a

result of the services performed by Plaintiff. In its third cause of action, Plaintiff seeks

to foreclose a mechanics lien filed by Plaintiff on September 21, 2015 (“the Lien”).

Lastly, in its fourth cause of action, Plaintiff claims that Defendants violated Section 79-

a of the New York Lien Law under Article 3-A. A copy of the Complaint is attached as

Exhibit A.

4. Defendants filed a Verified Answer to Plaintiff’s Complaint and

essentially denied Plaintiff’s claims. Defendants also brought forth several

counterclaims against Plaintiff for its defective work including claims of breach of

contract, unjust enrichment and Plaintiff’s failure to adhere to Article 3-A of the Lien

Law, specifically Lien Law §§39 and 39-a. A copy of Defendants’ Verified Answer and

Counterclaims filed in this action is attached as Exhibit B.

SUMMARY OF FACTS

5. In or about June 25, 2014, Plaintiff entered into an agreement (“the

Agreement”) with Defendants whereunder Plaintiff agreed to perform certain

plumbing, electrical, carpentry, tile, HVAC, and flooring work (the “Work”) at 161

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Hudson Street, Apt 4B, New York, New York 10013 (the “Unit”), and to furnish labor,

materials, and supplies related to such Work at the Unit.

6. Pursuant to the terms of the Agreement, the Work was to be performed in

a professional workmanlike manner for the fixed amount of Nine Hundred Nine

Thousand Twenty-Five ($909,025.00) Dollars. As a result of changes in the Work,

mutually agreed upon by both parties, the Work was to be performed for the new fixed

amount of Nine Hundred Seventy-Four Thousand Four Hundred Eighty and 63/100

($974,480.63) Dollars. A copy of the Agreement is attached as Exhibit C.

7. Plaintiff commenced the Work pursuant to the terms of the parties’

agreement. Notwithstanding the foregoing, Plaintiff performed the Work in a careless,

negligent and defective manner, through no fault of any of the Defendants.

8. The negligent and defective Work performed by Plaintiff included, but

was not limited to the following: faulty and collapsing shelves in the children’s

bedrooms; installation of damaged floor panels in the living/dining room, kitchen,

office, master bedroom, and hallways; missing or defective light fixtures in the

children’s bedrooms and in the master closet; chandeliers installed in an improper

setting in the living/dining room; installation of damaged millwork around the kitchen

appliances; improperly constructed wine cabinet in the living/dining room; installation

of damaged shades in the master bedroom; poorly installed doors in the master

bathroom, living/dining room, and in the children’s rooms; wooden parts left

unpainted and untreated in the Unit; poorly installed toilet units and sinks in the

children’s bathrooms; installation of damaged door handles in the powder room; faulty

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tile grout-work in the kitchen, showers and bathrooms; deteriorated and peeling

veneer-work; improperly installed audio/visual wiring throughout the Unit; wiring left

exposed in the master bedroom and in the children’s bedroom; and an improperly

repaired HVAC unit.

9. Despite demand by the individual Defendants that Plaintiff repair and

remedy the defects in the Work and the damage to the Unit, Plaintiff refused to

properly repair and remedy such defects and damage. Moreover, Plaintiff failed to

complete the full scope of the Work as required under its contract with Defendants.

10. As a direct and proximate result of Plaintiff’s failure to properly perform

and complete the Work, Defendants were caused to incur additional costs and expenses

to repair and remedy the defective Work performed by Plaintiff and the damage to the

Unit.

11. In addition, Plaintiff excessively and improperly charged Defendants for

the Work, presented fraudulent and false invoices to Defendants, falsely represented to

Defendants that Plaintiff had performed the Work in accordance with the Agreement

and wrongfully claimed that Plaintiff was entitled to payment for performing the Work.

12. In reliance on Plaintiff’s misrepresentations that the Work at the Unit was

being performed in accordance with the terms of the Agreement, Defendants provided

payments to Plaintiff in the sum of Nine Hundred Twenty-Six Thousand Two Hundred

Thirty and 34/100 ($926,230.34) Dollars. After Defendants discovered that the

Plaintiff’s work was not in accordance with the terms of the Agreement, Defendants

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objected to Plaintiff and withheld final payment. Defendants demanded that Plaintiff

remedy its defective work however Plaintiff refused.

13. On or about September 21, 2015, Plaintiff filed a mechanic’s lien (“the

Lien”) against the Unit, which wrongly claimed that the amount of Forty-Eight

Thousand Two Hundred Fifty and 29/100 ($48,250.29) Dollars was owed by the

Defendants to Plaintiff for unpaid labor and materials. A copy of the Mechanic’s Lien

filed by Plaintiff is attached as Exhibit D.

14. Notwithstanding the foregoing, no such amount was owed by the

Defendants given Plaintiff’s failure to properly perform and complete the Work and to

repair the damage to the Unit caused by Plaintiff’s defective and negligent Work.

Despite the demand by the Defendants that Plaintiff withdraw the improper Lien,

Plaintiff has refused to withdraw the Lien against the Unit.

15. On or about September 19, 2016, Plaintiff filed an extension of the Lien

against the Unit (the “Extended Lien”), alleging that Plaintiff is entitled to payment in

the amount of Forty-Eight Thousand Two Hundred Fifty and 29/100 ($48,250.29)

Dollars and is entitled to enforce its Lien against the Unit, Defendants and any other

claimants or affected parties. A copy of the extension of the Lien is attached as Exhibit

16. Plaintiff, however, never filed a Notice of Pendency, as required by Lien

Law §17, along with the commencement of this foreclosure action within the extended

lien period. A copy of the Court’s docket reflecting the lack of a Notice of Pendency

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filed in this action along with a copy of the condominium’s profile on the ACRIS system

maintained by the City of New York is attached as Exhibit F.

17. On December 2, 2016, Plaintiff commenced this action, seeking payment in

the amount of Forty-Eight Thousand Two Hundred Fifty and 29/100 ($48,250.29)

Dollars for its alleged unpaid labor and materials.

DEFENDANTS’ MOTION TO DISMISS MUST BE GRANTED

18. “On a motion to dismiss pursuant to CPLR 3211, the pleading is to be

afforded a liberal construction (see, CPLR 3026). We accept the facts as alleged in the

complaint as true, accord plaintiffs the benefit of every possible favorable inference, and

determine only whether the facts as alleged fit within any cognizable legal theory.”

Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972 (1994).

19. “In assessing a motion under CPLR 3211(a)(7) . . . the criterion is whether

the proponent of the pleading has a cause of action, not whether he has stated one.”

Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972 (1994) (Citation omitted; internal

quotation marks omitted).

20. “In determining whether a complaint is sufficient to withstand a motion to

dismiss pursuant to CPLR 3211(a)(7), the sole criterion is whether the pleading states a

cause of action . . . . If from the four corners of the complaint factual allegations are

discerned which, taken together, manifest any cause of action cognizable at law, a

motion to dismiss will fail.” Baker v. Andover Assoc. Mgt. Corp., 2009 WL 7400085, at

*12 (Sup. Ct. 2009) (Citation omitted).

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21. “The rule that the facts alleged are presumed to be true and are to be

accorded every favorable inference which can be drawn therefrom on a motion

addressed to the sufficiency of the pleadings . . . does not apply to allegations consisting

of bare legal conclusions, as well as factual claims either inherently incredible or flatly

contradicted by documentary evidence.” SRW Associates v. Bellport Beach Property

Owners, 129 A.D.2d 328, 331, 517 N.Y.S.2d 741 (2nd Dept. 1987) (Citation omitted;

emphasis added).

22. “Under CPLR 3211(a)(1), a dismissal is warranted only if the documentary

evidence submitted conclusively establishes a defense to the asserted claims as a matter

of law.” Leon v. Martinez, 84 NY2d 83, 88, 614 NYS2d 972 (1994).

23. “A motion to dismiss based on documentary evidence pursuant to

C.P.L.R. §3211(a)(1) may be appropriately granted only where the documentary

evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a

defense as a matter of law.” Norment v. Interfaith Ctr. of New York, 98 A.D.3d 955, 955,

2012 WL 3980764 (2nd Dept. 2012) (Internal quotation marks omitted). “In order to be

considered documentary evidence within the meaning of CPLR 3211(a)(1), the evidence

must be unambiguous and of undisputed authenticity.” Id. (Internal quotation marks

omitted).

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PLAINTIFF’S SECOND CAUSE OF ACTION FOR
UNJUST ENRICHMENT MUST BE DISMISSED

24. “The elements of a cause of action to recover for unjust enrichment are (1)

the defendant was enriched, (2) at the plaintiff's expense, and (3) that it is against equity

and good conscience to permit the defendant to retain what is sought to be recovered.”

Gym Door Repairs, Inc. v Astoria Gen. Contr. Corp., 144 A.D.3d 1093, 1096, 43 N.Y.S.3d

381 (2nd Dept. 2016) (Internal quotation marks omitted).

25. “Recovery under quasi-contractual theories is, generally, inappropriate if

there exists a valid and enforceable contract between the parties. It is impermissible . . .

to seek damages in an action sounding in quasi contract where the suing party has fully

performed on a valid written agreement, the existence of which is undisputed, and the

scope of which clearly covers the dispute between the parties. . . . However, [w]here . . .

there is a bona fide dispute as to the existence of a contract, or where the contract does

not cover the dispute in issue, a plaintiff may proceed upon a theory of quasi-contract

as well as breach of contract, and will not be required to elect his or her remedies.”

AHA Sales, Inc. v. Creative Bath Products, Inc., 58 A.D.3d 6, 20, 867 N.Y.S.2d 169 (2nd

Dept. 2008) (Citations omitted; internal quotation marks omitted).

26. “[T]he theory of unjust enrichment lies as a quasi-contract claim and

contemplates an obligation imposed by equity to prevent injustice, in the absence of an

actual agreement between the parties. . . . Thus, [a] cause of action predicated on a theory of

implied contract or quasi-contract is not viable where there is an express agreement that

governs the subject matter underlying the action.” Gym Door Repairs, Inc. v. Astoria

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Gen. Contr. Corp., 144 A.D.3d 1093, 1096—97, 43 N.Y.S.3d 381 (2nd Dept. 2016) (Citation

omitted; emphasis added; internal quotation marks omitted).

27. In this instant action, Plaintiff has failed to plead any facts which establish

a cause of action for unjust enrichment. Plaintiff’s unjust enrichment claim is premised

upon Defendants’ alleged failure to comply with the terms of their Agreement.

However, a contract between the parties already exists thereby precluding the

simultaneous maintenance of a cause of action for unjust enrichment and breach of

contract, which is Plaintiff’s first cause of action.

28. In fact, Plaintiff’s claims are not separate from the alleged breach of

contract between the parties. Thus, Plaintiff’s claim for unjust enrichment would be

duplicative of any purported cause of action for breach of contract. As such, the Court

should dismiss this quasi-contract claim, as there is already an agreement between the

parties.

29. Accordingly, since Plaintiff’s claim for unjust enrichment fails to set forth

allegations that are a separate and distinct from its alleged breach of contract claim, it

should be dismissed.

PLAINTIFF’S THIRD CAUSE OF ACTION FOR FORECLOSURE OF THE
MECHANIC’S LIEN MUST BE DISMISSED

30. New York Lien Law §17 states: “No lien specified in this article shall be a

lien for a longer period than one year after the notice of lien has been filed, unless

within that time an action is commenced to foreclose the lien, and a notice of the pendency

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of such action . . . is filed with the county clerk of the county in which the notice of lien is

filed . . . or unless an extension to such lien . . . is filed within one year from the filing of

the original notice of lien . . . No lien shall be continued by such extension for more than one

year from the filing thereof.” New York Lien Law §17.

31. “[I]t is well settled that commencement of a foreclosure action alone,

without filing a notice of pendency, is insufficient to continue a lien . . . . [A] lien is good

for one year only. To keep it valid longer, a lienor must, within that year, (1) start an

action to foreclose the lien and (2) file a notice of pendency. Alternatively, a lienor can

file (or move for) a one-year extension of the lien and consequently extend the time in

which to start the action and file a notice of pendency. In the event both things are not

accomplished within the extension period, and a further extension of the lien is not

obtained by order of the court, the lien expires.” Bianchi Const. Corp. v. D'Egidio, 165

Misc.2d 973, 976, 630 N.Y.S.2d 904, 1995 WL 495245 (Sup. Ct. 1995) (Citation omitted);

see also Madison Lexington Venture v. Thomas Crimmins Contr. Co., 159 A.D.2d 256,

257, 552 N.Y.S.2d 251, 1990 WL 25363 (1st Dept. 1990).

32. “In other words, Lien Law § 17 provides that a lienor has one year from

the filing of a mechanic's lien to commence an action and file a notice of pendency.

However, the lienor may obtain a one-year extension of the time in which to accomplish

the commencement of the action and the filing of a notice of pendency. Otherwise the

lien expires.” Id. at 976-77; See also Aztec Window & Door Mfg., Inc. v. 71 Vil. Rd., LLC,

60 A.D.3d 795, 796, 875 N.Y.S.2d 528, 2009 WL 711769 (2nd Dept. 2009) (“In the event

neither of these conditions is accomplished within the statutory period, nor is a further

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extension of the lien obtained by order of the court, the lien automatically expires by

operation of law, becoming a nullity and requiring its discharge.”).

33. In Bianchi Construction Corp., the plaintiff brought an action against

homeowners to foreclose a mechanics lien. The Court determined that the mechanics

lien expired one year after lienor obtained a valid extension of the lien, even though an

action to foreclose the lien was commenced during the extension period, because no

notice of pendency was filed within the extension period.

34. Furthermore, Courts have shown that it is unfavorable to amend an

expired lien. In Aztec Window & Door Mfg., Inc., the defendant moved to discharge the

then-expired mechanics lien, and the plaintiff cross-moved for leave to file an untimely

notice of pendency. The Court determined that due to plaintiff’s failure to file a notice

of pendency or move to extend the time to do so within the one-year period, the

mechanic’s lien expired as a matter of law and should be discharged. Ultimately

reversing the Supreme Court’s decision that granted Plaintiff’s motion for leave to file

its untimely notice of pendency.

35. In the present case, Plaintiff seeks the foreclosure of the Lien against the

Unit in the amount of $48,250.29. However, Plaintiff has not properly complied with the

requirements for foreclosure of the mechanics lien pursuant to New York Lien Law §17.

36. Plaintiff filed the mechanics lien against the Unit, on or about September

21, 2015, claiming that it is entitled to payment in the amount of $48,250.29. A valid

extension of the lien was filed on September 19, 2016.

37. Plaintiff commenced this action during the extension period, however, no

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notice of pendency was filed in this matter and the Complaint makes no allegation that

one was filed. A review of the court docket clearly shows that no Lis Pendens was ever

filed in this action as required by New York Lien Law §17. As a result, the Extended

Lien expired on September 19, 2017. Plaintiff has failed to comply with the rules set

forth in Lien Law §17, which require the commencement of a foreclosure action along

with filing a notice of pendency.

38. Moreover, Plaintiff had the option to move for an additional one-year

extension of the lien to extend the time in which to start the action and file a notice of

pendency, however, Plaintiff has not failed to do so on or before September 19, 2017. As

such, Plaintiff should not be allowed additional time to file its untimely notice of

pendency.

39. Even if Plaintiff were to file an extension, it must be done within

reasonable time before the expiration date.

40. Accordingly, Plaintiff has failed to file a notice of pendency. Therefore,

Defendant’s motion to dismiss should be granted pursuant to CPLR §3211(a)(7).

PLAINTIFF’S FOURTH CAUSE OF ACTION FOR
VIOLATION OF CONSTRUCTION TRUST FUNDS MUST BE DISMISSED

41. “Article 3-A of the Lien Law creates trust funds out of certain construction

payments or funds to assure payment of subcontractors, suppliers, architects, engineers,

laborers, as well as specified taxes and expenses of construction.” Aspro Mech. Contr.,

Inc. v. Fleet Bank, N.A., 1 N.Y.3d 324, 328, 773 N.Y.S.2d 735 (2004); New York Lien Law

§§70, 71.

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42. Pursuant to §70(1) of Lien Law, any funds received by a contractor from a

homeowner under or in connection with a contract for the improvement of real

property, or for home improvement, “shall constitute assets of a trust for the purposes

provided in section seventy-one of this chapter.” Upon the creation of such trust, a

contractor or subcontractor “becomes the trustee of such funds.” Lien Law §70(2); see

also Rogers v. State of New York, 181 Misc. 2d 683, 694 N.Y.S.2d 874 (Ct. of Cl. 1999),

affirmed 280 A.D.2d 930, 719 N.Y.S.2d 916 (4th Dept. 2001).

43. Pursuant to §71 of the Lien Law, trust assets of which a contractor is a

trustee shall be held and applied for, inter alia, payment of claims of subcontractors,

architects, engineers, surveyors, laborers and materialmen. See also Higgins-Kieffer v.

State, 165 Misc 2d 425, 627 NYS2d 513 (Ct. of Cl. 1995) (“Under article 3-A of the Lien

Law, which provides that all funds paid to a contractor in connection with the

improvement of real property constitute assets of a trust for the benefit of

subcontractors, laborers, materialmen. …”).

44. Section 79-a of the New York Lien Law states: “[a]ny trustee of a trust

arising under this article, and any officer, director or agent of such trustee, who applies

or consents to the application of trust funds received by the trustee as money or an

instrument for the payment of money for any purpose other than the trust purposes of

that trust, as defined in section seventy-one, is guilty of larceny and punishable as

provided in the penal law . . . .” New York Lien Law §79-a.

45. In the instant action, Plaintiff misinterprets Lien Law §79-a as Defendants

are not subject to that provision. More specifically, Defendants are not trustees of the

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trust fund which was created for the project at Defendants’ residence. It in fact is the

Plaintiff who is the trustee of the fund, pursuant to Lien Law §70(1) and Plaintiff must

maintain the funds it receives in trust from the Defendants as part of the project for the

purpose of paying Plaintiff’s subcontractors. Defendants did not receive any funds in

connection with the Agreement for the purposes of the making payments, as a trustee,

to subcontractors, architects, engineers, surveyors, laborers and materialmen.

46. Furthermore, Article 3-A is meant for the benefit of subcontractors,

suppliers, architects, engineers, laborers, etc. to ensure that they are paid. In the present

case, Defendants are not subcontractors, nor are they contractors who are deemed the

trustee of the trust fund. Therefore, Section 79-a is inapplicable.

47. Accordingly, Plaintiff’s fourth cause of action as set forth in the Complaint

must be dismissed.

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WHEREFORE it is respectfully requested that this Court issue an Order which

dismisses Plaintiff’s second, third and fourth cause of action in the Complaint pursuant

to CPLR §§3211(a)(1) and (a)(7) along with such other and further relief as this Court

deems just and proper.

Dated: New York, New York
October 3, 2017

_________________________________
PETER MOULINOS

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Motion-Secondary: Integrated Project Delivery Partners, Inc. v. Susan L. Schuman Family Trust, Ilene Osherow, Susan Schuman

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