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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
E.
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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