| U.W. Marx, Inc. v Koko Contr., Inc. |
| 2012 NY Slip Op 05375 [97 AD3d 893] |
| July 5, 2012 |
| Appellate Division, Third Department |
| U.W. Marx, Inc., Respondent, v Koko Contracting, Inc., Appellant.(Action No. 1.) Koko Contracting, Inc., Appellant, v U.W. Marx, Inc., et al.,Respondents, et al., Defendant. (Action No. 2.) |
—[*1] Mastropietro-Prade, LLC, Saratoga Springs (John P. Mastropietro of counsel), forrespondents.
Malone Jr., J. Appeal from an order of the Supreme Court (Hummel, J.), entered December27, 2011 in Rensselaer County, which, among other things, granted a motion by U.W. Marx, Inc.and Continental Casualty Company for, among other things, summary judgment dismissing thecomplaint in action No. 2.[*2]
U.W. Marx, Inc. was selected as the general contractorfor the construction of a school by the City School District of Peekskill. Marx entered into asubcontractor agreement with Koko Contracting, Inc. to complete the roofing work associatedwith the project. During the course of the project, a dispute arose between Marx and Kokoregarding payment to Koko. In November 2007, Marx and Koko both sent notices of default tothe other and, by December 2007, their relationship was terminated. In December 2007, Marxcommenced action No. 1 against Koko, alleging breach of contract. Koko subsequentlycommenced action No. 2 against Marx, Continental Casualty Company and the school districtseeking enforcement of its lien and asserting causes of action for account stated, quantum meruitand diversion of trust assets. Koko also made a claim against Continental as surety on the projectbond. The actions were thereafter joined for trial and, upon cross motions by Marx, Continentaland Koko, Supreme Court granted Marx's motion for partial summary judgment on its claimagainst Koko for breach of contract in action No. 1 and granted summary judgment to Marx andContinental dismissing Koko's complaint in action No. 2 in its entirety.[FN*] Koko appeals.
On a motion for summary judgment, the moving party bears the burden of establishing thatno material issues of triable fact exist and that it is entitled to judgment as a matter of law(see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of NewYork, 49 NY2d 557, 562 [1980]; Andrew R. Mancini Assoc., Inc. v Mary Imogene Bassett Hosp., 80AD3d 933, 935 [2011]). If the moving party meets its initial burden, the nonmoving partymust produce evidence sufficient to demonstrate a material issue of fact to avoid summaryjudgment (see id.). On a motion for summary judgment, the court must view the evidencebefore it in the light most favorable to the nonmoving party (see Vega v Restani Constr. Corp., 18 NY3d 499, 503 [2012];Andrew R. Mancini Assoc., Inc. v Mary Imogene Bassett Hosp., 80 AD3d at 935).
The record, which includes the parties' affidavits, deposition transcripts, correspondencebetween Marx and Koko during the relevant time period, the subcontract and the supplementalcontract between Marx and Koko, reveals material issues regarding the timing of critical factssuch as Koko's entitlement to payment, notice of default and cessation of work on the project.Initially, Marx maintains that Koko was not entitled to payment for work performed in July 2007,August 2007 and September 2007 because it had not submitted all necessary documentationrequired under the terms of the subcontract and supplemental contract and, because Koko wasnot entitled to payment, it did not have the right to stop work on the project. To the extent thatMarx's argument is based upon Koko's failure to submit lien waivers, it is without merit. Suchwaivers cannot be required as a precondition for payment and may only be required either at thetime payment is made or thereafter (see Lien Law § 34). With regard to Koko'ssubmission of certified payrolls, the record establishes, and Marx concedes, that certified payrollswere submitted for the July 2007 period in September 2007. If or when Koko became entitled topayment on the August 2007 and September 2007 requisitions is not clear but, nonetheless,Koko's entitlement to payment on the July 2007 requisition could provide the basis for it to stopwork pursuant to the terms of the contract and supplemental contract.
Marx also contends that Koko ceased work without proper notice pursuant to the terms of thesubcontract and supplemental contract. While the record contains some proof that Koko's last dayof work on the project may have been October 11, 2007, there is also proof that Koko's [*3]supervisor was injured at the site sometime between October 11 andOctober 17, 2007, it was awaiting a replacement and it had not abandoned the project at thattime. Moreover, there is proof that Koko had employees on site as late as October 31, 2007,provided notice of intent to cease work due to nonpayment on November 6, 2007 and actuallywithdrew from the project for that reason on November 14, 2007. Based upon the conflictingproof regarding when Koko ceased work on the project due to Marx's nonpayment, summaryjudgment on Marx's claim against Koko for breach of contract is not appropriate. Finally, giventhe existence of the factual issues regarding Koko's entitlement to payment, dismissal of Koko'sclaims for enforcement of its lien, account stated, diversion of trust assets and as againstContinental as surety on the bond was also erroneous.
Peters, P.J., Spain, Kavanagh and Garry, JJ., concur. Ordered that the order is modified, onthe law, without costs, by reversing so much thereof as (1) granted the motion by U.W. Marx,Inc. for partial summary judgment in action No. 1 and (2) granted the motion of U.W. Marx, Inc.and Continental Casualty Company for summary judgment dismissing the causes of action inaction No. 2 for enforcement of a lien, account stated, diversion of trust assets and surety on thebond; said motion in action No. 1 denied and said motion in action No. 2 denied to said extent;and, as so modified, affirmed.
Footnote *: Koko had stipulated to dismissalof its claim for quantum meruit.