| Broadway Houston Mack Dev., LLC v Kohl |
| 2010 NY Slip Op 02500 [71 AD3d 937] |
| March 23, 2010 |
| Appellate Division, Second Department |
| Broadway Houston Mack Development, LLC,Appellant, v Ted Kohl et al., Respondents. |
—[*1] Hiscock & Barclay, LLP, Rochester, N.Y. (Marc S. Brown of counsel), forrespondents.
In an action, inter alia, to recover sums paid to creditors of the defendants, the plaintiffappeals from an order of the Supreme Court, Suffolk County (Pines, J.), dated December 22,2008, which granted the defendants' motion for summary judgment dismissing the complaint anddenied its cross motion for summary judgment on the cause of action for subrogation.
Ordered that the order is affirmed, with costs.
The plaintiff, the ground lessee of certain real property, hired IDI Construction Company,Inc. (hereinafter IDI), of which the defendants were members, as its general contractor toconstruct an office building on the property. The plaintiff alleged that, at least in part, because ofthe defendants' malfeasance, IDI eventually was forced to declare bankruptcy. As a result, IDIfailed to remit to subcontractors money paid to it in trust by the plaintiff pursuant to the LienLaw. The plaintiff, to further its own interests, elected to pay the subcontractors directly despitethe fact that it had paid IDI in full. Thereafter, the plaintiff sought, inter alia, subrogation to thesubcontractors' claims against the defendants.
The equitable doctrine of subrogation "is 'applicable to cases where a party is compelled topay the debt of a third person to protect his own rights, or to save his own property' "(Gerseta Corp. v Equitable Trust Co. of N.Y., 241 NY 418, 426 [1926], quoting Colev Malcom, 66 NY 363, 366 [1876]). However, while the scope of subrogation is broad, itcannot be invoked where the payments sought to be recovered are voluntary (see BermudaTrust Co. v Ameropan Oil Corp., 266 AD2d 251 [1999]; Cohn v Rothman-GoodmanMgt. Corp., 155 AD2d 579, 580 [1989]). A party seeking subrogation can establish that itspayments were not voluntary either by pointing to a contractual obligation (see Hamlet at Willow Cr. Dev. Co., LLC vNortheast Land Dev. Corp., 64 AD3d 85, 106 [2009]) or to the need to protect its ownlegal or economic interests (see Gerseta Corp. v Equitable Trust Co. of N.Y., 241 NY at426). When invoking the latter ground, however, the party seeking subrogation must show thatthe act is not merely helpful but necessary to the protection of its interests (see Cohn vRothman-Goodman Mgt. Corp., 155 AD2d at 580).[*2]
Here, although the plaintiff pointed to interests whichwere furthered by its payments to IDI's subcontractors, it failed to demonstrate that thosepayments were necessary to protect its legal or economic interests (see Perma Pave Contr.Corp. v Paerdegat Boat & Racquet Club, 156 AD2d 550, 552 [1989]; H. Verby Co., Inc.v Plainview Assoc., 6 Misc 3d 1011[A], 2005 NY Slip Op 50026[U] [2005]; see alsoBlume, Inc. v Postal Tel.-Cable Co., 265 App Div 1062 [1943]). Accordingly, the plaintifffailed to establish its prima facie entitlement to judgment as a matter of law (see Zuckermanv City of New York, 49 NY2d 557 [1980]). Similarly, its conclusory and speculativeassertions were not sufficient to defeat the defendants' motion for summary judgment dismissingits causes of action which were premised on the Lien Law (see generally Ayotte vGervasio, 81 NY2d 1062 [1993]).
The plaintiff's remaining contentions are without merit (see Select Constr. Corp. v 502 Old Country Rd. LLC, 11 Misc 3d1078[A], 2006 NY Slip op 50609[U] [2006]; see generally Bermuda Trust Co. vAmeropan Oil Corp., 266 AD2d at 251; Cohn v Rothman-Goodman Mgt. Corp., 155AD2d at 580). Rivera, J.P., Florio, Angiolillo and Belen, JJ., concur. [Prior Case History: 22Misc 3d 1001.]