| Vertical Progression, Inc. v Canyon Johnson UrbanFunds |
| 2015 NY Slip Op 01939 [126 AD3d 784] |
| March 11, 2015 |
| Appellate Division, Second Department |
[*1]
| Vertical Progression, Inc., Appellant, v CanyonJohnson Urban Funds, Defendant, and Canyon-Johnson Realty Advisors II, LLC, et al.,Respondents. |
Rabinowitz & Galina, Mineola, N.Y. (Gayle A. Rosen of counsel), forappellant.
Cole, Schotz, Meisel, Forman & Leonard, P.A., New York, N.Y. (Leo V. Leyvaand Nolan E. Shanahan of counsel), for respondents.
In an action, inter alia, to recover damages for breach of contract and to foreclosemechanic's liens, the plaintiff appeals, as limited by its brief, from so much of anamended order of the Supreme Court, Kings County (Rothenberg, J.), dated January 24,2013, as granted those branches of the motion of the defendants Canyon-Johnson RealtyAdvisors II, LLC, Canyon-Johnson Urban Fund II, L.P., and CJUF II Hanson, LLC,which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss, insofar as asserted againstthe defendant CJUF II Hanson, LLC, the causes of action alleging breach of contract,based on quantum meruit, and to recover on an account stated, and so much of the causeof action to foreclose the mechanic's liens as was referable to the lien filed against thecommon areas of the subject real property
Ordered that the amended order is modified, on the law, by deleting the provisionsthereof granting those branches of the motion of the defendants Canyon-Johnson RealtyAdvisors II, LLC, Canyon-Johnson Urban Fund II, L.P., and CJUF II Hanson, LLC,which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the causes of actionalleging breach of contract, based on quantum meruit, and to recover on an accountstated insofar as asserted against the defendant CJUF II Hanson, LLC, and substitutingtherefor a provision denying those branches of the motion; as so modified, the order isaffirmed insofar as appealed from, with costs to the plaintiff.
In March 2010, the plaintiff Vertical Progression, Inc. (hereinafter Vertical), enteredinto a contract with nonparty HRH Construction (hereinafter HRH), pursuant to whichVertical was to provide certain construction services in connection with a condominiumconversion project at One Hanson Place in Brooklyn (hereinafter the property). Theowner of the property was the defendant CJUF II Hanson, LLC (hereinafter CJUF). HRHacted as CJUF's construction manager. On or about December 7, 2011, Verticalcommenced this action against, among others, CJUF, Canyon-Johnson Realty AdvisorsII, LLC, and Canyon-Johnson Urban Fund II, L.P. (hereinafter collectively the Canyondefendants), as well as Canyon Johnson Urban Funds to recover the sum of $464,697that it allegedly expended on labor and materials pursuant to the contract, and toforeclose upon mechanic's liens in the sum of $113,215 that it had filed against the firstfloor retail unit of the property. The complaint asserted four causes of action. The firstcause of action sought to recover damages for breach of contract, the second cause ofaction sought to [*2]recover damages based on quantummeruit, the third cause of action alleged that Vertical was entitled to recover on anaccount stated, and the fourth cause of action sought to foreclose the mechanic's liens.The Canyon defendants subsequently moved to dismiss the complaint pursuant to CPLR3211 (a) (1) and (7), to cancel the notice of pendency pursuant to CPLR 6514 (a) and (b),and to impose sanctions pursuant to 22 NYCRR 130-1.1.
In an amended order dated January 24, 2013, the Supreme Court granted thosebranches of the Canyon defendants' motion which were to dismiss the causes of actionalleging breach of contract, based on quantum meruit, and to recover on an accountstated. The court also directed the dismissal, as to all of the defendants, of so much of thecause of the action to foreclose the liens as was addressed to all of the liens except theone filed against the retail unit of the subject real property, and, as to all of thedefendants except CJUF, the court directed the dismissal of so much of the cause of theaction to foreclose the liens as was addressed to the lien filed against the retail unit. Thecourt held that so much of that cause of action as was addressed to the lien filed againstthe retail unit could proceed only insofar as asserted against CJUF. The request forsanctions was denied. Vertical appeals, as limited by its brief, from so much of theamended order as granted those branches of the Canyon defendants' motion which wereto dismiss, insofar as asserted against CJUF, the causes of action alleging breach ofcontract, based on quantum meruit, and to recover on an account stated, and so much ofthe cause of action to foreclose the liens as was addressed to the lien filed against thecommon areas of the subject property.
"A motion pursuant to CPLR 3211 (a) (1) to dismiss the complaint on the groundthat the action is barred by documentary evidence may be granted only where thedocumentary evidence utterly refutes the plaintiff's factual allegations, therebyconclusively establishing a defense as a matter of law" (Mendelovitz v Cohen, 37AD3d 670, 670 [2007]; see Goshen v Mutual Life Ins. Co. of N.Y., 98NY2d 314, 326 [2002]).
In considering a motion to dismiss a complaint pursuant to CPLR 3211 (a) (7), "thecourt must accept the facts as alleged in the complaint as true, accord plaintiffs thebenefit of every possible favorable inference, and determine only whether the facts asalleged fit within any cognizable legal theory" (Sokol v Leader, 74 AD3d 1180, 1181 [2010] [internalquotation marks omitted]; seeNonnon v City of New York, 9 NY3d 825, 827 [2007]; Leon vMartinez, 84 NY2d 83, 87-88 [1994].) However, when evidentiary material isadduced in support of a motion to dismiss a complaint pursuant to CPLR 3211 (a) (7),and the motion has not been converted to one for summary judgment, the court mustdetermine whether the proponent of the pleading has a cause of action, not whether he orshe has stated one and, "unless it has been shown that a material fact as claimed by the[plaintiff] to be one is not a fact at all and unless it is can be said that no significantdispute exists regarding it, . . . dismissal should not eventuate"(Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]; see Jannetti v Whelan, 97AD3d 797, 797-798 [2012]).
Here, the Supreme Court directed the dismissal of the causes of action allegingbreach of contract, based on quantum meruit, and to recover on an account stated againstCJUF, among others, concluding that Vertical lacked contractual privity with CJUF, andthat the subject matter in dispute was governed by Vertical's contract with HRH.Generally, a subcontractor may not assert a cause of action to recover damages for breachof contract against a party with whom it is not in privity (see Andrew R. Mancini Assoc.,Inc. v Mary Imogene Bassett Hosp., 80 AD3d 933, 934-935 [2011]; Spectrum Painting Contrs., Inc. vKreisler Borg Florman Gen. Constr. Co., Inc., 64 AD3d 565, 576 [2009]).Nevertheless, "a subcontractor can sometimes state a cause of action [alleging] breach ofcontract or unjust enrichment against the owner, where direct dealings between theowner and the subcontractor justify imposing an obligation upon the owner despite theinitial lack of privity between them" (Haig, Commercial Litigation in New York StateCourts § 104:18 [4C West's NY Prac Series 3d ed]; see Brown Bros.Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397 [1977]).
In opposition to the Canyon defendants' motion to dismiss the complaint, Verticalalleged that HRH executed the subject contract "as agent for" CJUF. Additionally,Vertical submitted documentary proof that CJUF directly paid Vertical, thus providingproof that CJUF was the true principal and the real party in interest. The documentaryevidence submitted by the Canyon [*3]defendants did notconclusively establish otherwise, and the totality of the evidence that they submitted didnot establish that a fact alleged by Vertical was not a fact at all, or that there was nosignificant dispute regarding it. Accordingly, the Supreme Court should not havedirected the dismissal of the causes of action alleging breach of contract, based onquantum meruit, and to recover on an account stated insofar as asserted againstCJUF.
There is no merit, however, to Vertical's contention that the Supreme Court erred ingranting that branch of the Canyon defendants' motion which was to dismiss, insofar asasserted against CJUF, so much of the cause of action to foreclose the mechanic's liens aswas referable to the lien filed against the common areas of the subject real property.
Vertical's remaining contentions are without merit. Rivera, J.P., Miller, Hinds-Radixand Duffy, JJ., concur.