As I previously noted in my post titled “Varying Interpretations of Lien Law Section 3’s Consent Requirement,” last year the New York Court of Appeals granted a motion for leave to appeal the Fourth Department’s decision in Ferrera v. Peaches Café LLC, 138 A.D.3d 1391, 30 N.Y.S.3d 765 (4th Dep’t…
New York Commercial and Construction Lawyer Blog
Lienor Unable To Establish Lien Fund Based Upon Owner’s Alleged “Bad Faith” Payment
Enforcing mechanic’s lien rights raises several issues which are distinct from the ability to simply file a mechanic’s lien. For example, a subcontractor must generally show that a “lien fund” existed between the owner and contractor at the time it filed its lien in order to successfully foreclose. Peri Formwork…
Right To File A Mechanic’s Lien For Pre-Construction Services Is Upheld
Not all work performed at or related to a construction project can form the basis of a mechanic’s lien. Rather, one can only lien for work performed or materials furnished on a privately owned project for the “improvement of real property” as set forth in Lien Law § 3. Generally…
Implied Contractual Indemnification Claim Sustained
Parties to contracts and courts continue to grapple with the distinctions between and among contribution, contractual indemnification and common law indemnification in a commercial/construction setting. A good example is the recent case of Matzinger v. MAC II (S.D.N.Y. 17 Civ. 4813, July 17, 2018). Plaintiffs, the Matzingers, were the owners…
Owners Are Possibly Not “Necessary Parties” When a Mechanic’s Lien Has Been Discharged
For years the First Department has found itself at odds with the Second and Third Departments concerning who is a necessary party to enforce a mechanic’s lien against real property after a bond has been filed and the lien discharged as of record. As explained in M. Gold & Son, Inc.…
“Permanent Improvement” Under The Lien Law Does Not Include Vibration Monitoring
The meaning of “permanent improvement” under the Lien Law was at the heart of the decision in Matter of 134-136 West Houston, LLC v New York City Land Surveyor P.C., 58 Misc.3d 1228 (A), 2018 WL 1279175 (Table), 2018 N.Y. Slip Op. 50304(U)(Sup. Ct. N.Y. Co. 2018), in which the…
The Subcontractor’s Uphill Dig
Subcontractors face significant challenges when they are confronted with a general contractor which fails or refuses to pay for a contract balance or extra work. For any one of innumerable reasons, general contractors can be undercapitalized such that even a victory at trial can produce a hollow result when the execution of a…
Recent Case Law Suggests That The Impact of the Prompt Payment Act May Be Limited
When the New York Prompt Payment Act (“PPA”) was first enacted (effective 1/14/2003), many believed that it would have a major impact on the payment process in the construction industry. That has not been the case. United States District Court Judge Jack Weinstein recognized the limited reach of the PPA…
Varying Interpretations of Lien Law Section 3’s Consent Requirement
Last September, the New York Court of Appeals granted a motion for leave to appeal the Fourth Department’s decision in Ferrera v. Peaches Café LLC, 138 A.D.3d 1391, 30 N.Y.S.3d 765 (4th Dep’t 2016). In Peaches, the Fourth Department enforced a mechanic’s lien filed by a contractor who was hired…
How Contract Drafting Effects the Establishment of a Lien Fund
According to the New York Lien Law, a mechanic’s lienor who is a subcontractor may only recover on its lien claim if it can establish there is a Lien Fund. That means the lienor must establish that funds were due and owing from the owner to the contractor in an…