Arr-Em Plastering Corp. v. 515 East 85th St. Corp.

• Decision Date: 08 February 1966
• Docket Number: ARR-EM
• Citation: 25 A.D.2d 59,266 N.Y.S.2d 944
• Parties: PLASTERING CORP., Plaintiff, v. 515 EAST 85TH STREET CORP., Defendant-Appellant, and Malcan Construction Co. Inc., Defendant-Respondent, and Brosen Associates, Inc. (formerly Brosen Realty Corp.), Gilsen Construction Corp., Fein Mechanical Corp. and Marmor Construction Corp., S. J. Sens, also known as Samuel J. Sens, The People of the State of New York, and Malcan Construction Co., Inc., and Rite Kitchens, Inc., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 944

266 N.Y.S.2d 944

25 A.D.2d 59

ARR-EM PLASTERING CORP., Plaintiff, v. 515 EAST 85TH STREET CORP., Defendant-Appellant, and Malcan

Construction Co. Inc., Defendant-Respondent, and Brosen

Associates, Inc. (formerly Brosen Realty Corp.), Gilsen

Construction Corp., Fein Mechanical Corp. and Marmor

Construction Corp., S. J. Sens, also known as Samuel J.

Sens, The People of the State of New York, and Malcan

Construction Co., Inc., and Rite Kitchens, Inc., Defendants.

Supreme Court, Appellate Division, First Department.

Feb. 8, 1966.

Sylvan D. Freeman, and Manuel Taxel, Brooklyn, of counsel (Dreyer & Traub, Brooklyn, attorneys) for appellant.

Leonard Shabasson, New York City, of counsel (Max E. Greenberg, New York City, on the brief; Mex E. Greenberg, New York City, attorney) for respondent.

Before BOTEIN, P J., and BREITEL, RABIN, McNALLY and EAGER, JJ.

McNALLY, Justice.

The question presented is whether a subcontractor which has validly waived its right to file a mechanic's lien may acquire such right, after it has performed the work and furnished the materials claimed for, upon the contractor's oral consent to the elimination of the waiver provision contained in the written contract between the contractor and the subcontractor without the knowledge or consent of the owner.

Defendant-appellant 515 East 85th Street Corp. owns premises 511-517 East 85th Street in the Borough of Manhattan. Appellant on December 5, 1961 entered into a lease-contract with defendant Brosen Associates, Inc. (formerly Brosen Realty Corp.) for the construction, at Brosen's expense, of a 13-story apartment house to be leased to Brosen for 21 years with options for renewal. Appellant effected a building loan mortgage of $1,080,000, the proceeds of which were received by Brosen and constituted the appellant's sole financial obligation relative to the construction of the building. Brosen covenanted not to create or permit any mechanic's lien against the premises.

Brosen contracted with defendant Gilsen Construction Corp. to erect the building. Brosen and Gilsen are family corporations. We have heretofore held that Gilsen is chargeable with knowledge of and bound by the said covenant not to create any mechanic's lien against the premises. (Arr-Em Plastering Corp. v. 515 East 85th St. Corp., 21 A.D.2d 415, 250 N.Y.S.2d 995.)

Defendant-respondent Malcan Construction Co. Inc. is the subcontractor in respect of the carpentry. Its claim is for the balance of $5,340.92 for work performed and materials supplied in accordance with its contract with Gilsen. Malcan's contract also provides it will not file or cause to be filed any mechanic's lien against the premises.

Malcan on April 12, 1963 instituted suit against Gilsen to recover the said balance. Pending said action and settlement negotiations and in consideration of the extension of time to answer of Gilsen during negotiations for settlement, Gilsen purported orally to waive the benefit of Malcan's covenant not to file a mechanic's lien. Thereupon, Malcan on June 13, 1963 filed the lien herein. In this action brought by plaintiff to foreclose a mechanic's lien, defendant-appellant moved for summary judgment dismissing Malcan's counterclaim and cross-complaint for the foreclosure of its lien and for its vacatur and discharge. Special Term denied the motion holding that factual issues are present as to Gilsen's alleged consent to the elimination of Malcan's waiver.

Section 34 of the Lien Law provides a subcontractor may waive his lien by express written agreement signed by him or his agent. Malcan's waiver of lien complies with the statute and it does not contend otherwise. The waiver served to extinguish Malcan's right to file a notice of lien. (Cummings v. Broadway-94th St. Realty Co., 233 N.Y. 407, 412, 135 N.E....