Carpenter's Backhoe & Dozer Service, Inc. v. Dewittsburg Housing Development Fund Corp.

• Decision Date: 07 December 1978
• Citation: 410 N.Y.S.2d 717,66 A.D.2d 916
• Court: New York Supreme Court — Appellate Division
• Parties: CARPENTER'S BACKHOE & DOZER SERVICE, INC., Respondent, v. DEWITTSBURG HOUSING DEVELOPMENT FUND CORP. et al., Appellants, and Horst Electric, Inc., et al., Defendants.

Page 717

410 N.Y.S.2d 717

66 A.D.2d 916

CARPENTER'S BACKHOE & DOZER SERVICE, INC., Respondent, v. DEWITTSBURG HOUSING DEVELOPMENT FUND CORP. et al., Appellants and Horst Electric, Inc., et al., Defendants.

Supreme Court, Appellate Division, Third Department.

Dec. 7, 1978.

Brown, Kelly, Turner, Hassett & Leach, Buffalo (Frederick D. Turner, Buffalo, of counsel), for appellants.

Fred Weinstein, Ithaca (John LoPinto, Ithaca, of counsel), for respondent.

Before SWEENEY, J. P., and STALEY, MAIN, LARKIN and MIKOLL, JJ.

MEMORANDUM DECISION.

Appeal from an order of the Supreme Court at Special Term, entered October 21, 1977 in Tompkins County, which denied defendants' motion for summary judgment dismissing the complaint, granted plaintiff's cross-motion for summary judgment to the extent of determining that plaintiff had a valid lien and ordered an immediate trial to determine the amount of said lien.

On November 22, 1971, appellant Dewittsburg Housing Development Fund Corporation (hereinafter Dewittsburg) contracted with Clay Development Corporation (hereinafter Clay) for the construction of 212 townhouse apartments upon certain realty owned by Dewittsburg in Elmira, New York. As surety for Clay, appellant Travelers Indemnity Company (hereinafter Travelers) issued a performance bond wherein it agreed to fully indemnify Dewittsburg from any damage which Dewittsburg might incur because of Clay's failure to perform on the contract. Pursuant to a separate contract with Stirling Homex, Inc., the parent company of Clay, ^* plaintiff Carpenter's Backhoe & Dozer Service, Inc. subsequently supplied labor and material for the project as a subcontractor and completed its work on May 24, 1972.

Thereafter, in late June the project sustained extensive damage as a result of flooding caused by "Hurricane Agnes", and neither Clay nor Stirling Homex worked on the project after June 28, 1972. The following month both of these companies filed petitions under chapter X of the Bankruptcy Laws, and on July 14, 1972 plaintiff filed a notice of mechanic's lien for the labor and material it had furnished for the project.

With these circumstances prevailing, Dewittsburg terminated Clay's rights under the original construction contract on September 15, 1972, and, in accordance with its obligations under the performance bond, Travelers arranged for the project to be completed by Wright and Kremers, Inc. (hereinafter Wright). As a result, Travelers, Dewittsburg and Wright then entered into a take-over agreement pursuant to which Wright completed the project, including extensive repair work necessitated by the flooding, at a cost of $2,432,662.80. Of this amount Dewittsburg ultimately paid Wright $1,020,321, the amount remaining unpaid under the original contract with Clay, and Travelers paid the remainder.

Alleging that it had still not been fully paid for labor and materials which it had...