Colonial Roofing Corp. v. John Mee, Inc.

• Decision Date: 04 September 1980
• Parties: COLONIAL ROOFING CORP. v. JOHN MEE, INC.
• Court: New York Supreme Court

Page 931

431 N.Y.S.2d 931

105 Misc.2d 140

COLONIAL ROOFING CORP. v. JOHN MEE, INC.

Supreme Court, Trial Term, Queens County, Part 1.

Sept. 4, 1980.

McGarvey & Steele, Lake Success, for plaintiff.

Edward I. Penson, P.C., Great Neck, for defendant.

MEMORANDUM

HYMAN, Justice.

Plaintiff moves for leave to reargue its prior motion for summary judgment which had been denied by the court.

Upon re-examination of the papers and exhibits as to the prior motion, together with the affirmations and exhibits now submitted by the parties, the court finds that a novel question as to contractual construction and interpretation is involved, one which has not been definitively dealt with by the courts of this State or, at least, never sufficiently clarified.

Plaintiff, by its former attorney, commenced this action to recover for work, labor and materials furnished to defendant at an "agreed price" and reasonable value; it alleges partial payment ($1,000) with a balance of $12,800 due, demanded, but unpaid. The defendant's answer denies the material allegations of the complaint, but asserts no affirmative defense of any kind.

The parties have proceeded upon the primary motion by plaintiff for summary judgment as though this action was one for work and labor performed and materials furnished pursuant to a "written contract" between them dated October 21, 1977. They have also proceeded similarly on this present motion for reargument. They have thus chartered their own course in this litigation; the court will consider same accordingly, and thus will lend itself to the basic issue of interpreting the language used in the Contract. The salient facts are, therefore, as follows:

On October 21, 1977 the parties entered into said written agreement. The agreement states, in part:

"The defendant (General) Contractor has entered into a contract with Davidson Avenue Rehab Associates, hereinafter called the 'Owner', for the construction of Davidson Ave. Rehab, 2000, 2012, 2016, 2020 Davidson Avenue, Bronx, New York, hereinafter referred to as the 'Project', all in accordance with General Contract Documents which are on file in the office of the Contractor and have been examined by the Subcontractor, and which the parties do hereby expressly make part hereof with the same force and effect as if same were physically incorporated herein. The term 'General Contract', * * * shall, without limiting the generality thereof include * * * 'Instructions to Bidders', 'Form of Contract'. 'General Conditions * * * including any amendments * * * .'

Statement of Work 1. The subcontractor agrees to furnish all the labor, * * *, material * * * for all of the roofing and sheetmetal work * * * as shown on the plans and specifications * * * .' 3. The sum to be paid by Contractor (defendant) to the Subcontractor (plaintiff) for the full and complete performance of said work shall be * * * $14,000 dollars subject to additions or deductions on account of alterations, additions or omissions in the work * * * ."

On May 1, 1978 the parties supplemented the contract by a "Change Order" * * * "the contract fee is being increased by the amount of $900.00." This "Change Order" therefore increased the contract amount to $14,900, in accordance with plaintiff's letter of February 21, 1977.

Apparently plaintiff caused its prior attorney (Stahl) to write to defendant on November 16, 1978 demanding payment of $15,000, to which defendant responded on November 22, 1978 indicating that the Contract and Change Order totalled only $14,900 of which $1,100 had been paid leaving a balance of $13,800; but, said letter also stated, "Please be advised that Colonial Roofing (plaintiff) still has outstanding work to perform * * * ."

Thereafter, 12 days later, on December 4, 1978, defendant again wrote to plaintiff's attorney (Stahl) enclosing $1,100 "to be credited against the outstanding account" (of plaintiff), and further stating therein, that, "We will forward * * * $5,210.00 by December 14, 1978, and * * * $6,210.00 by December 30, 1978. The retainage amount of $1,380.00 will be forwarded when we receive final payment from F.H.A. This will bring the grand total that is due to $13,800.00." (Emphasis added)

It is to be noted that the latter verbiage used by defendant specifically was, " * * * the grand total that is due to $13,800.00." No claim was made by defendant in that last writing as to any "outstanding unperformed work" required by plaintiff to be done before its entitlement to full payment less retainage.

Upon the primary motion, defendant's officer, Herbert A. Sylvester, argued in his affidavit in opposition, that the first letter of November 22, 1978 calls to plaintiff's attention "outstanding work" to be performed by plaintiff; but, it is to be further noted that such conclusion of there being outstanding work unperformed by plaintiff and what such unfinished work consisted of is not stated in its final letter of December 4, 1978 nor is any such "unperformed work" set forth in his opposing affidavit. As a matter of proof of such conclusory statement the opposing affidavit of defendant is completely devoid thereof. To the contrary, the defendant's officer states in his affidavit as follows:

"I specifically affirm that funds have not yet been paid to defendant by the owner for the work upon which plaintiff now claims, although that 'closing' and that funding are now anticipated to occur in the next few weeks. (In fact, the defendant is no longer on the job and the owner may even now have said funds available to distribute to plaintiff * * * "). (Emphasis added)

The law is well settled that on a motion for, or in opposition to a motion for summary judgment, a party must lay bare facts in proof thereof to indicate that it has a good and meritorious cause of action or defense, and that there does exist a triable or at least a substantial arguable question of fact which merits a trial (Banasik v. Reed Prentice Div. Package Mach. Co., 34 A.D.2d 746, 310 N.Y.S.2d 127). Certainly the affirmation of the attorney for defendant, consisting solely of argument by one without personal knowledge of the facts, cannot be considered with respect to the merits of any alleged "unfinished work", it being nothing more than hearsay (Horowitz v. Kevah Konner, Inc., 67 A.D.2d 38, 414 N.Y.S.2d 540; Bank Leumi Trust Co. of New York v. Collins Sales Service, Inc., 65 A.D.2d 735, 410 N.Y.S.2d 617; Homart Development Co. v. Graybar Elec. Co., 63 A.D.2d 727, 405 N.Y.S.2d 310; Pathmark Graphics, Inc. v. J. M. Fields, Inc., 53 A.D.2d 531, 384 N.Y.S.2d 177).

On the other hand, it appears that the affidavit by defendant's officer raises the only issue, that is, whether the plaintiff subcontractor must await its payment until the defendant general contractor has received its payment from the "Owner" (Davidson). This issue revolves around interpretation of the following contractual language.

"PAYMENTS":-

"3. Monthly, as the work progresses, an amount equal to 90% of the value of the work completed from month to month, provided, however, that the Owner shall theretofore have paid the Contractor on account of such work completed * * * ." (Emphasis added)

It is to be noted that, at least by December 4, 1978, plaintiff had completed its work and defendant had agreed to make payment to plaintiff for "the grand total that is due to $13,800.00 "; no condition of any kind for any reason was stated or made by defendant to making payment to plaintiff (defendant's letter of December 4, 1978). Now, however, some 21 months later, defendant asserts a so-called condition precedent to its requirement to making payment, contained in the contract as aforestated, and allegedly reflected by the terminology, "provided, however, that the Owner shall theretofore have paid the Contractor on account of such work completed ".

Assuming that defendant has as yet (21 months later) not been paid by the Owner, the question is whether the risks and hazards of payment by the Owner to the General Contractor (defendant) should be borne by the subcontractor (plaintiff)? In the opinion of this court, the answer must be no!

In Schuler-Hass Electric Corp. v. Aetna Cas. & Sur. Co., 49 A.D.2d 60, 371 N.Y.S.2d 207, affd. 40 N.Y.2d 883, 389 N.Y.S.2d 348, 357 N.E.2d 1003, defendant Aetna had issued a payment bond on behalf of the general contractor for the benefit of the subcontractors. Plaintiff subcontractor brought suit on the bond and Aetna defended on the basis of a subcontract provision similar to the "PAYMENTS" section subject to dispute herein. As in the instant case, defendant argued that since the owner had not paid the general contractor, the subcontractor's right to payment had not yet matured. The Appellate Division, in reversing Special Term's order denying plaintiff's motion for summary judgment, held (49 A.D.2d at pp. 64-65, 371 N.Y.S.2d at p. 210) "In the absence of a clear expression in the contract papers that the credit risk of the general contractor and the delay in payment frequently attending construction projects are meant to be shifted to such suppliers and subcontractors, the contract instruments should not be construed as intending such assumption (Dyer Co. v. Bishop Int. Eng. Co., 303 F.2d 665, (6th Cir., 1962)). Indeed, it is presumed that the parties did not intend that payment of the small subcontractors should await the determination of an extended legal dispute between the owner and general contractor over an...