Harman v. Fairview Associates, s. 1

• Citation: 294 N.Y.S.2d 442,30 A.D.2d 492
• Decision Date: 31 October 1968
• Docket Number: 2,Nos. 1,s. 1
• Parties: , 24 A.F.T.R.2d 69-5159, 69-1 USTC P 9187 Harry R. HARMAN, Plaintiff, v. FAIRVIEW ASSOCIATES, A. Friederich & Sons Company, Insurance Company of NorthAmerica and Colorcraft of Syracuse, Inc., Defendants. A. FRIEDERICH & SONS COMPANY, as Trustee of Certain Assets Received for and inConnection with the Improvement of Premises Commonly known as Fairview HeightsHousing, Ithaca, New York, pursuant to Article 3-a of the Lien Law, Respondent, v. Harry R. HARMAN, Appellant, United States of America, Respondent, Colorcraftof Syracuse, Inc., Industrial Commissioner of the State of New York, andChapin-Owen Company, Inc., Defendants. Action
• Court: New York Supreme Court — Appellate Division

Page 442

294 N.Y.S.2d 442

30 A.D.2d 492, 24 A.F.T.R.2d 69-5159,

69-1 USTC P 9187

Harry R. HARMAN, Plaintiff, v. FAIRVIEW ASSOCIATES, A. Friederich & Sons Company, Insurance

Company of NorthAmerica and Colorcraft of

Syracuse, Inc., Defendants.

A. FRIEDERICH & SONS COMPANY, as Trustee of Certain Assets

Received for and inConnection with the Improvement of

Premises Commonly known as Fairview HeightsHousing, Ithaca, New York, pursuant to Article 3-a of the Lien Law, Respondent, v. Harry R. HARMAN, Appellant, United States of America,

Respondent, Colorcraftof Syracuse, Inc.,

Industrial Commissioner of the State of

New York, andChapin-Owen

Company, Inc., Defendants.

Action Nos. 1, 2.

Supreme Court, Appellate Division, Fourth Department.

Oct. 31, 1968.

Levy & Levy, Rochester, for appellant (Walter J. Licata, Rochester, of counsel).

Liebschutz, Sutton, DeLeeuw, Clark & Lewis, Rochester, for respondent A. Friederich & Sons Co. and Insurance Co. of North America, defendants (Frank R. Monfredo, Rochester, of counsel).

John T. Curtin, Buffalo, for respondent United States (Donald Statland, of counsel).

Before BASTOW, P.J., and GOLDMAN, DEL VECCHIO, MARSH and WITMER, JJ.

WITMER, Justice.

This appeal presents questions as to the validity and priority of certain tax liens of the defendant United States of America (hereinafter referred to as 'U.S.') and of a lien of the defendant Chapin-Owen Company, Inc. (hereinafter referred to as 'Chapin') as partial assignee of subcontractor Colorcraft of Syracuse, Inc. on an apartment construction project in Ithaca, Tompkins County, New York owned by Fairview Associates, on which A. Friederich & Sons Co. (hereinafter referred to as 'Friederich') was general contractor. The plaintiff, Harry R. Harman, supplied materials to Colorcraft on this job, and duly filed a mechanic's lien therefor in Tompkins County. The owner paid Friederich the balance due on the contract upon its completion. Friederich admits that it owes money to Colorcraft on this job, although the exact amount thereof is in dispute. The U.S. tax claims arose out of this job, being for withholding and social security taxes due from wages of employees of Colorcraft, and it filed liens therefor in Onondaga County where in Colorcraft has its principal place of business, but not in Tompkins County where the project was constructed. Colorcraft duly filed in Tompkins County a lien for its claim against Friederich on this project, and to the extent of the amount assigned to it, Chapin succeeded to the rights of Colorcraft under said lien.

The plaintiff instituted action No. 1 to collect his claim by foreclosure of his mechanic's lien and by enforcement against Friederich of the trust for his benefit under Article 3-A of the Lien Law (see Lien Law, § 79). Friederich thereupon instituted action No. 2 for an accounting of the trust fund in its hands from this project under Article 3-A of the Lien Law, admitted having certain funds in trust from this project, joined as defendants all persons and corporations known to it to have claims, and asked the Court to determine to whom payment should be made. On motion by Friederich the two actions were consolidated; and Harman cross-moved for summary judgment in the consolidated action for dismissal of the complaint with respect to the claims of all other lienors, asserting that none of the lienors, including assignee Chapin, is entitled to any of the fund ahead of him nor is entitled to share in the fund with him. From the order of the Court below denying such cross-motion, Harman appeals. The claims of the Industrial Commissioner of the State of New York against the fund were withdrawn upon the argument of this appeal; and so we need only consider the liens of U.S. and of Chapin.

The moneys paid by the owner, Fairview Associates, to Friederich on this job constitute a trust fund for the benefit of subcontractors and suppliers (Lien Law, Article 3-A, section 70), available for payment of claims arising from work on and materials supplied to the project (Lien Law, § 71, subd. 2). The record shows that the U.S. liens arose out of this job, as did the claim of Colorcraft, part of which was assigned to Chapin. The contention of Harman that the claims of the U.S. are barred by its failure to enforce them within one year, under Lien Law, section 77, subdivision 2, is without merit, for expressly excepted from such time limitation is an action by the trustee (Friederich in this case) 'for final settlement of his accounts and for his discharge'.

The question presented with...