MLB Constr. Servs., LLC v. Lake Ave. Plaza, LLC, 524393

• Decision Date: 07 December 2017
• Docket Number: 524393
• Citation: 156 A.D.3d 983,66 N.Y.S.3d 568
• Parties: MLB CONSTRUCTION SERVICES, LLC, Appellant, v. LAKE AVENUE PLAZA, LLC, et al., Respondents, et al., Defendants. (Action No. 1.) A.E. Rosen Electrical Co., Inc., Plaintiff, v. MLB Construction Services, LLC, Defendant and Third–Party Plaintiff–Appellant; Lake Avenue Plaza, LLC, et al., Third–Party, Defendants–Respondents. (Action No. 2.) (And Two Other Related Actions.)
• Court: New York Supreme Court — Appellate Division

156 A.D.3d 983

66 N.Y.S.3d 568

MLB CONSTRUCTION SERVICES, LLC, Appellant,

v.LAKE AVENUE PLAZA, LLC, et al., Respondents, et al., Defendants. (Action No. 1.)

A.E. Rosen Electrical Co., Inc., Plaintiff,

v.MLB Construction Services, LLC, Defendant

and

Third–Party Plaintiff–Appellant;

Lake Avenue Plaza, LLC, et al., Third–Party, Defendants–Respondents. (Action No. 2.)

(And Two Other Related Actions.)

524393

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: October 13, 2017

Decided and Entered: December 7, 2017

Tobin & Dempf, LLP, Albany (Michael L. Costello of counsel), for appellant/defendant and third-party plaintiff-appellant.

Whiteman Osterman & Hanna LLP, Albany (Christopher M. McDonald of counsel), for Lake Avenue Plaza, LLC, respondent/third-party defendant-respondent.

Roemer Wallens Gold & Mineaux LLP, Albany (Earl T. Redding of counsel), for M & T Bank, respondent/third-party defendant-respondent.

Before: Peters, P.J., Garry, Devine, Clark and Aarons, JJ.

MEMORANDUM AND ORDER

Aarons, J.Appeals (1) from an order of the Supreme Court (Chauvin, J.), entered July 19, 2016 in Saratoga County, which, in action No. 1, among other things, granted motions by defendants M & T Bank and Lake Avenue Plaza, LLC to dismiss the amended complaint against them, and (2) from two orders of said court, entered August 3, 2016 and August 30, 2016 in Saratoga County, which, in action No. 2, among other things, granted motions by third-party defendants to dismiss the amended third-party complaint.

MLB Construction Services, LLC and Lake Avenue Plaza, LLC entered into a construction agreement in connection with a project to construct a hotel in Saratoga County. MLB served as the general contractor and Lake Avenue was the project owner. Lake Avenue and M & T Bank entered into a business loan agreement (hereinafter the BLA) wherein M & T agreed to finance the construction project. After Lake Avenue failed to make certain payments due to MLB, MLB commenced action No. 1 against Lake Avenue and M & T, among others. Although other named defendants interposed their respective answers with counterclaims against MLB, both Lake Avenue and M & T moved via separate pre-answer motions to dismiss the complaint. Before the pre-answer motions were decided, however, MLB filed an amended complaint. Lake Avenue thereafter made another pre-answer motion to dismiss the amended complaint. In a November 2015 order, Supreme Court, among other things, partially granted Lake Avenue's motion by dismissing six claims. Supreme Court also denied M & T's pre-answer motion without prejudice to submit a new one in light of MLB's amended complaint. M & T thereafter moved to dismiss the amended complaint, as well as various "cross claims" asserted against M & T by MLB in its separate replies to the counterclaims alleged by the other named defendants. Lake Avenue cross-moved to dismiss MLB's "cross claims" asserted against it.¹ By order entered July 19, 2016, Supreme Court granted M & T's motion and Lake Avenue's cross motion.

In action No. 2, A.E. Rosen Electrical Co., Inc. commenced an action against MLB, alleging breach of the subcontract executed between them. MLB thereafter commenced a third-party action against M & T and Lake Avenue. Both M & T and Lake Avenue separately moved to dismiss the amended third-party complaint. By orders entered August 3, 2016 and August 30, 2016, Supreme Court, among other things, granted M & T's and Lake Avenue's motions. MLB now appeals from all three orders.² We affirm.

When assessing a CPLR 3211 motion to dismiss, "the court must afford the pleadings a liberal construction, take the allegations of the complaint as true and provide [the] plaintiff the benefit of every possible inference" ( Crepin v. Fogarty, 59 A.D.3d 837, 838, 874 N.Y.S.2d 278 [2009] [internal quotation marks and citation omitted]; see Trump on the Ocean, LLC v. State of New York, 79 A.D.3d 1325, 1326, 913 N.Y.S.2d 792 [2010], lv dismissed and denied 17 N.Y.3d 770, 929 N.Y.S.2d 74, 952 N.E.2d 1067 [2011] ). A motion to dismiss under CPLR 3211(a)(1) may be granted where "the documentary evidence utterly refutes [the] plaintiff's factual allegations, conclusively establishing a defense as a matter of law" ( Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 [2002] ; see Jenkins v. Jenkins, 145 A.D.3d 1231, 1234, 44 N.Y.S.3d 223 [2016] ).

With respect to MLB's cause of action that M & T breached the BLA, we conclude that Supreme Court properly dismissed such claim because the documentary evidence utterly refutes it. A review of the BLA confirms that MLB was not a party to it. Rather, the BLA was entered into solely between M & T and Lake Avenue. Nor does the amended complaint allege that MLB was a party to the BLA. Because MLB was a nonparty to the BLA, it cannot maintain a breach of contract cause of action against M & T (see Jacobs v. Mazzei, 112 A.D.3d 1115, 1118, 977 N.Y.S.2d 123 [2013], lv dismissed 22 N.Y.3d 1172, 985 N.Y.S.2d 472, 8 N.E.3d 850 [2014] ; Borman v. Purvis, 299 A.D.2d 615, 616, 750 N.Y.S.2d 169 [2002] ). To the extent that MLB claims third-party beneficiary status, such claim is without merit (see IMS Engrs.-Architects, P.C. v. State of New York, 51 A.D.3d 1355, 1357, 858 N.Y.S.2d 486 [2008], lv denied 11 N.Y.3d 706, 866 N.Y.S.2d 609, 896 N.E.2d 95 [2008] ; Howard Sav. Bank v. Lefcon Partnership, 209 A.D.2d 473, 476, 618 N.Y.S.2d 910 [1994], lv dismissed 86 N.Y.2d 837, 634 N.Y.S.2d 445, 658 N.E.2d 223 [1995] ; Lake Placid Club Attached Lodges v. Elizabethtown Bldrs., 131 A.D.2d 159, 161–162, 521 N.Y.S.2d 165 [1987] ).

We reject MLB's reliance on the contractor's consent. The amended complaint alleged that the execution of the BLA between M & T and Lake Avenue was induced and contingent upon MLB's execution of the contractor's consent. While MLB contends that a tripartite relationship was thus created, we disagree inasmuch as the contractor's consent specifically stated that "[MLB] acknowledges that [M & T] is obligated under the [BLA] only to [Lake Avenue] and to no other person or entity." MLB's argument that the breach of the BLA claim survives because of a functional equivalent of privity is raised for the first time on appeal and, therefore, unpreserved for our review (see Malta Props. 1, LLC v. Town of Malta, 143 A.D.3d 1142, 1144 n., 39 N.Y.S.3d 544 [2016] ; Liere v. State of New...