Author: Thomas S. Tripodianos

A recent decision in P & T Contracting Corp. v. Consolidated Edison Company of New York, Inc. highlights the importance of documenting responsibility for utility interference work on public projects.

P & T Contracting was replacing lead water lines for the New York City Department of Environmental Protection. During the project, it encountered Con Edison infrastructure near its work area. Con Edison allegedly directed the contractor to excavate around the facilities by hand, increasing the contractor’s costs and reducing productivity.

The contractor sought payment from Con Edison for this additional work. Con Edison moved to dismiss, arguing that it had neither received a direct order from DEP nor entered into an interference agreement with the contractor.

The court denied Con Edison’s motion. The contractor alleged that DEP had directed Con Edison to protect its facilities and that DEP was copied on communications concerning the hand excavation. Because discovery had not yet occurred and the relevant communications were not before the court, the court found that the contractor had sufficiently alleged the possible existence of a direct agency order. The court also permitted the contractor to amend its complaint to provide additional details concerning that alleged order.

The decision does not establish that Con Edison must ultimately pay the contractor. It merely allows the contractor’s claims to proceed through discovery.

Practical Takeaways

A public contractor cannot ordinarily make a utility responsible for interference costs merely by notifying the utility of the project. Responsibility will generally depend upon a direct order from the public agency or an agreement allocating the interference work and its cost.

Before performing utility-related extra work, contractors should:

• Request a written agency directive identifying the utility’s obligations.
• Seek a written interference agreement among the contractor, agency, and utility.
• Give all required contractual notices and expressly reserve payment rights.
• Confirm who will pay before proceeding, whenever safety and project conditions permit.
• Separately track labor, equipment, materials, delays, and productivity impacts.
• Preserve all emails, meeting minutes, field directives, photographs, and daily reports.

The bottom line is straightforward: utility direction alone may not establish payment responsibility. A clear written agency directive or interference agreement remains the best protection against performing costly work without a confirmed source of payment.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440

A recent New York decision warns contractors using merchant cash advances or receivables financing: when repayment is genuinely contingent on future receipts, a court may treat the transaction as a purchase – not a loan – and reject a usury defense.

What Happened

In Simply Funding LLC v. Clarkston Complete Renovation LLC, the funder paid the contractor $120,000, less an agreed origination fee, in exchange for $169,200 of future receivables. The contractor authorized weekly ACH withdrawals of $3,845.45, and its principal personally guaranteed performance. After remitting $49,990.85, the contractor blocked further withdrawals. The funder sued for $121,709.15.

The Decision

The court dismissed the contractor’s affirmative defenses and granted summary judgment to the funder. It held that the agreement was not a loan – and therefore was not subject to New York’s usury laws – because:

• it contained a reconciliation process allowing withdrawals to adjust based on actual receipts;
• it had no fixed repayment term; and
• bankruptcy alone was not an event of default.

The court also rejected defenses based on unconscionability, lack of a contract, statute of frauds, lack of standing, failure to mitigate, and unclean hands. The funder’s business records established the funding, partial remittances, and blocked ACH transactions. Judgment could be entered for the amount demanded.

Why This Matters

The decision does not make every receivables purchase agreement enforceable. Courts examine substance, not labels, and the result turns on the agreement’s actual terms and operation. But when repayment is truly contingent and the agreement includes the three features above, a usury defense may fail. A personal guaranty can also expose the business owner directly.

Blocking ACH withdrawals is not a legal strategy. It may trigger default fees, attorneys’ fees, and immediate liability while depriving the business of leverage.

The Bottom Line

Before signing, contractors should have counsel review the cash actually received versus the receivables sold, the reconciliation process, ACH and default provisions, personal guaranties, stacking and cross-default restrictions, attorneys’ fees, and forum provisions. Merchant cash advances may provide fast cash, but the effective cost can be steep and the remedies aggressive. Review the agreement before signing – not after the withdrawals become unsustainable and the lawsuit arrives.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440

A recent New York Supreme Court decision, Doka USA, Ltd. v. Highbury Concrete Inc., provides an important reminder for contractors, subcontractors, suppliers, and equipment rental companies: even when the defendant fails to appear, the plaintiff still must prove its claims with competent documentation.

Doka sought more than $900,000 for allegedly unpaid equipment rentals, materials, and services furnished on four New York construction projects. The defendants did not appear, and Doka moved for a default judgment.

The Court granted judgment on breach of contract claims involving three projects, awarding approximately $558,000, because Doka submitted complete contracts and evidence demonstrating its performance, the defendant’s nonpayment, and the resulting damages.

However, the Court rejected the breach of contract claim on a fourth project because the contract submitted to the Court was incomplete and did not include the terms and conditions necessary to establish the claim.

The Court also denied several additional claims because the supporting documentation was insufficient, including claims under New York’s Prompt Payment Act, account stated, Article 3-A of the Lien Law, quantum meruit, unjust enrichment, replevin, and conversion.

Among other deficiencies, the plaintiff failed to submit invoices demonstrating when they were sent and whether they were disputed, failed to provide sufficient evidence that trust funds had actually been received and diverted, and failed to specifically identify equipment allegedly being wrongfully withheld.

The Court also declined to award attorneys’ fees at that time because the plaintiff failed to submit adequate documentation establishing the amount and reasonableness of the fees incurred.

Construction companies should maintain a complete and organized project record throughout the life of every project. At a minimum, that record should include:

• Fully executed contracts and all incorporated terms and conditions;
• Copies of invoices and proof showing when they were transmitted;
• Payment records and account statements;
• Documentation regarding receipt and use of project funds where trust claims may be asserted;
• Detailed records identifying rented, damaged, missing, or unreturned equipment; and
• Detailed attorney billing records where contractual attorneys’ fees may be recoverable.

A defendant’s default may eliminate the opposition, but it does not eliminate the plaintiff’s burden of proof.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440

A recent federal court decision highlights an important risk for subcontractors performing work at federally owned facilities: a project’s connection to the federal government does not necessarily make the Miller Act applicable.

In U.S. v. E.W. Howell Co. LLC, a steel subcontractor sought to recover approximately $1.5 million allegedly due for work performed at Brookhaven National Laboratory. Although the laboratory is owned by the federal government, it is operated by a private entity that contracted with the project’s prime contractor.

The prime contractor furnished payment and performance bonds to the private operator. The United States was not named as an obligee on the bonds.

The subcontractor argued that the Miller Act applied because the work was performed on federally owned property and federal regulations required the United States to be named on the payment bond. The Court rejected those arguments and dismissed the case for lack of federal jurisdiction.

The Court concluded that:

• The payment bond was furnished to a private entity, not to the United States.
• The private operator was a federal contractor, not an agent of the federal government.
• The Court could not treat the United States as an obligee merely because it should have been included on the bond.
• The subcontractor was responsible for confirming that the required payment protections were actually in place.

The decision also left the subcontractor subject to the subcontract’s requirement that disputes be litigated in Nassau County Supreme Court and its requirement that the parties participate in mediation before commencing litigation.

Subcontractors should not assume that the Miller Act applies simply because the project involves federally owned property, federal funding, or a federal facility. Before beginning work, subcontractors should obtain and review the payment bond and confirm:

1. The identity of the bond obligees;
2. Whether the United States is expressly named;
3. Whether the bond satisfies applicable federal requirements; and
4. Whether the subcontract contains mandatory mediation, notice, or forum-selection provisions.

The best time to determine whether a payment remedy exists is before the work is performed—not after payment stops.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440

A recent New York decision serves as a pointed reminder that a contractor performing work in an occupied residence must plan and sequence its work to preserve—or promptly restore—essential sanitary facilities, even when owner-directed changes delay portions of the project.

In Bak v. U.S. Levin Grp Corp., 2026 N.Y. Slip Op. 51045(U) (Civ. Ct., Kings County July 5, 2026), the Civil Court of the City of New York awarded a homeowner $17,400—the entire amount she had paid under the parties’ renovation contract—after the contractor left the apartment’s only toilet unusable for more than one month.

The Dispute

The contractor was retained to renovate the plaintiff’s bathroom and perform additional work throughout her apartment. During construction, the contractor removed the apartment’s only toilet. It was not restored to service for more than a month.

The plaintiff lived in the apartment with her 81-year-old husband, who was in poor health. While the toilet was unusable, the couple was required to leave their building and use restroom facilities in a neighboring building.

The contractor argued that the project had been delayed because the plaintiff changed her selections for bathroom tile and other finishing materials. The contractor ultimately completed the renovation, and the bathroom was operational by the time of trial.

The Court’s Decision

Following a bench trial, the court found that the contractor had materially breached its obligation to perform the renovation in a good and workmanlike manner.

Although the court credited the contractor’s testimony that the plaintiff’s material-selection changes caused some delay, it held that those changes did not justify leaving the apartment without its only toilet for several weeks. The court emphasized that changes affecting finish work did not relieve the contractor of its separate responsibility to implement reasonable measures to restore basic sanitary facilities or otherwise mitigate the hardship imposed upon the occupants.

The court awarded the plaintiff $17,400, representing the full amount she had paid the contractor. The award was intended to compensate her for the diminished value of the contractor’s performance, the prolonged loss of use of an essential portion of her home, and the resulting inconvenience.

Limits on Consequential Damages

The plaintiff also contended that the ordeal contributed to her husband’s declining health and subsequent death. The court rejected that portion of the claim because the plaintiff had not asserted a properly supported wrongful-death or personal-injury cause of action and presented no competent medical evidence establishing causation.

The court further held that the husband’s death was not a reasonably foreseeable consequence contemplated by the parties when they entered into the renovation contract. Accordingly, no damages were awarded for his illness, suffering, or death.

Practical Implications for Contractors

The decision illustrates that an owner’s changes, indecision, or late material selections will not automatically excuse every resulting project condition. The contractor must establish a causal relationship between the owner’s conduct and the specific delay or disruption for which the contractor seeks relief.

More importantly, delays affecting finishes do not necessarily justify leaving essential building systems unavailable. On projects in occupied residences, contractors should separately plan for temporary toilets, temporary plumbing connections, phased shutdowns, expedited restoration, temporary relocation arrangements, or other reasonable measures when work will interrupt critical services.

Change orders and delay notices should identify not only the additional time and cost resulting from an owner’s change, but also any effect on habitability, access, plumbing, electrical service, heat, water, fire protection, or other essential systems. The documentation should explain the available mitigation measures, their cost, and which party is responsible for authorizing and paying for them.

Contractors should also avoid relying on generalized statements that “owner changes delayed the project.” Daily reports, emails, photographs, procurement records, schedules, requests for information, and written notices should demonstrate precisely what work was affected and why the contractor could not proceed.

The Bottom Line

Bak is a trial-level, fact-specific decision, but its practical lesson is significant: a contractor may be found to have materially breached its contract even when the work is eventually completed and even when the owner contributed to project delays.

When construction affects an occupied home, the contractor’s duty to perform in a good and workmanlike manner includes reasonable planning and mitigation to protect the occupants’ ability to use essential portions of the premises. Owner-caused delay may support an extension of time or additional compensation, but it is not a blank check to disregard habitability and basic sanitary needs.

Welby, Brady & Greenblatt, LLP counsels contractors, subcontractors, owners, developers, and construction managers concerning contract drafting, project administration, delay claims, change orders, payment disputes, and construction litigation.

For additional information concerning this decision or construction-contract risk management, please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or (914) 428-2100.

This Legal Alert is provided for informational purposes only and does not constitute legal advice. Readers should consult counsel regarding the application of the decision to their particular contracts, projects, and circumstances.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440

The Appellate Division, First Department’s decision in 1992 Third Realty LLC v. Third Avenue NY Realty LLC is an important reminder for developers, contractors, adjacent property owners, design professionals, and insurers involved in New York City excavation and foundation work.

The Court held that an adjoining property owner could not be held liable in negligence for a developer’s construction delay damages allegedly caused by the poor condition of the neighboring building. The key takeaway is straightforward: under NYC Building Code § BC 3309.4, the party performing soil or foundation work bears the duty, at its own expense, to preserve and protect adjoining structures. That duty applies even where the adjoining building is allegedly old, unstable, defective, or non-code-compliant.

The case involved neighboring Manhattan properties. The developer began excavation and foundation work for a new building. The adjacent owner alleged that the work, including pile driving and dewatering, caused its nine-story building to settle and lean. The New York City Department of Buildings issued a stop work order identifying a potential hazard from soil or foundation work affecting the adjoining property and directing the developer to provide engineering remedial measures.

The developer responded with a negligence counterclaim against the adjoining owner. It alleged that the adjoining building had been defectively designed, poorly maintained, and left in an unsafe condition, which allegedly caused or contributed to the stop work order. The developer sought at least $16 million in delay-related damages. The trial court allowed that counterclaim to proceed. The First Department reversed and dismissed it.

The First Department held that the adjoining owner did not owe the developer a duty to design, construct, or maintain its building in a way that would protect the developer’s excavation project from delay.

The Court emphasized that § BC 3309.4 places the relevant duty on the person performing the excavation or foundation work. In other words, the developer — not the neighbor — controlled the excavation, the protection means and methods, the remedial measures, and the risk created by the project. Imposing a reciprocal duty on adjoining owners would conflict with the Building Code’s allocation of responsibility and could expose property owners to unpredictable, insurer-like liability for future neighboring projects.

The Court also rejected the developer’s attempt to recover purely economic delay damages in negligence. New York negligence law generally does not allow recovery for purely economic losses absent personal injury, property damage, contractual privity, or another recognized special duty. The developer claimed delay damages, not injury to person or property. That was not enough.

This decision strengthens the position of adjoining owners facing claims that their building’s preexisting condition delayed a neighboring development project. A developer cannot avoid its excavation-protection obligations by arguing that the neighboring building was already defective or unstable. The worse the condition of the neighboring building, the greater the practical burden on the excavator to plan, monitor, and protect against movement.

For developers and contractors, the lesson is equally direct. Before excavation begins, the project team should make sure it has a strong record of:

• preconstruction surveys;
• license/access agreements;
• geotechnical and structural review;
• vibration and movement monitoring;
• support of excavation plans;
• dewatering protocols;
• DOB filings and correspondence;
• insurance and indemnity protections; and
• emergency stabilization procedures.

License agreements with adjoining owners should be carefully drafted to address access, inspections, monitoring, professional fees, insurance, indemnity, emergency work, DOB response obligations, and dispute procedures. A vague license agreement is not risk management; it is just a fight with better stationery.

The First Department’s message is clear: in New York City excavation and foundation work, the party digging bears the burden of protecting adjoining structures. A developer generally cannot shift delay damages to the neighbor by claiming that the adjacent building was old, defective, or unstable — especially where the developer seeks only economic losses.

Beginning November 5, 2025, all entities submitting competitive bids to New York State, including bids to any state department, agency, or public authority, must certify that they have adopted and implemented a written “Gender-Based Violence and the Workplace” policy.

This requirement stems from the addition of Section 139-m to the New York State Finance Law, enacted as part of the FY 2025–2026 State Budget, and cross-references Executive Law §575(11), which directs the Office for the Prevention of Domestic Violence (OPDV) to publish model policies and guidance for employers.

Who Must Comply

The certification requirement applies to:

• Any competitive procurement issued on or after November 5, 2025; and
• All bidders seeking to perform work, provide services, or sell goods to the State or any public department or agency.

It does not apply to existing contracts or to procurements issued before November 5, 2025.

Certification Requirement

Each bidder must include in its proposal the following affirmed statement, subscribed under penalty of perjury:

“By submission of this bid, each bidder and each person signing on behalf of any bidder certifies … that the bidder has and has implemented a written policy addressing gender-based violence and the workplace and has provided such policy to all of its employees, directors and board members. Such policy shall, at a minimum, meet the requirements of subdivision 11 of section 575 of the executive law.”
— N.Y. State Finance Law §139-m(1)(a)

Failure to provide this certification will render a bid ineligible for award.

Minimum Policy Requirements

To comply, an employer’s written policy must include, at minimum:

1. Employee Information & Awareness
   • Provide employees with information about gender-based violence and available resources.
   • Display the New York State Domestic and Sexual Violence Hotline number and the official workplace poster.
2. Referral to Support Services
   • Require referral of employees who disclose current or past victimization to the State Hotline or, for out-of-state employers, to a comparable local provider.
   • Hotline: 1-800-942-6906 | Text: 844-997-2121 | Chat: opdv.ny.gov
3. Non-Discrimination & Non-Retaliation
   • Prohibit discrimination or retaliation against employees who identify as victims or survivors of gender-based violence.
4. Compliance with Applicable Law
   • Ensure alignment with other New York laws, including the New York State Human Rights Law and all related labor and employment statutes.
5. Implementation Support
   • Inform Human Resources and supervisory staff of implementation resources and training available from the Office for the Prevention of Domestic Violence (OPDV).

Practical Next Steps for Employers

• Draft or adopt a compliant policy. Employers may develop their own written policy or adapt the forthcoming OPDV model policy once issued.
• Distribute and post the policy. It must be provided to all employees, directors, and board members and prominently displayed at worksites.
• Integrate certification into bid procedures. Procurement departments and compliance officers should update internal checklists to ensure the certification accompanies every State bid submitted on or after November 5, 2025.
• Train HR and supervisory staff. Ensure familiarity with the referral process and OPDV guidance.

Failure to have and certify a compliant policy will disqualify a bid from consideration. Entities seeking to do business with New York State must act promptly to implement and document compliance before submitting any bid after November 5, 2025.

Welby, Brady & Greenblatt, LLP can assist with drafting, implementing, and certifying a Gender-Based Violence and the Workplace Policy consistent with these new statutory requirements.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440

In a major shift for the New York City rental market, the City Council passed the Fairness in Apartment Rental Expenses Act (FARE Act) on November 13, 2024. This legislation, effective mid-June 2025, significantly alters who bears the cost of broker fees in residential leasing transactions.

Key Provision: Landlords Pay Broker Fees

The FARE Act mandates that when a landlord hires a broker to market or lease an apartment, the landlord—not the tenant—must pay the associated broker fee. This effectively ends the longstanding (and often criticized) practice of tenants covering broker costs, even when they had no role in engaging the broker.

Historically, these fees have ranged from 10–15% of annual rent. For a typical $3,000/month apartment, this could add more than $5,000 to a tenant’s upfront costs, on top of first month’s rent and security deposit.

Legislative Background

Sponsored by Council Member Chi Ossé, the FARE Act passed by a 42–8 margin, with supporters citing the financial strain broker fees impose on tenants—particularly those in low- and middle-income brackets. The legislation aligns New York City with other major cities, such as San Francisco and Boston, where broker fees are commonly paid by landlords.

Pushback and Litigation

Opposition came swiftly from the real estate industry. The Real Estate Board of New York (REBNY) has filed a federal lawsuit challenging the FARE Act, claiming it infringes on state law and brokers’ First Amendment rights. Industry groups also warn that landlords may recoup costs through higher monthly rents, undercutting the Act’s intended relief for tenants.

Implications for Stakeholders

• Tenants should see reduced upfront costs when renting apartments where the landlord has retained a broker.
• Landlords must now budget for broker commissions when using intermediaries, potentially impacting rent-setting strategies.
• Brokers may need to adjust business models and expectations regarding fee recovery.

What’s Next?

With the law set to take effect in June 2025, landlords, brokers, and tenants should begin reviewing their leasing practices and form agreements. Industry participants are advised to monitor the ongoing litigation, which could impact enforcement or interpretation of the FARE Act.

For further guidance on how the FARE Act may affect your leasing strategy or contractual obligations, please contact us.

In a sweeping reversal of policy, the Financial Crimes Enforcement Network (FinCEN) announced today that it has issued an interim final rule eliminating the Beneficial Ownership Information (BOI) reporting requirement for all U.S. companies and U.S. persons under the Corporate Transparency Act (CTA).

This unexpected but significant shift aligns with the Department of the Treasury’s March 2, 2025 announcement and is effective immediately, ahead of its formal publication in the Federal Register.

Key Changes Under the Interim Final Rule

No More BOI Reporting for U.S. Entities FinCEN has revised the definition of “reporting company” to include only:

• Entities formed under the laws of a foreign country, and
• Registered to do business in any U.S. state or tribal jurisdiction by filing with a secretary of state or similar office (previously referred to as “foreign reporting companies”).

This means:

• All entities created in the United States are now fully exempt from BOI reporting under the CTA.
• U.S. persons will no longer be subject to any BOI disclosure obligations as beneficial owners.

New Rules for Foreign Entities

Entities formed outside the U.S. but registered to do business here may still be required to report BOI — but only if they do not qualify for one of the CTA’s existing exemptions. The new rules include the following deadlines:

• Foreign Entity Status
• BOI Filing Deadline
• Registered before March 26, 2025
• 30 days from March 26, 2025
• Registered on or after March 26, 2025

30 days from notice that registration is effective Importantly, even for these foreign entities:

• No U.S. persons need to report BOI as beneficial owners.
• No Enforcement for Domestic Entities

FinCEN has clarified that:

• It will not enforce any BOI-related penalties or fines against U.S. citizens, domestic reporting companies, or their beneficial owners.
• All exemptions and deadline extensions in this interim final rule are considered effective immediately.

What This Means for You

This is a monumental rollback of the CTA’s original reach. Effective today:

• U.S.-formed LLCs, corporations, and other domestic entities no longer need to file BOI reports.
• U.S. individuals will not be treated as beneficial owners for any reporting purpose under the CTA.
• Only foreign entities registered to do business in the U.S. — and not otherwise exempt — must comply with the CTA’s reporting obligations.

Next Steps:

If you previously began preparing BOI filings for U.S. entities or U.S. persons, those efforts can now be suspended. For clients with foreign entities operating in the U.S., we recommend a fresh review to determine if a reporting obligation still applies under the narrowed rule.

Please contact us with any questions or to reassess your CTA compliance strategy.

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440