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Appellate Court Affirms Denial Of Motion To Amend Lawsuit To Permit Subcontractor To Assert Direct Claims Against Project Owner

Written by Gregory J. Spaun on . Posted in Attorneys' Column.

Our readers will not be surprised to learn that we believe that mechanic’s liens are a powerful tool to assist unpaid contractors in collecting their money. We recently wrote about how failing to follow the requirements of asserting and foreclosing such liens is fatal to any subsequent recovery on the lien. In a nutshell, because the mechanic’s lien is a statutory compromise that gives a contractor the right to sue someone with which it has no contractual relationship, the need for the lienor to follow formalities (such as filing and renewing a Notice of Pendency) is emphasized. In the recent case of Marine Bulkheading, Inc., v Ibex Construction Company, LLC, and Costco Wholesale Corporation, an appellate court rejected an attempt by a subcontractor to get around the fact of a bankrupt general contractor and its own failure to renew a required Notice of Pendency by seeking to amend its complaint to include direct non-lien foreclosure claims against the project’s owner.

Background

In late 2015, Ibex Construction Company entered into a contract to construct a Costco on Third Avenue in Brooklyn. Because of the proximity of the property to the Gowanus Canal, foundation piles were required. That scope of work was subcontracted to Marine Bulkheading, Inc. Marine performed its work, but was not paid by Ibex. Marine filed a mechanic’s lien, and ultimately sued Ibex and Costco to foreclose the lien. Marine also asserted contract claims against Ibex. Marine filed a Notice of Pendency at the time it started the lawsuit, but never renewed its filing after three years, as required by the statute. 

Ultimately, Ibex filed for bankruptcy, and the lawsuit was stayed by federal law as a result. (Many practitioners mistakenly believe that a bankruptcy filing and the Automatic Stay prohibit taking ANY action against a bankrupt debtor; this is not true, a creditor is permitted to take actions to perfect and maintain liens pending the bankruptcy. The only thing prohibited by the Bankruptcy Code are attempts to collect on that lien.) By the time the lawsuit resumed, the deadline to renew the Notice of Pendency had passed (and, if you read our recent column, you realize that this resulted in the effective voiding of the mechanic’s lien). In an attempt to get around the now unrecoverable mechanic’s lien and the bankrupt general contractor, Marine moved to amend its complaint to assert a quasi-contractual quantum meruit claim directly against Costco, the project’s owner. In so moving, Marine noted the delays to the case and that there would be no prejudice to Costco as all facts were already known. Costco opposed, noting that there was already a contract between Marine and Ibex that covered the subject matter of the dispute, and arguing that such direct subcontractor against owner claims were improper.

Decision

The motion court denied the motion, following well settled law that holds that where there is already a written contract governing the subject matter of the dispute, quasi-contractual claims arising out of that same dispute are barred. Marine, with no other avenue to salvage any recovery, appealed. The Appellate Court affirmed, not only finding that the existing contract barred the proposed new claims, but also that “a property owner who contracts with a general contractor does not become liable to a subcontractor on a quasi-contract theory unless it expressly consents to pay for the subcontractor’s performance. The owner’s mere consent to and acceptance of improvements placed on his [or her] property by the subcontractor, without more, does not render it liable to the subcontractor”. 

Comment

While one has to admire Marine’s attempt to extricate itself from the effects of both the GC’s bankruptcy and its own failure to renew the Notice of Pendency, such were too little, too late. As we noted in a recent column, mechanic’s lien formalities are necessary because the mechanic’s lien is a statutory compromise that gives a contractor the right to sue someone with which it has no contractual relationship—and, in most circumstances, provides security for the underlying debt. Here, the contractor failed to follow all of the required formalities to keep its lien in place (the maintenance of the Notice of Pendency by making sure that it was timely renewed). Accordingly, once the Notice of Pendency expired, so did the contractor’s right to maintain the lien foreclosure lawsuit. Its post-hoc efforts to salvage recovery by asserting alternative claims against the only remaining solvent defendant (the owner) were not sufficient as a matter of law.

Mechanic’s liens must be prepared, filed, served (with proof thereof), and perfected (and maintained) correctly.  It is simple, fast and inexpensive to renew a Notice of Pendency.  It is very costly not to do so. Therefore, should you have any questions as to how to best protect your rights to recover on a mechanic’s lien, you should consult with experienced construction counsel.

About the authors: Thomas H. Welby, an attorney and licensed professional engineer, is General Counsel to the CIC and the BCA, and is the Founder of, and Senior Counsel to the law firm of Welby, Brady & Greenblatt, LLP, with offices located throughout the Tri-State Region. Gregory J. Spaun, General Counsel to the Queens and Bronx Building Association, and an attorney and a partner with the firm, co-authors this series.

If you would like more information regarding this topic please contact Thomas H. Welby at twelby@wbgllp.com or call (914) 428-2100

Governor Hochul Signs Construction Reporting Pay Act: What You Need To Know

Written by Gregory J. Spaun on . Posted in Legal Alerts.

In recent years, the New York State legislature has been imposing additional requirements on how contractors treat, and pay, their workers. Many of these requirements relate to the payment of prevailing wages, but not exclusively. On September 9, 2026, Governor Hochul signed another one of these requirements, and this one applies to both prevailing wage and non-prevailing wage projects. These requirements go into effect on Tuesday, December 8, 2026.

The Construction Industry Reporting Pay Act enacts two new statutes, Labor Law § 196-e for non-prevailing wage jobs, and § 224-g for prevailing wage jobs. Both of these statutes generally parallel each other in that they both require contractors to pay their workers who report for work a certain minimum pay. For prevailing wage jobs, this minimum is four hours’ pay at the prevailing rate (including supplements), even if the actual time worked is less than those four hours. For non-prevailing wage projects, the pay is for the lesser of the time of the regularly scheduled shift, or four hours. Additionally, when workers are told not to report to work on less than 12 hours’ notice (for instance, when there is no work because of weather, owner or general contractor shutdowns, delivery problems, or emergencies), contractors are required to pay those workers two hours’ pay (which, for prevailing wage jobs, is at the prevailing rate and includes supplements). 

It is important to note that these statutes establish only minimum requirements. If an applicable prevailing wage scale, collective bargaining agreement, or project labor agreement requirement is more generous, those higher requirements control. Stated simply, the new statute does not reduce any obligations already imposed, it simply creates a minimum floor where there are no otherwise applicable requirements.

The takeaway for contractors is to make sure that where they have workers report to a jobsite, they have sufficient work to justify having the worker report. Further, while not mandated by the Act, contractors should seriously consider implementing a time-stamped method of giving and preserving cancellation notices. As liability results from failing to provide timely notice and make the required payment, not simply from failing to document the communication, without such documentation contractors are going to have difficulty proving that timely notice was provided. Another important takeaway is that payments required under § 196-e are expressly deemed wages, while payments under § 224-g are deemed prevailing wages or supplements. Accordingly, a violation may involve more than payment of the underlying two or four hours—it may trigger enforcement actions under the applicable wage-and-hour or prevailing-wage statutes. 

Since this is a new statute, the Department of Labor has not yet promulgated any regulations (as of the initial publication date of September 21, 2026) as to, for instance, what kind of communication will be deemed sufficient when a contractor calls off workers, how the term “promised hourly wage” will be interpreted, or how they otherwise need to document their compliance. So, as always, stay tuned, and reach out to me if you have any questions or would like more information about this, or any other employment-related requirement. I can be reached at gspaun@wbgllp.com, or by phone at (914) 607-6425.

If you would like more information regarding this topic please contact Gregory J. Spaun at gspaun@wbgllp.com or call (914) 607-6425

ALJ Affirms Citation and Monetary Penalty To Firm For Not Filing OSHA Report on Time as ‘Ignorance of the Law is No Excuse’

Written by Costas Cyprus on . Posted in Safety Policy.

Construction employers can often focus their safety efforts where hazards are most visible: equipment operation, electrical exposure, fall protection, and lockout procedures. While those efforts remain essential, a recent decision from the Occupational Safety and Health Review Commission (OSHRC) serves as a reminder that compliance does not stop at physical conditions on the shop floor. Administrative and reporting obligations under OSHA can carry real consequences, even when an employer has otherwise invested in safety.

In Secretary of Labor v. Pleasant Mount Welding, Inc., the Administrative Law Judge (ALJ) vacated a cited electrical violation but affirmed a penalty for failing to timely submit an OSHA injury and illness summary electronically. The decision highlights two important lessons for construction employers: first, not every alleged “extension cord violation” will withstand scrutiny; and second, OSHA reporting requirements are to be strictly adhered.

OSHA’s inspection in this matter did not arise from an accident or anonymous call regarding unsafe practices (i.e. unprogrammed inspections). The inspection originated through OSHA’s national emphasis program (an NEP) to address the hazards of amputations in specific industries. OSHA’s NEPs are temporary programs focused on specific and particular workplace hazards and high-hazard industries, which sets forth that OSHA’s officers shall initiate randomized inspections under an NEP if a company falls under a specific classification indicating that the company falls under a designated high-risk industry (which includes construction and manufacturing) and has 10 or fewer employees. During these inspections, an OSHA officer may also identify any plain view violations, and the scope can be expanded if the company has history of employee injury or illness as noted on their OSHA 300 or 301 forms.

Here, during the inspection of Pleasant Mount Welding (PMWI)’s facility in Carbondale, PA, OSHA identified flexible cords powering a milling machine and a rotating bending machine and issued a serious citation under 29 C.F.R. § 1910.305(g)(1)(iv)(A), alleging that extension cords were being used as a substitute for fixed wiring.

At the hearing, the evidence showed that the machines were mobile, frequently repositioned to meet production needs, and powered through cords connected to existing wall outlets. Importantly, fixed wiring existed throughout the facility and was actively in use. The cords did not run through walls, ceilings, or floors, nor were they concealed or attached to building surfaces.

The ALJ focused on the language of the standard, which prohibits flexible cords from being used “as a substitute for the fixed wiring of a structure.” The ALJ rejected OSHA’s attempt to equate a machine with a “structure” and emphasized that the cords were being used to power equipment, not to replace building wiring. The citation was therefore vacated.

For construction employers, the takeaway is not that extension cords are risk-free, but that citations must be grounded in the actual text of the standard. Cord usage should still be evaluated for trip hazards, damage, overloading, and improper routing. However, where equipment is portable and fixed wiring is present and functioning, employers should not assume that any long- term cord use automatically violates OSHA’s rules. Documentation of equipment mobility and electrical layouts can also be critical in defending these claims.

However, the ALJ maintained the record-keeping citation. PMWI employed more than 20 employees and fell within a covered NAICS classification. As such, it was required to electronically submit its OSHA Form 300A Summary of Work-Related Injuries and Illnesses by March 2 of the following year.

Although PMWI maintained OSHA logs on-site and had only one recordable injury for the year, the summary was never submitted electronically. PMWI’s management conceded as much, testifying that they were unaware of the electronic submission requirement and believed the obligation ended with maintaining the forms internally. As the maxim goes, “ignorance of the law is no excuse” and so the ALJ affirmed this citation and upheld the monetary penalty. The decision makes clear that OSHA reporting violations are established simply by the failure to comply regardless of intent, injury frequency, or overall safety performance. PMWI presented evidence of safety committees, third-party inspections, and insurer-provided training. While those efforts are commendable, they did not offset the reporting violation or warrant a reduction of penalty especially in the absence of a written, employer-maintained safety program.

Construction employers should view this as a reminder that administrative compliance is part of safety compliance. Training programs, toolbox talks, and hazard assessments do not excuse missed deadlines or incomplete submissions. The policy behind the forms is that OSHA utilizes this data to identify trends, target inspections, and evaluate industry risks. When an employer fails to submit required information, all employees are deemed exposed because OSHA is deprived of accurate insight into working conditions.

This decision reinforces several practical and administrative points.

  • Review OSHA recordkeeping obligations annually, including electronic submission deadlines and post requirements.
  • Confirm whether your NAICS classification triggers electronic reporting requirements.
  • Assign clear responsibility for OSHA submissions and require confirmation of completion.
  • Maintain written safety programs, even when third parties provide training or audits.

Construction safety is often measured by what happens in the field, but OSHA enforcement extends well beyond visible hazards and field conditions. Although this decision shows that employers can successfully challenge overbroad interpretations of safety standards, they cannot overlook their reporting and administrative requirements.

About the author: Costas Cyprus, Esq. practices construction law and commercial litigation with Welby, Brady & Greenblatt, LLP, in White Plains, NY. He can be reached at 914-428-2100 and at ccyprus@wbgllp.com. The articles in this series do not constitute legal advice and are intended for general guidance only.

If you would like more information regarding this topic please contact Costas Cyprus at ccyprus@wbgllp.com or call (914) 607-6445

Utility Interference Costs: Written Agency Direction Can Preserve a Contractor’s Claim

Written by Thomas S. Tripodianos on . Posted in Legal Alerts.

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

Receivables Purchase Agreement Enforced Against Contractor and Personal Guarantor

Written by Thomas S. Tripodianos on . Posted in Legal Alerts.

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 Default Does Not Mean an Automatic Win: Construction Claims Still Require Proof

Written by Thomas S. Tripodianos on . Posted in Legal Alerts.

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

Federal Ownership Alone Does Not Guarantee Miller Act Protection

Written by Thomas S. Tripodianos on . Posted in Legal Alerts.

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

Appellate Court Declines to Dismiss Claims Based on Parties’ Course of Conduct Despite Writing Requirement in Contract

Written by Thomas H. Welby on . Posted in Attorneys' Column.

One of the more ubiquitous provisions in a construction contract is the provision that the contract cannot be modified except in writing. This issue usually (but not always) arises in the context of a fight about open change orders that were not signed off by the owner or upstream contractor before the work was performed, or a provision requiring that all change orders or other modifications be in writing. When this fight arises, all of the “just get it done and we will do paperwork later”, and similar conversations, are conveniently forgotten, and all of a sudden contractual formalities become paramount to the party resisting the change order. However, an appellate court, in the recent case of Tekton Builders, LLC v 1232 Southern Boulevard LLC, reminds us that even in the presence of such a modified-only-in-writing provision, the parties’ course of conduct, how they deal with each other during the project, can amount to a waiver of a contract’s requirements, including requirements relating to writings.

Background

In March of 2015, 1232 Southern Boulevard LLC, the entity which owns the property housing the Children’s Aid College Prep School, entered into an agreement with Tekton Builders for Tekton to serve as the construction manager for Children’s Aid’s project to build a charter school. The project was to have been completed in time for the 2016-17 school year, but the project was beset with various delays from the start. These delays were thoroughly discussed between all relevant parties in jobsite meetings, in email correspondence, and in other similar notes. Ultimately, in January of 2017, Tekton was terminated, and it sued to foreclose a mechanic’s lien and recover its costs, including its extended general conditions and the work it performed after the original completion date.

After discovery, Children’s Aid moved for summary judgment dismissing Tekton’s delay and change order claims, arguing that the contractual notice requirements were not followed and, therefore, Tekton waived its right to recoup these costs. (Children’s Aid also moved for summary judgment discharging Tekton’s mechanic’s lien, arguing that it was exaggerated.) In opposition, Tekton argued that Children’s Aid was kept fully apprised of the nature and extent of the delays in meetings, through email correspondence, through proposed change orders requesting extensions of time (and associated costs), and through stop work orders issued by the City. Accordingly, Tekton argued that Children’s Aid could not credibly claim any prejudice as a result of the failure to reduce this common knowledge to a contractually required written form. In that regard, to the extent that the contract required such formalized written notice, Tekton argued that such was waived by Children’s Aid’s own failure to comply with the contract in failing to promptly respond to change order requests, and in directing extra work notwithstanding such failures. 

Decision

The motion court denied that branch of Children’s Aid’s motion which was for summary judgment on its failure to comply with the condition precedent (written notice) defense, holding that there were issues of fact as to whether Children’s Aid waived the protection of the contractual provision by its course of conduct, and that such issue would have to be reserved for trial. (The motion court did, however, grant Children’s Aid summary judgment discharging Tekton’s mechanic’s lien, finding that it was willfully exaggerated, and that the amount of damages sustained by Children’s Aid as a result would be determined at the trial.)

Children’s Aid appealed the denial of summary judgment on its written notice affirmative defense, but fared no better before the appellate court. In affirming the order, the appellate court held that “even when a contract contains a nonwaiver clause and a provision stating that it cannot be modified except by a writing, it can still be effectively modified by actual performance and by the parties’ course of conduct”, and that there were issues of fact as to whether the parties waived this provision by their conduct which precluded an award of summary judgment to Children’s Aid. (On Tekton’s cross-appeal, the appellate court also affirmed the discharge of the exaggerated mechanic’s lien, holding that Tekton’s explanation of “inadvertent inclusions” in the lien, without an attempt at explanation, was not sufficient to rebut the showing that the lien was otherwise willfully exaggerated.)

Comment

While a written notice provision is designed to protect the parties by ensuring that there is an adequate paper trail for any dispute, parties are always free to chart their own course of action outside of the contractual provisions. However, when a dispute arises, if the parties ignored the specifics of the contract at the time, they cannot realistically expect a court to belatedly enforce the specifics of the contract simply because it would be more expedient for one of the parties. 

If you find this decision to be encouraging, take note of the fact that both of the contracting parties here were private entities.  A very different result may have been reached if the owner was a public entity. Public owners benefit from statutory requirements of strict compliance, and courts are generally more reluctant to stray from contractual adherence because there is no equitable estoppel doctrine applicable against municipalities. After all, the public policy rationale in that context is to protect the taxpayers’ pocketbook!

In order for a contractor to best protect its rights under its contract (and preserve its right to rely upon, or set aside its provisions in connection with any dispute), it would be well advised to consult with experienced construction counsel. (And, on another note, exaggerating a mechanic’s lien is still a very bad idea.)

About the authors: Thomas H. Welby, an attorney and licensed professional engineer, is General Counsel to the CIC and the BCA, and is the Founder of, and Senior Counsel to the law firm of Welby, Brady & Greenblatt, LLP, with offices located throughout the Tri-State Region. Gregory J. Spaun, General Counsel to the Queens and Bronx Building Association, and an attorney and a partner with the firm, co-authors this series.

Appellate Court Affirms Dismissal Of Mechanic’s Lien Foreclosure Action

Written by Gregory J. Spaun on . Posted in Attorneys' Column.

This column has often extolled the virtues of a mechanic’s lien as a powerful tool to help contractors get paid. A mechanic’s lien, however, is not something that can be deposited into a bank account. In order for a contractor to obtain the benefits of a lien, all of the formalities required by the Lien Law must be followed. As a contractor learned in the recent case of Hewitt Builder and Renovations v Tectonic Builders, one of the formalities that must be followed is the filing of a Notice of Pendency in connection with the filing of the lien foreclosure lawsuit, and the failure to follow all required formalities is fatal. 

Background

In April of 2021, Hewitt Builders and Renovation entered into a contract with Tectonic Builders for Hewitt to perform drywall and carpentry work for Tectonic at a property owned by Farmingville Associates. Hewitt finished its work in October of that year, but was still owed over $100,000. In order to secure its right to payment of that sum, on November 29, 2021, Hewitt filed a mechanic’s lien. When payment was still not forthcoming, in March of 2022, Hewitt filed a lien foreclosure lawsuit against both Tectonic and the owner, Farmingville. Hewitt, however, did not file a Notice of Pendency at the time it filed its lawsuit.  (A Notice of Pendency is, essentially, a “red flag” that a plaintiff files in the County Clerk’s office at the time the lawsuit is started [or shortly thereafter] that will stand out to anyone searching the title to the property notifying them that there is a lawsuit filed of which a prospective buyer or lender may need to be aware. A Notice of Pendency extends a mechanic’s lien for three years, and not just the one year that is otherwise available to a lienor by a traditional extension; a Notice of Pendency, however, is only available in the context of a lien foreclosure lawsuit.) In December of 2022, the owner obtained a mechanic’s lien discharge bond.

In September of 2023, the owner moved to dismiss the complaint insofar as asserted against it, arguing that as the mechanic’s lien had not been extended by the filing of a Notice of Pendency (or otherwise extended by any other filing), the mechanic’s lien expired by operation of law one year after its filing and could no longer be foreclosed upon. In opposition, Hewitt argued that as a bond had issued to serve as substitute security for the property, the filing of a Notice of Pendency was no longer necessary. 

Decision

The motion court granted the owner’s motion, noting that as the mechanic’s lien had already expired by the time the bond was procured, even if the bond had been filed with the County Clerk (which it had not), it was not sufficient to salvage a cause of action against the owner (or the surety). Accordingly, the motion court dismissed the claim. 

Hewitt appealed. However, it did not fare any better as the appellate court affirmed. In doing so, that court held that the bond, procured after the expiration of the lien, could not serve to extend the lien. The appellate court also declined to salvage any unjust enrichment claim against the owner, finding that Hewitt’s relationship was with Tectonic, and not the owner. 

Comment

In the private and public sectors, mechanic’s liens are a powerful tool to help an unpaid contractor get paid, but only if all of the required formalities are followed. These formalities are necessary because the mechanic’s lien is a statutory compromise that gives a contractor the right to sue someone with which it has no contractual relationship—and, in most circumstances, provides security for the underlying debt. Here, the contractor failed to follow all of the required formalities to keep its lien in place (the filing of the Notice of Pendency). Accordingly, once the lien expired, so did the contractor’s right to maintain the lien foreclosure lawsuit. 

Mechanic’s liens must be prepared, filed, served (with proof thereof), and perfected correctly.  Therefore, should you have any questions as to how to best protect your rights to recover on a mechanic’s lien, you should consult with experienced construction counsel.

About the authors: Thomas H. Welby, an attorney and licensed professional engineer, is General Counsel to the CIC and the BCA, and is the Founder of, and Senior Counsel to the law firm of Welby, Brady & Greenblatt, LLP, with offices located throughout the Tri-State Region. Gregory J. Spaun, General Counsel to the Queens and Bronx Building Association, and an attorney and a partner with the firm, co-authors this series.

If you would like more information regarding this topic please contact Thomas H. Welby at twelby@wbgllp.com or call (914) 428-2100

Owner-Caused Delays Do Not Excuse a Contractor’s Failure to Maintain Essential Services

Written by Thomas S. Tripodianos on . Posted in Legal Alerts.

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