Navillus Tile, Inc. v. Bovis Lend Lease LMB, Inc.

74 A.D.3d 1299, 904 N.Y.S.2d 207
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 29, 2010
StatusPublished
Cited by10 cases

This text of 74 A.D.3d 1299 (Navillus Tile, Inc. v. Bovis Lend Lease LMB, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Navillus Tile, Inc. v. Bovis Lend Lease LMB, Inc., 74 A.D.3d 1299, 904 N.Y.S.2d 207 (N.Y. Ct. App. 2010).

Opinion

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (Flug, J.), entered February 26, 2009, as granted that branch of the motion of the defendants Bovis Lend Lease LMB, Inc., Travelers Casualty and Surety Company, Federal Insurance Company, Fidelity and Deposit Company of Maryland, and Liberty Mutual Insurance Company and that branch of the separate motion of the defendant City of New York which were to dismiss the complaint insofar as asserted against them based upon the plaintiffs failure to exhaust its administrative remedies, and the defendant JD Consulting LLC, doing business as Donaldson Tradition Interiors, separately appeals, as limited by its brief, from so much of the same order as denied its separate motion, [1300]*1300in effect, for summary judgment declaring that certain provisions in the subject contract relied upon by the defendants Bovis Lend Lease LMB, Inc., Travelers Casualty and Surety Company, Federal Insurance Company, Fidelity and Deposit Company of Maryland, Liberty Mutual Insurance Company, and the City of New York in support of their separate motions to dismiss the complaint constitute an invalid waiver of rights under the Lien Law and are void as against public policy.

Ordered that the order is modified, on the law and the facts, (1) by deleting the provision thereof granting that branch of the motion of the defendants Bovis Lend Lease LMB, Inc., Travelers Casualty and Surety Company, Federal Insurance Company, Fidelity and Deposit Company of Maryland, and Liberty Mutual Insurance Company and that branch of the separate motion of the defendant City of New York which were to dismiss the complaint insofar as asserted against them based upon the plaintiffs failure to exhaust its administrative remedies and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed from, with one bill of costs payable to the appellants appearing separately and filing separate briefs, and the matter is remitted to the Supreme Court, Queens County, for a determination of that branch of the motion of the City of New York which was to dismiss the third cause of action.

The City of New York, Department of Design and Construction, Division of Structures (hereinafter the City) entered into a contract (hereinafter the prime contract) with the defendant Bovis Lend Lease LMB, Inc. (hereinafter Bovis), for Bovis to act as the construction manager on a project (hereinafter the project) to construct the new headquarters of the New York City Office of Emergency Management in Cadman Plaza, Brooklyn. In the event of disputes, Bovis and the City agreed to utilize certain alternative dispute resolution methods (hereinafter the ADR provisions) set forth in the Prime Contract and in the Rules of the Procurement Policy Board of the City of New York (hereinafter the PPB rules), which were expressly incorporated into the prime contract.

Bovis entered into a subcontract (hereinafter the subcontract) with the plaintiff, Navillus Tile, Inc., doing business as Navillus Contracting (hereinafter Navillus), for Navillus to act as the general contractor on the project. Paragraph 8 of the subcontract recited that the contract between Bovis and Navillus consisted of the subcontract, the general conditions, the special conditions, and the prime contract. Pursuant to the special conditions, under sections titled “Bid Security” and “Form of Bid,” [1301]*1301the special conditions were made subject to the PPB rules. The general conditions provided, however, that nothing in any contract document shall be deemed to impair a subcontractor’s rights under the Lien Law, and that all claims arising under the subcontract shall be litigated in state court.

Navillus, in turn, entered into a sub-subcontract with the defendant JD Consulting LLC, doing business as Donaldson Tradition Interiors (hereinafter Donaldson), for Donaldson to perform certain work on the project, including carpentry, drywall work, and installation of acoustic ceilings.

Navillus filed a mechanic’s lien against the project seeking payment of moneys it claimed were due to it for its work on the project. Donaldson subsequently filed a public improvement lien against Navillus’s interest in the mechanic’s lien for monies it claimed were due and owing to it for its work on the project.

Navillus commenced the instant action alleging breach of contract against Bovis, seeking payments for work performed pursuant to approved change orders and pursuant to unapproved change orders, seeking payment from the City under a guaranty set forth in article 10.6 of the prime contract, and seeking to foreclose on its mechanic’s lien against the project. The City moved, inter alia, to dismiss the complaint insofar as asserted against it based upon the plaintiffs failure to exhaust its administrative remedies. Bovis and the insurance defendants (hereinafter collectively Bovis) also moved, among other things, to dismiss the complaint insofar as asserted against them on the same ground. Donaldson, in effect, joined with Navillus in opposing the motions by cross-moving, inter alia, in effect, for summary judgment declaring that certain provisions in the subcontract upon which the City and Bovis relied in support of their respective motions to dismiss the complaint constitute an invalid waiver of a subcontractor’s rights under the Lien Law and are void as against public policy. The Supreme Court granted those branches of the separate motions of the City and Bovis which were to dismiss the complaint based upon Navillus’s failure to exhaust its administrative remedies, upon its finding that the subcontract incorporated the ADR provisions set forth in the prime contract and the PPB rules. The Supreme Court denied the remaining branches of the motions of the City and Bovis as academic. The Supreme Court also denied Donaldson’s cross motion.

“An alternate dispute resolution agreement, like an arbitration agreement, must be clear, explicit and unequivocal. . . and must not depend upon implication or subtlety. . . . [PJarties consenting to arbitration surrender many of their normal rights [1302]*1302under the procedural and substantive law of the State, and it would be unfair to infer such a significant waiver on the basis of anything less than a clear indication of intent” (Thomas Crimmins Contr. Co. v City of New York, 74 NY2d 166, 171 [1989] [internal quotation marks omitted]; see Matter of Waldron [Goddess], 61 NY2d 181, 183 [1984]). “While an agreement to arbitrate can be incorporated by reference, any such reference must clearly show such an intent to arbitrate” (Matter of Aerotech World Trade v Excalibur Sys., 236 AD2d 609, 611 [1997]). “Under New York law, incorporation clauses in a construction subcontract, incorporating prime contract clauses by reference into a subcontract, bind a subcontractor only as to prime contract provisions relating to the scope, quality, character and manner of the work to be performed by the subcontractor” (Bussanich v 310 E. 55th St. Tenants, 282 AD2d 243, 244 [2001]; see Waitkus v Metropolitan Hous. Partners, 50 AD3d 260, 261 [2008]).

Here, the general incorporation of the Prime Contract and the PPB Rules into the Subcontract, without any explicit reference to their respective ADR provisions, was insufficient to incorporate those ADR provisions into the Subcontract, including the ADR provision in article 29 of the Prime Contract requiring 30-day notice of a dispute (see Thomas Crimmins Contr. Co.

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Cite This Page — Counsel Stack

Bluebook (online)
74 A.D.3d 1299, 904 N.Y.S.2d 207, Counsel Stack Legal Research, https://law.counselstack.com/opinion/navillus-tile-inc-v-bovis-lend-lease-lmb-inc-nyappdiv-2010.