Regal Lumber Co. v. Buck

157 Misc. 2d 376, 596 N.Y.S.2d 1000, 1993 N.Y. Misc. LEXIS 127
CourtNew York County Courts
DecidedMarch 17, 1993
StatusPublished
Cited by1 cases

This text of 157 Misc. 2d 376 (Regal Lumber Co. v. Buck) is published on Counsel Stack Legal Research, covering New York County Courts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Regal Lumber Co. v. Buck, 157 Misc. 2d 376, 596 N.Y.S.2d 1000, 1993 N.Y. Misc. LEXIS 127 (N.Y. Super. Ct. 1993).

Opinion

OPINION OF THE COURT

Larry M. Himelein, J.

INTRODUCTION

This is an action by a materialman to foreclose a mechanic’s lien. The case was tried nonjury on January 20, January 21 and February 9, 1993. Memoranda and reply memoranda have been submitted by both sides and I thank counsel for both a well-tried case and their written materials which were instrumental in clarifying the issues.

Defendant Todd Boardman is a general contractor who agreed to build a home for defendants Gordon and Kathleen Buck. After problems arose, Boardman filed a mechanic’s lien on June 18, 1991 and commenced a foreclosure action on or about August 8, 1991. The Bucks’ answer raised the affirmative defense of willful exaggeration under section 39 of the Lien Law and counterclaimed for the cost of the work they performed themselves or paid for separately.

Plaintiff Regal is a building supply company that sold [378]*378materials to Boardman for use in constructing the home. After supplying more than $11,000 worth of materials that were not paid for, plaintiff filed a mechanic’s lien against the Buck property on May 30, 1991 and commenced its own foreclosure action on or about September 20, 1991. The Bucks answered and cross-claimed against Boardman.

In October of 1991, Boardman filed a bankruptcy petition and received the usual discharge of unsecured debts. The trustee in bankruptcy did not pursue Boardman’s foreclosure action and apparently all concede that this claim thus reverts to Boardman (1978 Bankruptcy Code [11 USCj § 554). The Bucks’ claims against Boardman were presumably discharged in the bankruptcy.

In July of 1992 (either after Boardman’s discharge in bankruptcy or after Regal obtained relief from the bankruptcy stay), Regal served an amended complaint which added David Jett as another defendant. Jett was a heating and plumbing subcontractor who had also filed a mechanic’s lien on the Buck property; his case was settled prior to trial.

PRELIMINARY LEGAL ISSUES

The Bucks’ answer raised as defenses (1) the lack of privity of contract between themselves and plaintiff; (2) the claim that they have paid in full for the materials; (3) the claim that the mechanic’s lien is invalid because it is exaggerated; and (4) the failure to state a cause of action.

Defendants also cross-claimed against Boardman, claiming (1) Boardman failed to adhere to the agreement between them, thus damaging the Bucks; (2) Boardman breached his agreement with the Bucks by failing to complete the home in a good and workmanlike matter and in fact did not complete the home; and (3) they paid Boardman for all materials he used in the construction and are therefore entitled to a credit from Boardman for all or part of the materials.

Two of the defenses are easily disposed of. The complaint clearly states a cause of action (see generally, Lien Law art 2; Martirano Constr. Corp. v Briar Contr. Corp., 104 AD2d 1028). Further, a materialman or subcontractor is not required to be in contractual privity with the property owner in order to foreclose a mechanic’s lien (Rainbow Elec. Co. v Bloom, 132 AD2d 539; Hartman v Travis, 81 AD2d 692).

At trial, defendants renewed the defenses of exaggeration and full payment. They also alleged that plaintiff changed [379]*379credit terms with Boardman in the middle of the job to the Bucks’ detriment. Finally, they moved to dismiss on the ground that either Boardman’s lien had lapsed or his action against the Bucks had lapsed, so plaintiffs case must fall since a materialman’s lien is derivative from the contractor’s.

I find the claim that plaintiff changed credit terms with Boardman unconvincing. The Bucks’ argument is that plaintiff was "stupid” to continue to extend credit to Boardman and thus, the innocent homeowner should not suffer for that stupidity. No authority is cited for this contention and my own research has disclosed no cases that hold that a material-man who extends credit to a contractor wisely is entitled to his lien while one who extends credit foolishly (or generously, as the case may be) is not. Moreover, the uncontroverted proof at trial established that the business relationship between plaintiff and Boardman was no different from the relationship plaintiff had with other area contractors.

Before the merits of the case can be reached, defendants’ motion to dismiss must be addressed. Boardman’s foreclosure action against defendants was not pursued by the bankruptcy trustee or by Boardman since his discharge. In this action, which named both Boardman and the Bucks as defendants, Boardman filed a notice of appearance but did not answer or cross-claim. Ergo, contend the Bucks, Boardman’s lien has lapsed and plaintiffs lien, because it derives from Boardman’s, must also fall (see, Lien Law § 44 [5]).

It is well settled that a materialman’s or subcontractor’s lien is derivative in the sense that it is derived from what is owed to the contractor (76 NY Jur 2d, Mechanics’ Liens, § 20; McCreary Co. v People, 267 NY 37). Does Boardman, by not answering plaintiffs complaint, give up his lien and consequently cause Regal to lose its lien? The statute appears to say "no.”

Section 17 of the Lien Law, in part, provides as follows: "If a lienor is made a party defendant in an action to enforce another lien, and the plaintiff or such defendant has filed a notice of the pendency of the action within the time prescribed in this section, the lien of such defendant is thereby continued. Such action shall be deemed an action to enforce the lien of such defendant lienor.” Therefore, according to the statute, Regal, by bringing this action and naming Boardman as a defendant, and timely filing a notice of pendency, has continued Boardman’s lien whether Boardman commenced his [380]*380own action or not (see also, Tri-City Elec. Co. v People, 96 AD2d 146, affd 63 NY2d 969; Berger Mfg. Co. v City of New York, 206 NY 24; Lien Law § 19 [2]).

Lincoln Natl. Bank v Pierce Co. (228 NY 359) is not to the contrary. Lincoln did not involve an action to foreclose a mortgage or enforce a lien and therefore the action did not "save” the defendant lienor’s lien; neither was Lien Law § 44 (5) implicated. In Lincoln, the defendant lienor did in fact appear, answered, alleged all facts necessary to foreclose its own lien and filed a lis pendens, and was thereby deemed to have commenced an action to foreclose a lien and saved his lien.

Although Boardman’s lien has been preserved by the commencement of this action, that does not end the inquiry. The Bucks urge that Boardman’s failure to answer or cross-claim in this case operates to waive his lien and thus, plaintiff’s derivative lien must also fall.

Resolution of this argument requires analysis of two provisions of the Lien Law. Section 44 (5) of the Lien Law provides that in an action to enforce a lien: "Every defendant who is a lienor shall, by answer in the action, set forth his lien, or he will be deemed to have waived the same, unless the lien is admitted in the complaint, and not contested by another defendant.” Section 17 of the Lien Law, however, provides that "[s]uch action [by a lienor who serves a defendant lienor] shall be deemed an action to enforce the lien of such defendant lienor”. I find it extremely difficult to reconcile those two sections.

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Bluebook (online)
157 Misc. 2d 376, 596 N.Y.S.2d 1000, 1993 N.Y. Misc. LEXIS 127, Counsel Stack Legal Research, https://law.counselstack.com/opinion/regal-lumber-co-v-buck-nycountyct-1993.