Charles A. Gaetano Construction Corp. v. Citizens Developers of Oneonta, Inc.
Court: Appellate Division of the Supreme Court of the State of New York; January 10, 1996; New York; State Appellate Court
Appeal from a Supreme Court judgment granted a motion for summary judgment by Daverman Associates, P.C. against Citizens Developers of Oneonta, Inc. (CDO), validating a mechanic’s lien for $30,400. Daverman filed a mechanic’s lien for $157,542 after providing architectural services for a redevelopment project. CDO secured a bond from Royal Insurance Company to discharge the lien, backed by a letter of credit from Wilber National Bank, guaranteed by CDO’s former members Harold Degraw and Philip Devine. Following a stipulation of settlement, CDO agreed to pay Daverman $30,400 in installments, but failed to make payments, leading to Daverman obtaining a judgment for the amount.
CDO's attempt to discharge the bond was unsuccessful due to the ongoing lien foreclosure action. In a related case, it was determined that Daverman's in personam judgment could not be satisfied from the bond and required a judgment in the foreclosure action for collection. CDO and Royal waived their right to contest CDO’s liability on the lien, and Daverman was limited to the agreed amount of $30,400. The Supreme Court granted Daverman's motion for summary judgment, affirming the lien's validity without a hearing, as CDO and Royal had waived their right to challenge it. CDO’s appeal is not moot despite Daverman collecting from Royal on the bond, as reversal would grant Wilber or the guarantors restitution rights. The appellate court affirmed the lower court's judgment, reiterating that the substantive issues had been previously resolved and CDO's arguments against Daverman's actions lacked merit.
The Court reaffirmed that the stipulation required the foreclosure action to remain pending until its terms were fulfilled, referencing prior rulings. It confirmed that the foreclosure suit was still active as of January 1994, allowing Daverman to seek judgment. The earlier judgment is deemed satisfied upon payment in this action, and if Daverman's claim of payment is accurate, a satisfaction piece should be filed per CPLR 5020. CDO’s remaining arguments were deemed without merit. Additionally, the guarantors have not yet had the opportunity to contest the lien’s validity and have not waived that right, meaning they can assert defenses when collection on their guarantees is pursued. The judgment is affirmed without costs.
