L. B. Foster Co. v. Terry Contracting, Inc.

Appeal from a judgment of the Supreme Court in favor of Melbros-Manco, Inc. and Tufano Contracting Corporation entered February 7, 1969 in New York County upon a decision of the court at a Trial Term without a jury.

Memorandum by the Court. Judgment, after a nonjury trial, entered February 7, 1969, affirmed, with $50 costs and disbursements. The defendants Melbros-Manco, Inc., and Tufano Contracting Corporation are both subcontractors. The main action was brought by L. B. Foster Company, a subcontractor, against the State of New York and other lienors joined as defendants, to foreclose a mechanic’s lien on moneys earned and to be earned under a contract between Terry Contracting, Inc., and the State of New York for the construction of a portion of the Prospect Expressway, Brooklyn, N. Y., on the payment and materials bond.

The evidence of breach of contract by Terry Contracting, Inc., is accepted, not in support of any claim for damages, but in support of Melbros' right to disregard the contract price and to press its claim in quantum meruit. Melbros was entitled to so do and obtain a valid mechanic’s lien for the fair and reasonable value of the work actually performed. (Wright v. Reusens, 133 N. Y. 298; Hunter v. Walter, 12 N. Y. S. 60; Day v. Eisele, 76 App. Div. 304; 51 ALR 2d 1009.)

In the instant case the work was done and led to the ultimate improvement of the property. And as then Judge Crane said in Goldberger-Raabin v. 74 Second Ave. Corp. (252 N. Y. 336, 341) “If such work was an improvement or necessary part of work done upon such property for its permanent improvement I see no reason why the labor and service in connection with such work should not be covered by the Lien Law.” (Emphasis added.)

Further, while the improvement of real property is the basis of any lien, in the case of the construction of a public improvement, and such is the case in suit, the statute grounds the lien upon the furnishing of materials to, or the performance of labor for, a contractor (Lien Law, § 5). The lien does not attach to the real property itself; it is solely upon money. (See Anderson v. Hayes Constr. Co., 243 N. Y. 140, 150.)

Construing the statute liberally, and giving to the words “improvement of real property” a broad and comprehensive meaning (Lien Law, § 23; Wahle-Phillips Co. v. Fitzgerald, 225 N. Y. 137, 140-141; Keck v. Charles B. Saxon, Inc., 164 Misc. 17, affd. 254 App. Div. 731), the trial court properly found that the extra work, labor and materials necessitated by Terry’s abandonment of the contract constituted an improvement of the State highway and were lienable (Lien Law, § 45). If an improvement includes “reasonable rental value for the period of actual use of machinery, tools and equipment ” and “ the value of materials actually manufactured for but not delivered to the real property ”, as also “ any work done upon 15 ” ® property or materials furnished for its improvement” (Lien Law, § 2, subd. 4) (emphasis supplied), the reasonable value of laborers “kept on hand”, together with materials and equipment, would also be an improvement.

And taking a realistic look at the record before us, the figures in suit are not seriously challenged; they are sufficient to countenance the judgment; and on the record and pleadipgs, after a protracted trial, long after the events, the judgment should be sustained.

As for the minority view, we find no support in the cases for the contention that any portion of the Melbros claim was not lienable. Nor is any such contention raised by any of the very knowledgeable counsel for parties to this litigation. Goldberger-Raabin v. 74 Second Ave. Corp. (supra) also cited in the minority opinion, is not a holding supporting the proposition that any portion of the Melbros claim is not lienable; that case deals with personal services, and only that portion of such services as was directed to aiding or assisting the procurement of subcontracts or subcontractors was excluded from the lien claim; also excluded were lost profits, arising from failure of an owner to complete the construction of a building, partially begun, because of financial inability. The lost profits in that case (p. 340) were “the profits he would have made if the contract 'had been fully completed ” pursuant to a percentage commission arrangement based upon the contemplated total construction cost of the building, the termination of the construction of which constituted the broken contract.

We also except to the statement of the dissent that “Any excess cost to which the lienor may have been put represents not value but damages to thelienor resulting from the breach ”. The distinction is not meaningful since we do not here deal with an anticipatory breach prior to any performance under a contract or damages arising from lost profits incident to failure of completion of a building commenced. The theory of the minority seems to be that where the services are greater in value than the benefit received, then there can be no lien; with this singular theory, not articulated to any point of ready discernibleness, we are unable to agree. And we note it was not developed by the appellants at the trial or on the appeal, nor did it ever figure before in this almost ancient litigation. Thus, we affirm in all respects.