Real Property Law

Misdescription of Property Owner Does Not Invalidate Mechanic's Lien

PM Contracting Co Inc. v. 32 AA Associates LLC

NYLJ 8/20/03, p. 18, col. 4

Supreme Ct., N.Y. Cty

(Lehner, J.)

In an action to foreclose a mechanic's lien, fee owner moved to dismiss based on lienor's alleged misidentification of the owner. The court denied the motion, holding that the notice of lien had misdescribed, but not misidentified, the owner.

In September 2000, 32AA, then the owner of the subject office building, leased space to Global Crossing. Global engaged lienor to make improvements to the space. Between May and December 2001, lienor made the improvements, but Global did not pay the amount due lienor; a deficiency of more than $2,000,000 remained unpaid. On January 15, 2002, lienor filed a notice of lien naming 32AA as the owner of the property. Seven months earlier, however, 32AA had formed 32 Sixth Avenue as a limited liability company and, on July 3, 2001, 32AA had conveyed the subject building to 32 Sixth Avenue. The deed was recorded on August 24, 2001 – several months before lienor had filed the notice of lien. Global Crossing filed for bankruptcy, and the bankruptcy court subsequently approved rejection of Global Crossing's lease. In this action, lienor sought to foreclose the mechanic's lien. 32AA resisted, contending that the notice of lien was jurisdictionally defective because it had misidentified the owner of the property.

In denying 32AA's motion, the court distinguished between misdescription of the owner, which does not invalidate a notice of lien, and misidentification, which does. Here, the court concluded that naming the parent company rather than the subsidiary as the owner constituted only a misdescription. Moreover, the court noted that 32AA, as owner of the premises had no statutory right to claim prejudice as a result of the misdescription. And because the senior mortgagee would be unaffected by the mechanic's lien, the mortgagee was not in a position to claim prejudice either. As a result, the court held denied 32AA's motion to dismiss, and granted lienor's motion to amend the notice of pendency to add 32 Sixth Avenue as owner.

COMMENT

Subdivision 2 of NY Lien Law ' 9 provides that the notice of a lien shall state “[t]he name of the owner of the real property against whose interest therein a lien is claimed.” However, subdivision 7 states that a “[a] failure to state the name of the true owner or contractor, or a misdescription of the true owner, shall not affect the validity of the lien.” Furthermore, NY Lien Law ' 23 provides that the laws pertaining to mechanic's liens are to be construed liberally and that substantial compliance with those laws is sufficient. New York courts have held where the lien misidentifies the true owner, the lien will fail to comply with ' 9, and consequently be invalid. If however, the inaccuracy is deemed a misdescription, then the lien will be valid pursuant to ' 9 subdivision 7. Whether a defect will be deemed a misidentification or a misdescription turns on whether the name cited in the lien provides adequate notice to all concerned. Thus, in Church E. Gates & Co., Inc. v. Empire City Racing Assn., 225 N.Y. 142, the Court of Appeals held that where the lienor identified the property owner as Empire City Trotting Club, instead of its new name, Empire City Racing Association, the defect was merely a misdescription and hence curable via an amendment nunc pro tunc. The court reasoned, that using the former name would “give the public substantially the same notice of the lien,” or at a minimum, provide the basis for further inquiry. Id. at 155. Essentially, the court chose to examine the defect from the perspective of future purchasers and others whom the notice requirement was meant to protect.

A thorough analysis of the relevant case law confirms the importance of notice. For example, in Tri Quality Mechanical Corp. v. Chappastream Corp., 138 A.D.2d 610, the lienor, named Central Federal Savings & Loan, F.S.B. (CFSL), as the owner, in the place of its alleged wholly owned subsidiary, Chappastream. The court held that notwithstanding CFSL's total control over Chappastream, the inaccuracy was a misidentification. (See Also Tri-State Sol-Aire Corp. v. Lakeville Pace Mech., 221 A.D.2d 519, where the court found the inaccuracy to be a misidentification where the lienor named Old Towne Medical Village Owners Associates, Inc. instead of Southampton Medical Properties Associates.) On the other hand, where the inaccurate name is similar to the actual name, the courts have deemed the error merely a misdescription. For example, Manniello v. Land Design Associates, P.C., 279 A.D.2d 460, the court deemed the error to be merely a misdescription, where the lienor identified the owner as Land Design Associates, instead of Land Design Associates Consulting Group.

In PM Contracting, the court draws attention to the fact that presumably 32 AA stands for 32 Avenue of the Americas, which is Sixth Avenue's official name. Hence, although the court places emphasis on 32 AA's (the owner named in the lien) control over 32 Sixth Avenue (the true owner), the inaccurate description was nevertheless adequate to provide notice of the true owner's identity.

Notice of Pendency Properly Filed in Action for Impairment of Lateral Support

Jenmat Realty Corp. v. 37 E. 63rd St Park and Madison, LLC

NYLJ 8/6/03, p. 18, col. 2

Supreme Ct., N.Y. Cty

(Schlesinger, J.)

In an action by landowner against neighbor for removal of underground construction beneath a common wall, neighbor sought to cancel the notice of pendency filed by plaintiff landowner. The court denied defendant-neighbor's motion, holding that filing of the notice of pendency was proper because judgment could affect possession, use, or enjoyment of defendant-neighbor's property.

Plaintiff landowner alleged that defendant neighbor had installed underpinning beneath an underground common wall and had constructed a cement box, 4-feet square, below ground at the rear of plaintiff landowner's parcel. Landowner contended that the construction was completed without consent, and caused the rear extension of landowner's building to shift, resulting in an order by the New York City Department of Buildings to vacate the rear extension, ultimately requiring demolition of the extension. Plaintiff landowner sought damages and removal of the underground construction to restore the property to its previously existing construction. Based on this action, plaintiff landowner filed a notice of pendency against defendant neighbor's property. Neighbor sought to cancel the notice of pendency, contending that judgment in the action would not affect neighbor's title, possession, use or enjoyment of the property. As a result, neighbor argued, CPLR 6501 provide no authority for filing of the notice of pendency.

In denying neighbor's motion, the court emphasized landowner's request for a judgment directing restoration of its property to its previously existing condition. The court noted that this restoration might require changes to the common underground wall and alterations to neighbor's land or construction on neighbor's land to restore the previously existing lateral support to landowner's property. The court emphasized that the New York City Building Code confirms a duty of lateral support, and concluded that the easement for lateral support affects the “title, possession, use, or enjoyment” of neighbor's real property. As a result, the notice of pendency was properly filed.

COMMENT

A landowner's right to file a notice of pendency on a neighbor's property depends on whether “the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property.” CPLR ' 6501. New York courts generally do not find that a cause of action fulfills this requirement when the only remedies available to the landowner are damages or abatement of nuisance-type behavior. See, e.g., Bressel v. Browning, 109 A.D. 588; Raimonda v. Cahn, 26 A.D.2d 939. A claim seeking physical changes to the neighbor's property, however, is proper grounds for a notice of pendency. In any action for money damages, a judgment is enforceable against the defendant, not against his property. Courts have held that a notice of pendency is not an appropriate tool for protecting whatever financial judgment a neighbor might obtain against a landowner. As a result, purchasers of a landowner's land take free of any judgment a neighbor might obtain against the landowner.

With a nuisance judgment, by contrast, subsequent purchasers remain subject to any order to abate, and would be subject to damages for failure to abate, just as the original landowner-defendant would have been. As a result, no notice of pendency is necessary. Thus, in Braunston v. Anchorage Woods, 10 N.Y.2d 302, a nuisance action to stop diversion of water onto the landowner's property, the landowner sought a notice of pendency, asserting that the nuisance-creating neighbor might come to owe him a judgment in tort that might later be satisfied by the property. The court held that this did not meet the test for filing a notice of pendency because Braunston was not claiming an actual interest in the neighbor's property.

Most types of nuisance would give more notice to a purchaser than would the sort of alterations – often subterranean – that affect a neighbor's right to lateral support. So in a category of actions, like those for support, where purchasers are unlikely to have notice of claims against their land, a notice of pendency becomes appropriate. Thus, in Bienstock v. Nista Const. Co., 225 A.D. 534, landowner Bienstock filed a notice of pendency while seeking relief that involved physical alterations of the neighbor's property. The neighbor had performed excavation that compromised lateral support of Bienstock's land in preparation to build a wall. Although the neighbor argued that a monetary bond was sufficient, the court reinstated Bienstock's notice of pendency. The court explained that when a landowner seeks relief in the nature of changes to a neighbor's property, such as compulsion of an easement of lateral support, the right to that relief could disappear if a court allowed the neighbor to substitute a monetary bond for notice of pendency. A bond would insure the court's power over the neighbor to an extent, but would not guarantee that a subsequent purchaser would reinstate the lateral support landowner had sought.

Misdescription of Property Owner Does Not Invalidate Mechanic's Lien

PM Contracting Co Inc. v. 32 AA Associates LLC

NYLJ 8/20/03, p. 18, col. 4

Supreme Ct., N.Y. Cty

(Lehner, J.)

In an action to foreclose a mechanic's lien, fee owner moved to dismiss based on lienor's alleged misidentification of the owner. The court denied the motion, holding that the notice of lien had misdescribed, but not misidentified, the owner.

In September 2000, 32AA, then the owner of the subject office building, leased space to Global Crossing. Global engaged lienor to make improvements to the space. Between May and December 2001, lienor made the improvements, but Global did not pay the amount due lienor; a deficiency of more than $2,000,000 remained unpaid. On January 15, 2002, lienor filed a notice of lien naming 32AA as the owner of the property. Seven months earlier, however, 32AA had formed 32 Sixth Avenue as a limited liability company and, on July 3, 2001, 32AA had conveyed the subject building to 32 Sixth Avenue. The deed was recorded on August 24, 2001 – several months before lienor had filed the notice of lien. Global Crossing filed for bankruptcy, and the bankruptcy court subsequently approved rejection of Global Crossing's lease. In this action, lienor sought to foreclose the mechanic's lien. 32AA resisted, contending that the notice of lien was jurisdictionally defective because it had misidentified the owner of the property.

In denying 32AA's motion, the court distinguished between misdescription of the owner, which does not invalidate a notice of lien, and misidentification, which does. Here, the court concluded that naming the parent company rather than the subsidiary as the owner constituted only a misdescription. Moreover, the court noted that 32AA, as owner of the premises had no statutory right to claim prejudice as a result of the misdescription. And because the senior mortgagee would be unaffected by the mechanic's lien, the mortgagee was not in a position to claim prejudice either. As a result, the court held denied 32AA's motion to dismiss, and granted lienor's motion to amend the notice of pendency to add 32 Sixth Avenue as owner.

COMMENT

Subdivision 2 of NY Lien Law ' 9 provides that the notice of a lien shall state “[t]he name of the owner of the real property against whose interest therein a lien is claimed.” However, subdivision 7 states that a “[a] failure to state the name of the true owner or contractor, or a misdescription of the true owner, shall not affect the validity of the lien.” Furthermore, NY Lien Law ' 23 provides that the laws pertaining to mechanic's liens are to be construed liberally and that substantial compliance with those laws is sufficient. New York courts have held where the lien misidentifies the true owner, the lien will fail to comply with ' 9, and consequently be invalid. If however, the inaccuracy is deemed a misdescription, then the lien will be valid pursuant to ' 9 subdivision 7. Whether a defect will be deemed a misidentification or a misdescription turns on whether the name cited in the lien provides adequate notice to all concerned. Thus, in Church E. Gates & Co., Inc. v. Empire City Racing Assn., 225 N.Y. 142, the Court of Appeals held that where the lienor identified the property owner as Empire City Trotting Club, instead of its new name, Empire City Racing Association, the defect was merely a misdescription and hence curable via an amendment nunc pro tunc. The court reasoned, that using the former name would “give the public substantially the same notice of the lien,” or at a minimum, provide the basis for further inquiry. Id. at 155. Essentially, the court chose to examine the defect from the perspective of future purchasers and others whom the notice requirement was meant to protect.

A thorough analysis of the relevant case law confirms the importance of notice. For example, in Tri Quality Mechanical Corp. v. Chappastream Corp., 138 A.D.2d 610, the lienor, named Central Federal Savings & Loan, F.S.B. (CFSL), as the owner, in the place of its alleged wholly owned subsidiary, Chappastream. The court held that notwithstanding CFSL's total control over Chappastream, the inaccuracy was a misidentification. (See Also Tri-State Sol-Aire Corp. v. Lakeville Pace Mech., 221 A.D.2d 519, where the court found the inaccuracy to be a misidentification where the lienor named Old Towne Medical Village Owners Associates, Inc. instead of Southampton Medical Properties Associates.) On the other hand, where the inaccurate name is similar to the actual name, the courts have deemed the error merely a misdescription. For example, Manniello v. Land Design Associates, P.C., 279 A.D.2d 460, the court deemed the error to be merely a misdescription, where the lienor identified the owner as Land Design Associates, instead of Land Design Associates Consulting Group.

In PM Contracting, the court draws attention to the fact that presumably 32 AA stands for 32 Avenue of the Americas, which is Sixth Avenue's official name. Hence, although the court places emphasis on 32 AA's (the owner named in the lien) control over 32 Sixth Avenue (the true owner), the inaccurate description was nevertheless adequate to provide notice of the true owner's identity.

Notice of Pendency Properly Filed in Action for Impairment of Lateral Support

Jenmat Realty Corp. v. 37 E. 63rd St Park and Madison, LLC

NYLJ 8/6/03, p. 18, col. 2

Supreme Ct., N.Y. Cty

(Schlesinger, J.)

In an action by landowner against neighbor for removal of underground construction beneath a common wall, neighbor sought to cancel the notice of pendency filed by plaintiff landowner. The court denied defendant-neighbor's motion, holding that filing of the notice of pendency was proper because judgment could affect possession, use, or enjoyment of defendant-neighbor's property.

Plaintiff landowner alleged that defendant neighbor had installed underpinning beneath an underground common wall and had constructed a cement box, 4-feet square, below ground at the rear of plaintiff landowner's parcel. Landowner contended that the construction was completed without consent, and caused the rear extension of landowner's building to shift, resulting in an order by the New York City Department of Buildings to vacate the rear extension, ultimately requiring demolition of the extension. Plaintiff landowner sought damages and removal of the underground construction to restore the property to its previously existing construction. Based on this action, plaintiff landowner filed a notice of pendency against defendant neighbor's property. Neighbor sought to cancel the notice of pendency, contending that judgment in the action would not affect neighbor's title, possession, use or enjoyment of the property. As a result, neighbor argued, CPLR 6501 provide no authority for filing of the notice of pendency.

In denying neighbor's motion, the court emphasized landowner's request for a judgment directing restoration of its property to its previously existing condition. The court noted that this restoration might require changes to the common underground wall and alterations to neighbor's land or construction on neighbor's land to restore the previously existing lateral support to landowner's property. The court emphasized that the New York City Building Code confirms a duty of lateral support, and concluded that the easement for lateral support affects the “title, possession, use, or enjoyment” of neighbor's real property. As a result, the notice of pendency was properly filed.

COMMENT

A landowner's right to file a notice of pendency on a neighbor's property depends on whether “the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property.” CPLR ' 6501. New York courts generally do not find that a cause of action fulfills this requirement when the only remedies available to the landowner are damages or abatement of nuisance-type behavior. See, e.g., Bressel v. Browning, 109 A.D. 588; Raimonda v. Cahn, 26 A.D.2d 939. A claim seeking physical changes to the neighbor's property, however, is proper grounds for a notice of pendency. In any action for money damages, a judgment is enforceable against the defendant, not against his property. Courts have held that a notice of pendency is not an appropriate tool for protecting whatever financial judgment a neighbor might obtain against a landowner. As a result, purchasers of a landowner's land take free of any judgment a neighbor might obtain against the landowner.

With a nuisance judgment, by contrast, subsequent purchasers remain subject to any order to abate, and would be subject to damages for failure to abate, just as the original landowner-defendant would have been. As a result, no notice of pendency is necessary. Thus, in Braunston v. Anchorage Woods, 10 N.Y.2d 302, a nuisance action to stop diversion of water onto the landowner's property, the landowner sought a notice of pendency, asserting that the nuisance-creating neighbor might come to owe him a judgment in tort that might later be satisfied by the property. The court held that this did not meet the test for filing a notice of pendency because Braunston was not claiming an actual interest in the neighbor's property.

Most types of nuisance would give more notice to a purchaser than would the sort of alterations – often subterranean – that affect a neighbor's right to lateral support. So in a category of actions, like those for support, where purchasers are unlikely to have notice of claims against their land, a notice of pendency becomes appropriate. Thus, in Bienstock v. Nista Const. Co., 225 A.D. 534, landowner Bienstock filed a notice of pendency while seeking relief that involved physical alterations of the neighbor's property. The neighbor had performed excavation that compromised lateral support of Bienstock's land in preparation to build a wall. Although the neighbor argued that a monetary bond was sufficient, the court reinstated Bienstock's notice of pendency. The court explained that when a landowner seeks relief in the nature of changes to a neighbor's property, such as compulsion of an easement of lateral support, the right to that relief could disappear if a court allowed the neighbor to substitute a monetary bond for notice of pendency. A bond would insure the court's power over the neighbor to an extent, but would not guarantee that a subsequent purchaser would reinstate the lateral support landowner had sought.