Real Property Law

In affirming, the Appellate Division started by noting that section 2(4) of the Lien Law defines "improvement" to include drawings by an architect, engineer, or surveyor of "plans or specifications … prepared for or used in connection with such improvement." In this case, lienor submitted an affidavit averring that it employed architects and engineers, and that it prepared "logistics and access plans" and performed "a constructability review for the project." The court accorded the Lien Law a liberal construction and concluded that the services provided by lienor could qualify as an improvement even if the plans prepared by lienor were prepared preconstruction. As a result, the court held that fee owner was not entitled to summary discharge of the lien, but that the validity of the lien was a subject for the lien foreclosure trial.

Comment

Property owners may obtain summary discharge pursuant to Lien Law §19(6) when services performed by the lienor do not constitute "improvements" within Lien Law §2(4). For instance, real estate brokerage services performed for a tenant do not constitute an "improvement" within Lien Law §2(4). In Robert Plan Corp. v. Greiner-Maltz Co., Inc., 229 A.D.2d 122, the Second Department discharged the mechanic's lien filed by a broker against owner's property for compensation owed under an exclusive listing agreement entered into between broker and tenant. The court held that Lien Law §2(4)'s definition of "improvement" contemplated real estate brokerage services only for an owner, and because broker's services were for a locating a new property for a tenant, the lien was facially invalid and owner was entitled to discharge of the lien.

The New York City Administrative Code explicitly expands the Lien Law's definition of improvement, limiting the availability of summary discharge. In Rivera v. Department of Housing Preservation and Development of City of New York, 29 N.Y.3d 45, the Court of Appeals reversed the lower court's summary discharge when two cases concerned mechanic's liens that were placed on properties by the New York City Department of Housing Preservation and Development (HPD) for the expenses incurred in relocating tenants pursuant to an emergency vacate order. The mechanic's liens were filed pursuant to Administrative Code of City of N.Y. §26–305, which entitles HPD to a mechanic's lien for "labor performed or materials furnished" in providing relocation services In Rivera, the Court of Appeals held that the mechanic's lien, which sought "hotel expenses," "administration costs," and "relocation costs," met the statutory requirement.

When summary discharge is unavailable because the lien is valid on its face, the lienor must nevertheless provide substantial receipts to recover in the lien foreclosure proceeding. In DiSario v. Rynston, 138 A.D.3d 672, the Second Department held that lienor was not entitled to recover on a lien for extra work performed because lienor had failed to offer bills, invoices, time sheets, checks or other evidence that established the cost of services rendered.

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Temporary Flooding Not a De Facto Taking In re Willis Avenue Bridge Replacement, 82 Willis LLC v. City of New York NYLJ 11/14/19, p. 25, col. 4 AppDiv, Second Dept. (memorandum opinion)

In landowner's inverse condemnation action, the city appealed from Supreme Court's denial of the city's motion to strike landowner' appraisal of its damages caused by flooding of its property and an access easement. The Appellate Division reversed and granted the city's motion, holding that the interference with landowner's parcel was not sufficiently permanent to support an inverse condemnation action.

In 2007, the city condemned fee and easement interests in land abutting landowner's parcel to facilitate replacement of the Willis Avenue Bridge. The following year, landowner filed a claim under the Eminent Domain Law, asserting that the city had acquired an easement over its lot. Subsequently, landowner contended that its lot and a non-exclusive easement it held became flooded after rainfall because cement from the construction blocked a drainage pipe. Landowner claimed loss of rental income and inability to construct a residential tower on the property, and supported its claim with an appraisal from Cushman and Wakefield. Supreme Court denied the city's motion to strike landowner's appraisal, and the city appealed.

In reversing, the court started by noting that the city had not engaged in a de jure taking of landowner's parcel, and then turned to landowner's de facto taking claim. The court held that the interference landowner claimed was not sufficiently permanent to constitute a de facto taking.

Comment

Even if a landowner adversely affected by government action cannot establish a permanent physical occupation, the landowner may be able to recover from the government on a trespass theory. In Corsello v. Verizon New York, Inc, 18 N.Y.3d 777, the Court of Appeals, while holding that landowner stated a de facto taking claim based on Verizon's installation of a terminal box on landowner's property, noted that landowner might also be able to prevail on a trespass claim. Corsello made two significant points: first, that landowner may be able to prevail on a trespass claim even when the government interference is only temporary, and second, that trespass and de facto taking claims are not mutually exclusive. Corsello did not, however, clarify what sorts of interference would be deemed temporary and hence limited to trespass claims. Nor did Corsello indicate how, if at all, the measure of damages would be different if the claim were for trespass rather than for a de facto taking.