WATERWORKS OPERATING COMPANY LLC v. 514 WEST 24TH OWNER LLC (2026)

Judgment, Supreme Court, New York County (Joel M. Cohen, J.), entered December 5, 2024, awarding plaintiff the principal amount of $1,396,058.74, and bringing up for review an order, same court and Justice, entered June 12, 2024, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for summary judgment on its causes of action for lien foreclosure and breach of contract, unanimously modified, on the law, without costs, to vacate the judgment and to remit to Supreme Court on the issue of damages only consistent with this decision, and otherwise affirmed, without costs. Appeal from the aforesaid order, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Plaintiff manufactures and supplies high-end bathroom fixtures. It commenced this action for breach of contract, lien foreclosure, and account stated against defendant 514 West 24th Owner LLC (the Owner) and its surety seeking complete payment for bathroom and cabinet materials that were delivered to the Owner for its redevelopment of a building in Chelsea. Pursuant to a series of purchase orders and change orders, the Owner agreed to pay plaintiff $2,577,166.99 (the full contract price) for the materials supplied. Both parties acknowledge that the Owner has paid plaintiff $1,608,827.37 for goods actually delivered and accepted. Plaintiff then filed a mechanic's lien in the amount of $968,339.62, which it asserts represents the outstanding balance due under the contract. Supreme Court granted plaintiff's motion for summary judgment on its breach of contract and lien foreclosure claims and dismissed the remaining cause of action as duplicative. The court awarded plaintiff damages corresponding to the outstanding balance due under the contract, based on the full contract price, plus pre-judgment interest, costs and disbursements.

Defendants principally advance two arguments on appeal. First, they argue that they cannot be held liable for breaching change orders totaling $390,605.51 because Michael Ohman of Sunrise Construction, LLC (Sunrise), the project's original construction manager, lacked authority to bind the Owner to those agreements. The Owner relies on a construction management agreement between the Owner and Sunrise which prohibited Sunrise from entering into change orders without the Owner's “prior written approval.” Defendants' argument lacks merit because the Owner's acceptance of materials delivered pursuant to the change orders, without objection, constituted an implied ratification of those agreements (see Matter of Cologne Life Reins. Co. v Zurich Reins. [N. Am.], 286 A.D.2d 118, 126 [1st Dept 2001] [“An affirmance of an unauthorized transaction can be inferred from a failure to repudiate it”] [internal quotation marks omitted]; cf. Standard Funding Corp. v. Lewitt, 89 N.Y.2d 546, 552 [1997]).

Defendants next argue that triable issues of fact exist as to the total damages that should be awarded to plaintiff because plaintiff did not establish that it delivered all materials required under the contract. In support of its summary judgment motion, plaintiff supplied invoices for materials delivered totaling $2,340,098 and defendants do not identify any specific items from these invoices that were not delivered or failed to conform to the terms of the applicable purchase orders. Thus, plaintiff met its prima facie burden to show that it delivered $2,340,098 in materials due under the contract.

Nonetheless, plaintiff did not satisfy its prima facie burden of establishing delivery of the remaining $237,069 in materials required by the contract. Plaintiff submitted an affidavit from its accounts receivable manager to demonstrate that all contract items were delivered to the Owner, but it did so only in reply in further support of its motion for summary judgment. Because defendants did not have an opportunity to rebut the evidence submitted by plaintiff in its reply papers, the affidavit must be disregarded (see Doyaga v. Camelot Taxi Inc., 102 AD3d 594, 595 [1st Dept 2013]). Accordingly, the judgment, which is premised on the unpaid balance of the full contract price, is vacated and the matter remanded for further proceedings on damages.

We have considered the remaining arguments and find them unavailing.