CNB CONTRACTING CORP v. GS UTAH WIND ACQUISITION LLC (2026)

DECISION & ORDER

In an action, inter alia, to foreclose a mechanic's lien and to recover damages for breach of contract, the defendant GS Utah Wind Acquisition, LLC, appeals from a judgment of the Supreme Court, Westchester County (Sam D. Walker, J.), dated April 5, 2022.  The judgment, insofar as appealed from, upon a decision of the same court dated March 21, 2022, made after a nonjury trial, is in favor of the plaintiff and against the defendant GS Utah Wind Acquisition, LLC, (1) on the cause of action to recover damages for breach of contract in the principal sum of $848,660.68, representing a damage award of $877,160.68 less a setoff to the defendant GS Utah Wind Acquisition, LLC, in the sum of $28,500, (2) on the cause of action to foreclose the mechanic's lien in the principal sum of $611,902.17, and (3) dismissing that defendant's counterclaim to recover damages for breach of contract.

ORDERED that the judgment is affirmed insofar as appealed from, with costs.

On February 22, 2017, the plaintiff entered into a contract with the defendant GS Utah Wind Acquisition, LLC (hereinafter GS Utah), to perform certain services on a project relating to the construction and installation of three modular homes in New Rochelle.  The contract contained certain milestone deadlines, as well as deadlines for substantial completion and final completion, and provided that GS Utah was entitled to liquidated damages for the plaintiff ‘s failure to meet each deadline.  However, the contract further provided that the plaintiff was entitled to an extension of time for certain delays not related to its performance or conduct.  Per the contract, the plaintiff was to be paid a total sum of $2,157,320 in installments as the work was completed, and the final completion deadline was scheduled to occur 180 days after the first payment was made to the plaintiff by GS Utah on April 10, 2017.  The contract further required the plaintiff to procure a commercial general liability insurance policy naming GS Utah, among others, as an additional insured.

The project encountered delays and the plaintiff submitted letters and change orders to GS Utah, alleging that it was entitled to an extension of time to complete the project and to additional costs totaling $155,245.10.  Beginning in March 2018, GS Utah refused to pay any further installments to the plaintiff due to the plaintiff's alleged delays in completing the work by the required deadlines and failure to procure insurance.

The plaintiff filed a mechanic's lien in the amount of $611,902.17, and commenced this action, inter alia, to foreclose the mechanic's lien and to recover damages for breach of contract.  GS Utah interposed an answer and asserted, among other things, a counterclaim to recover damages for breach of contract, alleging that it was entitled to liquidated damages in connection with the plaintiff's “inexcusable and wrongful delays” to the project.  After a nonjury trial, the Supreme Court determined, inter alia, that the project delays were not caused by the plaintiff, and as such, GS Utah was not entitled to enforce the liquidated damages clauses;  the plaintiff was entitled to recover the remainder of the amount due under the contract and for the additional work performed;  the plaintiff was not liable to GS Utah for insurance premiums, other than a $28,500 setoff;  and the plaintiff established its entitlement to foreclose the mechanic's lien.  A judgment was entered on the cause of action to recover damages for breach of contract in the principal sum of $848,660.68, representing a damage award of $877,160.68 less the $28,500 setoff, (2) on the cause of action to foreclose the mechanic's lien in the principal sum of $611,902.17, and (3) dismissing GS Utah's counterclaim to recover damages for breach of contract.

In reviewing a determination made after a nonjury trial, “the authority of this Court to review findings of fact is as broad as that of the trial court, and includes the power to render the judgment it finds warranted by the facts, taking into account in a close case that the trial judge had the advantage of seeing the witnesses” (Man Choi Chiu v. Chiu, 125 AD3d 824, 825;  see Matter of Coven v. Neptune Equities, Inc., 198 AD3d 643, 646).  “The essential elements of a breach of contract cause of action are the existence of a contract, the plaintiff's performance under the contract, the defendant's breach of that contract, and resulting damages” (Holman v. St. John's Episcopal Hosp., 241 AD3d 1295, 1297 [internal quotation marks omitted];  see LMEG Wireless, LLC v. Farro, 190 AD3d 716, 719).  Here, in light of the evidence presented at trial, and giving the Supreme Court's credibility determinations due deference, its determination that GS Utah, and not the plaintiff, breached the contract, and that the plaintiff was entitled to $877,160.68 as damages, less the $28,500 setoff to GS Utah, as reimbursement for a portion of the insurance premium, was warranted by the facts (see Richmond El. Co., Inc. v. Oakfield Group, LLC, 236 AD3d 947, 948).

Contrary to GS Utah's contention, the evidence at trial established that “there were no significant delays attributable to the plaintiff” (Electrical Contr.  Solutions Corp. v Trump Vil. Section 4, Inc., 226 AD3d 746, 749).  Accordingly, the Supreme Court properly dismissed GS Utah's counterclaim seeking to recover liquidated damages.

Although the contract required that extension requests be in writing and changes to the work be authorized by GS Utah in a writing signed by the owner, “[u]nder New York law, oral directions to perform extra work, or the general course of conduct between the parties, may modify or eliminate contract provisions requiring written authorization or notice of claims” (Peter Scalamandre & Sons, Inc. v FC 80 Dekalb Assoc., LLC, 129 AD3d 807, 809 [internal quotation marks omitted] ).  Here, GS Utah's agent, D'Wayne Prieto, waived the provisions requiring written authorization by the general course of conduct between the parties (see DeGraw Constr.  Group, Inc. v HPDC2 Hous. Dev. Fund Co., Inc., 189 AD3d 405, 405–406;  DHE Homes, Ltd. v. Jamnik, 121 AD3d 744, 745).  Contrary to GS Utah's contention, Prieto had apparent authority to act on its behalf, including, inter alia, approving or denying change orders (see Lisi v New York Ctr. for Rehabilitation & Nursing, 225 AD3d 590, 591).  Furthermore, GS Utah, by its own conduct in sending the plaintiff work directives without a signature, waived the right to insist upon strict compliance (see G. De Vincentis & Son Constr., Inc. v City of Oneonta, 304 A.D.2d 1006, 1008;  Care Sys. v. Laramee, 155 A.D.2d 770, 771).

The Supreme Court properly determined that the plaintiff did not breach the contract by failing to procure insurance (see Syed v. Normel Constr.  Corp., 4 AD3d 303, 304).  Although the policy issued to the plaintiff failed to provide for certain coverage, the court properly determined that this was not a material breach, and awarded GS Utah a setoff representing the cost of the premium it paid for that coverage (see id.).

“Pursuant to Lien Law § 3, a contractor who performs labor or furnishes materials for the improvement of real property with the consent, or at the request of, the owner ‘shall have a lien for the principal and interest, of the value, or the agreed price, of such labor ․ or materials upon the real property improved or to be improved and upon such improvement’ ” (DiSario v. Rynston, 138 AD3d 672, 673, quoting Lien Law § 3).  “A lienor may seek amounts due from both written contracts and from change orders for extras, depending on whether the owner gave his [or her] consent for the extra work” (DHE Homes, Ltd. v. Jamnik, 121 AD3d at 745;  see DiSario v. Rynston, 138 AD3d at 673).  Here, contrary to GS Utah's contention, the evidence supported a finding that the plaintiff had a valid mechanic's lien (see DHE Homes, Ltd. v. Jamnik, 121 AD3d at 746;  cf.  DiSario v. Rynston, 138 AD3d at 673).

The parties' remaining contentions either are not properly before us or need not be reached in light of our determination.

DILLON, J.P., IANNACCI, DOWLING and MCCORMACK, JJ., concur.