Automated Summary
Key Facts
Plaintiff Awe Inc. completed three construction projects for Anjac Enterprises Inc. as a subcontractor, with total outstanding payments of $99,000 (Manhattan: $27,550, Creedmoor: $42,650, Kingsboro: $28,800) under signed subcontracts requiring proof of compliance before final payment. Anjac received full payment from the New York State Office of General Services by October 2020 but failed to pay Awe Inc. in full. The court granted summary judgment to Awe Inc. on breach of contract claims against Anjac and for enforcement of mechanic's liens against Hudson Insurance Company's bonds, while dismissing all counterclaims. A 2023 Labor Commissioner notice regarding potential payroll issues on the Manhattan project was deemed too late and insufficient to create triable facts, as Anjac conceded no issues with Awe Inc.'s payroll submissions.
Transaction Type
Subcontract Agreement
Issues
- The court dismissed the plaintiff's diversion of funds claims as moot, as the summary judgment on the breach of contract claims rendered these claims unnecessary for further consideration.
- The defendants' counterclaims against Awe Inc. for alleged payroll deficiencies and damages from the lawsuit were dismissed. The court found no triable issues of fact, as the defendants failed to provide sufficient evidence to support their claims, and Shmulevich had no contract with the plaintiff.
- Awe Inc. successfully enforced its mechanic's liens against the bonds provided by Hudson Insurance Company, allowing recovery of the $99,000 owed for breach of contract. The court confirmed the validity of the liens and the right to enforce them against the bonds.
- The court ruled that Anjac breached three subcontract agreements with Awe Inc. by failing to make full payments after the work was completed and accepted by NYSOGS. Summary judgment was granted on these claims, resulting in a $99,000 judgment against Anjac.
Holdings
- Plaintiff's motion for summary judgment is granted against Anjac for breach of contract on all three subcontracts, awarding $99,000 in damages with statutory interest from February 7, 2020.
- Plaintiff's motion for summary judgment is granted for foreclosure of Mechanic's Liens against the Bonds, allowing recovery of damages from Anjac's insurance.
- Defendant Shmulevich's breach of contract claims are dismissed due to lack of contractual relationship with Plaintiff.
- All counterclaims by Defendants are dismissed, including those related to payroll deficiencies and diversion of funds, as no material issues of fact remain.
- Diversion of funds causes of action are dismissed as moot following the court's determination on breach of contract and lien enforcement.
Remedies
- Plaintiff's first, third, and fifth causes of action for breach of contract as against Defendant Gregory Shmulevich are dismissed.
- Plaintiff's motion for summary judgment is granted as to Defendants' counterclaims, and all counterclaims are dismissed.
- The motion for summary judgment is granted as to the seventh cause of action for the foreclosure of the Mechanic's Liens against the Bonds. Plaintiff shall have the right to enforce the awarded damages against the Bonds.
- Defendant Anjac Enterprises Inc. and/or Hudson Insurance Company are ordered to pay Plaintiff Awe Incorporated within 30 days of the service of the copy of this order with the notice of entry, up to but not to exceed the full amount due under the Bonds, to be applied toward the satisfaction of the judgment against Anjac.
- Plaintiff's second, fourth, and sixth causes of action for diversion of funds as to all Defendants are dismissed.
- The motion for summary judgment is granted as to the first, third, and fifth causes of action for breach of the Manhattan, Creedmoor, and Kingsboro Subcontracts against Defendant Anjac. The Clerk is directed to enter judgment in favor of Plaintiff Awe Incorporated and against Defendant Anjac Enterprises Inc. in the amount of $99,000 with statutory interest from February 7, 2020.
Monetary Damages
99000.00
Legal Principles
- The court enforced the requirement that to foreclose a mechanic's lien against a discharge bond, a plaintiff must demonstrate the lien's validity and entitlement to the asserted amount. This principle was applied to uphold the plaintiff's right to recover damages from the bonds.
- The court applied the principle that a moving party must make a prima facie showing of entitlement to judgment as a matter of law, eliminating material factual disputes. This standard was used to evaluate the plaintiff's motion for summary judgment on breach of contract claims against Anjac.
Precedent Name
- KNR Constr., LLC v Epiphany Constr. Servs., Ltd.
- Harris v Seward Park Hous. Corp.
- Winegrad v New York Univ. Med. Center
- Alvarez v Prospect Hosp.
- Stonehill Capital Mgt. LLC v Bank of the W.
- Zuckerman v City of New York
Key Disputed Contract Clauses
The subcontracts required proof of compliance with New York Labor Law §220 and payment to workers, material-, and equipment-suppliers prior to final payment. The court analyzed whether these terms were breached by Anjac's failure to pay the full amount due to Awe Inc. despite receiving final payments from NYSOGS.
Cited Statute
New York Labor Law Section 220
Judge Name
Lori S. Sattler
Passage Text
- On a motion for summary judgment, the moving party 'must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case' (Winegrad v New York Univ. Med. Center, 64 NY2d 851, 853 [1985], citing Zuckerman v City of New York, 49 NY2d 562 [1980]).
- '[A] shadowy semblance of an issue [is] insufficient to defeat summary judgment' (Stonehill Capital Mgt. LLC v Bank of the W., 28 NY3d 448 [2016] [internal citation omitted]).
- Plaintiff demonstrates that Anjac breached the Subcontracts by failing to pay the amounts due to Plaintiff and summary judgment is granted as to these causes of action as against Anjac.
Damages / Relief Type
- Plaintiff granted right to enforce Mechanic's Liens against discharge bonds issued by Hudson Insurance Company to recover the $99,000 judgment.
- Compensatory damages of $99,000 awarded to Plaintiff Awe Incorporated for breach of contract against Anjac Enterprises Inc.