Quality Aggregates, Inc. v Prime Mix Corp., et al.
Attorneys and Parties
Brief Summary
Construction materials supplier sought to foreclose a mechanic's lien and recover for alleged diversion of trust funds and unjust enrichment arising from a construction project.
The Supreme Court, Kings County, denied defendants' motion for summary judgment seeking dismissal of the unjust enrichment, mechanic's lien foreclosure, and Lien Law article 3-A diversion claims.
Modified only to dismiss the unjust enrichment claim against FMC Enterprises, LLC; otherwise the denial of summary judgment was affirmed.
Defendants failed to make a prima facie showing to defeat the lien foreclosure and article 3-A trust claims, relying on self-serving affidavits and uncertified records. As to unjust enrichment, the claim against the owner (FMC Enterprises, LLC) failed because plaintiff did not allege FMC assumed an obligation to pay for the materials.
Background
FMC Enterprises, LLC owned the premises. Prime Mix Corp. allegedly served as the general contractor for a project at the premises, and Quality Aggregates, Inc. supplied materials to Prime under a subcontract, allegedly with FMC's knowledge and consent, from August 26, 2019 through March 16, 2020. Plaintiff filed a mechanic's lien for $630,084.86 on August 27, 2020 and commenced suit on September 29, 2020 asserting: (1) unjust enrichment, (2) foreclosure of the lien under Lien Law § 3 [provides a lien to subcontractors furnishing labor or materials for the improvement of real property with the consent of the owner or the owner's agent; the lien amount is limited by the contract], with "improvement" defined by Lien Law § 2(4) [includes demolition, erection, alteration, or repair of structures and materials for permanent improvement], and (3) diversion of trust funds under Lien Law article 3-A [creates trust funds from certain construction payments to ensure payment to subcontractors, suppliers, laborers, and specified expenses].
Lower Court Decision
The Supreme Court, Kings County (Peter P. Sweeney, J.), denied defendants' motion for summary judgment dismissing the unjust enrichment, mechanic's lien foreclosure, and Lien Law article 3-A diversion claims insofar as asserted against Prime Mix Corp., Carl Juliano, and FMC Enterprises, LLC.
Appellate Division Reversal
The Appellate Division modified by granting summary judgment dismissing the unjust enrichment claim against FMC Enterprises, LLC, because plaintiff failed to allege FMC assumed an obligation to pay for the materials. It otherwise affirmed denial of summary judgment on the lien foreclosure and article 3-A diversion claims, finding defendants did not meet their prima facie burden where their proof consisted of self-serving, conclusory affidavits and uncertified Department of Buildings records and did not negate consent or the existence of a project or trust.
Legal Significance
Reaffirms that owner consent under Lien Law § 3 requires more than passive acquiescence and may be inferred from an affirmative course of conduct; that uncertified records and conclusory affidavits are insufficient to establish prima facie entitlement to summary judgment on lien and trust claims; and that unjust enrichment claims against an owner fail absent allegations that the owner assumed an obligation to pay.
On construction disputes, defendants must present competent, non-conclusory evidence to defeat mechanic's lien and article 3-A claims; owners may avoid unjust enrichment liability where they did not assume payment obligations, but lack of prima facie proof will preserve lien and trust claims for trial.