Skycom SRL v. F.A. & Partners, Inc., Index Nos. 155999/2013 & 155985/2013 (Kornreich, J).

By Evan Jaffe | Staff Writer

Standing; Contract; breach; Unjust enrichment

Plaintiff sub-subcontractor, a foreign corporation located in Milan, Italy, filed two actions against various contractors regarding the contractors’ failure to make payments on two high-rise construction projects. In Action 1, Defendant general contractor (“General Contractor”) hired Defendant sub-contractor (“Sub-contractor”) to furnish, fabricate, and install curtain walls for non-party 42nd street building. Sub-contractor hired Plaintiff to manufacture and deliver curtain walls pursuant to an alleged sub-contract.  Pursuant to an express agreement (“Flintlock Agreement”) between General Contractor and Plaintiff, General Contractor agreed to directly pay Plaintiff for the work covered in an alleged sub-contract between Sub-contractor and Plaintiff. Plaintiff delivered curtain wall materials to General Contractor, incurring a cost of $505,000. General Contractor paid approximately $450,000. Plaintiff incurred further costs to meet deadlines in the Flintlock Agreement. Sub-contractor terminated agreement with Plaintiff. Plaintiff, in turn, filed a mechanic’s lien against the building General Contractor’s failure to pay. Defendant insurance company (“Insurance Company”) posted a bond to discharge the lien. In Action 2, General Contractor hired Sub-contractor to furnish, fabricate, and install curtain walls for non-party 50th street building. Sub-contractor hired Plaintiff to manufacture and deliver curtain walls pursuant to an alleged sub-contract. Plaintiff furnished approximately $1.2M of labor and materials. Plaintiff shipped materials in stages, and Sub-contractor rejected some or never received some. Plaintiff, in turn, filed a mechanic’s lien against the building for Sub-contractor’s failure to pay. Insurance Company posted a bond to discharge the lien. In Action 1, Plaintiff alleged breach of contract, unjust enrichment for the unpaid balance, among other causes of action. In Action 2, Plaintiff alleged unjust enrichment for the unpaid balance, account stated, and foreclosure of mechanic’s lien. General Contractor and Insurance Company moved to dismiss Actions 1 and 2 for lack of standing. General Contractor and Insurance Company argued Plaintiff was doing business in New York but failed to register and therefore lacked capacity to sue pursuant to Business Corporation Law §1312. Plaintiff maintained a New York address on its website but did not have a permanent physical presence in the form of an office, warehouse, or showroom. Plaintiff did not solicit or conduct business from the New York address. The court held General Contractor and Insurance Company failed to state a prima facie case that Plaintiff was “doing business” in New York to warrant compliance with BCL §1312. The court found at most a question of fact existed whether Plaintiff’s limited connection to New York was regular and continuous. The court found Defendants failed to show Plaintiff’s contractual involvement with a project in the Bronx amounted to a regular course of business in New York. Additionally, Plaintiff’s website merely evidenced a casual presence in New York, and a magazine article describing four buildings did not mention Plaintiff’s involvement in those projects. General Contractor and Insurance Company also moved to dismiss Action 1 for failure to state a claim of unjust enrichment. The court denied this motion because a question of fact existed whether the Flintlock Agreement covered the same subject matter of the alleged sub-contract between Sub-contractor and Plaintiff; therefore, Plaintiff could plead unjust enrichment in the alternative to breach of contract. The court granted Insurance Company’s motion to dismiss for failure to state of a claim of unjust enrichment. The court held Insurance Company received no benefit from paying the mechanic’s lien.

Skycom SRL v. F.A. & Partners, Inc., Index Nos. 155999/2013 & 155985/2013 (Kornreich, J).

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