Defendants Kit Construction Co., Inc. ("Kit Construction") and Atlantic Court LLC ("Atlantic" ) (together, the "Defendants"), move, pursuant to CPLR 2221, for leave to renew their prior motion for partial summary judgment, decided June 23, 2010, and, alternatively, pursuant to CPLR 3211 (c),^[FN1] for an immediate trial on the limited issue of the enforceability of a partial lien waiver signed July 20, 2007 (the "July 20 release").

This action arises out of a dispute concerning alleged payments owed plaintiff Axion Construction & Development LLC ("Axion") for work performed under a trade subcontract. Defendant Atlantic is the sponsor and developer of a multi-family residential building located at 295 Atlantic Avenue, Brooklyn NY (the "Project"). Defendant Kit Construction was hired by Atlantic to serve as the construction manager for the Project and subsequently entered into a trade subcontract with plaintiff on January 24, 2007, wherein plaintiff agreed to perform certain masonry and cast stone work for the Project for a base contract price of $1,875,000 (the "Contract"). The Contract was executed on behalf of plaintiff by Bill Handakas and on behalf of Kit Construction by Sam Boymelgreen. Section 1.4 of the Contract, states:

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OF THE CONTRACT DOCUMENTS, THE PARTIES HERETO HEREBY AGREE AND ACKNOWLEDGE THAT NO CHANGES TO THE WORK SHALL BE MADE OR PERFORMED (CHANGE ORDERS) UNLESS FIRST APPROVED IN WRITING BY THE OWNER. ANY AND ALL CHANGES MADE TO THE WORK WITHOUT THE PRIOR WRITTEN APPROVAL OF THE OWNER SHALL (i) NOT BE BINDING ON EITHER THE CONTRACTOR OR THE OWNER, (ii) BE OF NO FORCE NOR EFFECT, AND (iii) NOT ENTITLE SUBCONTRACTOR TO THE PAYMENT OF ADDITIONAL MONIES BEYOND THE CONTRACT PRICE SET FORTH IN SECTION 1.1 ABOVE (Ex. B to Motion).

Section 15 of the Contract further states "[n]o amendments to this Subcontract shall change or modify this Subcontract unless in writing and signed by both the Contractor and the Subcontractor" (id.).

While performing the Contract, plaintiff submitted proposed change orders for Kit Construction's approval on an ongoing basis. Some, but not all, of the change orders were approved by Kit Construction and appear to have been incorporated into plaintiff's applications for payment.^[FN2] Plaintiff submitted monthly applications for payment that stated the percentage of [*2]work completed and the new contract sum to date, as revised by approved change orders.^[FN3] Plaintiff would execute partial lien waivers upon receipt of payment from Kit Construction. In total, plaintiff executed eight partial lien waivers, the first seven of which were executed by Bill Handakas and the eighth, the July 20 release, which was executed by Fotios Milonopoulos.^[FN4]

Section 3.7 of the Contract states, in part:

DELIVERY BY SUBCONTRACTOR TO CONTRACTOR AND/OR OWNER OF A PARTIAL LIEN WAIVER, REQUISITION OR FINAL LIEN WAIVER IN CONNECTION WITH A PAYMENT ON ACCOUNT OF THE CONTRACT PRICE SHALL BE CONCLUSIVE EVIDENCE AND SUBCONTRACTOR HEREBY REPRESENTS AND WARRANTS TO THE CONTRACTOR AND OWNER, AND CONTRACTOR AND/OR OWNER SHALL BE ENTITLED TO RELY UPON THE FACT, THAT ALL WORK TO THE DATE OF SUCH PAYMENT HAS BEEN COMPLETED IN ACCORDANCE WITH THE PROVISIONS OF THIS SUBCONTRACT AND HAS BEEN PAID IN FULL BY THE SUBCONTRACTOR TO ANY AND ALL THIRD-PARTY PROVIDERS AND SUPPLIERS. FOR PURPOSES OF THIS SUBCONTRACT, SUCH REPRESENTATION AND WARRANTY SHALL BE DEEMED TO BE MADE BY SUBCONTRACTOR EACH AND EVERY TIME IT MAKES THE AFOREMENTIONED DELIVERIES TO CONTRACTOR AND/OR OWNER.

Plaintiff's central claim is that, throughout the course of performing work under the contract, defendant Kit Construction verbally directed plaintiff to perform additional masonry and cast stone work prior to July 20, 2007, which was integral to its performance of the Contract, and was not duly compensated for all of the additional work. At issue is whether certain change orders relating to additional work performed prior to July 20, 2007,^[FN5] which were submitted by plaintiff to Kit Construction for approval after July 20, 2007 and incorporated into plaintiff's final application for payment but never actually issued as written change orders, were, in fact, authorized by Defendants. Defendants contend that plaintiff, by its execution of the July 20 release, acknowledged receipt of full payment for all work performed on the Project to date, [*3]including any additional work performed and is barred from receiving additional payment for unissued change orders. The July 20 release states:

THIS WAIVER AND RELEASE OF MECHANIC'S LIEN issued by Axion Construction . . . shall confirm that the undersigned has received partial payment due to the undersigned from Atlantic Court, LLC, in the sum of $59,195.53 . . . The partial payment received hereby . . . makes the total sum of money received by the undersigned $1,694,783.53, which covers all of the labor, services, material, equipment and work performed to date at 295 Atlantic Avenue, Brooklyn, NY 11201 . . . I hereby acknowledge that the partial payment and total sum received to date fully satisfies the portion of the contract, plus all change orders submitted, that could be claimed by the undersigned as legitimate, owing and/or due and payable, or that could be claimed by any materialman or tradesman claiming by, through, or under the undersigned, for the labor, services, material, equipment and work performed at the Premises to date.

On October 12, 2007, plaintiff filed a Notice Under Mechanic's Lien Law with the Kings County Clerk against the premises in the amount of $1,612,098.99. On May 27, 2008, plaintiff commenced the action by filing a summons and complaint. In January of 2010,^[FN6] plaintiff filed and served a supplemental summons and amended complaint, which added Fidelity and Deposit Company of Maryland as a defendant. The Defendants answered and asserted counterclaims against the complaint, on or about February 5, 2010. Plaintiff filed its reply on February 16, 2010.^[FN7] On May 21, 2010, plaintiff and defendants executed a stipulation of partial discontinuance as to Boymelgreen only.

Shortly thereafter, defendants moved for partial summary judgment, arguing that the July 20 release precluded plaintiff from recovering additional payment for any work performed prior to July 20, 2007 and that Section 1.4 of the Contract prohibits oral change orders. On June 23, 2010, this court denied the Defendants' motion for partial summary judgment, noting "[d]iscovery is necessary as questions of the parties course of dealing and the basis of plaintiffs' claim have been raised" (Ex. M to Motion). The parties then proceeded with discovery. On November 15, 2010, plaintiff filed its Note of Issue, certifying that discovery was complete and it was prepared for trial.

Defendants subsequently filed the instant motion, pursuant to CPLR 2221, for leave to renew their prior motion for partial summary judgment, and, alternatively, for an immediate trial on the limited issue of the enforceability of the July 20 release. On January 19, 2011, this court denied Defendants' motion to renew at oral argument on the grounds that it was improper (Novosiadlyi v James, 70 AD3d 793, 794 [2d Dept 2010]; see CPLR 2221 [e] [2], [3]; see also Caraballo v Kim, 63 AD3d 976, 978 [2d Dept 2009]) but reserved decision on Defendants' partial summary judgment motion to determine whether an immediate trial, pursuant to CPLR 3212 (c), would be appropriate.

Summary judgment is a drastic remedy only available when there is no triable issue of fact presented (see L.N.L. Constr. v M.T.F. Indus., Inc., 190 AD2d 714 [2d Dept 1993]; Zuckerman v City of New York, 49 NY2d 557 [1980]). "On a motion for summary judgment, the function of the court is not to determine issues of fact or credibility, but merely to determine the existence of such issues . . . Further, in deciding such a motion, the facts alleged by the nonmovant and inferences that may be drawn therefrom must be accepted as true" (Dykeman v Heht, 52 AD3d 767, 769 [2d Dept 2008] (internal citations omitted)). Under CPLR 3212 (c), "[i]f it appears that the only triable issues of fact arising on a motion for summary judgment relate to the amount or extent of damages . . . the court may, when appropriate for the expeditious disposition of the controversy, order an immediate trial of such issues of fact raised by the motion, before a referee, before the court, or before the court and a jury, whichever may be proper."

In support of their motion for partial summary judgment, Defendants reiterate the arguments made in their prior motion regarding the enforceability of the July 20 release, but now also argue that the clear language in Section 1.4 of the Contract, which prohibits the performance of any additional work unless authorized by a written change order, and General Obligations Law § 15-301 [1], which prohibits oral modification of a written agreement except through an executory agreement in writing, also bar the plaintiff from recovering the amount requested by the contested change orders. Defendants claim that summary judgment should now be granted as plaintiff's vice-president, Vassilios Handakas,^[FN8] admitted during depositions that plaintiff performed additional work knowing the written change orders were not issued by Kit Construction and as plaintiff has failed to present any evidence which undermines the enforceability of the July 20 release or the Contract.

Plaintiff, in opposition to Defendants' motion, submits the affidavit of Handakas contending that, despite the completion of extensive discovery, a full trial is required. Handakas claims that triable issues of fact have been raised relating to the course of dealing between plaintiff and Kit Construction, whether change orders for additional work performed prior to July 20, 2007 were actually submitted pursuant to the language of the Partial Lien Waiver, whether the Partial Lien Waiver was merely a receipt or acknowledgment of payment for only those amounts received up to the date thereof, and whether Fotios Milonopoulos was authorized by plaintiff to execute the July 20 release.

Plaintiffs' claims raise issues of fact relating to the course of the parties' dealings, whether the partial lien waivers functioned primarily as receipts of payment, and whether Fotios Milonopoulos was authorized by plaintiff to execute the July 20 release. Handakas alleges that, over the course of Axion's performance of the Contract, Kit Construction directed Axion to perform additional work, which was outside the scope of the original agreement, under time and economic pressure, and would negotiate the price of the additional work with representatives of Kit Construction while the work was ongoing. According to plaintiff, contrary to the terms of the Contract, certain additional work was authorized orally, and written change orders were issued [*5]later and incorporated into the applications for payment submitted to Kit Construction by plaintiff, after the work had been completed. In support of this proposition, plaintiff submits a copy of an email, dated March 21, 2007, from Handakas to John Supp, a former employee of nonparty Boymelgreen Developers, and Dan Herdoon, an employee of Kit Construction, urgently requesting that they issue change orders 1 through 6, which Handakas claims to have submitted at a much earlier time. Handakas also wrote a letter to Herdoon and Leviev Boymelgreen,^[FN9] dated March 22, 2007. The letter states:

As you are aware of, we have been diligently working on the site for approximately three (3) months now, under extreme winter conditions and fighting constantly with GC's Union picket lines - only in an effort to expedite the masonry work. We have only received on payment of $106,114.05 - while we have completed over $650,000.00 worth of work (including [change order] work).

A number of change orders have been issued - 8 to date - while we are field directed - and given no choice but to complete - but have not received the executed change orders yet. This causes an even greater financial burden that cannot be absorbed any further. . . .

We were continuously forced - while under protest - to proceed neither in compliance with industry standards nor the project specifications. We have made that very clear numerous times on the record. . . .

Please be advised that by copy of this letter not only has AXION answered and refuted every allegation of non-compliance contained in the No.12 non-compliance notice issued from KIT Construction Co., Inc. on 3/21/07 - but considers these items "cured" effective immediately on AXION's part. (Ex. G to Opp. to Motion).

Handakas continued to correspond with Supp and Herdoon about submitted change orders over the following months. On June 22, 2007, Handakas sent an email to Herdoon stating, "Dan, I submit these change orders to be processed. There are a few more to go. I'll let you know when they are ready[.] Keep in mind that CO #7, regarding overtime[,] is up to a certain time - not all inclusive" (id.). Plaintiff also submits the affidavit of Supp, who claims that he was present during multiple meetings and reviewed plaintiff's change order requests, which oftentimes included work that plaintiff had already performed. Defendants claim that the clear language of the Contract and the July 20 release establish that plaintiff had no basis for believing that the additional work was authorized absent a written change order.

As a general rule, when a written contract contains a provision that it can be modified only by a signed writing, an oral modification of that agreement is not enforceable unless the oral modification is fully executed or there has been a partial performance "unequivocally referable" to the oral modification (see Rose v Spa Realty Assoc., 42 NY2d 338, 343-344 [1977]; Calica v Reisman, Peirez & Reisman, LLP, 296 AD2d 367, 368 [2d Dept 2002]); General Obligations Law § 15-301). Such provision can be waived where "the conduct of the parties demonstrates an indisputable mutual departure from the written agreement and the changes were clearly requested by plaintiff and executed by defendant" (Austin v Barber, 227 AD2d 826, 828 [3d Dept 1996]). [*6]Denial of summary judgment is warranted where, as here, the plaintiff has raised a genuine issue of material fact as to the scope of the additional work or as to whether Kit Construction waived the contractual requirement that it approve additional work in writing by directing plaintiff to perform additional work before a written change order was issued (see Spectrum Painting Contr., Inc. v Kreisler Borg Florman, 64 AD3d 565, 579 [2d Dept 2009]; Joseph F. Egan, Inc. v City of New York, 17 NY2d 90 [1966]; Tridee Assoc., Inc. v New York City School Const. Auth., 292 AD2d 444 [2d Dept. 2002]; but cf. Charles T. Driscoll Masonry Restoration Co., Inc. v County of Ulster, 40 AD3d 1289 [3rd Dept 2007]).

Moreover, Handakas claims that the partial lien waivers functioned primarily as receipts and that Kit Construction refused to make progress payments to the plaintiff unless the plaintiff first executed a partial lien waiver. Handakas contends that Kit Construction did not hold plaintiff to the strict terms of the prior partial lien waivers, noting that the fourth application for payment in the amount of $494,046.00, which covered work performed up to April 28, 2007, was paid in two separate installments; one payment of $100,000 was made on May 22, 2007, and one payment of $394,046.00 was made on May 25, 2007. Upon receipt of each payment, plaintiff signed partial lien waivers containing the exact same language as that in the July 20 release. Plaintiff, however, contends that all parties were aware that, in spite of its signing the partial lien waiver, plaintiff's receipt of the May 22, 2007 payment did not "fully satisf[y] the portion of the contract, plus all change orders submitted, that could be claimed by the undersigned as legitimate, owing and/or due and payable, or that could be claimed by any materialman or tradesman" nor did plaintiff "waive, relinquish, and forever release any and all rights of the undersigned" (Ex. L to Motion).

"The meaning and scope of a release must be determined within the context of the controversy being settled" (Eaton Elec., Inc. v Dormitory Auth. of State of New York, 48 AD3d 619, 624 [2d Dept 2008], quoting Matter of Schaefer, 18 NY2d 314, 317 [1966]). Here, plaintiff has raised a triable issue of fact as to the parties' course of dealing and the significance and function of the partial lien waivers (see E-J Elec. Installation Co. v Brooklyn Historical Socy, 43 AD3d 642, 643-644 [1st Dept 2007]; Penava Mech. Corp. v Afgo Mech. Serv., Inc., 71 AD3d 493, 495 [1st Dept 2010]; Apollo Steel Corp. v Sicolo & Massaro, Inc., 300 AD2d 1021 [4th Dept 2002]; cf. Teller Paving and Contr. Corp. v City of New York, 72 AD2d 694 [1st Dept 1979]). Defendants' claim, that Kit Construction informed plaintiff beforehand that it would, as an exception to its typical practice, pay the fourth application for payment in two parts, is unavailing. Even if Kit Construction had informed plaintiff that it would make two separate payments requiring the execution of two partial lien waivers, its conduct raises a triable issue of fact as the parties seemed to agree that the terms of the May 22, 2007 waiver would not be strictly enforced, to permit further payment to be made on May 25, 2007 for work performed prior to May 22, 2007, in contravention of the language contained in the May 22, 2007 release, that "the partial payment and total sum received to date fully satisfies the portion of the contract, plus all change orders submitted, that could be claimed by the undersigned as legitimate, owing and/or due and payable" (Ex. L to Motion).

Plaintiff also raises a triable issue of fact as to whether Fotios Milonopoulos was authorized to execute the July 20 release. Handakas also claims that Milonopoulos, at the time, an employee of Axion or its subcontractor Vector Structural Preservation Corp., was not [*7]authorized to execute the July 20 release on behalf of Axion. Defendants do not contend that Milonopoulos was authorized by Axion, but refer to Handakas's affidavit in which he stated, "there is no dispute that Axion executed a Partial Lien Waiver dated July 20, 2007" (Ex. B to Reply). Plaintiff, however, is not claiming that Axion did not execute the July 20 release, plaintiff is only claiming that the individual who signed on behalf of Axion was not actually authorized to execute the release, but was compelled to do so in order to receive payment.

Notwithstanding the language in the Contract and the July 20 release, plaintiffs have raised a triable issue of fact as to whether the Defendants authorized additional work and waived enforcement of the contractual language, given plaintiff's claims that, over the course of its dealings with Defendants, it was authorized, and, in fact, required, to perform change order work before written change orders were signed. Plaintiffs also raise triable issues of fact relating to how the partial lien waivers functioned and whether Milonopoulos was authorized to execute the July 20 release.

As multiple issues of fact have been raised, including an issue of fact relating to the function of the partial lien waivers, an immediate trial on the limited issue of the enforceability of the July 20 release would not be appropriate. Moreover, discovery is complete, and there would be no delay in conducting a plenary trial. Defendants' motion is denied in its entirety. In the event that the matter does not settle during mediation, a final settlement conference has been scheduled for April 6, 2010, and all parties are to appear.

E N T E R,

_______________________

Carolyn E. Demarest

J. S. C.