This action arises from a construction contract to renovate a hotel façade. Plaintiff, Saga Management Group (the contractor), has sued defendants IHMS LLC (which leases the property on which the hotel is located and operates the hotel) and 795 Fifth Avenue Corporation (which owns the property). Saga is seeking to foreclose on a mechanic's lien; on breach-of-contract, unjust-enrichment, and account-stated theories, to obtain damages for the outstanding amounts allegedly owed under the contract; and to be awarded damages in conversion for the alleged [*2]appropriation of construction equipment and supplies.

On this motion, IHMS moves under CPLR 3211 (a) (1) and (a) (7) to dismiss Saga's claims asserted against it. (See NYSCEF No. 9 [notice of motion].) 795 Fifth has not moved to dismiss. Instead, it has filed an attorney affirmation on this motion, contending that IHMS's arguments for dismissal "apply equally to 795 Fifth," and that to "conserve judicial resources," it is adopting those arguments and "request[ing] similar relief" from the court. (NYSCEF No. 17 at ¶¶ 4-5.) Saga has not opposed the motion.^[FN1] The motion is granted in part and denied in part.

IHMS's principal argument for dismissal is that Saga's claims in this action cannot be reconciled with an application for payment that Saga itself made to IHMS only two weeks before filing its mechanic's lien. (Compare NYSCEF No. 14 at 1 [application for payment], with NYSCEF No. 3 at 1 [notice of lien].) The foundation that IHMS has laid for consideration of this document on the current motion is somewhat thin: It consists only of a bare-bones attorney affirmation that does not attest that the appended payment application is a true and correct copy of the original document. (See NYSCEF No. 10 at ¶ 6.) Yet absent opposition papers from Saga, this court sees no basis to decline to consider the payment application on this motion.

Taking the payment application into account, defendants' requests for dismissal of each cause of action are considered in turn below.

IHMS first requests dismissal of Saga's lien-foreclosure cause of action, as well as vacatur of the lien itself under Lien Law § 39. This request is granted.

The purportedly unpaid amount stated in Saga's June 23, 2022, notice of lien is approximately $3.35 million. (See NYSCEF No. 3 at 1.) This amount is eleven times as large as the outstanding unpaid amount identified in Saga's own June 6, 2022, payment application, approximately $286,000. (See NYSCEF No. 14 at 1.) Not only that, but the lien's $3.35 million figure for allegedly unpaid work carried out through May 23, 2022 (see NYSCEF No. 3 at 1) exceeds by more than a million dollars the value of the work that Saga itself said in its payment application that it had completed as of June 6, 2022 (approximately $2.1 million). (See id.) These huge discrepancies within Saga's own documents, for which Saga has offered no explanation, shows that Saga willfully exaggerated its lien.^[FN2] (See Strongback Corp. v N.E.D. Cambridge Ave. [*3]Dev. Corp., 25 AD3d 392, 393-394 [1st Dept 2006]; accord Abra Constr. Corp. v 112 Duane Assoc., LLC, 59 AD3d 263, 264 [1st Dept 2009] [affirming finding of willful exaggeration "based on plaintiff's own documentation of the work it performed . . . and the amount it had been paid therefor"].) The lien is therefore subject to vacatur as void.

IHMS also seeks an award of lien-exaggeration damages under Lien Law § 39-a. This request is denied. Section 39-a provides that when (i) a lienor brings a lien-foreclosure action, and (ii) the court declares the lien void for willful exaggeration, then (iii) the lienor is liable in damages to the owner or contractor. The amount of that damages award includes attorney fees and the amount by which the lien was willfully exaggerated. (See Lien Law § 39-a; Goodman v Del-Sa-Co Foods, Inc., 15 NY2d 191, 194-195 [1965].)

Saga has asserted a lien-foreclosure claim; and this court has concluded that the lien is void for willful exaggeration. As a result, this court has little difficulty concluding that § 39-a makes Saga liable to IHMS for lien-exaggeration damages. This conclusion, though, does not support the award of damages to IHMS on this motion. IHMS has not pleaded a counterclaim for this relief. Nor has IHMS provided authority for the proposition that this court may award IHMS damages upon the dismissal of Saga's claim.

In any event, it is IMHS's burden, in seeking damages under Lien Law § 39-a, to prove the amount of the willful exaggeration. (See Goodman, 15 NY2d at 199.) IHMS has not met that burden. IHMS emphasizes that "the Complaint is devoid of any concrete, particularized allegations establishing that Saga is entitled to any payments beyond" the amount in payments identified in the payment application. (NYSCEF No. 15 at 9 [emphasis added].) Based on that fact, IHMS suggests that the total amount outstanding is $0 and that the entire unpaid amount given in the notice of lien (i.e., $3.35 million) was willfully exaggerated. (NYSCEF No. 15 at 9 [emphasis added].) But the payment application itself reflects an assertedly unpaid amount of $286,614.42—not $0. (See NYSCEF No. 14 at 1.) IHMS, to be sure, disputes its liability for that amount. (See NYSCEF No. 15 at 4 n 2, 14.) IHMS has not, however, demonstrated that it has no liability to pay the $286,614.42 to Saga.

Nor, for that matter, has IHMS established that the full amount of the difference between the $286,614.42 claimed in the payment requisition and the $3.35 million claimed in the notice of lien stems from willful exaggeration by Saga, as opposed to some form of honest mistake. Given the discrepancies within Saga's own documents, one might plausibly infer that the difference in amounts is the product of willful exaggeration. But plausible inferences are not evidence—let alone sufficient evidence to support a multimillion-dollar damages award.

IHMS next moves to dismiss Saga's breach-of-contract claim. This request is granted in part and denied in part. As IHMS argues, the payment application—reflecting a total contract [*4]price of no more than $4.54 million as of June 6, 2022, and no more than $2.59 million worth of contractual work still to be done (see NYSCEF No. 14 at 1)—cannot be reconciled with the allegations in Saga's complaint that, as of May 23, 2022, the total contract price was approximately $5 million, and that Saga was owed approximately $3.35 million for work already done but not paid for (see NYSCEF No. 1 at ¶¶ 18-19). The documentary evidence thus refutes Saga's claim to be entitled to that $3.35 million in breach of contract.

However, that Saga lacks a claim to the full amount it seeks on that cause of action does not mean the cause of action should be dismissed in its entirety. According to the payment application, Saga, as of June 6, 2022, had performed $1.95 million worth of work, and had been paid $1.67 million, leaving a total unpaid balance of $286,614.42. (See NYSCEF No. 14 at 1.) IHMS does not contend on this motion that this unpaid balance was ever satisfied. At this stage of the action, therefore, Saga has a viable breach-of-contract claim for that amount, though not more. IHMS contends in moving to dismiss that Saga should not be permitted to proceed on a claim for this amount, because "the Complaint is devoid of any allegations regarding same," nor "seek payment of same." (NYSCEF No. 15 at 10 n 3.) That will not do. IHMS may not ask this court to treat the payment application as authoritative to the extent that it refutes Saga's breach-of-contract claim yet simultaneously ask this court to disregard the payment application as irrelevant to the extent that it supports Saga's breach-of-contract claim. Put another way, IHMS does not identify a reason why this court should refrain from treating Saga's complaint as having been effectively amended under CPLR 3025 (c) to conform to the record evidence in the form of the payment application.

IHMS's request to dismiss Saga's breach-of-contract cause of action is thus granted to the extent of limiting Saga's potential damages to $286,614.42, and otherwise denied.

IHMS next moves to dismiss Saga's unjust-enrichment and quantum-meruit claims against it. These claims are subject to dismissal as duplicative of Saga's breach-of-contract cause of action, because the written contract between IHMS and Saga (or Saga's assignor) covers the subject matter of the dispute between them. (See Island Stars 21 Inc. v Buccaria, 221 AD3d 531, 532 [1st Dept 2023].)

Saga has also asserted unjust-enrichment and quantum-meruit claims against defendant 795 Fifth. As noted above, 795 Fifth has not separately moved to dismiss those claims. At most, it has asked in an attorney affirmation that this court apply IHMS's arguments for dismissal to Saga's claims against 795 Fifth. (See NYSCEF no. 17 at ¶ 5.) Even assuming that this procedurally irregular request suffices to warrant testing the sufficiency of those claims, no basis exists at this stage to dismiss Saga's unjust-enrichment cause of action against 795 Fifth. Unlike IHMS, 795 Fifth did not have a contract with Saga. And, as with the breach-of-contract claim discussed above, the payment application indicates that 795 Fifth received the uncompensated benefit of $286,614.42 worth of work by Saga to repair or rebuild part of the structure located on 795 Fifth's property. At least for pleading purposes, this evidence suffices to support an unjust-enrichment claim by Saga against 795 Fifth for that amount. The quantum-meruit claim against 795 Fifth, on the other hand, is subject to dismissal as duplicative of the unjust-enrichment claim itself.

IHMS also seeks dismissal of Saga's claim against it sounding in an account stated. This request is granted in part and denied in part. This court agrees with IHMS that the payment application conclusively refutes the complaint's allegation that IHMS received, and retained without objection, a Saga invoice (or invoices) for $3.35 million in unpaid work. (See NYSCEF No. 15 at 13-14 [mem. of law].)

Yet at the same time, the payment application itself constitutes an invoice delivered to (and clearly received by) IHMS for $286,614.42. As noted above, IHMS does not contend on this motion that it paid the invoiced amount. And although IHMS's memorandum of law asserts that it disputed that amount at the time and continues to dispute it (see id. at 14), IHMS has not submitted evidence on this motion of those objections. Absent such evidence, no basis exists to dismiss Saga's account-stated cause of action in its entirety, as IHMS requests.

Finally, defendants seek dismissal of Saga's conversion cause of action. This request is denied. IHMS's proffered ground for dismissal is that the conversion claim is simply an attempt in another guise to recover the asserted unpaid contract balance. (See NYSCEF No. 15 at 14-15.) Therefore, IHMS argues, this claim is duplicative of the breach-of-contract claim, and also does not sufficiently allege the existence of a "discrete, identifiable fund" of money that could support a conversion claim. (See id. at 14 [internal quotation marks omitted].) This argument fails because it rests on a mistaken premise.

Saga's conversion claim does not pertain to the (asserted) unpaid contract balance. Rather, it seeks a different amount in damages ($50,000), which Saga allegedly sustained due to defendants' alleged improper exercise of dominion and control over its "tools[,] equipment, supplies, scaffolding equipment and mobilization equipment" remaining at the property. (NYSCEF No. 1 at ¶¶ 45-46.) These allegations, whatever their ultimate merit, are sufficient to state a cause of action for conversion.

Accordingly, it is

ORDEED that the branch of IHMS's motion seeking dismissal of Saga's first cause of action (for lien foreclosure) is granted, and that cause of action is dismissed as against IHMS; and it is further

ORDERED that the branch of IHMS's motion seeking to vacate Saga's mechanic's lien under Lien Law § 39 as willfully exaggerated is granted; and it is further

ORDERED that the branch of IHMS's motion seeking an award of lien-exaggeration damages under Lien Law § 39-a is denied without prejudice; and it is further

ORDERED that the branch of IHMS's motion seeking dismissal of Saga's second cause of action (for breach of contract) is granted to the extent of limiting Saga's potential damages on this cause of action to $286,614.42, and otherwise denied; and it is further

ORDERED that the branches of IHMS's motion seeking dismissal of Saga's third cause of action (in quantum meruit) and fourth cause of action (in unjust enrichment) is granted, and those causes of action are dismissed as against IHMS; and it is further

ORDERED that 795 Fifth's request for dismissal of Saga's third and fourth causes of action as against 795 Fifth is granted as to the third cause of action and denied as to the fourth [*6]cause of action; and it is further

ORDERED that the branch of IHMS's motion seeking dismissal of Saga's fifth cause of action (on an account stated) is denied; and it is further

ORDERED that the branch of IHMS's motion, and 795 Fifth's request, for dismissal of Saga's sixth cause of action (for conversion) is denied; and it is further

ORDERED that IHMS and 795 Fifth shall, within 20 days of entry of this order, file answers responding to Saga's remaining causes of action (and asserting counterclaims, if any); and it is further

ORDERED that the parties shall appear before this court for a telephonic preliminary conference on May 2, 2025; and it is further

ORDERED that IHMS shall serve a copy of this order with notice of its entry on all parties and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/1jd/supctmanh/E-Filing.shtml); and it is further

ORDERED that upon service of notice of entry, the County Clerk is directed to cancel the mechanic's lien filed on June 23, 2022, by Saga Management Group Inc. in the amount of $3,345.408.57 against the property known as 2 East 61st Street, New York, NY 10065, block 1375, lot 67.