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MADISON RESTORATION CORP. v. SMITHSONIAN INST.

December 15, 1997

MADISON RESTORATION CORP., Plaintiff, against THE SMITHSONIAN INSTITUTE, AJ CONTRACTING COMPANY, INC. and "XXX SURETY, INC.," an Unknown Surety Corporation, Defendants.


The opinion of the court was delivered by: SWEET

 Sweet, D.J.

 Defendant A.J. Contracting Co., Inc. ("AJ Contracting") has moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the first claim in plaintiff Madison Restoration Corporation's ("Madison") complaint (the "Complaint") for failure to state a claim upon which relief can be granted. Madison alleged three claims in the Complaint: (1) foreclosure upon a lien pursuant to New York Lien Law against all defendants (the "Lien Claim"); (2) breach of contract against AJ Contracting; and (3) quantum meruit against AJ Contracting. Madison has cross-moved to substitute parties, pursuant to Rule 25 of the Federal Rules of Civil Procedure. For the reasons set forth below, AJ Contracting's motion is granted, the Lien Claim is dismissed, and Madison's motion is denied, with leave granted to amend the Complaint within twenty (20) days of the date hereof.

 The Parties

 Madison is a New York State corporation with its principal office at 5 Penn Plaza, New York, New York.

 A.J. Contracting is a New York State corporation with its principal office at 470 Park Avenue South, New York, New York.

 The Smithsonian Institution (the "Smithsonian") is a federal entity with its principal office at 1000 Jefferson Drive, S.W., Washington, D.C.

 Prior Proceedings and Facts

 In considering a motion to dismiss, the factual allegations of the complaint are presumed to be true and all factual inferences must be drawn in the plaintiff's favor. See Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974) (on review of sufficiency of a complaint, "allegations of the complaint should be construed favorably to the pleader"); Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989); Dwyer v. Regan, 777 F.2d 825, 828-29 (2d Cir. 1985). Accordingly, the factual allegations considered here and set forth below are taken from the Complaint and do not constitute findings of fact by the Court.

 On December 24, 1994, AJ Contracting entered into a contract with the Smithsonian to supply all labor and material to perform work on a project known as the Renovation/Construction of the Miller/Fox Townhouses and the Carnegie Mansion at the Cooper-Hewitt Museum located at 2 East 91st Street, New York, New York (the "General Contract"). In connection with this project, on or about August 1, 1995, Madison and AJ Contracting entered into a contract whereupon Madison agreed to provide labor and material necessary for AJ Contracting to fulfill its contract with the Smithsonian (the "Subcontract").

 Madison undertook to perform the Subcontract, but AJ Contracting terminated the Subcontract before completion. AJ Contracting paid Madison $ 235,931 for work performed, and a balance in the amount of $ 98,953 is due and owning.

 On January 21, 1997, Madison filed with the Smithsonian a Notice of Lien on Account of a Public Improvement, pursuant to N.Y. Lien Law § 12 (McKinney's 1993) (the "Lien"). The Lien, in the amount of $ 98,953, is against the interest of AJ Contracting in monies due or to become due upon the General Contract. Madison also served a copy of the Lien on AJ Contracting. At the time the Lien was filed, an amount was due and owning, or to become due, from the Smithsonian to AJ Contracting pursuant to the General Contract in excess of the amount of the Lien. AJ Contracting served on Madison a Notice to Commence Action or Show Cause, pursuant to N.Y. Lien Law § 21-a, requiring Madison to commence an action within thirty days thereof.

 On February 28, 1997, Madison filed the Complaint in New York State Supreme Court. On or about March 19, 1997, AJ Contracting moved to dismiss the Lien Claim.

 On April 1, 1997, the Smithsonian filed a notice of removal to remove the action to this Court, pursuant to 28 U.S.C. §§ 1441(a) and 1446. On July 24, 1997, Madison filed its motion to substitute parties. The motions were deemed ...


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