United States District Court, N.D. New York
MID ATLANTIC FRAMING, LLC, on behalf of itself and all other similarly situated beneficiaries of trust funds received, or to be received by defendant Varish Construction, Inc. Under Article 3-A of the New York Lien Law, Plaintiff,
VARISH CONSTRUCTION, INC.; AVA REALTY ITHACA, LLC; AVA DEVELOPMENT, LLC; TOM VARISH, individually: AJESH PATEL, individually; 359 HOSPITALITY ASSOCIATES, LLC; SENECA SUPPLY, LLC d/b/a THE DUKE COMPANY; and " JOHN DOE NO. 1" through " JOHN DOE NO. 20" , inclusive, as those persons and entities having an interest in real property located at 359 Elmira Road, Ithaca, New York, and being designated as Tax Parcel Nos.: 128.-1-8 and 129.-1-9 on the Land and Tax Map of the City of Ithaca, Tompkins County, New York, and a portion of Tax Parcel Nos.: 129-1-10.2, 129.-1-1-1, 129.-1-6.2 and 129.-1-7.2 on the Land and Tax Map of the City of Ithaca, Tompkins County, New York, and/or the trust funds received, or to be received VARISH CONSTRUCTION, INC. for the improvement of said property, Defendants
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For Plaintiff: GEORGE SITARAS, ESQ., OF COUNSEL, MARCO & SITARAS, PLLC, New York, New York.
For AVA Realty Ithaca, LLC, AVA Development LLC, and Ajesh Patel, Defendants: BRIAN W. MATULA, ESQ., OF COUNSEL, COOPER ERVING & SAVAGE LLP, Albany, New York.
MEMORANDUM-DECISION AND ORDER
Mae A. D' Agostino, United States District Judge.
Plaintiff commenced this action on November 5, 2013, seeking damages in connection with a construction project in which Plaintiff performed work as a subcontractor of Varish Construction, Inc. (together with owner/principal, Tom Varish, collectively " Varish" ) on property owned at the time by AVA Realty Ithaca, LLC (together with AVA Development LLC and Ajesh Patel, collectively " AVA" ); Varish and AVA are co-defendants in this action. See Dkt. No. 1.
Currently before the Court are (1) AVA's motion for partial judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, and (2) Plaintiff's cross-motion for leave to file a second amended verified complaint.
A. Procedural Posture
AVA filed the instant Rule 12(c) motion on June 2, 2014. See Dkt. No. 31. In response to Plaintiff's letter motion submitted on June 6, 2014, the Court issued a Text Order on June 9, 2014, resetting the deadlines as to the pending motion for judgment on the pleadings. See Dkt. No. 37. The deadlines for the responsive pleading and reply were reset to July 30, 2014, and August 5, 2014, respectively. See id. Both the responsive cross-motion and the reply were timely filed. See Dkt. Nos. 48-50.
On September 9, 2014, the Court issued a Text Order staying this case pending the resolution of the U.S. Bankruptcy Case in the Middle District of Pennsylvania involving Varish Construction, Inc. See Dkt. No. 57. The bankruptcy case has since been resolved, and this Court accordingly lifted the stay on June 11, 2015. See Dkt. No. 63. Varish has not appeared to defend against the present action.
B. Factual Background
In September 2012, Plaintiff entered into a subcontract with Varish, whereby Plaintiff would furnish and install certain framing and carpentry work for the construction of " Fairfield Inn and Suites," located at 359 Elmira Road, Ithaca, New York 14850. See Dkt. No. 48-3 at ¶ ¶ 17-18. The primary contract was executed between Varish and AVA; the subcontract price was $721,000. See id.
" During the course of the project, Varish directed Plaintiff to perform extra work in the amount of $11,740.00, thereby adjusting the contract price upward to $732,740.00." Id. at ¶ 19. Plaintiff claims that it substantially completed the work required under the subcontract, but was paid only $115,000, leaving a remaining balance of $617,740 still due to Plaintiff. Id. at ¶ 20. On March 28, 2013, Plaintiff filed a Notice of Mechanic's Lien in Tompkins County against the property in the amount of $600,960. See id. at ¶ 92.
On June 12, 2013, AVA filed a petition in the state supreme court in Tompkins County seeking summary discharge of the mechanics lien. See id. at ¶ 102. The court dismissed the petition because it did not find the lien to be facially defective. See Dkt. No. 31-7. Plaintiff claims that Varish and AVA falsely represented, both to the state supreme court and the Wilmington Savings Fund Society (" WSFS" ), that AVA had paid Varish in full for Plaintiff's work. See id. at ¶ 104. Plaintiff alleges that these false statements were fraudulently made to give the appearance that no funds were due to Varish from AVA at the time Plaintiff's lien was filed; the purpose of the fraud being to procure the discharge of the lien. See id. at ¶ ¶ 105-06. Plaintiff asserts that (1) AVA knew of the falsity of the statements or had a hand in crafting them; (2) AVA submitted these false certifications to WSFS to obtain advances on the building loan; and (3) these advances were due in trust to Plaintiff but never paid. See id. at ¶ ¶ 112-14.
AVA commenced a state-court action in Tompkins County on September 24, 2014, seeking a declaratory judgment that the mechanics lien asserted by Mid Atlantic is null and void because all contractual obligations between AVA and the primary contractor (Varish) had been fulfilled. See Dkt. No. 31-8. On August 14, 2015, Plaintiff's counsel informed this Court that its motion to dismiss the state-court action had been granted. See Dkt. No. ...