NY Court Holds That a Handshake Is As Good As a Signed Written Change Order In Breach of Contract And Lien Foreclosure Case

If you normally work on a handshake, that handshake might be as good as a written contract in the construction industry.  In a breach of contract and mechanics lien foreclosure action filed by a general contractor, an electrical contractor and a flooring contractor against an owner, the court ruled in favor of all three plaintiffs awarding the amount owed to each plus over 6 years in interest to each plaintiff.  The Court also ruled that each plaintiff contractor held a valid mechanics lien for the awarded amount and each was entitled to foreclose on their respective liens.  The defendant owner argued that the plaintiffs were not due the amounts invoiced because numerous change orders and modifications were not approved in writing by the owner.  The Court dismissed this argument holding that parties course of conduct and dealing of approving change orders without signed writings waived any requirement that the changes order were to be approved only in writing.

Further, the defendant owner argued that the flooring contractor was not due any money because the flooring failed because they were installed prior to the building being sealed and properly heated.  The Court also dismissed this defense, explaining, the owner’s “agent insisted, over [the flooring contractor’s] objection, that [the flooring contractor] install the flooring even though the building was not yet fully sealed to the elements or properly heated, and that [the owner’s] agent threatened to pull [the flooring contractor] off the job and back charge [the flooring contractor] for the cost of installation by another contractor if [the flooring contractor] did not install the floors under those conditions…Consequently, [the owner], through its agent, must be deemed to have accepted the risk that the flooring would not hold due to those conditions and was responsible for problems with the flooring by failing to insure that a consistent temperature was maintained.  The case is CA Construction, Inc., A&M Electrical Service, Inc. and A&J Rapaport Partners d/b/a J. Rapaport Flooring v. Rao's City Views, LLC, et al., Case No. 112328/06 (New York County, June 28, 2012).

Poulos LoPiccolo represents contractors in NY and NJ in all aspects of construction litigation.  The attorneys at Poulos LoPiccolo have extensive experience handling NY mechanics lien and NJ construction lien matters.