Commercial Division Blog

Posted: August 5, 2017 / Categories Commercial, Contracts

Property Owner Not Liable to Subcontractor for General Contractor's Obligations

On July 26, 2017, Justice Emerson of the Suffolk County Commercial Division issued a decision in County Wide Flooring, Corp. v. Town of Huntington, 2017 NY Slip Op. 50967(U), holding that a property owner was not liable for a general contractor's contractual obligations to a subcontractor, explaining:

When, as here, there is an express contract between the general contractor and the subcontractor, the owner of the subject premises may not be held directly liable to the subcontractor on a theory of implied or quasi-contract unless the owner has, in fact, assented to such an obligation. The mere fact that the owner has consented to the improvements provided by the subcontractor and accepted their benefit does not render the owner liable to the subcontractor, whose sole remedy lies against the general contractor.

It is undisputed that there is no privity of contract between the plaintiff and the Town and that the plaintiff's contract was with Wenger. Contrary to the plaintiff's contentions, the subcontract with Wenger bars any claim against the Town sounding in quantum meriut or unjust enrichment. Moreover, the record does not reflect that the Town expressed a willingness to pay the plaintiff for the work it performed at the ice rink.

The plaintiff's reliance on General Municipal Law § 106-b is misplaced. That section merely sets forth the procedure for payment by public owners of property to contractors and for payment by contractors to subcontractors. It does not create a private cause of action, nor does it impose any liability upon public owners for the their failure or the failure of their contractors to comply therewith. Subdivision (2) of § 106-b expressly provides, "Nothing provided herein shall create any obligation on the part of the public owner to pay or to see to the payment of any moneys to any subcontractor or materialman from any contractor nor shall anything provided herein serve to create any relationship in contract or otherwise, implied or expressed, between the subcontractor or materialman and the public owner." Accordingly, the motion is granted, and the complaint is dismissed insofar as asserted against the Town.

(Internal quotations or citations omitted).