ARBITRATION OF CONSTRUCTION DISPUTE AND MECHANICS LIEN

Tozzi v. McLoughlin Constr. Corp., Date filed: 2022-03-24, Court: Supreme Court, Suffolk, Judge: Justice Christopher Modelewski, Case Number: 615869/2021:

"This is an action sounding in claims for breach of contract, conversion, accounting, fraud, fraud in the inducement, and willful exaggeration of a mechanic’s lien. Plaintiff commenced this action by the filing of a summons and complaint on August 18, 2021. The complaint alleges that defendant McLoughlin Construction Corp. (“MCC”) breached a construction contract for the improvement of real property located at 77 Dune Road, Bridgehampton, New York (the “subject property”). The complaint alleges that plaintiff is a resident of the State of Wyoming and is also the owner of the subject property. The complaint further alleges that plaintiff acquired the subject property “with the intent of demolishing the existing home and constructing a new beach front summer home” (the “project”). The complaint further alleges that MCC and defendant James McLoughlin (“McLoughlin”) made certain representations regarding their skills, expertise, and experience in high-end home building to induce plaintiff to enter into a contract with MCC for the construction of the Project. The complaint further alleges that plaintiff and MCC entered into a contract dated August 2, 2018 for the improvement of the subject property by the construction of a two-story single-family residence (the “contract”). By submissions filed on September 29, 2021, MCC and McLoughlin filed a verified answer, third-party complaint, and moved to compel plaintiff to arbitrate his claims pursuant to §§6.1 and 6.2 of the contract (collectively referred to herein as “the arbitration clause”). MCC and McLoughlin argue that the arbitration clause requires this dispute to be resolved by arbitration pursuant to the American Arbitration Association Construction Industry Arbitration Rules. Plaintiff opposes the motion and argues that the arbitration clause in the contract is unenforceable and void under §399-c of the General Business Law (“GBL 399-c”), that MCC and McLoughlin failed to proceed to mediation, which is a condition precedent to arbitration, and that arbitration should not be compelled because not all claims are arbitrable. MCC and McLoughlin reply.

New York State “has a long and strong public policy favoring arbitration” (Matter of Smith Barney Shearson v. Sacharow, 91 NY2d 39, 49, 666 NYS2d 990 [1997]; see also Matter of Nationwide Gen. Ins. Co. v. Investors Ins. Co. of Am., 37 NY2d 91, 371 NYS2d 463 [1975]). “Any doubts as to whether an issue is arbitrable will be resolved in favor of arbitration” (State of New York v. Philip Morris Inc., 30 Ad3d 26, 813 NYS2d 71 [1st Dept 2006] affd 8 NY3d 574, 838 NYS2d 460 [2007]). CPLR 7501 confers jurisdiction on courts to enforce written arbitration agreements (Crawford v. Merrill Lynch, Pierce, Fenner & Smith, 35 N.Y.2d 291, 299 [1974]; see also Flores v. Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 370 [2005]). Specifically, a “written agreement to submit any controversy…to arbitration is enforceable without regard to the justiciable character of the controversy and confers jurisdiction on the courts of the state to enforce it and to enter judgment on an award” (CPLR 7501). “Where there is no substantial question whether a valid agreement was made or complied with…the court shall direct the parties to arbitrate” (CPLR 7503; see also Degraw Const. Group, Inc. v. McGowan Builders, Inc., 152 AD3d 567, 58 NYS3d 152 [2d Dept 2017]). The arbitration agreement need not be signed “so long as there is other proof that the parties actually agreed on it” (God’s Battalion of Prayer Pentecostal Church, Inc., v. Miele Associates, LLP, 6 NY3d 371, 374, 812 NYS2d 435 [2006]). On a motion to compel arbitration, it must be determined “in the first instance…whether the parties have agreed to submit their disputes to arbitration and, if so, whether the disputes generally come within the scope of their arbitration agreement” (Matter of Norrtheast & Central Contractors, Inc. v. Quanto Capital, LLC, ___AD3d ___, ___NYS3d ___, 2022 WL 791296, 2022 NY Slip Op 01791 [2d Dept 2022] quoting Revis v. Schwartz, 192 AD3d 127, 140 NYS3d 68 [2d Dept 2020]; see also Degraw Const. Group, Inc. v. McGowan Builders, Inc., supra at 569, 58 NYS3d 152 quoting Sisters of St. John the Baptist, Providence Rest Convent v. Geraghty Constructor, 67 NY2d 997, 998, 502 NYS2d 997 [1986]; Highland HC, LLC v. Scott, 113 AD3d 590, 978 NYS2d 302 [2d Dept 2014]). Indeed, “arbitration is a matter of contract” and an “arbitration clause is a contractual right” (Degraw Const. Group, Inc. v. McGowan Builders, Inc., supra at 569, 58 NYS3d 152). A party to an agreement will not be compelled to arbitrate its dispute with another unless the evidence establishes the parties’ “clear, explicit and unequivocal” agreement to arbitrate (God’s Battalion of Prayer Pentecostal Church, Inc., v. Miele Associates, LLP, 6 NY3d 371, 373, 812 NYS2d 435 [2006]).

In determining the rights and obligations of the parties to a contract, it is well-established that “a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (Greenfield v. Philles Records 98 NY2d 562, 569, 750 NYS2d 565 [2002]; R/S Assoc. v. N.Y. Job Dev Auth., 98 NY2d 29, 32, 744 NYS2d 358 [2002]). “In construing a contract, one of a court’s goals is to avoid an interpretation that would leave contractual clauses meaningless” (Two Guys from Harrison-N.Y. v. S.F.R. Realty Assoc., 63 NY2d 396, 403, 482 NYS2d 465, 468 [1984]). The aim of the court when interpreting a contract is to arrive at a construction that gives fair meaning to all of its terms and provisions, and to reach a “practical interpretation of the expressions of the parties so that their reasonable expectations will be realized” (see Pellot v. Pellot, 305 AD2d 478, 759 NYS2d 494 [2d Dept 2003]; Gonzalez v. Norrito, 256 AD2d 440, 682 NYS2d 100 [2d Dept 1998]; Joseph v. Creek & Pines, Ltd., 217 AD2d 534, 535, 629 NYS2d 75 [2d Dept], lv denied 89 NY2d 804, 653 NYS2d 543 [1996]; see also Matter of Matco-Norca, Inc., 22 AD3d 495, 802 NYS2d 707 [2d Dept 2005]; Tikotzky v. City of New York, 286 AD2d 493, 729 NYS2d 525 [2d Dept 2001]; Partrick v. Guarniere, 204 AD2d 702, 612 NYS2d 630 [2d Dept], lv denied 84 NY2d 810, 621 NYS2d 519 [1994]). As it is a question of law whether or not a contract is ambiguous (W. W. W. Assoc. v. Giancontieri, 77 NY2d 157, 565 NYS2d 440 [1990]), a court must first determine whether the agreement at issue on its face is reasonably susceptible to more than one interpretation (see Chimart Assoc. v. Paul, 66 NY2d 570, 498 NYS2d 344 [1986]). “If the language of the agreement is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence” (Salerno v. Odoardi, 41 AD3d 574, 575, 838 NYS2d 156 [2d Dept 2007]).

Here, there is no dispute that the contract includes an arbitration clause, which reads, in pertinent part, that

[i]f a dispute arises from or is related to this Agreement or a breach thereof, the parties shall endeavor in good faith to solve the dispute through direct negotiations. The Parties hereto agree in the event of a dispute arising stemming from or relating to this Agreement or a breach thereof, they will submit for resolution their dispute to their named designated private arbitrator…. If a dispute cannot be settled through direct negotiations, the parties agree to endeavor to settle the dispute through mediation administered by a mutually acceptable mediator…. If the dispute is not resolved within 10 days of being submitted to mediation, the parties further agree that the unresolved controversy or claim shall be settled through binding arbitration using the American Arbitration Association Construction Industry Arbitration Rules…. Any arbitration decision and/or award is final and binding and may be enforced in the courts of Suffolk County, New York.

The arbitration clause is clear and unambiguous and no party herein is arguing that the clause contains an ambiguity. Further, the arbitration clause is broadly worded and pertains to all claims arising from or relating to the contract. The Court of Appeals has determined that “an arbitration clause is generally separable from substantive provisions of a contract, so that an agreement to arbitrate is valid even if the substantive provisions of the contract are induced by fraud” (Ferrarella v. Godt, 131 AD3d 563, 566, 15 NYS3d 180 [2d Dept 2015] citing Matter of Weinrott (Carp), 32 NY2d 190, 344 NYS2d 848 [1973]). Thus, as a general rule, the issue of fraud in the inducement should be determined by the arbitrator, except where the arbitration clause specifically excludes fraud in the inducement from the issues to be determined by arbitration” (Anderson St. Realty Corp. v. New Rochelle Revitalization, LLC, 78 AD3d 972, 974, 913 NYS2d 114 [2d Dept 2010] citing GAF Corp. v. Werner, 66 NY2d 97, 105, 495 NYS2d 312 [1985] after remand 115 AD3d 1021 [1986] cert denied 475 US 1083 [1986]). Here, the fraud claims are not specifically excluded from arbitration. Further, fraud claims only affect the validity of the arbitration clause when the fraud relates to the arbitration provision itself. Here, there are no allegations “that the agreement was not the result of an arm’s length negotiation, or that the arbitration clause was inserted into the contract to accomplish a fraudulent scheme” (Ferrarella v. Godt, supra 131 AD3d at 566-67; Anderson St. Realty Corp. v. New Rochelle Revitalization, LLC, supra at 974, 913 NYS2d 114). Based upon the foregoing, the breach of contract, conversion, accounting, and fraud claims are to be determined by the arbitrator. There is no dispute that the mechanic’s lien claim is not arbitrable; such liens falling within the exclusive jurisdiction of the Court (see Lien Law §41). Despite plaintiff’s claims to the contrary, GBL 399-c (1)(a) does not apply herein. That statute defines a consumer as a natural person residing in New York. Plaintiff admits in his complaint that he is a resident and citizen of the state of Wyoming. Therefore, he cannot be considered a consumer subject to the provisions of GBL 399-c, which prohibits arbitration clauses in contracts for the sale or purchase of consumer goods. Due to this finding that the prohibitions of GBL 399-c do not apply, the Court need not reach the issue of whether GBL 399-c is preempted by the Federal Arbitration Act (9 USC §1 et seq.). Further, the argument that MCC was required to engage in mediation as a condition precedent to arbitration and that MCC’s failure to mediate precludes it from compelling arbitration are not issues for this Court to decide. Indeed, the issue of whether plaintiff and/or MCC waived mediation or whether MCC waived arbitration, are procedural questions for the arbitrator to decide under the subject arbitration clause (see Matter of Barbalious v. Exterior Wall Sys., Inc., 14 AD3d 508, 787 NYS2d 715 [2d Dept 2005]; Chain Sales Mktg., Inc. v. Roach, 65 Misc3d 1232 (A), 119 NYS3d 829 [Sup. Ct. Suffolk County 2019]; 33 Calvert Props. LLC v. AMEC LLC, 70 Misc.3d 295, 310, 135 NYS3d 767, 779 (Sup. Ct. Westchester County 2020]). The Court has considered the remaining arguments of plaintiff and finds that they lack merit.

Accordingly, the motion by defendants/third-party plaintiffs McLoughlin Construction Corp. and James McLoughlin is granted except as to the mechanic’s lien claim."

UNLICENSED CONTRACTORS CAN RECOVER IF IT'S A NEW HOME?

Caveat emptor when you build a new home on your existing land. 

BREAD OVER BREAD CORP. v. TARDIEU, 2020 NY Slip Op 51537 - NY: Supreme Court December 22, 2020:

"......plaintiff contends, among other things, that the provisions of the General Business Law and the Suffolk County Code upon which defendant relies — GBL Article 36-A ("Home Improvement Contracts") and Suffolk County Code Chapter 563 ("Licensed Occupations") — are inapplicable because the claimed contract involved the construction of a new house, for investment purposes and which defendants did not intend to occupy, and not the construction of a "custom home" — see GBL 770(7) — or a residential "home improvement" — id., 770(3).

.....

Failure to comply with GBL Article 36-A and Suffolk County Code Chapter 563. If, as claimed by defendants, the alleged contract and its subject matter is governed by Article 36-A of the General Business Law and plaintiff was required to hold a home improvement license pursuant to Suffolk County Code Chapter 563, then plaintiff is precluded from recovering payment from defendants, whether under the claimed contract or for quantum meruit (see Durao Concrete v. Jonas, 287 AD2d 481, 731 NYS2d 203 [2d Dept 2001]; citing B & F Bldg. Corp. v. Liebig, 76 NY2d 689, 563 NYS2d 40 [1990]; Richards Conditioning Corp. v. Oleet, 21 NYS2d 895, 289 NYS2d 411 [1968]; Todisco v. Econopouly, 155 AD2d 441, 547 NYS2d 103 [2d Dept 1989]; see also Enko Const. Corp. v. Aronshtein, 89 AD3d 676, 932 NYS2d 501 [2d Dept 2011]). In that event, defendants will have made a sufficient prima facie showing of entitlement to judgment as a matter of law on the issue of whether plaintiff can recover on a putative home improvement contract when it is not a licensed contractor^[2]. Further, because the claimed contract does not contain the elements required in a home improvement contract (see GBL § 771[a]-[h]), it would be unenforceable for that reason, as well (see generally Consigliere v Grandolfo, 30 Misc 3d 1207(A) [NY City Ct 2011] ("The statute's plain purpose is to protect homeowners from unscrupulous, venal home improvement contractors. It protects them by, among other things, requiring a written contract containing specific language and items to be included, including granting certain rights to the homeowner. . . ."); compare Johnson v Robertson, 131 AD3d 670, 672 [2d Dept 2015]). Whether plaintiff's claim is precluded by the provisions of GBL Article 36-A and Chapter 563 of the Suffolk County Code presents issues of fact that cannot be fully resolved on the current record; as was stated by the Appellate Division in Enko Const. Corp. v. Aronshtein, supra, which involved a similar provision of the Nassau County Administrative Code:

Although the licensing requirement does not apply to the construction of a new home, interpreting a functionally equivalent local law, this Court concluded that "[t]he statutory exemption for `construction of a new home' is limited to the creation of a structure, where none previously existed... Even if a dwelling is stripped to the frame and rebuilt, the work constitutes the renovation of an existing home, not the erection of a new one" (J.M. Bldrs. & Assoc., Inc. v. Lindner, 67 AD3d at 740, 889 N.Y.S.2d 60 [some internal quotation marks omitted] 89 AD3d at 678; see also Blake Elec. Contr. Co., Inc. v Paschall, 222 AD2d 264, 265 [1st Dept 1995] (same as to the exemption in New York City Administrative Code § 20-386(2) for "construction of a new home").

......."

WHO MUST SIGN A HOME IMPROVEMENT CONTRACT

J.B. Sterling Co. v. Verhelle, NYLJ September 16, 2019, Date filed: 2019-09-09, Court: U.S. District Court for the Western District of New York, U.S. - WDNY, Judge: District Judge Elizabeth Wolford, Case Number: 6:15-CV-06271:

"Defendants’ primary argument in support of their motion for partial summary judgment is that the Contract is unenforceable because it does not satisfy the requirements of GBL §771, which governs home improvement contracts in New York. (See Dkt. 68-13 at 8-11). The Court agrees, for the reasons that follow.

GBL §771 sets forth the requirements for a valid home improvement contract under New York State law. First, the home improvement contract must be “evidenced by a writing” and “signed by all the parties to the contract.” N.Y. Gen. Bus. L. §771(1). Second, the home improvement contract must contain various disclosures regarding the contractor, the work to be performed, pricing and payment, and the homeowner’s rights and obligations. Id. at §§771(1)(a)-(h).

It is undisputed that the Contract in this case was a home improvement contract within the meaning of GBL §771 and, accordingly, compliance with that law was required. As such, the Contract was required to be “evidenced by a writing” and “signed by all the parties to the Contract.” N.Y. Gen. Bus. L. §771(1) (emphasis added). The Contract itself defines “William & Cyndee Verhelle” as “signing parties” (Dkt. 67-18 at 2 (emphasis added)), yet it is undisputed that Mrs. Verhelle never signed the Contract. Accordingly, a reasonable jury would have to conclude that the Contract fails, on its face, to comply with GBL §771′s fundamental requirement that a home improvement contract be signed by all the parties.2

Plaintiff offers several arguments in support of its position that Mrs. Verhelle’s signature was not required on the Contract. First, it claims that there “can be no question that there was a meeting of the minds in a written agreement,” because Mr. Verhelle participated in the drafting of the Contract, and because “both parties acknowledge that they entered into a contract for remodeling and renovation.” (Dkt. 71-1 at 3). Second, Plaintiff contends that it was Mr. Verhelle who modified the Contract to identify “William & Cyndee Verhelle (Homeowner)” as signing parties, and that Mr. Verhelle held himself out as a homeowner. (Id. at 3-4). Finally, Plaintiff contends that Mr. Verhelle intended to bind Mrs. Verhelle to the terms of the Contract, and that he had the authority to bind Mrs. Verhelle as her spouse under “an implied agency theory.” (Id. at 4). The Court is not persuaded by these arguments.

Plaintiff’s argument that there was a “meeting of the minds” between it and Mr. Verhelle, who purportedly participated in drafting the Contract, misses the point. GBL §771 is a consumer protection statute, and its requirement that a home improvement contract be signed by “all parties” ensures that a homeowner is aware of his or her rights. See Carrea & Sons, Inc. v. Hemmerdinger, 42 Misc. 3d 791, 796 (Rye City Ct. 2013) (explaining GBL §771 is part of “a consumer protection disclosure regimen to protect the property of homeowners from home improvement contractors”). In this case, regardless of any agreement reached between Plaintiff and Mr. Verhelle, there is no evidence that Plaintiff ever reached a “meeting of the minds” with Mrs. Verhelle, the sole owner of the Mendon Property. Moreover, contrary to Plaintiff’s contentions, Mrs. Verhelle does not acknowledge entering into the Contract, and in fact testified at her deposition that she did not recall having ever seen the Contract in 2014, that she was not involved in the bid process, and that she was not involved in the renovation project until the very end. (Dkt. 73-1 at 6-8).

Turning next to Plaintiff’s argument that Mr. Verhelle is the one who included Mrs. Verhelle as a party to the Contract, it is not clear to the Court why Plaintiff thinks this contention supports its position. It is undisputed that Mrs. Verhelle is the sole legal owner of the Mendon Property. As such, her consent was required before any home improvement project could lawfully be undertaken. As a matter of basic property law, it was appropriate and necessary for her to be included as a party to the Contract. Additionally, under New York law, “it is the contractor’s obligation to prepare the contract in compliance with the law. If the contractor fails to do so, it is the contractor who should bear the burden, not the homeowner, who only occasionally may enter into a home improvement contract.” Carrea & Sons, 42 Misc. 3d at 796. In other words, regardless of what changes Mr. Verhelle may have requested as to the Contract, it was ultimately Plaintiff’s burden, as the contractor, to ensure compliance with GBL §771.

To the extent Plaintiff contends that Mr. Verhelle wrongfully held himself out as co-owner of the Mendon Property, the Court notes as an initial matter that property ownership is a matter of public record, and that the appropriate filing of a deed serves as constructive notice regarding the owner of real property. See, e.g., Smullens v. MacVean, 183 A.D.2d 1105, 1107 (3d Dep’t 1992) (“The recording of the deed constituted constructive notice…that [the plaintiff] was the owner of such real property. A reasonable investigation of public records…would have revealed that [the plaintiff] was the title owner of the real property adjacent to defendants’ property.” (citations omitted)). Moreover, there is no evidence in the record before the Court that Mrs. Verhelle ever represented to Plaintiff that Mr. Verhelle was a co-owner of the Mendon Property.3 Plaintiff essentially asks the Court to hold Mrs. Verhelle responsible for Mr. Verhelle’s purported misrepresentations simply because he is her husband, which is a result New York law will not countenance. See Schwartz v. Bankers Tr. Co., 28 A.D.2d 696, 698 (2d Dep’t 1967) (“[A] husband is not deemed the agent of his wife by inference from the marital relationship, the rule being that no agency is to be implied between the spouses from the mere fact of their marriage.”), aff’d, 21 N.Y.2d 927 (1968); Parent Teacher Ass’n, Pub. Sch. 72 v. Manufacturers Hanover Tr. Co., 138 Misc. 2d 289, 297 (N.Y.C. Civ. Ct. 1988) (“One spouse is not an agent of another and cannot be held liable for a spouse’s independently wrongful act because of the marital relationship.” (citation omitted)). In other words, Mr. Verhelle’s alleged misrepresentations could perhaps serve as the basis for a tort claim against Mr. Verhelle (a claim that has not been pleaded). However, the alleged misrepresentations by Mr. Verhelle cannot circumvent the statutory requirement that Mrs. Verhelle’s signature was required on the Contract in order to render it enforceable.

Lastly, the Court is not persuaded that Mr. Verhelle was serving as Mrs. Verhelle’s agent, such that he could bind her to the Contract’s terms. It is true that, under New York law, “[a] spouse, under certain circumstances, may also cause his or her spouse to incur liability under a theory of implied agency.” Jones-Soderman v. Mazawey, No. 09 CIV 3185 SCR LMS, 2010 WL 54759, at *4 (S.D.N.Y. Jan. 6, 2010). In particular, implied agency may exist “where the circumstances are such as to give rise to, or raise a presumption of, an implied authority to make such contracts or purchases, as for example, where the one spouse has been in the habit of conducting the other’s business and making purchases therefor, and the other spouse has acquiesced therein.” 45 N.Y. Jur. 2d Domestic Relations §245. However, “[i]n accordance with the general rule of agency, one spouse is not, under any theory of agency, bound by, or liable for, the act or contract of the other which is beyond the actual, and not within the apparent, scope of the other spouse’s authority or employment, unless the transaction is ratified by the spouse.” 45 N.Y. Jur. 2d Domestic Relations §247 (emphasis added). In other words, as with all theories of agency, an implied agency theory requires some affirmative act by the purported principal to demonstrate an intent or willingness to be bound by the purported agent. See Greene v. Hellman, 51 N.Y.2d 197, 204 (1980) (“As with implied actual authority, apparent authority is dependent on verbal or other acts by a principal which reasonably give an appearance of authority to conduct the transaction….”); see Hallock v. State, 64 N.Y.2d 224, 231 (1984) (“The agent cannot by his own acts imbue himself with apparent authority.”).

Here, Plaintiff has identified no affirmative acts by Mrs. Verhelle to support a finding of implied agency. To the contrary, Plaintiff has cited no facts whatsoever in support of its implied agency argument. (See Dkt. 71-1 at 4). As the party claiming apparent authority by a purported agent, Plaintiff bears the burden of proof on this issue. See Ford v. Unity Hosp., 32 N.Y.2d 464, 472 (1973) (under New York law, “[o]ne who deals with an agent does so at his peril, and must make the necessary effort to discover the actual scope of authority,” and in order to support an apparent authority argument, a party must make “a factual showing that the third party relied upon the misrepresentations of the agent because of some misleading conduct on the part of the principal – not the agent”). On the record before the Court, no reasonable jury could conclude that Plaintiff had met that burden.

The cases cited by Plaintiff are distinguishable from the instant matter, because in each of them, there was evidence of affirmative conduct by the party who was found to be potentially bound by their spouse. In In re Bear Stearns Companies, Inc. Sec., Derivative, & Erisa Litig., 308 F.R.D. 113 (S.D.N.Y. 2015), there was evidence in the record that the husband and wife had “worked in concert to make the trades at issue in the case,” and had affirmatively claimed each other as agents in a related context. Id. at 121. In Jill Real Estate, Inc. v. Smyles, 150 A.D.2d 640 (2d Dep’t 1989), the issue was whether a husband’s signature on a memorandum of sale bound his wife, the co-owner of the property at issue. Id. at 642. In that case, the wife had participated in the sale and “unequivocally informed [the plaintiff] that she was not the owner of the property.” Id. Finally, in Kozecke v. Humble Oil & Ref. Co., 46 A.D.2d 986 (3d Dep’t 1974), the Court expressly acknowledged that “an agency between husband and wife is not to be implied from the mere fact of marriage,” but explained that the evidence of record supported the conclusion that the wife in that case had participated in and ratified her husband’s conduct. Id. at 987. In this case, Plaintiff has not adduced any evidence of participation by Mrs. Verhelle in the negotiation of the Contract, or cited any facts that would support the conclusion that she ratified its terms. To the contrary, the record before the Court shows no communication between Plaintiff and Mrs. Verhelle whatsoever. Plaintiff cannot demonstrate that Mr. Verhelle was acting as Mrs. Verhelle’s implied agent based on nothing more than their marital relationship.

Moreover, even were Plaintiff able to show an implied agency relationship between Mr. and Mrs. Verhelle, the plain language of GBL §771 requires the signatures of all parties, not their agents. Plaintiff has cited to no case law supporting the position that GBL §771′s requirement that all parties sign a home improvement contract can be satisfied through a showing of implied agency. GBL §771 is a consumer protection statute that contains a writing requirement specifically to make certain that homeowners are informed of their rights and, and requiring a personal signature from every contracting party is part of that statutory scheme. Plaintiff has not demonstrated that the common-law concept of implied agency can trump this express statutory requirement. Cf. Wilner v. Allstate Ins. Co., 71 A.D.3d 155, 159 (2d Dep’t 2010) (explaining that the New York Court of Appeals reads consumer protection statutes broadly to effectuate their remedial purposes).

Having determined that the Contract in this case fails to satisfy GBL §771, the Court next considers whether, as Defendants contend, that renders the Contract unenforceable. New York’s highest court, the New York Court of Appeals, has not opined on the consequences for failing to comply with the requirements of GBL §771. However, two of New York’s intermediate appellate courts-the Appellate Divisions of the Third and Fourth Departments-have held that “the failure to strictly comply with [GBL §771] bars recovery under an oral or insufficiently detailed written home improvement contract[.]” Harter v. Krause, 250 A.D.2d 984, 986-87 (3d Dep’t 1998); see also Weiss v. Zellar Homes, Ltd., 169 A.D.3d 1491, 1493 (4th Dep’t 2019); Frank v. Feiss, 266 A.D.2d 825, 826 (4th Dep’t 1999).

The Appellate Division, Second Department has taken a somewhat more lenient approach to compliance with GBL §771, holding that “an otherwise valid, signed, written contract” is not “rendered unenforceable solely by virtue of its failure to contain each and every item enumerated in General Business Law §771.” Wowaka & Sons, Inc. v. Pardell, 242 A.D.2d 1, 7-8 (2d Dep’t 1998). However, even the Second Department has held that GBL §771 precludes enforcement of home improvement contracts that are not “in writing and signed by the parties thereto.” F & M Gen. Contracting v. Oncel, 132 A.D.3d 946, 948 (2d Dep’t 2015); see also Home Const. Corp. v. Beaury, 149 A.D.3d 699, 702 (2d Dep’t 2017) (“General Business Law §771 sets forth a number of requirements for home improvement contracts, including that the contract be evidenced by a writing signed by all the parties to the contract…. [A] contractor cannot enforce a contract that fails to comply with General Business Law §771.”).

Based on these intermediate appellate court cases, the Court concludes that, under New York law, a home improvement contract that does not comport with GBL §771′s signature requirement is unenforceable. Accordingly, the Court agrees with Defendants that Plaintiff’s first cause of action, for breach of the Contract, fails as a matter of law.

The Court’s conclusion does not leave Plaintiff without recourse to seek the compensation it contends it is owed for the work it performed. See Weiss, 159 A.D.3d at 1493 (explaining that “although the failure to strictly comply with the statute bars recovery under an oral or insufficiently detailed written home improvement contract, such failure does not preclude recovery for completed work under principles of quantum meruit” (quotation omitted)). Defendants have not sought summary judgment on Plaintiff’s unjust enrichment claim, and Plaintiff remains free to pursue that theory of recovery."

CAUSES OF ACTION AGAINST HOME IMPROVEMENT CONTRACTOR

In addition to breach of contract, there are remedies under the General Business Law and the Lien Law. In this case, the court dismissed the claims for fraudulent inducement and unjust enrichment because of the breach of contract claim.

Cha v Columbia E. Constr. Corp., 2019 NY Slip Op 31829(U), June 18, 2019, Supreme Court, Kings County, Docket Number: 525240/18, Judge: Karen B. Rothenberg:

"With regard to the first cause of action, the plaintiff sufficiently pleaded a claim under the New York Home Improvement Business Law, N.Y. Gen. Bus. Law [GBL] Art. 36-A, §770 et. seq. Defendants argument that plaintiff is not a protected individual because the "home" is an investment property and not her residence is without merit. GBL§ 771(1) provides that "[e]very home improvement contract subject to the provisions of ... article [36-a], and all amendments thereto, shall be evidenced by a writing and shall be signed by all the parties to the contract." GBL §770 defines an "Owner" as any "homeowner" and defines a "home improvement contract" as "an agreement for the performance of home improvement, between a home improvement contractor and an owner, and where the aggregate contract price specified ... exceeds five hundred dollars." Defendant fails to cite any language in the text of the GBL or case law interpreting the provisions of the GBL as restricting its protections to only certain types of homeowners. Further, as this action is not based on an alleged violation of the Home Improvement Business provisions of the Administrative Code of the City ofNew York, §20-386 et. seq, defendants' citation to cases holding that such provisions are only applicable to individuals residing in the subject premises is of no import. Thus, the protections afforded under GBL §770, et. seq. applies to the home improvement contract at issue.

Moreover, plaintiff, as an owner, sufficiently pleaded her third cause of action against defendants for diversion of trust funds in violation of Art. 3A of the Lien Law (see Ippolito v TJC Dev., LLC [83 AD3d 57 [2d Dept 2011]). Under the Lien Law, the funds paid to defendants under the home improvement contract qualify as trust funds, requiring defendants to hold the funds in an escrow account, where they would remain the property ofthe plaintiffuntil substantial completion of the contract (GBL §771[1][e]; N.Y. Lien Law §71-a[4][a][d]). The use of trust funds for any purpose "other than the expenditures authorized in Lien Law §71 before all trust claims have been paid or discharged constitutes an improper diversion of trust assets, regardless of the propriety of the trustee's intentions" and enables an owner to commence an action pursuant to Art. 3A of the Lien Law (RLI Ins. Co. v New York State Dept. of Labor, 97 NY2d 256 [2002]). Further, an officer or agent of the defendant corporation, may be held personally liable for his/her acts which constitute an improper diversion of trust funds (see Ippolito at 71). The complaint alleges that the defendants, in violation of the Lien Law, wrongfully co-mingled funds and used or applied a portion of the paid funds for purposes unrelated to the construction and renovation work contemplated by the contract. It is also alleged that the defendants failed to maintain the required records concerning the trust. Thus, the plaintiff has a viable cause of action against both defendants pursuant to Art. 3A of the Lien Law (see Gorman v Fowkes, 97 AD3d 726 [2d Dept 2012]). Lastly, as it is alleged that the project was abandoned by the defendants, the one-year limitations period of §77(2) of Art. 3A of the Lien Law is not applicable (see Putnins Contracting Corp. v Winston Woods at Dix Hills, Inc., 36 NY2d 679 [1975]). "

PROOF OF LIABILITY BUT NO PROOF OF DAMAGES

ARABIA VEGGACADO, Plaintiff, v. LORDSWORKS WELDING CO. &  ERIC SESSOMS, Defendants. Docket No. CV-013055-18/BX. Civil Court of the City of New York, Bronx County. November 8, 2018:

"`As a general rule, there is implied in every contract for work or services a duty to perform it skillfully, carefully, diligently and in a workmanlike manner `(N.Y. Prac, Contract Law § 11:14) [Jeffries v. Willow Woodworking, Inc., 40 Misc. 3d 1205(A)].

The contract at issue is a Home Improvement Contract which is defined by statute as ". . . an agreement for the performance of home improvement, between a home improvement contractor and an owner, and where the aggregate contract price specified in one or more home improvement contracts, including all labor, services and materials to be furnished by the home improvement contractor, exceeds five hundred dollars (N.Y. Gen. Bus. Law § 770(6))."

Home improvement includes the repairing, remodeling, altering, converting, or modernizing of, or adding to, residential property, and specifically include the construction, replacement or improvement of roofing and flooring, as well as other improvements of the residential property [N.Y. Gen. Bus. Law § 770 (3)].

Plaintiff proved to the court's satisfaction that there were defects in Defendant's work. However, Plaintiff failed to prove a dollar amount of damages. Although Plaintiff testified that she hired someone to finish the work, she never submitted documentation to support that or show the amount incurred.

Plaintiff bore the burden of proving damages resulting from defendant's breach of contract (see Peak v. Northway Travel Trailers, Inc., 27 A.D.3d 927, 928, 811 N.Y.S.2d 798 [2006]; Cotazino v. Basil Dev. Corp., 167 A.D.2d 632, 633, 562 N.Y.S.2d 988 [1990]). In general, the proper measure of damages for breach of a construction contract is the cost to either repair the defective construction or complete the contemplated construction (see Route 7 Mobil v. Machnick Bldrs., 296 A.D.2d 809, 810, 745 N.Y.S.2d 336 [2002]; Thompson v. McCarthy, 289 A.D.2d 663, 664, 733 N.Y.S.2d 791 [2001]; Lyon v. Belosky Constr., 247 A.D.2d 730, 731, 669 N.Y.S.2d 400 [1998]). The damages must be reasonably certain, however, not based upon speculation (see Peak v. Northway Travel Trailers, Inc., 27 A.D.3d at 929, 811 N.Y.S.2d 798).

Similarly while Plaintiff claimed that parts of her property were damaged, no evidence was offered to enable the court to place a dollar value on said damage."

UNLICENSED SUBCONTRACTORS

Kristeel, Inc. v Seaview Dev. Corp., 2018 NY Slip Op 07296, Decided on October 31, 2018, Appellate Division, Second Department:

"On October 3, 2014, the plaintiff, a steel subcontractor, entered into a contract with the defendant Seaview Development Corp. (hereinafter Seaview), a general contractor, to furnish work, labor, services, and materials for the improvement of certain residential property located in the Town of East Hampton, owned by the defendant 14 Fieldview, LLC. According to the plaintiff, although it performed the work, Seaview failed to pay the full contract price. The plaintiff filed a mechanic's lien against the property and commenced this action to recover the balances it claimed it was owed and to foreclose on the mechanic's lien. The defendants moved pursuant to, inter alia, CPLR 3211(a)(7) to dismiss the complaint and to vacate the mechanic's lien, asserting that, since the plaintiff lacked a home improvement contracting license to perform the work on the property, it could not enforce the contract. Additionally, the defendants contended that, since the plaintiff was unlicensed, the subject mechanic's lien was invalid on its face and should, therefore, be vacated. The Supreme Court denied the defendants' motion, and the defendants appeal.

"Pursuant to CPLR 3015(e), a complaint that seeks to recover damages for breach of a home improvement contract or to recover in quantum meruit for home improvement services is subject to dismissal under CPLR 3211(a)(7) if it does not allege compliance with the licensing requirement" (ENKO Constr. Corp. v Aronshtein, 89 AD3d 676, 677; see Holistic Homes, LLC v Greenfield, 138 AD3d 689, 690; Westchester Stone, Sand & Gravel v Marcella, 262 AD2d 403, 404). Moreover, a home improvement contractor who fails to possess and plead possession of a valid license as required by relevant laws may not commence an action to foreclose a mechanic's lien (see Nicotra v Manger, 64 AD3d 547).

Here, the complaint did not allege that the plaintiff was duly licensed in the Town of East Hampton at the time the services were rendered (see Town Code of the Town of East Hampton [hereinafter Town Code] § 156-4). Moreover, in opposition to the defendants' motion, the plaintiff did not dispute that it did not possess the necessary license. The plaintiff's contention that the work it performed was not for home improvement but, rather, was for the construction of a new home for which a home improvement contracting license was not necessary, is without merit. The Town Code defines "home improvement" as including, inter alia, "[n]ew home construction" (Town Code § 156-3). Moreover, contrary to the plaintiff's contention, the defendants are entitled to the protection of CPLR 3015(e) and the applicable licensing requirements (see Town Code §§ 156-2, 156-3; Lorenzo Marble & Tile v Meves, 236 AD2d 448, 449). Accordingly, the Supreme Court should have granted the defendants' motion (see Holistic Homes, LLC v Greenfield, 138 AD3d at 690; ENKO Constr. Corp. v Aronshtein, 89 AD3d at 678; Nicotra v Manger, 64 AD3d at 548; Flax v Hommel, 40 AD3d 809, 810; Lorenzo Marble & Tile v Meves, 236 AD2d at 449)."

HOME IMPROVEMENT CONTRACTORS - NO SIGNED WRITTEN AGREEMENT

HOME CONSTRUCTION CORP. v. BEAURY, 2017 NY Slip Op 2628 - NY: Appellate Div., 2nd Dept. 2017 where plaintiff claimed the total cost of the project, including additions and credits, was $1,068,720, of which $219,850 remained unpaid:

"General Business Law § 771 sets forth a number of requirements for home improvement contracts, including that the contract be evidenced by a writing signed by all the parties to the contract (see General Business Law § 771; Johnson v Robertson, 131 AD3d 670, 672; Evans-Freke v Showcase Contr. Corp., 85 AD3d 961, 962). Generally, the absence of an enforceable written agreement between the parties precludes a contractor from recovering for breach of a home improvement contract (see F & M Gen. Contr. v Oncel, 132 AD3d 946, 948; Johnson v Robertson, 131 AD3d at 672; Frank v Feiss, 266 AD2d 825, 826; Mindich Devs. v Milstein, 227 AD2d 536, 536-537).

Although a contractor cannot enforce a contract that fails to comply with General Business Law § 771, a contractor may seek to recover based on the equitable theory of quantum meruit (see Johnson v Robertson, 131 AD3d at 672; Evans-Freke v Showcase Contr. Corp., 85 AD3d at 962; Frank v Feiss, 266 AD2d at 826; Mindich Devs. v Milstein, 227 AD2d at 537). "The elements of a cause of action sounding in quantum meruit are (1) performance of services in good faith, (2) acceptance of services by the person to whom they are rendered, (3) expectation of compensation therefor, and (4) reasonable value of the services rendered" (Evans-Freke v Showcase Contr. Corp., 85 AD3d at 962; see Johnson v Robertson, 131 AD3d at 672).

Although an unenforceable writing may provide evidence of the value of services rendered in quantum meruit (see Frank v Feiss, 266 AD2d at 826; Taylor & Jennings v Bellino Bros. Constr. Co., 106 AD2d 779, 780; see also Evans-Freke v Showcase Contr. Corp., 85 AD3d at 963), here, the record is devoid of evidence which would establish the reasonable value of the services Home Construction may have provided to the defendants (see Michaels v Byung Keun Song, 138 AD3d at 1075; see also Crown Constr. Bldrs. & Project Mgrs. Corp. v Chavez, 130 AD3d 969, 971-972; Geraldi v Melamid, 212 AD2d 575, 576). Neither the unsigned written proposal nor the testimony of Malo established the value of any services undertaken by Home Construction, or that the value of such services exceeded the amounts paid by the defendants. Accordingly, the Supreme Court properly dismissed Home Construction's cause of action to recover in quantum meruit for lack of proof (see Michaels v Byung Keun Song, 138 AD3d at 1075).

In contrast, the defendants, on their counterclaim, offered the testimony of experts regarding the cost they expended in completing or repairing roofing, flooring, brickwork, and other aspects of the project as set forth in the architectural plans. The Supreme Court properly concluded that the defendants were entitled to be compensated for the cost of completion of the construction work and the correction of defects in Home Construction's work, and the proper measure of damages is the fair and reasonable market price for correcting the defective installation or completing the construction (see Bellizzi v Huntley Estates, 3 NY2d 112, 115; Hodges v Cusanno, 94 AD3d 1168, 1169; Kaufman v Le Curt Constr. Corp., 196 AD2d 577, 578)."

WHAT IS HOME IMPROVEMENT FOR PURPOSES OF CONSUMER AFFAIRS LICENSE

TPE VENTURES, INC. v. NASSAU COUNTY OFF. OF CONSUMER AFFAIRS, 2017 NY Slip Op 50839 - NY: Supreme Court 2017:

"........The NCAC provides that the definition of home improvement "means repair, maintenance, replacement remodeling, alteration, conversion, modernization, or addition to any land or building, or that portion thereof, which is used as a private residence or dwelling place for not more than three families, and other improvements to structures or upon land which is adjacent to a dwelling and shall include, but not be limited to gardening/landscaping."

In its Verified Petition, the Petitioner admits that "core aeration involves perforating the soil with small holes to allow air, water and nutrients to penetrate the grass roots. This helps the roots grow deeply and produce stronger, more vigorous lawn." In similar fashion, the Hearing Officer determined that core aeration "involves alteration of the earth".

The cornerstone of this Court's review of the County's determination is one of rationality. The Hearing Officer's conclusion that the act of core aeration alters the land of the Petitioner's customers and thus requires a home improvement license issued by Nassau County is supported by a rational basis and is reasonable. Judicial function is exhausted when there is found to be a rational basis for conclusions approved by an administrative body."

AGAIN WHEN DEALING WITH UNLICENSED CONTRACTORS

This case is a year old but a warning to those in home improvement to go through the licensing procedure. HOLISTIC HOMES, LLC v. Greenfield, 138 AD 3d 689 - NY: Appellate Div., 2nd Dept. 2016:

"`An unlicensed contractor may neither enforce a home improvement contract against an owner nor seek recovery in quantum meruit'" (J.M. Bldrs. & Assoc., Inc. v Lindner, 67 AD3d 738, 741 [2009], quoting Blake Elec. Contr. Co. v Paschall, 222 AD2d 264, 266 [1995]; see ENKO Constr. Corp. v Aronshtein, 89 AD3d 676, 677 [2011]). "Pursuant to CPLR 3015 (e), a complaint that seeks to recover damages for breach of a home improvement contract or to recover in quantum meruit for home improvement services is subject to dismissal under CPLR 3211 (a) (7) if it does not allege compliance with the licensing requirement" (ENKO Constr. Corp. v Aronshtein, 89 AD3d at 677; see Westchester Stone, Sand & Gravel v Marcella, 262 AD2d 403, 404 [1999]).

Here, the complaint did not allege that the plaintiff was duly licensed in Nassau County at the time of the services rendered (see Nassau County Administrative Code § 21-11.2). Moreover, in opposition to the motion of the defendant Alan B. Greenfield (hereinafter the defendant), the plaintiff conceded that it did not possess the necessary license. Therefore, the plaintiff was not entitled to enforce its contract against the defendant or to recover in quantum meruit (see ENKO Constr. Corp. v Aronshtein, 89 AD3d at 677; Flax v Hommel, 40 AD3d 809, 810 [2007]; cf. Ozkurt v Hyatt Realty, LLC, 117 AD3d 926, 926 [2014])."

MORE ON UNLICENSED CONTRACTORS

MATTER OF MacNAMARA v. Edwards, 2016 NY Slip Op 32199 - NY: Supreme Court 2016:

"The established law of the Second Department is clear that a home improvement contractor who is unlicensed at the time of the performance of the work for which he or she seeks compensation forfeits the right to recover damages based on either breach of contract or quantum meruit (Flax v. Hommel, 40 AD3d 809, 810, 835 NYS2d 735, 736 [2d Dept. 2007]; accord Emergency Restoration Servs. Corp. v. Corrado, 109 AD3d 576, 577, 970 NYS2d 806, 807 [2d Dept. 2013][applying Suffolk County Code regulating unlicensed home improvement]; Racwell Const., LLC v. Manfredi, 61 AD3d 731, 732-33, 878 NYS2d 369, 371 [2d Dept. 2009][Westchester County]). Pursuant to CPLR 3015(e), a complaint that seeks to recover damages for breach of a home improvement contract or to recover in quantum meruit for home improvement services is subject to dismissal . . . if it does not allege compliance with the licensing requirement" (CMC Quality Concrete III, LLC v. Indriolo, 95 AD3d 924, 925-26, 944 NYS2d 253, 254-55 [2d Dept. 2012]).

Generally speaking the law of this department recognizes that a homeowner may seek restitution for payments actually made for work which was not performed or for defective work (Brite-N-Up, Inc. v. Reno, 7 AD3d 656, 657, 776 NYS2d 839, 840 [2d Dept. 2004]; Goldstein v. Gerbano, 158 A.D.2d 671, 552 N.Y.S.2d 44, 45 [2d Dept. 1990] [plaintiffs were entitled to rescind the contracts and to recover the amounts designated in the judgment as a result of the defendant's failure to perform]; Segrete v. Zimmerman, 67 AD2d 999, 1000, 413 NYS2d 732, 733 [2d Dept. 1979]; compare with Sutton v. Ohrbach, 198 AD2d 144, 144, 603 NYS2d 857, 857 [1st Dept. 1993][plaintiff may not use the statute as a sword to recoup monies already paid in exchange for the purportedly unlicensed services]).

......................
Moreover, while case law exists which supports a homeowner seeking a monetary remedy as against an unlicensed home improvement contractor, it is similarly clear that those circumstances are warranted for the costs associated to cover, i.e. costs incurred by the homeowner for remediating or substitutionary performance (See e.g. Maltese, Joseph & Porgia v New England Contractors, 17 Misc.3d 1134(A), *3 [Sup, Ct., Kings Co. 2007][plaintiff homeowner parties to home improvement project may recover against unlicensed contractor upon presentation of evidence of out of pocket losses due to the failure to perform under the contract])."

ACTIONS AGAINST UNLICENSED CONTRACTORS

The rules differ somewhat in the First and Second Department. This was discussed recently in MATTER OF MacNAMARA v. Edwards, 2016 NY Slip Op 32199 - NY: Supreme Court 2016:

"The established law of the Second Department is clear that a home improvement contractor who is unlicensed at the time of the performance of the work for which he or she seeks compensation forfeits the right to recover damages based on either breach of contract or quantum meruit (Flax v. Hommel, 40 AD3d 809, 810, 835 NYS2d 735, 736 [2d Dept. 2007]; accord Emergency Restoration Servs. Corp. v. Corrado, 109 AD3d 576, 577, 970 NYS2d 806, 807 [2d Dept. 2013][applying Suffolk County Code regulating unlicensed home improvement]; Racwell Const., LLC v. Manfredi, 61 AD3d 731, 732-33, 878 NYS2d 369, 371 [2d Dept. 2009][Westchester County]). Pursuant to CPLR 3015(e), a complaint that seeks to recover damages for breach of a home improvement contract or to recover in quantum meruit for home improvement services is subject to dismissal . . . if it does not allege compliance with the licensing requirement" (CMC Quality Concrete III, LLC v. Indriolo, 95 AD3d 924, 925-26, 944 NYS2d 253, 254-55 [2d Dept. 2012]).

Generally speaking the law of this department recognizes that a homeowner may seek restitution for payments actually made for work which was not performed or for defective work (Brite-N-Up, Inc. v. Reno, 7 AD3d 656, 657, 776 NYS2d 839, 840 [2d Dept. 2004]; Goldstein v. Gerbano, 158 A.D.2d 671, 552 N.Y.S.2d 44, 45 [2d Dept. 1990] [plaintiffs were entitled to rescind the contracts and to recover the amounts designated in the judgment as a result of the defendant's failure to perform]; Segrete v. Zimmerman, 67 AD2d 999, 1000, 413 NYS2d 732, 733 [2d Dept. 1979]; compare with Sutton v. Ohrbach, 198 AD2d 144, 144, 603 NYS2d 857, 857 [1st Dept. 1993][plaintiff may not use the statute as a sword to recoup monies already paid in exchange for the purportedly unlicensed services])."

ON DEALING WITH CONTRACTORS (LICENSED OR NOT)

Kudos to Newsday for yesterday's story - but the bottom line is: maybe you should consult with a lawyer before you sign:

http://www.newsday.com/long-island/many-liers-pay-for-home-improvements-only-to-learn-costly-lesson-of-buyer-beware-1.10586461

HOME REPAIR SCAMS

It was reported today that SBA loans will be available for flooding victims of this summer's storm.

On August 20, the governor's office issued the following warning in light of the flood damage regarding home repair scams but the warnings are "timeless":

"Dear Fellow New Yorker,

This week we issued a consumer alert warning to homeowners to protect themselves against home repair scams, which may arise in the wake of the recent flooding that occurred on Long Island. Unfortunately, unscrupulous home repair scam artists often come out of the woodwork in the aftermath of major storms and try to take advantage of their neighbors. There are a number of steps that homeowners can take to avoid these schemes and help ensure that you are engaging with reputable businesses.

Homeowners should beware of anyone who:

• Comes to your home or calls you on the phone offering to make repairs. 
• Tells you that you must make repairs immediately or offers discounts if you buy their services today. 
• Pressures you to sign a contract immediately. 
• Tells you that they are doing work in your neighborhood and that they have extra materials left from another job. 
• Is not an established local business, but has come to the area from somewhere else to “help.”

Avoid unlicensed contractors in areas where a license is required, such as Nassau and Suffolk Counties. In addition, avoid contractors who:

• Don't supply references or whose references can't be reached. 
• Tell you there's no need for a written contract. By law, all contracts for $500 or more must be in writing, but it's a good idea to get a written contract even for smaller projects. 
• Only have a P.O. Box address or a cell phone number. 
• Cannot supply proof of insurance. 
• Ask you to get required building permits. It could mean that the contractor is unlicensed or has a bad track record, and is therefore reluctant to deal with the local building inspector. However, you should verify with your local building department that all necessary permits have been obtained by the contractor. 
• Ask for money to buy materials before starting a job. Reliable, established contractors can buy materials on credit. 
• Demand payment in cash or want full payment up front, before work has begun. Instead, find a contractor who will agree to a payment schedule providing for an initial down payment and subsequent incremental payments until the work is completed.

If you believe you have been victimized by scams, consult a lawyer immediately. There are time deadlines to cancel sales and pursue legal claims. Homeowners can also contact New York State Department of Financial Services for insurance-related scams, or the offices of your county’s District Attorney or the state Attorney General.

Homeowners with disputes involving home improvement contractors can file complaints with the New York State Department of State or by calling 1-800-697-1220. Contact your insurance company, agent or broker to get answers to specific questions about insurance policies or claims. For further insurance-related help, feel free to contact the New York State Department of Financial Services’ Consumer Services Unit at 1-800-339-1759.

For more tips on safe ways to find a contractor to repair your home, visit governor.ny.gov.

Sincerely,

The Office of the Governor"

INDICTMENT ON SUPERSTORM SANDY SCAM - UNLICENSED PLUMBER?

Some homeowners can only seek relief in civil litigation when dealing with issues with home improvement contractors. In this case dealing with a plumber and Sandy victims, the district attorney stepped in:

http://www.newsday.com/long-island/nassau/david-jensen-indicted-after-taking-money-from-superstorm-sandy-victims-without-doing-work-da-says-1.9228446

Plumbers and Electricians that operate in Nassau County, are licensed by the cities, towns and villages. For more information, contact the city, town or village directly.

MORE RE: UNLICENSED HOME CONTRACTORS

A blog post I started on May 28, 2010 had received numerous comments on this issue:

Friday, May 28, 2010 - UNLICENSED HOME CONTRACTORS

To add to that discussion, here is a story of the recent arrest of Nassau home improvment contractors for operating without a license and it appears the target of these arrests were contractors working on Superstorm Sandy victims:

ABC LOCAL - Nassau contractors busted for working unlicensed

NEWSDAY - Nassau: 61 unlicensed contractors nabbed in Sandy sting

MORE ON SUPERSTORM SANDY

And as a follow up to yesterday's post regarding mechanic's liens and out of state contractors, see this link:

NYS DFS - BEWARE OF HOME SCAMS

LICENSED HOME IMPROVEMENT CONTRACTORS & THE LIEN LAW

This I found interesting from The Home Equity Theft Reporter:

Home Improvement Contractor Pinched In Ripoff For Pocketing $300K, Abandoning Project; Failure To Treat Cash As Trust Funds & Provide An Accounting Constitute Violations Of NYS Lien Law