Jose A. Aquino – Duane Morris Construction Law

March 10, 2026March 10, 2026 by Jose A. Aquino

Appellate Court Finds Oral Assurances Sufficient to Keep Contractor’s Claims Alive

In Best Work Holdings (New York), LLC v. Ma, a recent decision from the New York Appellate Division, First Department, the court examines how promissory‑estoppel and unjust‑enrichment claims are evaluated when construction work is performed without a written contract.

Plaintiff building owner accused defendants of participating in a fraudulent contracting scheme. Defendant Li responded with counterclaims, asserting that he performed legitimate preparation work for the building’s renovation because he was told he would be reimbursed. Li alleged that the head of asset management for the owner’s parent company promised him that “if Li performed preparation work… he would be reimbursed the costs for material, labor, equipment, and services.” Li also claimed that he relied on this assurance because of his prior working relationship with the project manager, noting that he had previously managed projects “without a written contract.”

The court held that these allegations were enough to state a claim for promissory estoppel. At the pleading stage, the question is not whether Li will ultimately prove his reliance was reasonable, but whether the allegations, taken as true, are plausible. The court emphasized that the reasonableness of reliance “is an issue for the trier of fact” and that Li is entitled to favorable inferences because his reliance was not “patently unreasonable on its face.”

The court also reinstated Li’s unjust enrichment claim. Li alleged that he spent $200,000 on preparation work and that the building owner benefited from that work without paying for it. The court found these allegations sufficient, explaining that Li claimed the owner “was enriched by Li’s preparation work” and that it would be “against equity and good conscience” for the owner to retain that benefit without payment.

Although the counterclaims lacked detail, the court concluded that they were sufficiently specific to withstand a motion to dismiss. The decision underscores that quasi‑contract claims may proceed even without a formal agreement when a contractor alleges a pattern of similar prior dealings and significant out‑of‑pocket expenditures.

Jose A. Aquino (@JoseAquinoEsq on X) is a special counsel at Duane Morris LLP’s New York office, where he is a member of Construction Group, specializing in construction law, lien law, and government procurement law. He is also a member of the Cuba Business Group.

This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed herein are those of the author and do not necessarily reflect the views of Duane Morris LLP or its individual attorneys.

February 9, 2026February 9, 2026 by Jose A. Aquino

Appellate Court Reinforces Strict Compliance with Statutory Notice‑of‑Claim Deadlines in Contract Disputes

The New York Appellate Division, Second Department, recently reaffirmed that notice‑of‑claim requirements can bar contract claims when statutory deadlines are missed. In Custom Crafted Management Solutions, Inc. v. Elmont Fire District, the court dismissed a breach‑of‑contract action for failure to timely file a notice of claim as required by N.Y. Town Law § 180.

The dispute arose from four contracts that the Elmont Fire District entered into with four separate vendors. Each vendor subsequently assigned its rights under its respective contract to the plaintiff. On December 27, 2022, the plaintiff issued four invoices demanding payment, each with a due date of January 31, 2023. The Fire District did not make payment by the deadline. More than eight months later, the plaintiff filed a notice of claim by hand on October 2, 2023, seeking the amounts allegedly due, and mailed it on October 10, 2023. The plaintiff commenced the action on March 3, 2024, asserting breach of contract and related claims.

The Fire District moved to dismiss the complaint, on the ground that the plaintiff failed to file a notice of claim within six months of the accrual of its causes of action, as required by applicable statute, Town Law § 180. The trial court found that factual questions existed regarding when the claims accrued and denied the motion. On appeal, the Second Department reversed.

The appellate court emphasized that Town Law § 180 imposes a condition precedent that no action may be maintained arising out of a contract unless a verified written claim is filed within six months after the cause of action accrued. The court stated that “[c]ourts have no authority to disregard lack of compliance with such a provision,” making clear that the statutory notice of claim provisions is mandatory, not discretionary.

The court explained that a contractor’s claim accrues when its demand for payment is rejected. Plaintiff set January 31, 2023, as the payment deadline. The claim accrued when the Fire District did not pay by the deadline. The six‑month notice‑of‑claim period therefore expired on or about July 31, 2023. Because the plaintiff did not serve its notice of claim until October 2023—more than eight months after accrual—the appellate court reversed the trial court and granted the Fire District’s motion to dismiss. The filing of the notice of claim was untimely as a matter of law.

This decision highlights how strictly courts enforce statutory notice‑of‑claim requirements. Even where the underlying contract claims may appear straightforward, the failure to strictly comply with mandated condition precedent can be fatal.

January 28, 2026January 29, 2026 by Jose A. Aquino

Supreme Court Shifts Design‑Professional Malpractice Claims Toward Federal Court

Courts and legislatures in many states require plaintiffs to file an expert affidavit or certificate of merit at the beginning of a malpractice case, including claims against architects, engineers, and other design professionals. These requirements often function as early gatekeeping tools, allowing defendants to seek early dismissal. A recent U.S. Supreme Court decision, however, may limit the impact of those statutes in federal court and change litigation strategy in design‑professional cases.

As my Duane Morris colleagues explained in an Alert on January 22, 2026, the U.S. Supreme Court in Berk v. Choy ruled that state affidavit‑of‑merit requirements do not apply in federal court, and that reasoning is not limited to medical malpractice cases—it may also affect similar rules for other licensed professionals. This means that people bringing malpractice claims against architects and engineers in federal court may no longer need to file the expert affidavit that many states require at the start of a case, making it easier for those claims to move forward and removing an early‑dismissal tool for defendants. It may also change how strict filing deadlines, like statutes of repose, work in federal court, because a case is considered started as soon as the complaint is filed. The decision makes federal court a more appealing option for plaintiffs and shifts how design‑professional malpractice cases are handled.

For design professionals, insurers, and others in the construction industry, this shift raises important considerations. Removal to federal court may now eliminate a key procedural defense that would otherwise be available in state court. As courts begin applying Berk beyond the medical‑malpractice context, parties should expect meaningful differences between state and federal practice in professional‑liability cases and adjust their litigation strategies accordingly.

December 22, 2025December 22, 2025 by Jose A. Aquino

Under Article 3‑A of the NY Lien Law, Settlement Proceeds Are Trust Assets — Not a Source of Contractor Reimbursement

A recent decision from the New York Appellate Division, Third Department, reinforces how strictly New York courts apply the trust-fund rules of Article 3-A of the Lien Law, particularly when settlement funds are involved. In L.C. Whitford Co., Inc. v. Babcock & Wilcox Solar Energy, Inc., the Court held that a general contractor could not use settlement proceeds to reimburse itself for project costs it claimed to have advanced, even where those advances were used to pay subcontractors.

The case arose out of several solar construction projects that ended in disputes and delays. The project owners and the general contractor ultimately resolved their disputes through a confidential settlement that resulted in a multimillion-dollar payment to the contractor. Subcontractors with pending mechanic’s liens objected when the contractor stated that it intended to apply a portion of the settlement funds to reimburse itself for monies it had previously advanced on the jobs.

The Appellate Division agreed with the subcontractors. The Court concluded that the settlement proceeds were trust assets under Article 3-A because they were paid in connection with contracts for the improvement of real property. Once funds are deemed trust assets, the Lien Law strictly limits how they may be used. For a contractor acting as trustee, those funds must be applied first to pay subcontractors, laborers, and material suppliers.

The contractor argued that it should be allowed to reimburse itself because it had used its own money to pay subcontractors when project funds were exhausted. The Court rejected that argument, emphasizing that the Lien Law does not permit a contractor‑trustee to place itself ahead of unpaid trust beneficiaries. The statutory language governing the use of trust assets “is mandatory.” Unlike an owner, a contractor has no statutory right to apply trust funds toward its own “costs of improvement.” Until all valid trust claims are satisfied, the contractor has no beneficial interest in the trust funds at all.

Because the proposed reimbursement would have diverted trust assets away from subcontractors with unresolved claims, the Court held that it would violate the contractor’s fiduciary obligations under Article 3-A. The injunction barring any use of the settlement funds without court approval was therefore properly granted.

The dissent took a different view, reasoning that nothing in the statute prohibits the use of trust assets to reimburse payments made for proper trust purposes before trust assets were available. It cautioned that the majority’s interpretation could discourage contractors from advancing their own funds to keep projects moving when owners fail to pay on time. The majority, however, reaffirmed that Article 3‑A is designed to protect subcontractors first and foremost, even if doing so places the financial risk of such advances squarely on the contractor.

The decision underscores that settlement proceeds from construction projects are not available for contractor reimbursement when trust claims remain unresolved. Contractors who front their own funds do so at their own risk, while subcontractors retain strong protections under Article 3‑A to ensure settlement funds are used exclusively to satisfy trust claims..

December 15, 2025 by Jose A. Aquino

Strict Compliance With Notice‑To‑Cure Provisions In Construction Contracts

Strict compliance with notice‑to‑cure provisions is essential in construction contracts, particularly when a contractor seeks to terminate a subcontract for cause. These provisions are designed to ensure that subcontractors receive clear, written notice of alleged defaults and a defined period to cure them before facing termination. Courts have repeatedly emphasized that failure to follow these procedures can make a termination invalid and expose the contractor to liability.

In the recent case of Pizzarotti, LLC v. MDB Development Corp., the New York Appellate Division, First Department, reinforced this principle. The general contractor terminated its concrete subcontractor on May 22, 2018, citing performance failures. The court found the termination invalid because the contractor had not complied with the subcontract’s requirement that termination for cause could occur only if the subcontractor failed to cure a default within five calendar days after receiving written notice. The last correspondence that could arguably qualify as a notice of default was sent on January 31, 2018, identifying incomplete work. In the months that followed, the subcontractor substantially completed much of that work. Later emails and letters did not amount to valid notices of default: a February email confirmed that most problems were fixed and left only minor punch‑list items, while the March and April letters about liens did not start the notice‑to‑cure process, since the contractor removed the liens itself and only mentioned applying back charges. By allowing this time to pass without further notice, the contractor effectively waived its right to terminate based on those alleged defaults.

The court cited Bast Hatfield, Inc. v. Joseph R. Wunderlich, Inc., where a contractor issued a 48‑hour notice but then waited more than a month while the subcontractor corrected deficiencies. When the contractor later terminated without issuing any further notice, the court held that it had waived its right to rely on those defaults. The same reasoning applied in Pizzarotti: delay and informal communications cannot excuse the formal notice required by contract.

The Appellate Division also rejected the claim that the subcontractor abandoned the project. Although its last work on site occurred on February 27, 2018, the subcontractor continued to communicate with the contractor and the engineer of record, expressing readiness to complete remaining items pending direction. These communications demonstrated that the subcontractor had not repudiated the subcontract, and therefore the contractor could not bypass the notice‑to‑cure requirement.

Together, Pizzarotti and Bast Hatfield underscore that termination for cause requires strict adherence to contractual procedures. Contractors who fail to comply risk not only forfeiting their termination rights but also incurring substantial exposure to breach‑of‑contract claims and related liabilities.

December 4, 2025 by Jose A. Aquino

Court Reaffirms: Licensing Is Essential for Home Improvement Contractors

The New York Appellate Division, Second Department, in Nationwide HVAC Supply Corp. v. Mosby, held that an unlicensed home improvement contractor cannot recover damages for breach of contract or foreclose a mechanic’s lien, and therefore dismissed the complaint. The dispute began when Andrew Mosby hired Nationwide HVAC Supply Corp. to install an HVAC system at his home, leading to a mechanic’s lien after payment disagreements. Although the trial court denied Mosby’s motion to dismiss, the appellate court reversed, stressing that Nassau County Administrative Code requires strict compliance with licensing laws. Because Nationwide failed to allege possession of a valid license, it forfeited its right to enforce the lien or seek damages. The appellate court also rejected the argument that reliance on a licensed subcontractor could cure the defect, reaffirming that subcontractor licensing does not substitute for the general contractor’s own compliance. This ruling makes clear that in New York, contractors who lack the required license cannot enforce contracts or liens, even when the work has been fully performed.

December 2, 2025December 2, 2025 by Jose A. Aquino

Appellate Court Reinforces Delay Clause in Construction Subcontract

The First Department’s recent decision in Henick–Lane, LLC v. Stellar Management Group, Inc. reaffirms New York’s strong policy of enforcing no-damages-for-delay clauses. Henick–Lane sought compensation for eight change orders tied to delays, but the subcontract’s no-damages-for-delay clause limited remedies to extensions of time. The court held that the claims were barred, rejecting arguments that they constituted “extra work” or that recognized exceptions applied. It found that evidence of poor planning was insufficient to establish bad faith, that the delays were expressly contemplated by the subcontract, and that the defendants’ failure to provide a crane did not amount to breach of a fundamental obligation. The court also held that the prevention doctrine—which bars a party from relying on a condition precedent it has itself prevented—was inapplicable because a no-damages-for-delay clause is exculpatory rather than a condition precedent. The decision illustrates how New York courts apply no-damages-for-delay provisions according to their plain terms.

September 15, 2025September 15, 2025 by Jose A. Aquino

Court Affirms Default Finding in Public Contract Dispute

In a recent decision from the New York Supreme Court, Appellate Division, Second Department, In the Matter of New York Constr. & Renovation, Inc. v. City of New York Dep’t of Parks & Recreation, the court affirmed the dismissal of a hybrid proceeding brought by New York Construction & Renovation, Inc. (NYCR) against the City of New York Department of Parks and Recreation. The dispute arose from a construction contract awarded to NYCR in for the development of a comfort station in Canarsie Park in Brooklyn, New York. Although the Parks Department initially directed NYCR to begin work on March 1, 2019, it granted a one-month extension to April 1, 2019, in response to NYCR’s request. NYCR failed to commence work by the revised start date, prompting the Parks Department to issue a notice in September 2019 requiring NYCR to show cause why it should not be declared in default. Following a meeting, the Parks Department issued a default determination on October 30, 2019.

NYCR challenged the default determination through a hybrid New York Civil Practice Law and Rules (CPLR) Article 78 proceeding and sought declaratory relief. An Article 78 proceeding is the legal mechanism in New York that allows individuals or entities to seek judicial review of actions or decisions made by administrative agencies or public officials. It is commonly used to challenge determinations that are claimed to be unlawful, arbitrary, or procedurally flawed.

In this case, the Parks Department moved to dismiss the declaratory judgment claims, citing a contractual provision that limited NYCR’s remedies to judicial review under Article 78. The court agreed, holding that the parties’ contract expressly restricted post-default remedies and that the Parks Department’s determination was neither arbitrary nor capricious.

In an Article 78 proceeding, the court’s review is limited to whether the agency’s determination was made in violation of lawful procedure, was affected by an error of law, was arbitrary and capricious, or lacked a rational basis. Applying this standard, the court found that the Parks Department acted rationally in concluding that NYCR had defaulted. The agency’s decision was based on NYCR’s failure to submit an acceptable progress schedule, provide necessary submittals, and obtain a required permit from the Department of Buildings, all of which contributed to project delays.

NYCR argued that a moratorium on gas line applications by National Grid prevented it from obtaining the necessary permit, but the court declined to consider this claim because it had not been raised during the administrative process. The court also rejected NYCR’s due process argument, finding no procedural violations. Additionally, the court found no error of law and concluded that there were no factual issues requiring a trial.

Ultimately, the court upheld the Parks Department’s motion to dismiss, denied NYCR’s petition, and affirmed the agency’s default determination. The decision shows the importance following contractual and agency procedures when disputing government actions.

September 9, 2025September 9, 2025 by Jose A. Aquino

Indemnity by Implication Rejected by the New York Judiciary

In a recent decision from the New York Supreme Court, Appellate Division, Second Department, Garcia v. Fed LI, LLC, the court addressed a dispute involving personal injury, Labor Law liability, and contractual indemnification. The case arose from an incident in which an electrician fell from an extension ladder while working on a commercial property. The property was owned by several entities and leased by Multi Packaging Solutions, Inc. (collectively MPS). The electrician and his wife filed suit under Labor Law § 240(1), also known as the Scaffold Law, which holds owners and contractors strictly liable for injuries to workers from falling objects or falls from elevations. The plaintiffs sought summary judgment on liability, while MPS sought to transfer responsibility to the electrician’s employer, J.P.S. Electric Co., Inc. (JPS), through a third-party contractual indemnification claim.

Indemnification emerged as the key issue on appeal. MPS contended that a purchase order issued to JPS approximately one month after the accident incorporated “Terms and Conditions” that included an indemnification clause. However, the court found this argument legally insufficient. Incorporation by reference requires that the referenced document be clearly identified and mutually understood by both parties. The material to be incorporated must be so well known to the contracting parties that a mere reference is sufficient. In this case, the purchase order did not specifically mention any indemnification clause, nor were the Terms and Conditions provided to JPS prior to the accident. The vague reference lacked the legal certainty required for incorporation, rendering the clause invalid.

Even if the indemnification clause had been valid, its timing presented another problem. Courts do not apply indemnity agreements to past events unless the contract clearly expresses that intention. In this case, neither the purchase order nor the Terms and Conditions manifested any intent to cover an incident that had already occurred. Because there was no clear language making the clause retroactive, it could not be used to shift responsibility for the accident. The court emphasized that indemnity agreements signed after an incident apply only when both parties clearly intended that outcome.

As a result, the court affirmed the dismissal of the third-party cause of action for contractual indemnification. JPS had no legal duty to indemnify MPS. This decision underscores the importance of clarity and timing in indemnity agreements. Parties seeking to shift liability must ensure that indemnification clauses are explicitly stated and properly incorporated.

September 5, 2025 by Jose A. Aquino

States and Developers Sue Trump Administration to Resume Construction of Wind Farms

Rhode Island and Connecticut, alongside developers Ørsted and Skyborn Renewables, are taking legal action against the Trump administration over its halt to construction on the Revolution Wind offshore project. The 704-megawatt wind farm, already 80% complete with 46 turbines installed, was ordered to stop work by the Bureau of Ocean Energy Management on August 22, citing national security concerns. The states filed suit in Rhode Island federal court, while the developers filed in the District of Columbia, both aiming to lift the stop-work order and resume progress on a project set to power 350,000 homes.