CPLR – Duane Morris Construction Law

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.

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.

August 1, 2025 by Jose A. Aquino

New York Appellate Court Highlights Standards for Dismissal and Summary Judgment in Contract Cases

In its July 30, 2025 decision in All Nations Steel Corp. v. KSK Construction Group, LLC, the New York Appellate Division, Second Department, reinforced the legal standards for dismissal and summary judgment motions in breach of contract cases. The case arose from a dispute between a subcontractor (the plaintiff) and the general contractor and project owner (the defendants) over the termination of a subcontract. The subcontractor claimed it was wrongfully terminated, while the defendants argued the termination was justified because the subcontractor did not obtain the required insurance.

The defendants moved to dismiss the complaint, or alternatively for summary judgment, including a request to limit damages to $50,000 based on a liquidated damages clause. The trial court denied the motion in all respects, and the appellate court affirmed.

The appellate court emphasized that dismissal is only appropriate when the documentary evidence “utterly refutes” the complaint’s allegations and “conclusively establishes a defense as a matter of law.” Here, the defendants’ affidavits and insurance documents failed to meet that high bar. Affidavits are not considered documentary evidence, and the insurance policy submitted did not definitively disprove the plaintiff’s claim that it complied with the subcontract’s requirements.

The court reiterated that on a motion to dismiss the complaint must be liberally construed, with the plaintiff afforded every favorable inference. The complaint sufficiently alleged the elements of a breach of contract claim: the existence of a contract, plaintiff’s performance, defendants’ breach, and resulting damages. The defendants failed to show that any of these allegations were indisputably false.

The court also rejected the defendants’ request for summary judgment. The defendants failed to meet their initial burden of showing that the termination was justified. Because they failed to eliminate all material issues of fact, the court did not even need to address the plaintiff’s opposition papers. Similarly, the request to limit damages under the liquidated damages clause was denied because factual disputes remained as to whether the clause applied—specifically, whether the termination was due to a material breach by the plaintiff.

This decision reinforces the legal standards required to succeed on a motion to dismiss or for summary judgment in contract disputes. It also reflects the courts’ reluctance to enforce liquidated damages clauses where the underlying breach is contested. The decision is a reminder that conclusory assertions and incomplete records will not suffice to dispose of claims at the pleading or summary judgment stage.

January 3, 2023 by Jose A. Aquino

New York Court Rejects Building Owner’s Motion For Default Judgment Against Subcontractor And Architect

A recent decision of the New York Supreme Court, LAM Group v. Anthony T. Rinaldi LLC, 2022 WL 17881264 (Sup. Ct., NY Co., Dec. 22, 2022), illustrates the importance of meticulously following the procedures set forth in civil practice statues and rules. In LAM, the owners of a commercial building in lower Manhattan brought an action against their contractor, a subcontractor, and other construction professionals alleging breach of contract, negligence, and other claims in connection with the installation of a stucco façade on their property.

Plaintiffs alleged that pieces of the stucco façade from the exterior of the building dislodged and landed on a neighboring property causing damage. Eventually, the entire stucco façade required replacement. Defendant Bayport Construction Group (“Bayport”), a subcontractor, had performed the masonry and stuccowork. Bayport and another defendant, Nobutaka Ashihara Architect PC (“NAA”), the initial architect retained for the project, were served with the summons and verified complaint by service on the New York Secretary of State, pursuant to New York Business Corporation Law § 306(b). However, neither Bayport nor NAA filed an answer or otherwise appeared in the action. Plaintiffs filed a motions for default judgment against the two non-appearing defendants. The court found that plaintiffs properly served Bayport and NAA with process and with the motion papers, but refrained from entering a default because plaintiffs failed to strictly follow the procedure set forth in the New York Civil Practice Law and Rules (“CPLR”).

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