                            State of New York
                     Supreme Court, Appellate Division
                        Third Judicial Department
Decided and Entered: December 11, 2014                     518040
________________________________

EDWARDS & ZUCK, P.C.,
                    Plaintiff,
      v

CAPPELLI ENTERPRISES, INC.,
   et al.,                                    OPINION AND ORDER
                    Appellants,
      and

CIVES CORPORATION,
                    Respondent,
                    et al.,
                    Defendants.
________________________________


Calendar Date:   October 8, 2014

Before:   Peters, P.J., Lahtinen, Garry, Rose and Lynch, JJ.

                               __________


      DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, White
Plains (Patrick M. Reilly of counsel), for appellants.

      Goldberg & Connolly, Rockville Centre (William J. Tinsley
Jr. of counsel), for respondent.

                               __________


Lahtinen, J.

      Appeal from that part of an order of the Supreme Court
(Meddaugh, J.), entered December 31, 2012 in Sullivan County,
which granted a motion by defendant Cives Corporation for leave
to amend its answer by adding a counterclaim and cross claims.

      Numerous mechanic's liens were filed as a result of
substantial unpaid construction costs stemming from a casino-and-
                               -2-                518040

hotel project in Sullivan County that was developed and owned by
defendants Cappelli Enterprises, Inc. and Concord Associates, LP
(hereinafter collectively referred to as Concord). As relevant
here, defendant Cives Corporation – a subcontractor that supplied
and installed structural steel – filed a mechanic's lien for
nearly $9,000,000 in May 2009, which it later extended for a year
to April 2011 and, in 2011, obtained a court-ordered extension to
April 25, 2012 (see Lien Law § 17). In March 2011, plaintiff –
an engineering firm with a mechanic's lien of over $1,500,000 –
commenced this action against Concord and the lienholders
seeking, among other relief, to foreclose the liens.

      In May 2011, Cives filed its verified answer in which it
admitted and set forth its lien, interposed affirmative defenses
asserting the priority of its lien and requested judgment
determining its lien rights. In August 2012, Cives moved for
leave to amend its answer to include a counterclaim against
plaintiff and cross claims as to all other defendants seeking to
foreclose its lien. Concord opposed the motion arguing, in
essence, that Cives had waived its lien as per Lien Law § 44 (5)
by failing to assert a counterclaim and/or cross claims in its
May 2011 answer and that its lien had since expired on April 25,
2012. Supreme Court granted Cives' motion.1 Concord appeals.

      "[L]eave to amend a pleading 'rests within the trial
court's discretion and should be freely granted in the absence of
prejudice or surprise resulting from the delay except in
situations where the proposed amendment is wholly devoid of
merit'" (Bast Hatfield, Inc. v Schalmont Cent. School Dist., 37
AD3d 987, 988 [2007], quoting Berger v Water Commrs. of Town of
Waterford, 296 AD2d 649, 649 [2002]; see CPLR 3025 [b]). Here,
there is no prejudice or surprise. Cives' lien was alleged in
plaintiff's complaint, Cives' answer set forth its lien and
purported priority, and the answer requested judgment in its


     1
        Supreme Court also granted a separate motion by defendant
Lessard Architectural Group to extend its time to serve its
answer with cross claims, and granted a motion by Concord to
remove and consolidate a separate action by Lessard against
Concord that was pending in Westchester County.
                              -3-                518040

favor based on its lien. Moreover, no disclosure had occurred
and, in an effort to avoid a motion, Cives had sent its proposed
amended answer to the parties in April 2012. Concord contends,
however, that the proposed amendment – i.e., adding a
counterclaim and cross claims – is wholly meritless because Cives
had waived its lien and, accordingly, Supreme Court erred in
granting Cives' motion.

      "The duration of a lien is prescribed by statute and the
right to enforce it, like the right to file and create it, is
derived therefrom" (Berger Mfg. Co. v City of New York, 206 NY
24, 29 [1912]). That statutory framework "is remedial in nature
and intended to protect those who have directly expended labor
and materials to improve real property at the direction of the
owner or a general contractor" (West-Fair Elec. Contrs. v Aetna
Cas. & Sur. Co., 87 NY2d 148, 157 [1995]; see Matter of Niagara
Venture v Sicoli & Massaro, 77 NY2d 175, 180 [1990]). The law
governing mechanic's liens is thus liberally construed to ensure
that its purpose is accomplished, and substantial compliance with
its provisions is generally sufficient (see Lien Law §§ 23, 40;
Greenwich Excavating & Constr., Inc. v Mark J. MacDonald Plumbing
& Heating, Inc., 24 AD3d 1147, 1148 [2005]).

      Lien Law § 44 (5) provides in pertinent part that "[e]very
defendant who is a lienor shall, by answer in the action, set
forth his [or her] lien, or he [or she] will be deemed to have
waived the same, unless the lien is admitted in the complaint,
and not contested by another defendant." When faced with a case
involving this statutory language – albeit as then contained in
former Code of Civil Procedure § 3402 – we accorded the language
a liberal interpretation to preserve the rights of the lienors
(see Kelley Lbr. Co. v Otselic Val. R.R. Co., 136 App Div 146,
148-149 [1909]). In Kelley, the lienor-plaintiff brought an
action to foreclose a lien against the owner and two lienor-
defendants. The lienor-defendants confirmed their liens in their
answers and eventually established those liens at trial, but the
trial court held that they were not entitled to relief because
their answers were insufficient to warrant foreclosure (id. at
148). We reversed, finding that the lienor-defendants' answers,
read in connection with the complaint, were sufficient to
preserve their rights (id. at 149). Similarly, here, at the time
                              -4-                518040

Cives made its motion to amend its answer, plaintiff's complaint,
read in conjunction with Cives' answer as well as the other
pleadings, constituted a sufficient substantial admission of
Cives' lien such that, had the matter gone to trial on those
pleadings, Cives' rights would have been preserved under the
statutory language as interpreted in Kelley. Since Cives' lien
rights had not been already waived as a matter of law when it
made its motion to amend its answer, its proposed counterclaim
and cross claims were not wholly devoid of merit.

      Although Concord relies upon language in Naber Elec. Corp.
v George A. Fuller Co., Inc., (62 AD3d 971 [2009]), we do not
read the holding in Naber as broadly as urged by Concord. That
case did not involve a motion to amend where all parties' rights
were still preserved by the existing pleadings, but instead
involved a motion to sever and bring a separate action against
the owners. Certainly, the better practice is to include any
counterclaim and/or cross claims at the time of the original
answer and before the lien expires (see id. at 972). Failure to
do so could result in a loss or waiver of lien rights if, for
example, the lienor-plaintiff discontinues the original action or
the lienor-defendant otherwise attempts to bring an action
independent from the original one, as occurred in Naber.
However, since Cives' lien rights were still viable at the time
of its motion, and given the liberal interpretation both of the
Lien Law and motions to amend pleadings, we are unpersuaded that
Supreme Court abused its discretion in granting Cives' motion.

      The remaining arguments, to the extent not academic, are
unavailing.

     Peters, P.J., Garry, Rose and Lynch, JJ., concur.
                        -5-                  518040

ORDERED that the order is affirmed, with costs.




                       ENTER:




                       Robert D. Mayberger
                       Clerk of the Court
