This is a contract action arising out of construction at the Turning Stone Casino complex, which is owned by the Oneida Indian Nation in Oneida County. On July 18, 2003 general contractor defendant Hunt Construction Group, Inc. ["Hunt"] entered into a written Subcontract Agreement with subcontractor plaintiff Otis Elevator Company ["Otis"] whereby Otis agreed to provide labor, materials and services to furnish and install elevators and escalators at the Tower Hotel. Otis now seeks partial summary judgment to be paid for seven (7) Change Orders which it alleges were approved by Hunt but not paid; as well as partial summary judgment to reduce from 10% to 5% the retainage previously held by Hunt and return 5% to Otis. Hunt cross-moves for summary judgment dismissing the Complaint on the basis of a "pay-when-paid" clause in its [*2]contract with Otis and on the basis of claimed "backcharges" for which the Oneida Indian Nation has withheld payment from Hunt.

The uncontested facts reveal that the original contract price was $2,994,487 but after Change Orders No. 1-7, the contract was increased to $3,391,408 of which Hunt has paid Otis only $2,754,277. More specifically, Otis alleges that Hunt approved Change Orders No. 1-7, and Otis completed the work on these Change Orders, as follows: -

Change Order #1(($25,000)) [decrease the total elevator cab finish allowance by $25,000] -

Change Order #2$200,000 [for overtime work to expedite installation of elevators] -

Change Order #3$4,544 [to run elevator to chip concrete in hoistway] -

Change Order #4$150,000 [to run elevators to hoist men & material in Tower Hotel] -

Change Order #5$2,245 [to install Braille Insert buttons, doorframe and floor plates] -

Change Order #6$50,000 [to run elevators to hoist men & material to all levels of Hotel] -

Change Order #7$15,132 [to add floor stop at elevators PE11 and PE11A]

[Otis also alleges that it performed additional work not required by the contract, which work was approved by Hunt but not paid; and there are several change orders and requests for payment which remain in dispute, but none of these items are the subjects of this motion.]

Moreover, while Hunt originally held back a retention of 10% from the subcontractors on this project, on February 28, 2005 Hunt informed Otis that the retention on the project had been reduced from 10% to 5%. Specifically, on that date Hunt sent Otis a fax-transmission stating: "The owner has approved a reduction of your retainage to 5%. Please forward a submission of payment application to the amount of retainage indicated for processing" [see Exhibit D to Jeremy Metzger's affidavit dated February 7, 2007].

On October 24, 2006, Otis served Notice to Admit, requesting that Hunt admit the authenticity of various documents. On November 13, 2006 Hunt responded, admitting it had approved Otis's payment application for $114,581 and also admitting the authenticity of the fax-transmission reducing the retainage from 10% to 5%. The Court also has before it a faxed-letter dated August 23, 2005 [see Exhibit Q to Jeremy Metzger's affidavit dated March 23, 2007] whereby Bertino & Associates on behalf of the Oneida Indian Nation explained to Otis that the Nation had paid Hunt a total of $2,852,408 for elevator and escalator work performed by Otis, including the release of 5% of the previously held retainage.

Hunt takes the position that the Complaint should be dismissed in its entirety

because it has not received payment in full from the Oneida Indian Nation and under the "pay-when-paid" clause in the Subcontract Agreement, it is not required to pay subcontractor Otis until it has been paid by the Nation. Hunt also raises general allegations concerning various "backcharges" on the work of various subcontractors, which the Oneida Indian nation claims to be defective and for which the Oneida Nation has withheld payment. The Oneida Indian Nation provided a spread sheet to Hunt of the various claimed defects, but the Nation has never itemized which of those claimed defects relate to which subcontractors. During oral argument, it became clear to this Court that Hunt who is the only party in a position to compel the Oneida Indian Nation to respond with more specificity as to these claimed defects [by virtue of the waiver of [*3]immunity in Hunt's contract with the Nation] has never pursued discovery in this regard.

In response, Otis asserts that it is only seeking partial summary judgment on those charges which have already been approved by Otis, and not on any items which are still in dispute. Otis further asserts that the "pay-when-paid" clause in the Subcontract Agreement is not enforceable because it violates public policy in New York.

This Court listened very carefully to oral argument at Motion Term and engaged in a spirited colloquy with counsel for both parties which is part of the record in this matter. After again reviewing the papers submitted on these cross-motions and reviewing the relevant case law, the Court renders the following Decision.

Otis's motion for partial summary judgment is very specific as to the seven (7) Change Orders for which plaintiff Otis Elevator seeks payment, one (1) of which provided a $25,000 credit, and six (6) of which increased the amount of money due to Otis on this project. Specifically, Change Orders #2 through #7 pertained to additional costs for Otis Elevator to work overtime to expedite installation of elevators, to run an elevator for subcontractor LeChase Construction to chip concrete in the elevator hoistway, to run elevators to hoist men and material in all levels of the Tower Hotel, to install Braille Insert buttons, door frame and floor plates, and to add a floor stop at elevators PE11 and PE11A. Each of these Change Orders was approved and signed by defendant Hunt Construction, and nowhere in the papers before this Court is there any proof whatsoever that those seven (7) specific items of work were not performed or were defectively performed. Otis has demonstrated its entitlement to partial summary judgment on these seven (7) Change Orders, and Hunt has not raised any triable issue of fact as to these seven (7) items.

Hunt also raises several general claims of "backcharges," without detailing what specific amounts are attributable to Otis Elevator. Nowhere in the various affidavits and submissions of Hunt is there any evidence in admissible form sufficient to overcome Otis' very specific motion for partial summary judgment on these seven (7) Change Orders. Nowhere does Hunt demonstrate in admissible form that Otis failed to expedite installation of the elevators, or failed to run the elevators to hoist men and materials to perform the work of other subcontractors, or failed to install Braille buttons, doorframe and floor plates, or failed to add a floor stop at elevators PE11 and PE11A. Plaintiff Otis Elevator is entitled to receive payment for these specific Change Orders which were approved by Hunt and performed by Otis, and there is no evidence before this Court to overcome Otis's right to partial summary judgment on these seven (7) Change Orders.

Likewise, the proof before this Court, in the form of a faxed-letter from defendant Hunt [Exhibit D to Jeremy Metzger's affidavit dated February 7, 2007] and a faxed-letter from Bertino & Associates on behalf of the property owner Oneida Indian Nation [see Exhibit Q to Jeremy Metzger's affidavit dated March 23, 2007], confirms that the $2,852,408 which Hunt received from the Nation for work performed by Otis included the return of 5% of the previously held retainage from Otis. Absent a showing of any legitimate "backcharge" against Otis or any [*4]triable issue of fact as to whether this 5% retainage was returned to Hunt, Otis is also entitled to partial summary judgment for this 5% retainage.

Hunt's reliance on the pay-when-paid clause to avoid payment of these items to Otis is not well placed, since such clauses have been found to be void and unenforceable as contrary to public policy in New York State (see West-Fair Electric Contractors v. Aetna Casualty & Surety Company, 87 NY2d 148 [12-7-95]; see also LeChase Construction Services, LLC v. Hunt Construction Group, Inc.,AD3d[4th Dept. April 20, 2007] which unanimously affirmed, for the reasons stated by this Court, in a Memorandum Decision dated February 21, 2006 and Order dated April 20, 2006). Hunt raises the sovereign immunity of the Oneida Indian Nation as a rationale for enforcing this pay-when-paid clause, but the issue of sovereign immunity is irrelevant to the Subcontract Agreement before this Court since it involves two (2) corporations authorized to do business in New York, not the sovereign Oneida Indian Nation. Indeed, the fact that Hunt is the only entity which can compel payment from the Oneida Indian Nation by virtue of the waiver of immunity in Hunt's contract with the Nation and the fact that Hunt has apparently not done so to date, is all the more reason for Otis to pursue payment from Hunt for these items of approved and completed work.

For the reasons stated, plaintiff Otis's motion for partial summary judgment is granted, and defendant Hunt's cross-motion for summary judgment dismissing the complaint is denied. Plaintiff Otis Elevator is awarded $100 costs on its motion.

This constitutes the Decision of the Court and plaintiff's counsel is directed to submit one Order for signature incorporating both motions, with this original Decision appended thereto, after submitting a copy of defense counsel for his approval as to form.

Dated:

/s/Anthony F. Shaheen

ANTHONY F. SHAHEEN, J.S.C.