- Court
- New York Supreme Court, Appellate Division, Second Department
- Case
- 75 Cohoes Realty Associates, LLC v. Machnick Builders, Ltd.
- Date
- June 3, 2026
- Slip Op. No.
- 2026 NY Slip Op 03415
Background
Plaintiffs, who own adjoining commercial properties on Cohoes Avenue in Green Island, commenced this action against defendant Machnick Builders, Ltd., to recover damages for breach of warranty. Plaintiffs alleged that the defendant breached warranties covering its installation of roofs on the buildings located on the properties. The key issue was that the warranties had been executed by Green Island Properties, LLC (a different entity), as the original owner of the properties, and were expressly non-transferable and non-assignable.
Defendant moved to dismiss under CPLR 3211(a), submitting the warranty agreements and deeds demonstrating that the properties were transferred from Green Island Properties, LLC to the respective plaintiffs some years after the warranties were executed. Plaintiffs cross-moved for leave to amend the complaint to add a negligence cause of action. Supreme Court, Nassau County (R. Bruce Cozzens, J.), granted the motion to dismiss and in effect denied the cross-motion to amend. Plaintiffs appealed.
Holding
The Appellate Division, Second Department, affirmed the order with costs. The Court held that the documentary evidence—specifically, the warranty agreements and property transfer deeds—utterly refuted the factual allegations in the complaint and conclusively established a defense as a matter of law. The warranties unambiguously provided that they were tendered for the sole benefit of the original owner and were not transferable or assignable. Since the properties had been transferred to the plaintiffs after the warranties were executed, plaintiffs had no standing to enforce them.
An affirmation submitted by plaintiffs claiming they were “in effect the original owners” because the buildings were constructed at their behest was insufficient to overcome the documentary evidence. The Court also upheld the denial of leave to amend, finding the proposed negligence cause of action was palpably insufficient and patently devoid of merit.
Takeaways
This decision underscores the enforceability of non-transferability provisions in construction warranties. When a warranty expressly limits its beneficiaries to the original owner and prohibits assignment, subsequent purchasers cannot enforce it regardless of their relationship to the original owner or their involvement in the underlying construction project. The case also illustrates the high bar for amending a complaint to add a new theory when the proposed cause of action is clearly without merit.
Why It Matters
Real estate investors and developers who acquire properties should carefully review whether construction warranties transfer with the property. This case demonstrates that warranties with non-assignability clauses will be enforced as written, even where the subsequent owner claims to have been the de facto project sponsor. Buyers of commercial real estate should negotiate warranty assignments as part of the transaction or secure independent warranty coverage. For construction litigators, this case is a reminder that CPLR 3211(a)(1) documentary evidence motions can be powerful tools when the underlying contracts contain clear limitation provisions.