Background
In 2019, John Benowski, doing business as Sprague Electric Co., began installing electrical systems at a commercial renovation project in Broome County. The property was jointly owned by Track Drive, LLC and PSM Limited Partnership. Because of Benowski’s longstanding relationship with the owners, no formal written contract was executed. He did provide a written project proposal setting out the scope of work and an expected total price of approximately $1.14 million — an amount that also incorporated a 10% retainer fee he expected to receive at project completion.
Over the course of the project, Benowski submitted payment applications that underwent an approval process. The project encountered delays. At some point, one of Track Drive’s owners purportedly asked Benowski to forgo his retainer fee as compensation to a tenant, L3Harris Technologies, for disruption caused by the delays. On January 7, 2020, after having received approximately $800,000 for his work, Benowski signed a written release acknowledging that a payment of $233,797.23 “constitutes the entire unpaid balance due” and that payment of that amount “will constitute payment in full and will fully satisfy any and all liens, claims, and demands” he might assert against the owner in connection with the project.
In May 2021, Benowski commenced an action seeking approximately $140,738.47 — representing the 10% retainer fee plus additional amounts he claimed were owed. He challenged the release on three grounds: he did not sign it; it was not fairly and knowingly made; and its scope was limited to lien releases rather than money claims. After discovery, Supreme Court (Broome County) granted defendants’ summary judgment motion, finding the release clear and unambiguous, and dismissed the complaint. Benowski appealed.
The Court’s Holding
The Appellate Division (Third Department) unanimously affirmed. Under New York law, a valid release is a complete bar to an action on the claims covered by it. Where the language of a release is clear and unambiguous, signing it is a binding legal act. A release may be avoided only on a showing of fraud, duress, or mutual mistake — the burden of making that showing rests on the party challenging the release.
The court held that defendants had clearly established their prima facie case: the January 2020 release used sweeping language waiving “any and all liens, claims, and demands” against the owner in connection with the project, and the testimony of Track Drive’s owner and a witness who observed Benowski sign the document established both the fact of signature and the circumstances under which it was given. Defendants thus shifted the burden to Benowski to raise a genuine issue of material fact on fraud, duress, or mistake.
Benowski failed to do so. The court found that evidence establishing that the release was designed to cover only liens — not all money claims — was absent. Although the release used the word “liens” in one clause, its broader language explicitly satisfied “any and all liens, claims, and demands,” and no structural or contextual reading supported Benowski’s narrower interpretation. The court also found no triable issue on whether the release was fairly and knowingly made, crediting the deposition testimony of the defendants’ witnesses over Benowski’s unsupported assertions.
Key Takeaways
- A release in a construction payment dispute that uses “any and all claims and demands” language will be given its full sweep — electrical, mechanical, and other specialty contractors who sign such documents to receive a final payment should understand they are likely extinguishing all outstanding money claims, not merely their lien rights.
- The party challenging a release bears a demanding burden: fraud, duress, or mutual mistake must be demonstrated with evidence, not conclusory assertions. Deposition testimony from witnesses to the signing is powerful proof that the release was knowingly executed.
- No formal contract is not the same as no binding agreement — and signing a release after an informal construction project can eliminate rights that arose even without a written agreement. The absence of a formal contract did not help Benowski here.
- Contractors receiving a final payment under a settlement of disputed amounts should insist on release language that accurately reflects their intent, whether that is a lien waiver only, a full satisfaction, or a carve-out for specified claims.
Why It Matters
Benowski is a recurring cautionary story in the New York construction industry: an established contractor, operating on the strength of a business relationship rather than a formal contract, signs an end-of-project document presented by the property owner and later discovers it surrendered more than intended. The Third Department’s straightforward application of New York release law leaves little room for contractors in this position. Courts will not look past clear language to rescue a party who signed without fully understanding the scope — unless that party can prove fraud or mistake, which requires evidence, not after-the-fact regret.
For construction practitioners advising specialty contractors, subcontractors, and project owners in New York, the decision is a reminder to review final payment documentation carefully before signing, and to negotiate release language that precisely reflects what is being exchanged. On the owner’s side, a well-drafted final payment release — using the kind of sweeping language at issue here — is a powerful shield against post-completion claims.