P. J. Zibarras

The moving parties, who were guarantors of a mortgage, sought summary judgment against the mortgagor corporation for indemnity after the mortgage fell into default.

The moving parties had not yet made any payments toward the mortgage debt.

The court dismissed the motion, finding that under the terms of the mortgage and the common law of subrogation, a guarantor's cause of action against the principal debtor does not crystallize until the guarantor actually makes a payment on the debt.

A contractor commenced an action to recover payment under a fixed-price construction contract after leaving a renovation project when the owner refused to pay a milestone invoice.

The owner counterclaimed for completion costs, deficiencies, delay, and lost rental income.

The court held that the owner’s design changes altered the sequence of work and made the contractual milestone conditions impossible to satisfy, giving rise to an obligation to renegotiate milestone payments in good faith.

By refusing to negotiate or make any interim payment after the contractor completed the mezzanine stage, the owner repudiated the contract.

The contractor was entitled to quantum meruit compensation for services and materials supplied, allowable extras, overhead and profit, and lost profit on the remaining contract work.

Claims for delay, lost rental income, and most deficiencies were rejected, and the construction lien was held to have been preserved and perfected in time.