Payment Conditions and Conflicting Suit Deadlines: JC Ryan v. Lipsky

Reviewed September 7, 2026.

In JC Ryan EBCO/H&G, LLC v. Lipsky Enterprises, Inc., 78 AD3d 788 (2010), a subcontract made owner payment a condition of payment and required the subcontractor to pursue lien foreclosure to judgment before suing the contractor. It also imposed a six-month suit deadline.

The Second Department affirmed denial of the motion to dismiss. The payment condition improperly transferred the owner's nonpayment risk. The claim might not become enforceable under that condition before the six-month deadline expired, and the court found the conflicting provisions inseverable.

The practical lesson

This decision addresses the actual risk-shifting language and conflicting deadlines, even though the opinion uses the phrase “pay-when-paid.” It does not invalidate every payment-timing clause or every shortened limitations period. Review severability language and the precise trigger for each deadline. Keep separate calendars for contractual notices, payment-bond claims and lien preservation; a favorable argument about one clause does not excuse missing an independent requirement.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract litigation. Contact 631-752-7100 or vtp@kushnicklaw.com.

Attorney Advertising. General information, not legal advice.