Out-of-State Construction Dispute Clauses: HVS and New York Law

Reviewed September 7, 2026.

In HVS, LLC v. Fortney & Weygandt, Inc., 49 Misc 3d 1143 (2015), Supreme Court, Rockland County, rejected an Ohio dispute-location clause for electrical work on a New York project. The court directed arbitration in New York and stayed the lien-foreclosure action.

This was a trial-court decision, not an appellate ruling. Its rejection of the Federal Arbitration Act argument depended on the record presented, including the local work and absence of evidence establishing the asserted interstate connection. It should not be read as deciding every federal preemption question.

Check current statutory coverage

General Business Law § 757 addresses foreign law and dispute proceedings outside New York for covered construction contracts, subject to its stated exception. The relevant statute is the General Business Law, not the General Obligations Law.

Review coverage under § 756, the contract date, forum language and any applicable federal law. Disputing the forum does not excuse missing a lien, bond or contract deadline.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration and dispute resolution. Contact 631-752-7100 or vtp@kushnicklaw.com.

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New York Construction Collections: Protect Payment Rights Before a Debt Becomes a Lawsuit

Reviewed September 7, 2026.

Collecting construction receivables starts with the contract and continues throughout the project. A payment demand may help resolve a dispute, but it does not preserve every lien, bond or statutory deadline.

Build a usable payment record

Identify the contracting entities, scope, price, billing requirements, change-order procedure and payment dates. Negotiate clear provisions addressing interest, collection costs and attorney’s fees where appropriate; do not assume those amounts are recoverable without an applicable agreement or statute. Keep signed contracts, delivery tickets, approved changes, daily reports, invoices and proof of submission together. Review aging receivables regularly and document the reason for each withheld payment.

Check prompt-payment protections

New York’s private construction prompt-payment law has a defined scope and exclusions. For covered contracts, General Business Law § 756-a generally requires invoice approval or written disapproval within 12 business days after receipt of the invoice and required documentation. Payment timing, lawful withholding and lower-tier payment rules require separate analysis. Review notice requirements before suspending work.

Preserve parallel remedies

A private mechanic’s lien generally has a four-month filing period for qualifying single-family dwellings and an eight-month period for other private improvements, subject to statutory exceptions and special retainage rules under Lien Law § 10. Public-improvement liens attach to project funds and follow different filing and service rules under § 12. Filing does not finish the process: calendar lien duration, extension and enforcement requirements.

Obtain any payment bond promptly. Eligible claimant tiers, notices and lawsuit deadlines depend on the bond and applicable law. Where project funds may have been diverted, evaluate Article 3-A trust remedies. Under § 77, subcontractors and material suppliers have a limitation rule tied to the later of project completion or final payment becoming due. Nonpayment alone does not establish diversion, personal liability or entitlement to attorney’s fees.

Use negotiations, mediation, arbitration or litigation as appropriate while preserving these separate rights. An early assessment of documentation, defenses, collectability and cost helps select a practical recovery strategy.

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

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Complete Required Dispute Steps and Preserve the Lien: MCC Development

Reviewed September 7, 2026.

In MCC Development Corp. v. Perla, 81 AD3d 474 (2011), the First Department affirmed dismissal of contract-related claims, discharge of a mechanic's lien and cancellation of a notice of pendency. The contractor had not completed the required initial architect decision and mediation before litigation.

The defendants' protective court filings did not waive the contractual dispute process. The decision demonstrates the consequences of starting an enforcement action before satisfying applicable conditions precedent.

Coordinate the contract process with statutory deadlines

The opinion addresses the premature litigation before it; it should not be read as permission to let a lien filing or preservation deadline expire while mediation proceeds. Review the contract's current edition and amendments, required decision maker, mediation steps and any exceptions.

Separately preserve a lien under the applicable provisions of Lien Law § 17 for private improvements or § 18 for public improvements. Available extensions depend on the lien and timely compliance. A court does not automatically revive an expired lien merely because ADR is pending. Obtain advice before choosing dismissal, a stay or an extension application.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration and dispute resolution. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Home Improvement Arbitration Clauses: New York Consumer Law and the FAA

Reviewed September 7, 2026.

A residential construction arbitration clause requires more analysis than the blanket statement that all such provisions are void. General Business Law § 399-c prohibits the mandatory arbitration provisions it defines in consumer contracts, including qualifying home construction and renovation agreements.

Federal law can change the result

Where the Federal Arbitration Act applies to a transaction involving interstate commerce, it can preempt this state prohibition. The agreement, supporting evidence, applicable law and properly raised arguments matter. Ordinary contract defenses may still apply; a party should not assume that merely naming the FAA guarantees enforcement.

In Zinna v. StrongArm Ventures, LLC, 2025 NY Slip Op 50072(U), a Suffolk County trial court declined to compel arbitration because the defendants failed to establish a valid clause under § 399-c or a basis for FAA preemption. It nevertheless enforced the applicable nonbinding mediation requirement for certain parties. Other transactions with an established interstate connection can have a different result, as DeOliveira v. Custom Made illustrates.

Have residential dispute-resolution terms reviewed before signing. Address mediation, forum, costs, claim procedures and enforceability together. Do not rely on the old suggestion that the homeowner always has a unilateral choice of arbitration or litigation.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration and dispute-resolution agreements. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Construction Arbitration and Lien Preservation: The Cava Decision

Reviewed September 7, 2026.

Filing a mechanic’s lien does not waive a contractual arbitration right. But coordinating arbitration with lien deadlines may require court relief; an arbitration demand alone should not be assumed to preserve the lien.

In Cava Construction & Development, Inc. v. DAB Group LLC, 2010 NY Slip Op 32993(U), the court applied Lien Law § 35 and granted relief concerning a § 59 foreclosure demand while arbitration proceeded. Its order stayed the foreclosure requirement until thirty days after the arbitrator’s decision. That was a specific court order, not an automatic statutory extension triggered by requesting arbitration.

Preserve the security and choose the proper procedure

Review § 17, any § 59 demand, the contract and the status of any bond. Depending on the case, timely commencement of foreclosure followed by a stay may preserve the security while arbitration resolves the contractual dispute. Identify necessary parties and any required notice of pendency or statutory exception.

Section 35 makes an arbitration award on value or price conclusive between its parties in foreclosure, but does not automatically establish lien validity or bind nonparties. If the award is unpaid, further enforcement steps may be required. Obtain an appropriate order or enforceable arrangement before allowing a deadline to pass or discontinuing a preservation action.

Related services include mechanic’s lien foreclosure.

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

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Arbitration or Litigation for a Construction Dispute: What to Compare

Reviewed September 7, 2026.

An arbitration clause can be useful, but it is a business and legal choice. Neither arbitration nor litigation is always faster, cheaper or better. Evaluate the likely dispute, the parties needed to resolve it, and the terms of the proposed agreement.

Compare the total cost

Arbitration may involve administrative filing and case fees, arbitrator compensation, hearing expenses, attorneys and experts. Litigation involves court fees, service, discovery, motions, trial preparation, attorneys and experts. A court filing fee is not the total cost of a lawsuit. The old dollar examples in this article are obsolete; consult the AAA’s current construction rules and fee schedules, including any applicable home construction schedule, when budgeting.

Consider procedure and proof

Arbitration can offer a neutral with construction experience and a tailored hearing schedule. The agreement and applicable rules influence document exchange, depositions, expert evidence and available procedures. Limited discovery may reduce expense but can hinder a party that needs evidence held by others. Multiple parties and inconsistent dispute clauses can lead to separate proceedings.

Understand review and enforcement

Judicial review of an arbitration award is narrow. CPLR 7511 provides specified grounds and deadlines for vacating or modifying an award; it is not a routine appeal of the merits. Court litigation has its own appeal rules, timing and costs. Neither forum guarantees a quick recovery.

Before signing, address mediation, location, number of arbitrators, joinder, discovery, fees and preservation of lien and bond rights. Residential consumer contracts also require analysis of New York consumer law and any applicable Federal Arbitration Act preemption. Match the clause to the project rather than adopting it automatically.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration and dispute-resolution planning. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Drafting a Protective New York Construction Contract

Reviewed September 7, 2026.

A useful construction contract makes the parties’ obligations clear and provides workable procedures when scope, schedule or payment changes. Copying an old form without checking the project can leave important gaps.

1. Use the correct parties and required written terms. Identify the legal entities, project and authorized signers. Certain home-improvement agreements must satisfy General Business Law § 771, including detailed written-contract requirements. Confirm local licensing rules as well.
2. Define scope and changes. Specify included work, exclusions, allowances, plans, owner selections and responsibility for permits and design. State who may authorize changes and how price and time adjustments are documented.
3. Make payment procedures practical. Address invoicing, required supporting documents, due dates, retainage and disputed amounts. Review applicable prompt-payment law before relying on a clause that delays payment or allows work suspension. Interest and late charges must be lawful.
4. Address collection costs clearly. If the parties intend fee recovery in a dispute between themselves, use an appropriately drafted provision. A general indemnity clause does not automatically shift attorney’s fees in a direct contract dispute.
5. Choose dispute resolution deliberately. Evaluate negotiation, mediation, arbitration and court proceedings, including forum, consolidation and available relief. Arbitration is not necessarily cheaper or faster. Consumer-contract restrictions and federal arbitration law can affect enforceability.
6. Allocate risk with care. Coordinate indemnity, insurance, warranties, termination rights and any consequential-damage waiver. Review exclusions, mutuality and the particular losses being allocated; a waiver does not necessarily eliminate every category of damages.
7. Check the complete package. Reconcile incorporated documents and inconsistent clauses. Ensure the people administering the job understand notice requirements and can keep the records the contract requires.

Project-specific review before signing is usually more useful than discovering conflicting obligations after a dispute begins. Update forms when the law, insurance program or type of work changes.

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

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Chris Keefe Builders: Fraud Admissions, Arbitration and Unresolved Lien Priority

Reviewed September 7, 2026.

Chris Keefe Builders, Inc. v. Hazzard, 71 AD3d 1599 (4th Dept 2010), arose from two renovation contracts. Only the second contained an arbitration clause. The contractor filed a $264,045.09 mechanic’s lien and later obtained an arbitration award of $122,606.82.

After the order compelling arbitration, the homeowners defaulted on an amended complaint alleging fraudulent inducement of the second contract. Those resulting admissions supplied new evidence. The appellate court granted renewal, vacated the order compelling arbitration, and denied removal of the stay of enforcement of the arbitration award.

The mortgage issues remained disputed

The lender relied on a letter purportedly from the contractor saying the lien had been paid and would be removed. The contractor claimed the letter was forged. Factual questions about the lender’s knowledge of the lien, authorship of the letter and reasonable detrimental reliance prevented summary judgment on equitable subrogation and estoppel.

This procedural history does not establish that simply alleging fraud always defeats arbitration. Current disputes require analysis of the agreement, the particular challenge, governing state or federal law, and whether the court or arbitrator decides the issue. Likewise, the decision did not finally resolve lien priority. Verify satisfaction and discharge documents directly and preserve the complete closing and payment record.

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

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Contractor Risks in AIA A201: Notices, Disputes and Damages

Updated September 7, 2026. An AIA form number is the starting point for contract review. The edition, completed owner-contractor agreement, supplementary conditions and project amendments determine the actual obligations. This overview discusses the standard A201–2017 framework.

Check the dispute-resolution selection

Using A201 does not, by itself, mean every dispute must be arbitrated. For example, A101–2017 § 6.2 permits the parties to select arbitration, litigation or another method. Its default is litigation if no different method is selected or subsequently agreed in writing.

Review the applicable initial-decision and mediation steps, any exceptions and the selected binding process together. Starting the wrong proceeding or missing a required preliminary step can complicate an otherwise valid claim. Kushnick Pallaci PLLC assists with construction arbitration and related contract disputes.

Do not use one notice deadline for every event

The AIA's explanation of A201–2017 distinguishes claims arising before the correction period ends from later claims. The former generally involve a 21-day notice requirement under Article 15; the latter are not subject to that same 21-day rule. Other provisions can impose different requirements: the 2017 concealed-or-unknown-condition provision uses a 14-day reporting period.

Check the specific trigger, recipient, delivery method and supporting information in the signed documents. An ordinary project email may not satisfy a formal claim-notice requirement. Do not plan on excusing a late notice through an assumed waiver or informal conversation.

Read the actual damages waiver

A201–2017 § 15.1.7 contains a mutual consequential-damages waiver. Its treatment of contractor profit expressly distinguishes anticipated profit arising directly from the work. A waiver therefore should not be summarized as eliminating every lost-profit claim or every form of delay recovery.

Review the categories waived, amendments, direct-damage claims and any liquidated-damages provision together. The AIA's consequential-damages overview and the firm's discussion of consequential damages in construction claims provide background.

Turn the contract into a working checklist

Before work begins, record the notice addresses, change-order procedure, payment requirements, insurance and bond obligations, termination provisions and claim deadlines. Keep that checklist with the complete executed contract and update it when the parties sign a modification.

Kushnick Pallaci PLLC provides construction contract drafting and review for project-specific risk allocation.

This article provides general information. An older A201 edition or amended contract may produce a different result.

County Glass: Interwoven Claims Can Put Litigation on Hold During Arbitration

Reviewed September 7, 2026.

Different dispute-resolution clauses on the same project can affect the sequence of a payment case. In County Glass & Metal Installers, Inc. v. Pavarini McGovern, LLC, 65 AD3d 940 (1st Dept 2009), a curtain-wall installer agreed separately to arbitrate disputes with the manufacturer.

After the owner and construction manager withheld payment and alleged leaks, the installer filed a lien and sued. The installer added the manufacturer after the owner and construction manager asserted defect counterclaims. The appellate court upheld a stay of the litigation and compelled arbitration of the installer’s dispute with the manufacturer.

Why the sequence mattered

The arbitrable and nonarbitrable issues were closely intertwined. Deciding whether the curtain wall was defective could simplify the remaining installation, payment and delay issues and reduce the risk of inconsistent results.

The decision does not require every lawsuit involving any arbitrable claim to stop. The agreements, issues and relationships between the parties matter. At contract formation, coordinate dispute provisions across the owner agreement, subcontract and supply contract. Once a dispute arises, evaluate joinder, stays, evidence and limitation periods together. Do not assume arbitration automatically preserves lien, bond or court-filing deadlines.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration and coordinated dispute resolution. Contact 631-752-7100 or vtp@kushnicklaw.com.

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