What did the court decide?

The court affirmed three lower-court orders: it allowed defendants to amend and add a setoff counterclaim, denied plaintiffs' request for more discovery tied to that counterclaim, and denied plaintiffs' motion for partial summary judgment on contract-based payment claims.

Who is affected by this decision?

The plaintiffs (Seymour) and defendants (Hovnanian and affiliated contractors) in the townhome contamination and repair-cost dispute are directly affected, as are any third-party contractors tied to remediation responsibilities.

What happens next in the case?

Defendants may pursue their setoff counterclaim in the ongoing litigation; plaintiffs must defend against that counterclaim and cannot rely on the denied summary judgment to obtain immediate payment under the license agreement.

Why was plaintiffs' summary judgment denied?

Because the license agreement did not contain the specific terms plaintiffs claimed and there are factual disputes about what "first class" repairs mean and the value of plaintiffs' items, making resolution on summary judgment inappropriate.

Can this decision be appealed further?

Yes; the parties may seek leave to appeal to the Court of Appeals, subject to applicable rules and standards for permission to appeal.

Seymour v. Hovnanian

Docket Index No. 154579/16, 595896/16|Appeal No. 6428-6429-6430-6431|Case No. 2025-02354, 2025-00342, 2025-02250|

Court of record · Indexed in NoticeRegistry archive · AI-enriched for research

CivilAffirmed

Filed: Apr 21, 2026 · 1 week ago
Jurisdiction: New York
Court: Appellate Division of the Supreme Court of the State of New York
Type: Opinion
Case type: Civil
Disposition: Affirmed
Citation: 2026 NY Slip Op 02380
Docket numbers: Index No154579/16, 595896/16Appeal No6428-6429-6430-6431Case No2025-02354, 2025-00342, 2025-02250

Appeal from three Supreme Court orders: granting leave to amend the answer, denying plaintiffs' discovery motion, and denying plaintiffs' motion for partial summary judgment in a property-damage action.

Summary

The Appellate Division, First Department affirmed three Supreme Court orders in a dispute over property damage and toxic dust infiltration between owners of adjoining townhomes. The court upheld (1) defendants' leave to amend their answer to add a counterclaim for setoff based on plaintiffs' alleged delays and increased remediation costs, (2) denial of plaintiffs' motion to compel additional discovery related to that new counterclaim, and (3) denial of plaintiffs' motion for partial summary judgment seeking payment under a license agreement. The court found the counterclaim not frivolous, the discovery requests unnecessary to the setoff theory, and that disputed factual terms in the license agreement precluded summary judgment.

Issues Decided

Whether the motion court properly granted defendants leave to amend their answer to assert a counterclaim for setoff.
Whether plaintiffs were entitled to additional discovery related to defendants' newly asserted setoff counterclaim.
Whether plaintiffs were entitled to partial summary judgment enforcing payment obligations under the parties' license agreement for remediation and repair costs.

Court's Reasoning

The court held that the proposed setoff counterclaim was not palpably insufficient and therefore liberal amendment rules permitted it. The court found the additional discovery sought by plaintiffs unnecessary because defendants' setoff is premised on plaintiffs' alleged delays and failure to mitigate, making the requested discovery immaterial. Finally, the license agreement did not contain the specific terms plaintiffs urged (such as an unconditional obligation to promptly pay first-class repair costs or a definition of "first class"), so material factual disputes remained and summary judgment was improper.

Authorities Cited

CPLR 3025(b), (c)
Loomis v Civetta Corinno Constr. Corp.54 NY2d 18 (1981)
Trataros Constr., Inc. v New York City Hous. Auth.34 AD3d 451 (2d Dept 2006)
Those Certain Underwriters at Lloyds, London v Occidental Gems, Inc.41 AD3d 362 (1st Dept 2007), affd 11 NY3d 843 (2008)
NFL Enters. LLC v Comcast Cable Communications, LLC51 AD3d 52 (1st Dept 2008)

Parties

Appellant: Whitney Seymour et al.
Respondent: Ara Hovnanian et al.
Third-Party Plaintiffs-Respondents: Ara Hovnanian et al.
Third-Party Defendants: Autun Contractors, et al.
Judge: Melissa A. Crane

Key Dates

Decision date: 2026-04-21
Order granting leave to amend entered: 2024-12-17
Order denying discovery motion entered: 2025-03-26
Order denying partial summary judgment entered: 2025-04-14

What You Should Do Next

1
Prepare to litigate the setoff counterclaim
Defendants should assemble evidence of plaintiffs' alleged delays and the claimed increases in remediation costs; plaintiffs should prepare defenses and mitigation evidence.
2
Evaluate discovery needs
Plaintiffs may refine discovery requests to target matters directly material to the setoff theory and consider seeking leave to renew limited discovery if new facts justify it.
3
Consider settlement discussions
Given unresolved factual disputes and potentially large remediation figures, parties may assess settlement or alternative dispute resolution to avoid protracted litigation.
4
Consult appellate counsel about further appeal
If a party believes there are appealable legal errors, they should timely consult appellate counsel regarding seeking leave to appeal to the Court of Appeals.

Frequently Asked Questions

What did the court decide?: The court affirmed three lower-court orders: it allowed defendants to amend and add a setoff counterclaim, denied plaintiffs' request for more discovery tied to that counterclaim, and denied plaintiffs' motion for partial summary judgment on contract-based payment claims.
Who is affected by this decision?: The plaintiffs (Seymour) and defendants (Hovnanian and affiliated contractors) in the townhome contamination and repair-cost dispute are directly affected, as are any third-party contractors tied to remediation responsibilities.
What happens next in the case?: Defendants may pursue their setoff counterclaim in the ongoing litigation; plaintiffs must defend against that counterclaim and cannot rely on the denied summary judgment to obtain immediate payment under the license agreement.
Why was plaintiffs' summary judgment denied?: Because the license agreement did not contain the specific terms plaintiffs claimed and there are factual disputes about what "first class" repairs mean and the value of plaintiffs' items, making resolution on summary judgment inappropriate.
Can this decision be appealed further?: Yes; the parties may seek leave to appeal to the Court of Appeals, subject to applicable rules and standards for permission to appeal.

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Full Filing Text

Seymour v Hovnanian - 2026 NY Slip Op 02380

Seymour v Hovnanian

2026 NY Slip Op 02380

April 21, 2026

Appellate Division, First Department

Whitney Seymour et al., Appellants,

Ara Hovnanian et al., Respondents.

Ara Hovnanian et al., Third-Party Plaintiffs-Respondents,

Autun Contractors, et al., Third-Party Defendants.

Decided and Entered: April 21, 2026

Index No. 154579/16, 595896/16|Appeal No. 6428-6429-6430-6431|Case No. 2025-02354, 2025-00342, 2025-02250|

Before: Renwick, P.J., Friedman, Gesmer, Pitt-Burke, Hagler, JJ.

Lundin PLLC, New York (Niall D. O'Murchadha of counsel), and Mazer PLLC, New York (Jonathan Mazer of counsel), for appellants.

Lester Schwab Katz & Dwyer, LLP, New York (Daniel S. Kotler of counsel), for respondents.

Order, Supreme Court, New York County (Melissa A. Crane, J.), entered December 17, 2024, which granted defendants' motion for leave to amend the answer, unanimously affirmed, without costs. Order, same court and Justice, entered March 26, 2025, which denied plaintiffs' motion for discovery related to defendants' new counterclaim, unanimously affirmed, without costs. Order, same court and Justice, entered April 14, 2025, which denied plaintiffs' motion for partial summary judgment, unanimously affirmed, without costs.

This action arose from property damage and toxic dust infiltration into plaintiffs' townhome due to renovations conducted on defendants' townhome. The two townhomes share a party wall.

The motion court providently exercised its discretion in granting defendants leave to amend their answer to include a counterclaim for a setoff (
see
CPLR 3025[b], [c];
Loomis v Civetta Corinno Constr. Corp.,
54 NY2d 18, 23 [1981]). Defendants' proposed counterclaim seeking recoupment of potential increased costs to be paid due to plaintiffs' alleged delays was not palpably insufficient or devoid of merit (
see

Trataros Constr., Inc. v New York City Hous. Auth
., 34 AD3d 451, 452-453 [2d Dept 2006]).

The motion court properly exercised its discretion in denying plaintiffs' motion to compel additional depositions and document discovery from defendants (
see

Those Certain Underwriters at Lloyds, London v Occidental Gems, Inc
., 41 AD3d 362, 364 [1st Dept 2007],
affd
11 NY3d 843 [2008]). The setoff counterclaim seeks to establish the reasons for plaintiffs' delays in complying with a 2020 order, and for the increase in their estimated remediation and repair costs for the work specified in the 2020 order from approximately $514,000 to over $9 million in the ensuing four-year period. Any alleged delays by defendants would not be material to defendants' setoff claims predicated on plaintiffs' delays and alleged failure to mitigate costs.

Plaintiffs' motion for partial summary judgment was correctly denied. Plaintiffs read terms into the parties' license agreement that are not there (
see

NFL Enters. LLC v Comcast Cable Communications, LLC
, 51 AD3d 52, 59 [1st Dept 2008]). The terms of the license agreement, which permitted defendants' contractors to access plaintiffs' townhome on specified conditions did not require that defendants promptly pay for first class repairs to all damaged soft contents regardless of their actual value prior to the construction work. The agreement also did not require defendants to pay simply upon plaintiffs' submission of a bill for such costs, nor did it define the term "first class." On this record, factual issues exist as to plaintiffs' entitlement to costs to remediate any dust contamination from its selected soft content possessions.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: April 21, 2026