Court rules against contractor in fee dispute with developer

A New York appellate court has ruled against electrical contractor John Benowski in his legal dispute with Track Drive, LLC, concerning unpaid fees related to a construction project. The Appellate Division of the Supreme Court of the State of New York issued its decision on July 16, 2026, affirming a lower court's ruling that dismissed Benowski's claims. This ruling is significant for contractors and developers as it underscores the importance of written agreements in business transactions.

The case, Benowski v. Track Dr., LLC, with docket number CV-25-0305, revolves around a disagreement over a construction project in Broome County. Benowski, who operates under the name Sprague Electric Co., claimed he was owed $140,738.47 for work performed on a renovated commercial property owned by Track Drive and PSM Limited Partnership. The court's ruling could impact how similar disputes are handled in the future.

Background

John Benowski is an electrical contractor who began work on a commercial property renovation in 2019. The property was owned by Track Drive, LLC, and PSM Limited Partnership. Despite having a long-standing relationship with Track Drive's owners, Benowski did not have a formal written contract for the project. Instead, he provided a project proposal that outlined the scope of work and estimated costs, totaling about $1.14 million.

As the project progressed, Benowski submitted invoices and payment applications to Track Drive. After facing delays, one of the owners reportedly asked him to waive his retainer fee to help compensate a tenant, L3Harris Technologies, Inc., leasing space in the property. On January 7, 2020, Benowski signed a release stating that he would waive all claims against Track Drive after receiving an additional $233,797.23, which he accepted as the remaining balance owed for his work. However, this amount did not include the 10% retainer fee.

In May 2021, Benowski filed a lawsuit seeking to recover the retainer fee and additional sums he believed were owed. The defendants moved for summary judgment to dismiss the complaint based on the release he signed, which Benowski contested, arguing it was not signed knowingly or fairly and only pertained to liens against the property.

The Ruling

The appellate court upheld the lower court's ruling, stating that the release signed by Benowski clearly barred his claims. The judges noted that a valid release generally serves as a complete bar to any action on claims covered by it. The court emphasized that the language in the release was clear and unambiguous.

The court ruled, "A release must be fairly and knowingly made... may be set aside on the basis of fraud or mutual mistake."

Judges Clark, Fisher, Powers, Mackey, and Corcoran concurred with the decision. They pointed out that the defendants had met their burden of proof by providing evidence that Benowski signed the release and that it was witnessed. The court found that Benowski failed to raise a genuine issue of material fact regarding the validity of his signature or the circumstances under which the release was signed.

During the proceedings, the court reviewed deposition testimonies and other evidence, including a forensic examination of the release, which confirmed that Benowski's signature was authentic. The judges concluded that Benowski's claims about not recalling signing the document did not sufficiently challenge its validity.

Impact

This ruling has significant implications for contractors and developers alike. It highlights the necessity of having clear, written agreements in business transactions to avoid disputes over payment and contractual obligations. The court's decision reinforces the idea that signed releases can effectively limit a party's ability to pursue claims if the language is clear and unambiguous.

Furthermore, the ruling may serve as a precedent for future cases involving similar disputes over releases and agreements in construction projects. Contractors may need to be more diligent in ensuring that all aspects of their agreements are documented in writing, especially when it comes to payment terms and conditions.

What's Next

Benowski can appeal this decision to the New York Court of Appeals, the state's highest court. However, the outcome of such an appeal is uncertain, as the appellate court's ruling was based on established legal principles regarding releases and the burden of proof. Details regarding any related cases or pending appeals were not available in the court filing.