| Schmidt & Schmidt, Inc. v Town of Charlton |
| 2013 NY Slip Op 01118 [103 AD3d 1011] |
| February 21, 2013 |
| Appellate Division, Third Department |
| Schmidt & Schmidt, Inc., Respondent, v Town ofCharlton et al., Defendants, and J. Paul Vosburgh Architect, P.C.,Appellant. |
—[*1] Fox & Kowaleswski, LLP, Clifton Park (Laurence I. Fox of counsel), forrespondent.
Egan Jr., J. Appeal from an order of the Supreme Court (Ferradino, J.), enteredJanuary 12, 2012 in Saratoga County, which denied a motion by defendant J. PaulVosburgh Architect, P.C. for summary judgment dismissing plaintiff's fifth cause ofaction.
Beginning in October 2004, defendant Town of Charlton entered into a series ofcontracts in connection with the construction of its new town hall. Defendant J. PaulVosburgh Architect, P.C. (hereinafter defendant) was retained to provide design andcontract administration services, defendant AKW Consulting, Inc. was hired to overseeand administer the construction project and plaintiff was awarded the generalconstruction contract for the project. Insofar as is relevant here, defendant'sresponsibilities included visiting the construction site at appropriate intervals, keepingthe Town apprised as to the progress and quality of the work, guarding against defectsand deficiencies in the work and reporting any deviations from the contract documentsand construction schedule to the Town.
In December 2006, AKW sent a letter to the Town expressing its "continuingconcern regarding the lack of progress" on the project and discussing—at somelength—what it viewed as [*2]plaintiff's "generaldisregard of accepted construction means and methods" and "willful[ ] violat[ion] [of]the law as well as the approved project plans and specifications." Specifically, AKWasserted that plaintiff had failed to provide a detailed construction schedule, disregardedthe recommendations made by a particular engineering consultant and ignored projectspecifications governing the placement and protection of concrete at the site. In themonths that followed, concerns regarding plaintiff's progress and performance continuedto mount and, in June 2007, plaintiff and its surety were advised that the Town wasconsidering declaring plaintiff to be in default.
Prior to doing so, the Town retained Paul Carr, a consultant and engineeringprofessor at Cornell University, to act as a "[p]roject [n]eutral" and, in that capacity,ascertain the cause of the construction delays and offer solutions. Following a visit to thesite, review of pertinent documents and interviews with project participants, Carr issueda lengthy report in August 2007 wherein he concluded that "a heavy burden ofresponsibility for the current state of the . . . [p]roject rest[ed] with[plaintiff] and [its] failure to perform in accordance with the terms of the[ ] contract."According to Carr, plaintiff failed to provide a schedule that satisfied "even the mostrudimentary requirements of the [c]ontract [d]ocuments," delayed in tendering requiredpaperwork (bonds, insurance documents, executed contracts and the like), neglected todevote "adequate attention" to an issue concerning the roof trusses,[FN1]provided "an inadequate workforce" and demonstrated an "inability to coordinate thedelivery of critical materials," thereby evidencing "a pattern of performance failures."
On September 5, 2007, the Town's governing body met with the relevantentities—including plaintiff—to discuss Carr's report, at which time plaintiffand its counsel were advised of certain requirements that needed to be met in order forplaintiff to continue as the general contractor. The parties reconvened one week laterand, after finding that plaintiff's submissions "did not represent an adequate, sufficient orsatisfactory response" to the requested materials, the Town exercised its rights undersection 14.2.2 of its contract with plaintiff and declared plaintiff to be indefault.[FN2]
Plaintiff thereafter commenced this action against defendant, the Town and AKWsetting forth, insofar as is relevant here, a cause of action against defendant for tortiousinterference with contract. Following joinder of issue, Supreme Court granteddefendant's motion to dismiss the complaint against it for failure to state a cause ofaction. On appeal, this Court modified and reinstated the claim for tortious interferencewith contract (68 AD3d 1314[*3][2009]). Defendant thenmoved for summary judgment dismissing that cause of action and Supreme Court deniedthe motion, prompting this appeal.
When this matter was last before us, we found that plaintiff'ssubmissions—liberally construed—were sufficient to survive defendant'smotion to dismiss for failure to state a cause of action (id. at 1315; seegenerally CPLR 3211 [a] [7]). However, in opposing defendant's subsequent motionfor summary judgment pursuant to CPLR 3212, plaintiff was held to a higher burden;once defendant demonstrated its entitlement to judgment as a matter of law (seeinfra), plaintiff was required to come forward with sufficient admissible proof toraise a genuine question of fact—a burden that, in turn, cannot be satisfied with"conjecture, speculation or surmise" (Oefelein v CFI Constr., Inc., 45 AD3d 1002, 1004 [2007]).As plaintiff's proof fell short in this regard, we now reverse and grant defendant's motion
To sustain a cause of action for tortious interference with contract, a plaintiff mustshow "(1) the existence of a valid contract between the plaintiff and a third party, (2) thedefendant's knowledge of that contract, (3) the defendant's intentional [and improper]inducement of the third party to breach that contract, and (4) damages"(Rosario-Suarz v Wormuth Bros. Foundry, 233 AD2d 575, 577 [1996]; see White Plains Coat & ApronCo., Inc. v Cintas Corp., 8 NY3d 422, 426 [2007]; 68 AD3d at 1316;Murray v SYSCO Corp., 273 AD2d 760, 761 [2000]). "This tort is not satisfiedby conduct that is merely negligent or incidental to some other, lawful, purpose" (Harris v Town of Fort Ann, 35AD3d 928, 929 [2006] [internal quotation marks and citation omitted]); rather, "theplaintiff must establish that the defendant's procurement of the alleged breach was solelymalicious" (Rosario-Suarz v Wormuth Bros. Foundry, 233 AD2d at 577 [internalquotation marks and citation omitted]; see Montano v City of Watervliet, 47 AD3d 1106,1109-1110 [2008]; Murray v SYSCO Corp., 273 AD2d at 761-762). More to thepoint, "where, as here, an agent is alleged to have induced its principal to breach acontract, the agent cannot be found liable unless it does not act in good faith andcommits independent torts or predatory acts directed at another for personal pecuniarygain" (68 AD3d at 1316 [emphasis added; internal quotation marks and citationsomitted]; see First Am.Commercial Bancorp, Inc. v Saatchi & Saatchi Rowland, Inc., 55 AD3d 1264,1266-1267 [2008], lv dismissed and denied 12 NY3d 829 [2009]; Bradbury v Cope-Schwarz, 20AD3d 657, 659 [2005]).
In support of its motion for summary judgment, defendant tendered, among otherthings, a copy of its contract with the Town (outlining its obligations and responsibilitiesto guard against defects and deficiencies in the work), correspondence from AKW(documenting plaintiff's role in the project's delay and questioning plaintiff's ability tosuccessfully complete the work required under its contract) and a copy of Carr's detailedreport (documenting plaintiff's failure to meet or comply with various contractrequirements). Such proof, in our view, was more than sufficient to discharge defendant'sinitial burden on the motion for summary judgment.
In opposition, plaintiff tendered, among other things, an affidavit from its president,Walter Schmidt, wherein Schmidt averred that defendant "arbitrarily rejected andreduced certifications for periodic payments," "created an adversarial relationship"between plaintiff and the Town, "intentionally delayed [its] response to fifteen (15)separate requests for information" made by plaintiff and, "in bad faith, refused to providethe necessary design to enclose the roof so that [plaintiff's] truss supplier could fabricateand place the final trusses." Additionally, Schmidt testified at his examination before trialthat it was his "personal belief that [defendant's] intent was to delay this project, to thepoint that [defendant] could request additional compensation from the Town for [its]representation of [its] erroneous plans." When pressed as to the basis for [*4]this belief, Schmidt replied that this was defendant's "MOin [the] industry, [its] method of operation"—a conclusion that, in turn, was basedupon hearing "stories" from other contractors who had worked with defendant.[FN3]
Even accepting that the foregoing proof, which largely consists of plaintiff'ssubjective interpretations of defendant's conduct, is sufficient to raise a question of factas to whether defendant acted outside the scope of its agency, i.e., did something otherthan discharge its responsibilities as project architect, and engaged in, among otherthings, bad faith, plaintiff's proof as a whole falls far short of demonstrating thatdefendant's conduct resulted in plaintiff's termination. Specifically, in light of thedocumented concerns raised by AKW, Carr's critical analysis of and conclusionsregarding plaintiff's performance and plaintiff's failure to meet the requirements imposedby the Town at its September 5, 2007 meeting, plaintiff cannot establish that, "but for"defendant's conduct, including the authoring of the September 2007 letter, the Townwould not have declared plaintiff to be in default and terminated the underlying contract(see Sun Gold, Corp. vStillman, 95 AD3d 668, 669 [2012]; Montano v City of Watervliet, 47AD3d at 1110; cf. First Am. Commercial Bancorp, Inc. v Saatchi & SaatchiRowland, Inc., 55 AD3d at 1267). Accordingly, defendant is entitled to summaryjudgment dismissing plaintiff's fifth cause of action.
Peters, P.J., Stein and Garry, JJ., concur. Ordered that the order is reversed, on thelaw, with costs, motion granted and fifth cause of action dismissed.
Footnote 1: According to Carr, theroof trusses were a "critical path item," the absence of which resulted in an"unrecoverable" delay.
Footnote 2: This provision allowedthe Town to terminate plaintiff's contract "upon certification by the [a]rchitect thatsufficient cause exist[ed] to justify such action." Following the September 5, 2007meeting, and in response to the Town's request, defendant tendered a letter to that effect,certifying that "sufficient cause exist[ed] to conclude that [plaintiff] persistently orrepeatedly failed to supply enough properly skilled workers or proper materials[ ] toperform its work on the project."
Footnote 3: To that end, plaintiffsubmitted an affidavit from the owner and president of another prime contractor on theproject echoing plaintiff's complaints of "delayed and ambiguous responses" to requestsfor information and "arbitrary" reductions in payment applications, as well as an affidavitfrom the owner and president of a subcontractor on the project attesting to discrepanciesin defendant's site drawings and the delays that purportedly flowed therefrom.