| Mary Imogene Bassett Hosp. v Cannon Design, Inc. |
| 2015 NY Slip Op 03016 [127 AD3d 1377] |
| April 9, 2015 |
| Appellate Division, Third Department |
[*1]
| Mary Imogene Bassett Hospital, Doing Business asBassett Healthcare, Respondent, v Cannon Design, Inc.,Appellant. |
Shaub Ahmuty Citrin & Spratt, LLP, New York City (Steven J. Ahmuty Jr. ofcounsel), for appellant.
Perum & Heim, PC, Mechanicsburg, Pennsylvania (Matthew E. Hamlin ofcounsel), for respondent.
McCarthy, J. Appeal from a judgment of the Supreme Court (Dowd, J.), enteredApril 28, 2014 in Otsego County, upon a decision of the court in favor of plaintiff.
Plaintiff operates a hospital in Otsego County. Defendant is an architectural anddesign firm providing, among other things, structural design services. In 2002, the partiesentered into a contract for architectural services including, as relevant here, a seismicretrofit of one of plaintiff's hospital buildings.[FN1] Defendant, with input and approvalfrom plaintiff, designed the retrofit using four steel plate shear walls to be installedduring phase one of construction. After defendant built three of the shear walls as part ofphase one, and the parties decided to defer the fourth shear wall to phase two due tointerference caused by electrical systems that were scheduled to be replaced in phase two,plaintiff terminated its relationship with defendant under the contract. Plaintiffcommenced this action alleging breach of contract and professional malpractice arisingfrom [*2]defendant's allegedly defective design of theseismic retrofit.[FN2] After a nonjury trial, Supreme Courtdetermined that defendant breached the contract and committed professional malpractice,and awarded plaintiff damages of approximately $1.7 million plus prejudgment interest.Defendant appeals.
Supreme Court should have dismissed the breach of contract cause of action. In anappeal from a judgment issued after a nonjury trial, this Court "independently review[s]the weight of the evidence . . . and, while according appropriate deferenceto the trial judge's credibility assessments and factual findings, grant[s] the judgmentwarranted by the record" (Nationstar Mtge., LLC v Davidson, 116 AD3d 1294, 1295[2014], lv denied 24 NY3d 905 [2014]; see Northern WestchesterProfessional Park Assoc. v Town of Bedford, 60 NY2d 492, 499 [1983]; but seeThoreson v Penthouse Intl., 80 NY2d 490 [1992]). In construing the parties' contract,we must enforce the document according to its terms if the writing is clear and complete(see Consedine v Portville Cent.School Dist., 12 NY3d 286, 293 [2009]; Monticello Raceway Mgt., Inc. v Concord Assoc. L.P., 104AD3d 1114, 1116 [2013]). Courts determine as a matter of law whether a contract isambiguous, and extrinsic or parol evidence may not be considered absent an ambiguity(see Consedine v Portville Cent. School Dist., 12 NY3d at 293; MonticelloRaceway Mgt., Inc. v Concord Assoc. L.P., 104 AD3d at 1116; City of Plattsburgh v Borner,38 AD3d 1047, 1048 [2007]). Plaintiff contended, and Supreme Court found, thatdefendant breached the contract by failing to meet the requirements of the 2000International Building Code (hereinafter IBC) for the seismic retrofit design. Whiledefendant and several of its witnesses conceded that everyone involved considered the2000 IBC to be the agreed-upon design criteria, the IBC is not mentioned in the contractitself and the contract prohibits any oral modifications.[FN3] The absence of design criteria does notcreate an ambiguity (see Reiss v Financial Performance Corp., 97 NY2d 195, 199[2001]). Thus, we cannot read compliance with the 2000 IBC into the contract, anddefendant did not breach the unambiguous contract by failing to comply with thestandards in that code.
The contract does contain two clauses regarding defendant's performance. Theyprovide that defendant's "services shall be performed as expeditiously as is consistentwith professional skill and care and the orderly progress of the [w]ork," and "shall beprovided . . . in a manner consistent with the standards of care and skillexhibited in its profession for projects of this nature, type and degree of difficulty."These provisions simply incorporate into the contract the common-law standard of carefor a professional. "Making such ordinary obligations express terms of an agreementdoes not remove the issue [of a violation thereof] from the realm of negligence. . . , nor can it convert a malpractice action into a breach of contract action"(Matter of R.M. Kliment &Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d 538,542-543 [2004]). Inasmuch as a breach of contract cause of action based on the violationof these particular contract provisions would be duplicative of a professional malpracticecause of action, Supreme Court should have dismissed plaintiff's breach of contract causeof action.
Supreme Court did not err in determining that defendant committed professionalmalpractice in its design of the seismic retrofit. To establish a claim of professionalmalpractice, a plaintiff must prove a departure from accepted standards of practice of thatprofession in the relevant area and that the departure was a proximate cause of theplaintiff's injury (see Talon AirServs. LLC v CMA Design Studio, P.C., 86 AD3d 511, 515 [2011]). Theseelements are generally established through "credible expert testimony that [the]defendants deviated from locally prevailing standards of practice" (Talon Air Servs.LLC v CMA Design Studio, P.C., 86 AD3d at 515). At trial here, plaintiff presentedexpert testimony from a structural engineer with experience in seismic engineering.Plaintiff's expert testified that defendant performed calculations based on the 2000 IBCseismic demand and distributed the load to four shear walls. He noted that the 2000 IBCdoes not address steel plate shear walls, so it was reasonable for defendant to rely on aparticular engineering article, but defendant did not adhere to the design approachdiscussed in that article. The expert explained that the failure to fully follow thatapproach led to inaccurate calculations, such that the four shear walls would not protectplaintiff's building from the magnitude of earthquakes that the seismic retrofit wasallegedly designed to withstand. Basically, the expert opined that the design wasdefective because the other elements of the design were not stronger than the shear walls,which would cause those elements to fail and collapse before the shear walls, contrary toa proper design. Thus, plaintiff submitted sufficient expert evidence to establish thatdefendant failed to meet the proper standard of practice for structural engineering.Supreme Court did not err in accepting that proof over the competing opinion ofdefendant's expert (see Matterof Village Sq. of Penna, Inc. v Board of Assessment Review of the Town of Colonie,123 AD3d 1402, 1404 [2014], lv denied 25 NY3d 903 [2015]).
Although defendant contends that it never completed its design of the seismic retrofitdue to plaintiff's cancellation of the contract, the record contains conflicting informationin that regard. We will not disturb Supreme Court's credibility determinations and factualfindings that defendant's retrofit design was complete and only called for the addition ofthe fourth shear wall to fully implement that design. Everyone recognized that theseismic retrofit was not complete without the addition of the fourth shear wall, butplaintiff proved that the three shear walls that were already installed were not properlydesigned as part of the seismic retrofit. As for proximate cause, plaintiff's expert opinedthat defendant's failure to comply with the relevant standards resulted in a seismic retrofitdesign that would not operate as intended, requiring remedial efforts to create a buildingthat would withstand the magnitude of seismic events contemplated by the parties as thestandard for the retrofit.
Plaintiff also submitted proof of damages. The appropriate measure of damages for adefective design "is the cost to repair the defects," if those defects are remediable(Brushton-Moira Cent. School Dist. v Thomas Assoc., 91 NY2d 256, 261-262[1998]). Plaintiff proved that the seismic retrofit it received, even if completed throughthe installation of the fourth shear wall as designed by defendant, would be defectivebecause it would not provide the anticipated level of protection. We find irrelevantdefendant's assertions that the current building code has less stringent seismic standardsthan the 2000 IBC and the seismic threat level for Otsego County has been reduced;regardless of code changes in the interim, plaintiff did not receive the seismic retrofitdesign that it expected from defendant and that defendant has conceded that it intendedto provide. Plaintiff submitted proof that the three shear walls that were already installed,and that [*3]were part of defendant's completed butdefective seismic retrofit design, need to be modified to provide the agreed-upon level ofseismic protection.
To arrive at an amount for damages, plaintiff presented a construction administratorwith experience in project cost estimation. This cost estimator testified as to the total costto remediate defendant's seismic retrofit by implementing the design of plaintiff's expertengineer, reduced to the dollar value of November 2005 (the time when the malpracticeclaim accrued). Contrary to defendant's assertion that the cost estimator lacked a properfoundation for his opinion because he relied on a document that was not in evidence, hewas directly involved in the estimation process and prepared the document from whichhe extracted the figures that he testified to. Plaintiff's engineering expert testified thatexperts in the profession commonly rely on drawings and documents gathered fromsubcontractors. Thus, the cost estimator's testimony was based on information commonlyrelied upon in the profession or within his personal knowledge (see Matter of State of New York vMark S., 87 AD3d 73, 77-78 [2011], lv denied 17 NY3d 714 [2011]; see also Hinlicky v Dreyfuss, 6NY3d 636, 648 [2006]).
We reject defendant's contention that plaintiff's proposed amount of damagesconstitutes economic waste. The proper measure of damages due to the defective designof a building is the cost to remedy the defect, unless such amount is "grossly and unfairlyout of proportion to the good to be attained" by fixing the building (Jacob &Youngs, Inc. v Kent, 230 NY 239, 244 [1921]). The defects here were not trivial, butwere substantial as to the seismic function of the building, such that plaintiff was entitledto damages in the amount necessary to remediate the defects (less any amount that wouldhave been necessary to add the fourth shear wall, which was anticipated to be added inany event) (see Lyon v Belosky Constr., 247 AD2d 730, 731-732 [1998];compare Jacob & Youngs, Inc. v Kent, 230 NY at 244-245). Supreme Courtobserved the expert witnesses and was in a better position to weigh their competingopinions and assess their credibility (see Matter of Village Sq. of Penna, Inc. v Boardof Assessment Review of the Town of Colonie, 123 AD3d at 1404). Based on therecord evidence and those credibility determinations, we find the damages awarded bySupreme Court to be appropriate.
Peters, P.J., Rose and Clark, JJ., concur. Ordered that the judgment is modified,without costs, by reversing so much thereof as found defendant liable under the breach ofcontract cause of action; said cause of action dismissed; and, as so modified,affirmed.
Footnote 1:A seismic retrofit is theaddition of structural enhancements to an existing building to protect the building, itscontents and its users from the effects of seismic activity such as earthquakes.
Footnote 2:This Court has decidedprevious appeals in this matter dealing with pretrial issues (97 AD3d 1030 [2012]; 84AD3d 1543 [2011]; 84 AD3d 1524 [2011]; 66 AD3d 1286 [2009]).
Footnote 3:In a previous appeal, weaffirmed the denial of summary judgment on the breach of contract cause of action (84AD3d 1524, 1527 [2011], supra). At that procedural stage, we found thatdefendant had not established, as a matter of law, "that the IBC standards were not partof the contract," because those standards were listed or referred to in structural designcriteria and on technical drawings (id.). After trial, however, we find that plaintifffailed to prove that compliance with the IBC was a contract requirement.