| Structure Tone, Inc. v Universal Servs. Group, Ltd. |
| 2011 NY Slip Op 06459 [87 AD3d 909] |
| September 15, 2011 |
| Appellate Division, First Department |
| Structure Tone, Inc., Respondent, v Universal ServicesGroup, Ltd., Appellant. Universal Services Group, Ltd., Third-Party Plaintiff-Appellant, v PacePlumbing Corp. et al., Third-Party Defendants-Respondents. Universal Services Group, Ltd.,Second Third-Party Plaintiff-Appellant, v Prep-Crete, Inc., Second Third-PartyDefendant-Respondent. |
—[*1] Barry, McTiernan & Moore, New York (Mark A. Collesano of counsel), for Structure Tone,Inc., respondent. Bonner Kiernan Trebach & Crociata, LLP, New York (Mindy L. Jayne of counsel), forSBLM Architects, P.C., respondent. Rivkin Radler, LLP, Uniondale (Merril S. Biscone of counsel), for Pace Plumbing Corp.,respondent. Herzfeld & Rubin, P.C., New York (Michael B. Sena of counsel), for Tremco Incorporated,[*2]respondent. Goldberg Segalla, LLP, White Plains (Matthew J. McDermott of counsel), for Prep-Crete,Inc., respondent.
Order, Supreme Court, New York County (Carol R. Edmead, J.), entered June 3, 2010,which, to the extent appealed from as limited by the briefs, granted the motions of third-partydefendants Pace Plumbing Corp., SBLM Architects, P.C., and Tremco Inc., for summaryjudgment dismissing the third-party complaint, and denied defendant Universal Service Group's(USG) motion for summary judgment dismissing all claims for damages associated withredesigns and upgrades and for summary judgment on USG's affirmative defenses, unanimouslyaffirmed, with costs.
This action arises out of the construction of a Whole Foods market on the concourse of theAOL/Time Warner Center at Columbus Circ1e in Manhattan. Plaintiff Structure Tone, Inc. (STI),the general contractor for the work, retained USG to waterproof the market. The agreementprovided that USG would be liable to STI for any damages incurred as a consequence of thefailure by USG to comply with its obligations under the agreement. In the event that USG failedto promptly correct defective work, STI, at its option, could correct the work and deduct the costfrom any money due to USG; if the cost of finishing the work exceeded the unpaid balance of thecontract, USG was to pay the difference.
STI commenced this action in May 2006. STI's complaint alleges that on 15 occasions fromFebruary 19, 2004 through February 24, 2005, the waterproofing failed causing water to leakfrom the Whole Foods market into various tenant spaces below. STI stated that the leaks causeddamage to an Equinox gym as well as to the Time Warner security center and a physical therapycenter. As a result, STI undertook to remedy the problem, and allegedly sustained damages of$1.2 million. For each of the leaks, the complaint alleges both a cause of action for negligenceand for breach of contract. STI specified its damages as the costs of remediation, futureconstruction, loss of profit, recovery of the amounts paid to USG, and contract balances not paidby Whole Foods.
In its answer, USG interposed a number of affirmative defenses. These included: (1) STI'sfailure to mitigate damages; (2) interference; (3) frustration of performance; (4) waiver; and (5)breach of the covenant of good faith and fair dealing. It subsequently abandoned its claims offailure to mitigate damages and interference.
In August 2006, USG commenced a third-party action against, inter alia, Pace, the plumbingsubcontractor, SBLM, the architect, and Tremco, which supplied the waterproofing material.USG stated causes of action for contribution and indemnification. In addition, USG allegedseparate causes of action for negligence against SBLM, and for negligence, strict productsliability, and breach of warranty against Tremco.
In February 2010, Pace, Tremco, and SBLM moved for summary judgment dismissing thethird-party complaint. The third-party defendants asserted, inter alia, that USG's claims forcontribution were barred because STI sought to recover only damages for "economic loss."Further, they asserted that the claims for common-law indemnification were improper since, inthe underlying action, USG was alleged to have been actively at fault.
In the same month, USG moved for partial summary judgment. USG sought dismissal of[*3]plaintiff's claims for damages resulting from four of thealleged leak occurrences. It also sought dismissal of all claims associated with redesigns andupgrades, and summary judgment on its affirmative defenses.
The motion court properly granted third-party defendants summary judgment as to USG'sclaims for contribution because despite USG's attempts at casting its claims in tort, the claims arebased on alleged breaches of an express contract. Claims for contribution are governed by CPLR1401 and apply to damages for personal injury, injury to property or wrongful death. Here, therewas no personal injury, and a purely economic loss resulting from a breach of contract does notconstitute an "injury to property" within the meaning of CPLR 1401 (see Board of Educ. ofHudson City School Dist. v Sargent, Webster, Crenshaw & Folley, 71 NY2d 21, 26 [1987];see also Trump Vil. Section 3 v New York State Hous. Fin. Agency, 307 AD2d 891, 897[2003], lv denied 1 NY3d 504 [2003]).
USG's reliance on Trustees of Columbia Univ. v Mitchell/Giurgola Assoc. (109AD2d 449 [1985]), Sommer v Federal Signal Corp. (79 NY2d 540 [1992]), and Castle Vil. Owners Corp. v Greater N.Y.Mut. Ins. Co. (58 AD3d 178 [2008]) is misplaced. Those cases involved an undulydangerous product or circumstance which threatened the public for which a party may be liable intort independent of the party's contractual duties. In this case, although counsel at oral argumentattempted to assert danger to the public from the leaks, there is no evidence of record of any suchdanger.
Further, it is well settled that common-law indemnification is available to a party that hasbeen held vicariously liable from the party who was at fault in causing plaintiff's injuries (seeHawthorne v South Bronx Community Corp., 78 NY2d 433 [1991]; Richards Plumbing & Heating Co., Inc. vWashington Group Intl., Inc., 59 AD3d 311 [2009]; see also Kye Yong Kim v 40thAssoc., 306 AD2d 220 [2003]). In this case, STI seeks recovery from USG solely because ofUSG's alleged wrongdoing. Thus, the motion court properly dismissed USG's third-party claimsfor common-law indemnification.
Moreover, the motion court correctly barred the third-party claims of negligence as againstSBLM, and negligence, product liability and breach of warranty claims as against Tremco. Therewas no contractual relationship between USG and the third-party defendants, or indeed any otherrelationship that would impose a duty running to USG. Additionally, Tremco's liability waslimited by its enforceable warranty (see UCC 2-719), which it fulfilled by providingreplacement waterproofing material.
As to USG's motion for partial summary judgment, the court properly denied that branch ofthe motion seeking dismissal of plaintiff's claimed damages due to upgrades as opposed to repairwork. There was conflicting testimony regarding whether any of the costs included in thedamages constituted upgrades as opposed to repair costs, and thus a triable issue of fact wasraised precluding summary judgment (see Forrest v Jewish Guild for the Blind, 3 NY3d 295 [2004]).
The court also properly denied dismissal of plaintiff's contractual causes of action based onUSG's affirmative defenses. First, the doctrine of frustration of performance is inapplicable heresince the doctrine offers a defense against enforcement of a contract when the reasons forperforming the contract cease to exist due to an unforeseeable event which destroys the reasonsfor performing the contract (see Pettinelli Elec. Co. v Board of Educ. of City of N.Y., 56AD2d 520 [1977], affd 43 NY2d 760 [1977]; see also Warner v Kaplan, 71 AD3d 1 [2009], lv denied 14NY3d 706 [2010]). Nor was USG entitled to summary judgment based on the defenses of [*4]waiver and breach of the covenant of good faith and fair dealing.USG argues on appeal that it asserts these defenses because plaintiff instructed USG to proceedwith the waterproofing despite USG's complaints and concerns as to STI's alleged deviationsfrom specifications. The motion court properly found that there is evidence in the record thatUSG's application of the waterproofing membrane was defective in multiple respects. Hence,there is no evidence of record that the waterproofing would have been successfully installed butfor the failure of plaintiff to address USG's concerns and complaints.
We have considered appellant's remaining claims and find them unavailing.Concur—Mazzarelli, J.P., Catterson, Manzanet-Daniels and RomÁn, JJ. [PriorCase History: 2010 NY Slip Op 31384(U).]