| Southern Wine & Spirits of Am., Inc. v Impact Envtl. Eng'g,PLLC |
| 2013 NY Slip Op 02146 [104 AD3d 613] |
| March 28, 2013 |
| Appellate Division, First Department |
| Southern Wine & Spirits of America, Inc., et al.,Respondents-Appellants, v Impact Environmental Engineering, PLLC, et al.,Appellants-Respondents. |
—[*1] Ganfer & Shore, LLP, New York (Ira Brad Matetsky of counsel), forrespondents-appellants.
Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered April 13,2012, which denied that branch of defendants' motion for summary judgment that soughtdismissal of plaintiffs' claims for negligence and gross negligence, granted that branch ofthe motion that sought dismissal of Southern Wine & Spirits of New York, Inc.(Southern New York) and Syosset Property Partners, LLC, as plaintiffs in this action,and granted that branch of the motion that sought dismissal of the complaint as againstdefendants, except Impact Environmental Consulting, Inc. (Impact), unanimouslyaffirmed, with costs.
In a prior appeal in this action, we held that plaintiffs could not utilize therelation-back provisions in CPLR 203 (f) to cure their defective initial complaint, basedon their failure to comply with the subject agreements' condition precedent tocommencing an action against Impact, since the doctrine is dependent upon the existenceof a valid preexisting action (seeSouthern Wine & Spirits of Am., Inc. v Impact Envtl. Eng'g, PLLC, 80 AD3d505 [1st Dept 2011]). However, on this appeal, we find that the savings clause ofCPLR 205 (a) does not bar plaintiffs' action, since the statute was "created to serve inthose cases in which the prior action was defective and so had to be dismissed" (seeCarrick v Central Gen. Hosp., 51 NY2d 242, 248-249 [1980]). The dismissal of theprior action for plaintiffs' failure to comply with a condition precedent was not ajudgment on the merits (seeSabbatini v Galati, 43 AD3d 1136, 1139 [2d Dept 2007]), and plaintiffcommenced a new action within the six-month period required by CPLR 205 (a).
The negligence claim is timely, since plaintiffs filed the original complaint onDecember 11, 2008, less than three years after Impact's submission of the lastenvironmental site assessment (ESA) report to plaintiff Southern Wine & Spirits ofAmerica, Inc. (Southern Wine). Indeed, the three-year statute of limitations on theprofessional negligence/malpractice claim did not begin to run until Impact delivered itslast report to Southern Wine (see CPLR 214 [6]; Levin vPricewaterhouseCoopers, 302 AD2d 287, 288 [1st Dept 2003]).
Public policy "forbids a party's attempt to escape liability, through a contractualclause, [*2]for damages occasioned by grossly negligentconduct" (Colnaghi, U.S.A. v Jewelers Protection Servs., 81 NY2d 821, 823[1993] [internal quotation marks omitted]). The court properly declined to enforceImpact's contractual limitation on liability, since an issue of fact exists as to whetherImpact's conduct was "grossly negligent," given plaintiffs' expert affidavit stating thatImpact failed to disclose to Southern Wine the presence of 38 dry wells, containingpotential contaminants, on plaintiffs' property, despite the availability of this informationin the public records.
The court properly found that Impact had a professional duty independent of theparties' agreements. Although Impact, an environmental consultant, was not subject tolicensing requirements, public policy requires that it should be held to a "professional"standard of care, given the nature of its services (see Green Hills [USA], L.L.C. vAaron Streit, Inc., 361 F Supp 2d 81, 89-91 [ED NY 2005]). Indeed, "[p]rofessionals. . . may be subject to tort liability for failure to exercise reasonable care,irrespective of their contractual duties" (Sommer v Federal Signal Corp., 79NY2d 540, 551 [1992]).
The court properly dismissed Southern New York and Syosset Property as plaintiffsin this action. Absent privity of contract, or the functional equivalent of privity ofcontract, these entities have no right to recover from defendants either for breach ofcontract or professional negligence (see Residential Bd. of Mgrs. of ZeckendorfTowers v Union Sq.-14th St. Assoc., 190 AD2d 636, 637 [1st Dept 1993]). There isno indication in the record that Southern New York and Syosset Property were intendedbeneficiaries of Southern Wine's agreements with Impact. Indeed, there is no evidencethat Impact was aware that the substance of the ESA Reports it furnished to SouthernWine would be transmitted to and relied upon by any other entity, including SouthernNew York and Syosset Property (Credit Alliance Corp. v Arthur Andersen &Co., 65 NY2d 536, 551, 553 [1985]). Nor is there any evidence of direct contact orany communication between Impact and the two entities that would constitute conductlinking Impact to either of the entities to support their reliance on the ESA Reports(id. at 553-554; cf. Ossining Union Free School Dist. v Anderson LaRoccaAnderson, 73 NY2d 417, 425 [1989]). Further, the parties' agreements contained aclause in which Impact disclaimed any intention to benefit third parties, and there is noevidence of any provisions in the parties' agreements granting enforceable rights to anyentity other than Impact (cf.Diamond Castle Partners IV PRC, L.P. v IAC/InterActiveCorp, 82 AD3d 421[1st Dept 2011]).
Given that Southern Wine was not in privity with any of the other defendants, exceptImpact, the court properly dismissed plaintiffs' complaint as against the other defendants(see Leonard v Gateway II,LLC, 68 AD3d 408, 408-409 [1st Dept 2009]). Concur—Tom, J.P.,Acosta, Saxe, Freedman and Feinman, JJ.