Board of Mgrs. of Trump Palace Condominium v Feld Kaminetzky & Cohen, P.C.

[*1] Board of Mgrs. of Trump Palace Condominium v Feld Kaminetzky & Cohen, P.C. 2009 NY Slip Op 51235(U) [24 Misc 3d 1203(A)] Decided on June 9, 2009 Supreme Court, New York County Goodman, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 9, 2009
Supreme Court, New York County

The Board of Managers of Trump Palace Condominium, Plaintiff,

against

Feld Kaminetzky & Cohen, P.C., Scorcia & Diana Associates, Inc., and Arrow Restoration, Inc., Defendants.



602544/07

Emily Jane Goodman, J.

The plaintiff in this action is The Board of Managers of Trump Palace Condominium (the Board), an association of managers elected by the condominium apartment owners of The Trump Palace located at 200 East 69th Street, New York City (the Building). The defendants are Feld Kaminetzky & Cohen, P.C. (FKC), an engineering firm retained by the Board as engineers for a facade rehabilitation project, including but not limited to repairing water leaks at the Building (the Project); Scorcia & Diana Associates, Inc. (SDA), a construction firm retained by the Board as construction managers for the Project; and Arrow Restoration, Inc. (Arrow), a general contracting firm retained by the Board as general contractors for the Project.

The complaint filed in this action, as amended, contains five causes of action (as amended, the Complaint). The first and second causes of action (breach of contract and professional malpractice) are against FKC; the third cause of action (breach of contract) is against SDA; and the fourth and fifth causes of action (breach of contract and breach of guaranty/contract) are against Arrow.

SDA files the instant motion to dismiss the Complaint against it pursuant to CPLR 3211 (a) (1) and (a) (7), and to dismiss Arrow's cross claim on the ground that Arrow is not entitled to indemnification. The plaintiff, as well as co-defendants FKC and Arrow, oppose the various forms of relief sought by SDA. For the reasons stated herein, the motion to dismiss is granted in part, and denied in part.

Background

According to William Fichter, the resident building manager of The Trump Palace, the Building is a fifty-five story luxury condominium located in New York City. Fichter Affidavit, ¶ 2. Starting in 2000, the Building's facade suffered from leaks that caused water to infiltrate into some of the apartment units. Id. In January 2001, the Board retained FKC as the architect-engineer for the Project. Complaint, ¶ 8. In or about August 2001, the Board entered into [*2]separate contracts with SDA (the SDA Contract) and Arrow to serve as the construction manager and the general contractor, respectively, for the Project. Complaint, ¶ 9-10. A copy of the SDA Contract is annexed as "Exhibit A" to the Fichter Affidavit.

The Complaint alleges that throughout the course of the Project, the Board repeatedly notified all defendants, including SDA, of persistent water leaks in some of the apartments of the Building. Despite such notifications, defendants allegedly disregarded their duties and obligations to repair the leaks, which caused "the Board to unnecessarily expend significant additional sums both to correct leaks that should have been repaired by the Defendants and to otherwise address Defendants' breaches." Complaint, ¶ 12; Fichter Affidavit, ¶ 8-9.

With respect to SDA, the Complaint alleges that the Board entered into the SDA Contract and hired SDA as the construction manager, whereby SDA was "responsible for overseeing the Project and to assist the Board and building staff in administering, implementing and coordinating the work required." Complaint,¶ 32. The Complaint also alleges that SDA was required to "monitor the work and otherwise represent the interests of the Board in relation to defendants FKC and Arrow," but SDA did not maintain effective command and control over the Project" and failed to "monitor the Project effectively." Id. at ¶ 33, 37, 39. The Complaint further alleges that from late 2001 to 2003, water leaks in some of the apartments were "never resolved in a permanent or sustainable manner, due in part to SDA's failure and/or refusal to fulfill its contractual obligations." Id. at ¶ 41. Hence, the Board had to hire other contractors to repair the leaks, and consequently "sustained damages resulting from the breach of contract by SDA totaling the $119,684.95 payments made to SDA, plus sums in excess of $535,167.74 in other combined damages it incurred ... for total damages of at least $654,852.89 ... ." Id. at ¶ 46. In sum, the Complaint asserts a single cause of action against SDA sounding in breach of contract.

Seeking dismissal of the Complaint against it, SDA asserts that dismissal is warranted pursuant to CPLR 3211 (a) (1) based on documentary evidence, and 3211 (a) (7) for failure to state a cause of action. In essence, SDA argues that the breach of contract claim fails, because the alleged acts (or omissions) of SDA supporting such claim were not acts within the purview of the SDA Contract, and thus SDA could not have breached the contract. SDA also seeks dismissal of Arrow's cross claim.[FN1]

Discussion

In considering a CPLR 3211 (a) (7) motion to dismiss, the court is to determine whether the plaintiff's pleadings state a cause of action. "The motion must be denied if from the pleadings' four corners, factual allegations are discerned which taken together manifest any cause of action cognizable at law [internal quotation marks omitted]." Richbell Info. Services, Inc. v Jupiter Partners, L.P., 309 AD2d 288, 289 (1st Dept 2003), quoting 511 W. 232nd Owners Corp. v Jennifer Realty Corp., 98 NY2d 144, 151-152 (2002). The pleadings are to be afforded a "liberal construction," and the court is to "accord plaintiffs the benefit of every possible favorable inference." Leon v Martinez, 84 NY2d 83, 87-88 (1994).

On the other hand, while factual allegations in a complaint should be accorded "favorable inference," bare legal conclusions and inherently incredible facts are not entitled to preferential [*3]consideration. Sud v Sud, 211 AD2d 423, 424 (1st Dept 1995). Moreover, "[w]hen the moving party [seeks dismissal pursuant to CPLR (a) (1) and] offers evidentiary material, the court is required to determine whether the proponent of the [complaint] has a cause of action, not whether [he or] she has stated one". Asgahar v Tringali Realty, Inc., 18 AD3d 408, 409 (2nd Dept 2005) (citations omitted).

The Breach of Contract Claim

It is axiomatic that in order to prevail on a breach of contract claim, a plaintiff must establish the following four elements: (1) existence of a valid contract; (2) plaintiff's performance of the contract; (3) defendant's material breach of the contract; and (4) resulting damages. See e.g., Noise in Attic Productions, Inc. v London Records, 10 AD3d 303 (1st Dept 2004); Furia v Furia, 116 AD2d 694 (2d Dept 1986).

In this case, it is disputed by SDA that its acts and/or omissions, as alleged in the Complaint, did not breach the terms of the SDA Contract. Among other things, SDA contends that, contrary to the allegation of the Complaint that SDA was hired to "monitor" the Project, Article 13.5 of the SDA Contract omits this from SDA's scope of work because it states: "No full time superintendent on this project, only as necessary." Based on its interpretation of this provision, SDA contends that it was "not hired to monitor the work at all." SDA's Brief, p. 3. SDA also contends that it was not hired to "command and control" the Project, because its role was administrative, and pertained only to coordinating and scheduling the activities and responsibilities of the various parties to the Project. In such regard, SDA relies on selected provisions of the SDA Contract which provide, in relevant part: "The Construction Manager shall provide administration of the Contracts for Construction in cooperation with the Architect" (Article 2.3.2); "The Construction Manager shall provide administrative, management and related services to coordinate scheduled activities and responsibilities of the Contractors with each other and with those of the Construction Manager, the Owner and the Architect to endeavor to manage the Project" (Article 2.3.3); "The Construction Manager shall schedule and conduct meetings to discuss such matters as procedures, progress and scheduling" (Article 2.3.4); and "The Construction Manager shall coordinate the sequence of construction and assignment of space in areas where the Contractors are performing work" (Article 2.3.6). SDA further contends that it is not responsible for the work of the Contractors because the SDA Contract provides that: "With respect to each Contractor's own Work, the Construction Manager shall not have control over or charge of and shall not be responsible for construction means, methods .... since those are solely the Contractor's responsibility ... The Construction Manager shall not be responsible for a Contractor's failure to carry out the Work in accordance with the respective Contract Documents." (Article 2.3.15).

SDA's contentions are unpersuasive. Besides the selected provisions noted by SDA, the SDA Contract also contains the following provisions, among others: "The Construction Manager shall determine in general that the Work of each Contractor is being performed in accordance with the requirements of the Contract Documents, endeavoring to guard the Owner against defects and deficiencies in the Work" (Article 2.3.13); "The Construction Manager shall record the progress of the Project ... submit written progress reports to the Owner and Architect ... keep a daily log containing a record of ... each Contractor's Work on the site, number of workers ... Work accomplished, problems encountered, and other similar relevant data as the Owner may [*4]require" (Article 2.3.21); "The Construction Manager shall endeavor to obtain satisfactory performance from each of the Contractors [and] shall recommend courses of action to the Owner when requirements of a Contract are not being fulfilled" (Article 2.3.7); "The Construction Manager shall monitor the approved estimate of Construction Cost ... and shall show actual costs for activities in progress and estimates for uncompleted tasks by way of comparison with such approved estimate" (Article 2.3.8); and "The Construction Manager shall determine in general that the Work of each Contractor is being performed in accordance with the requirements of the Contract Documents ... [and] in consultation with the Architect, may reject Work which does not conform to the requirements of the Contract Documents" (Article 2.3.13). In view of these provisions, among others, SDA's attempt in minimizing the role it was obligated to assume in relation to the Project as only administrative in nature is unconvincing and unsuccessful. Thus, even if Article 2.3.15 states that SDA is not responsible for the work of contractors, other provisions of the SDA Contract impose obligations upon SDA to monitor and coordinate their work, report to the Board and/or FKC if the work was not properly performed, so as to protect the Board from defective or deficient performance.

SDA's other argument that it was "not hired to monitor the work at all," because Article 13.5 of the SDA Contract states that no full time superintendent would be placed on the Project, has no merit. In fact, as noted by plaintiff in its opposition papers, "Attachment B" to the SDA Contract shows that SDA was required to place a superintendent on the Project for about 25 hours per week for 26 weeks, and a project manager for about 5 hours per week for 26 weeks, for an aggregate cost of $46,000 for both positions. Plaintiff's Opposition Brief, p. 14. Hence, any argument that SDA had no duty to monitor the Project work at all is unavailing. Indeed, plaintiff alleges that the duties of the superintendent and the project manager were not properly performed by SDA, as such supervisory personnel often were not present at the Project site in accordance with their contractual obligations. Fichter Affidavit, ¶ 34.

Notably, SDA also argues throughout its papers that there is no specific language in the SDA Contract which required it to "command and control the Project," yet the Complaint asserts that "SDA did not maintain effective command and control over the Project." SDA's reliance on semantics to support its argument is specious. Even assuming, arguendo, that plaintiff's Complaint were inartfully pleaded, the relevant and specific provisions of the SDA Contract discussed above, together with the supporting Fichter Affidavit submitted in opposition to the SDA Motion to Dismiss, are sufficient to survive the Motion based on CPLR 3211 (a) (7). Leon v Martinez, 84 NY2d at 87-88 ("[I]n assessing a motion under CPLR 3211 (a) (7), however, a court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint ... and the criterion is whether the proponent of the pleading has a cause of action, not whether he was stated one")(internal quotation marks and citations omitted).

In addition to relying upon selected provisions of the SDA Contract as "documentary evidence" to support its Motion to Dismiss pursuant to CPLR 3211 (a) (1), SDA also relies upon, inter alia, a letter from Arrow to SDA, dated January 20, 2003,[FN2] a copy of which is annexed as "Exhibit E" to the Markowitz Affirmation in support of the Motion to Dismiss. The Arrow letter [*5]stated, in relevant part, that:

Let it be noted that in these area's [sic] we were only directed to do minor pionting [sic] and spot caulking as directed by the engineer of record (FKC). I would also like to note that Arrow Restoration had to give back 100% of the quantities in the contract for window head restoration because this option was note [sic] chosen by the engineer at these leak locations or any other locations on the above mentioned building. If this method of repair was chosen, instead of spot work, these leaks may not be occurring at the present time.

Based on the Arrow letter, SDA contends that the recurring water leaks were the result of FKC and/or plaintiff directing the window head restoration not to take place.[FN3] SDA also contends that it was plaintiff's choice not to proceed with more "costly permanent repairs" to the Building's facade, but instead resorted to "cheaper spot fixes," that resulted in not obtaining or achieving an effective repair of the leaks. SDA Brief, p. 4.

In response to SDA's contentions, plaintiff asserts that the Board had fully intended to do extensive brick replacement and window head restoration, and only agreed to reduce the scope of the work after it was advised to do so by SDA and other co-defendants, including FKC. In particular, plaintiff asserts that "the Board had already budgeted for and contracted with the Defendants to undertake window head restoration to correct leaks," and the Board had "approved the purchase of in excess of 6,500 bricks for window head restoration work to correct leaks." Fichter Affidavit, ¶ 39. Plaintiff further asserts that due to SDA's erroneous advice, which included downplaying the need for facade brick work and that the Project was mainly a lintel job,[FN4] the Board agreed to reduce the scope of work. Thus, at the end of the Project, several thousand bricks were left behind, and the "left-over bricks were later used by subsequent contractors to correct the leaks that the Defendants should have corrected." Id. at ¶ 40. Plaintiff also pointed to a letter from SDA, dated May 25, 2001, a copy of which is annexed as "Exhibit C" to the Fichter Affidavit, which purports to show that SDA, through its principal Michael Scorcia, had made various recommendations to the Board concerning the methods and procedures for repairing the leaks, and the Board adopted the recommendations, which "later proved to be erroneous." Plaintiff's Opposition Brief, p. 9.

In light of the foregoing, the so-called "documentary evidence" submitted by SDA is far from conclusively establishing a defense to plaintiff's breach of contract claim as a matter of law. Further, because this court is required to accord plaintiff the benefit of every possible favorable inference in the context of a motion to dismiss, the CPLR 3211 (a) (1) Motion to Dismiss based on documentary evidence is denied. Tsimerman v Janoff, 40 AD3d 242 (1st Dept 2007)(denying defendant's motion to dismiss based on "documentary evidence" because defendants' affidavits and documents did not conclusively establish a defense to the claims asserted by plaintiff as a [*6]matter of law).

The Arrow Cross Claim Against SDA

In its answer to the Complaint, Arrow also cross claims against SDA (as well as FKC). While Arrow asserts that it is entitled to be indemnified by co-defendants in whole or in part (Arrow Answer, ¶ 62), it seeks judgment over or apportionment of liability in accordance with each co-defendant's equitable share of responsibility. Thus, it appears that Arrow's cross claim is based on common law (as opposed to contractual) indemnification and/or contribution, as it is undisputed that the parties are not in privity of contract. Indeed, Arrow asserts, in its brief, that its cross claim seeks indemnification and/or contribution. Arrow Opposition Brief, p. 3, 10.[FN5]

SDA seeks dismissal of the indemnity claim, arguing, inter alia: (1) plaintiff's claims against Arrow are based on Arrow's own acts of wrongdoing, which are separate and distinct from the acts or omissions of SDA; and (2) the indemnity claim fails as indemnity is available only to one who has committed no wrong, but is held vicariously liable for the wrongdoing of another, and the Complaint does not seek to hold Arrow vicariously liable for the alleged acts or omissions of SDA. See County of Westchester v Welton Becket Assocs., 102 AD2d 34 (2d Dept 1984); see also Kagan v Jacob, 260 AD2d 442, 442 (2d Dept 1999) ("the predicate for common law indemnity is vicarious liability without fault on the part of the proposed indemnitee").

In response, Arrow argues that plaintiff's claims against Arrow and SDA are intertwined, and the work of Arrow and SDA were also intertwined. According to Arrow, this scenario provides the basis for the indemnification claim in the event Arrow were found liable to plaintiff, particularly when SDA was contractually required to coordinate and monitor Arrow's work, but failed to do so, as alleged in the Complaint. Arrow relies on James McKinney & Sons, Inc. v Lake Placid 1980 Olympic Games, Inc. (92 AD2d 991 [3d Dept 1983]), aff'd as mod 61 NY2d 836 (1984) and Northrop Contracting, Inc. v Village of Bergen (139 Misc 2d 435 [Sup Ct, Monroe Cty 1986]), for the proposition of law that a contractor may assert claims against a construction manager who is not in privity of contract, where the manager failed to exercise due care in managing and supervising the contractor's work. Arrow Opposition Brief, p. 4-5.

Arrow's argument is unpersuasive, and its reliance on the McKinney and Northrop cases, supra, is misplaced. In McKinney, a subcontractor hired by a project owner commenced an action against the project manager (and the owner), asserting, inter alia, a claim sounding in negligence against the manager. The court found that the manager's contractual duties owed to the owner inured to the benefit of the subcontractor, even though the subcontractor and the manager were not in privity of contract. As such, the court refused to dismiss the negligence claim on the ground that the subcontractor's reliance on the manager's ability to manage the project was foreseeable. Unlike the instant case, however, the facts and the law in McKinney are distinguishable because it did not involve any indemnity claim and there was no discussion of vicarious liability. The Northrop case is also inapposite, as the primary issue there was whether a contractor's reliance on the work product of the project engineer, who was hired by the owner to design and supervise the project, but was not in contractual privity with the plaintiff contractor, was sufficient to create a nexus approaching privity that would support the contractor's claim of [*7]negligent supervision against the engineer. Because Northrop did not involve indemnification or vicarious liability issues, it is likewise inapplicable.

Moreover, even if the work performed (or failed to be performed) by Arrow and SDA, and the claims against them, are intertwined, there is an insufficient showing by Arrow that plaintiff intends to hold Arrow vicariously liable for the acts or omissions of SDA. Arrow has not pointed to specific provisions of the Complaint that aid its argument, despite its assertion that "Trump [i.e. plaintiff] is looking to hold Arrow responsible for acts and behavior of S & D ... ." Arrow Opposition Brief, p. 9. The Kalina Affirmation (¶ 15 therein) submitted in support of Arrow's opposition also failed to do so, because it merely listed the separate causes of action asserted in the Complaint against FKC, SDA and Arrow, without establishing that plaintiff is seeking to hold Arrow vicariously liable for SDA's alleged wrongdoings and that Arrow was itself not at fault. Therefore, Arrow's indemnification claim against SDA should be dismissed. See The Edge Management Consulting, Inc. v Blank, 25 AD3d 364, 367 (1st Dept 2006) ("Common-law indemnification is predicated on vicarious liability without actual fault, which necessitates that a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine") (internal quotation marks and citations omitted).

Accordingly, it is

ORDERED that the part of the motion to dismiss the Complaint by Scorcia & Diana Associates, Inc. (SDA) based on CPLR 3211 (a) (1) and (a) (7) is hereby denied; and it is further

ORDERED that the part of the SDA motion to dismiss the cross claim based on indemnification of Arrow Restoration, Inc. is hereby granted.

This constitutes the Decision and Order of the court.

Dated: June 9, 2009

ENTER:

____________________

J.S.C. Footnotes

Footnote 1: Arrow's cross claim against FKC is not the subject of this decision and order.

Footnote 2: The "January 20, 2003" date was an apparent typographical error, as the relevant facts indicate that the letter should have been dated as "January 20, 2004" instead.

Footnote 3: Window head restoration usually requires "repair and/or replacement of bricks and mortar, metal flashing, and many other structurally-related components." Fichter Affidavit, ¶ 15, fn. 1.

Footnote 4: In contrast to "window head restoration," which is more costly and involves greater intrusion to a building's facade, "lintel work" is non-intrusive and involves removing rust and applying sealants or waterproofing products. Id. at ¶ 15, fn. 1.

Footnote 5: This decision and order does not address whether the contribution claim is viable (if at all) under the facts of this case, as the parties have not briefed the issue.