Neznek v Architectural Sys., Inc.

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Neznek v Architectural Sys., Inc. 2012 NY Slip Op 32847(U) October 10, 2012 Sup Ct, New York County Docket Number: 116344/2008 Judge: Milton A. Tingling Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 121312012 [* 1] [* 2] I ' SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK:PART 44 X "_11__________________________11__1_1_11----------------------------- KEVIN NEZNEK, Index No. 1 1634412008 Plaintiff, DECSION AND ORDER - against- ARCHITECTURAL SYSTEMS, N C , , WFI BAMBOO LLC, and EXOTECO, LLC Defendants. 7 ARTCHITECURAL SYSTEMS, INC. Third Party Plaintiff, FILED NOV 0 9 2012 -against- 1 I Hon, Milton A. Tingling, J.S.C. I. BACKGROUND By complaint dated November 2 1st, 2008, Plaintiff Kevin Neznek alleges that wood flooring which was used in the construction of Plaintiffs residence had to be replaced after the flooring allegedly began to split, crack and warp. A review of the various moving papers submitted by the parties demonstrates all parties acknowledge the flooring defects resulted from the flooring's .* I incompatibility with the humidity levels in Plaintiff's residence. As a result of the alleged complications with the flooring, Plaintiff initiated this action against the distributor of the wood flooring, ARCHITECTURAL SYSTEMS, JNC. (ASI), as well as the manufacturers of the flooring, WFI BAMBOO LLC and EXOTECO, LLC. Plaintiff alleges that Defendants supplied and [* 3] manufactured the flooring negligently and in breach of implied and express warranties. After the cornplaint was ijled, Defendant ASI, filed a third-party complaint against Plaintiffs contractor who installed the flooring, B N Y CONSTRUCTION, as well as CITY LANDMARK CORP., a company allegedly affiliated with BNY. NEZNEK, ASI, CITY LANDMARK CORP., and BNY CONSTRUCTION INC., all now move this court for summary judgment. The three motions, under sequence numbers six through eight are, are consolidated for decision herein. With respect to Plaintiffs motion for summary judgment, Plaintiff NEZENK argues that AS1 breached warranties by allegedly failing to provide wood flooring fit for its intended use. As to Defendant ASI s motion for summary judgment, AS1 asserts that (1) Plaintiffs tort claims are barred by New York s economic loss doctrine and (2) Plaintiff cannot maintain the breach of implied and express warranties claims, as Plaintiff lacks the requisite privity of contract to maintain a breach of warranty claim. Finally, with respect to thirdparty Defendants CITY LANDMARK and BNY s motion for summary judgment, third-party defendants assert they are entitled to summaryjudgment as there is no evidence which raises atriable issue of fact as to who selected the flooring to be used or as to the correctness of the installation. For the reasons stated herein, Defendant and third-party Plaintiff ASI s motion for summary judgment is granted and Plaintiffs complaint against AS1 is dismissed in its entirety. Accordingly, Plaintiffs NEZNEK s motion for summaryjudgment is denied and the third-party complaint against CITY LANDMARK COW. and BNY CONSTRUCTION PIC. is dismissed. . * [* 4] 11. DEFENDANT ASI S MOTION FOR SUMMARY JUDGMENT Summary Judgment Standnrd The Court of Appeals has held that in order to grant summary judgment, The movant . must establish his cause of action or defense sufficiently to warrant the court as a matter of law in directing summary judgment in his favor. Zuckermun u. City oflvew York,49 N.Y.2d 557,427 N.Y.S.2d 595 (198). Furthermore, the party opposing a motion for summary judgment must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim. Id at 598. New York s Economic Loss Doctrine In the first branch of its motion for summaryjudgment, Defendant AS1 argues that Plaintiffs tort causes of action are deficient as a matter of law under New York s economic loss doctrine. AS1 argues that because Plaintiff has only claimed damages with respect to flooring in question and consequential damages that allegedly resulted therefrom, Plaintiffs tort claims are untenable under New York law. The economic loss doctrine provides that where only economic loss with respect to a product itself is alleged and the underlying transaction is a sale of goods, the purchaser is limited to contractual remedies and may not maintain the traditional tort causes of action of negligence or strict liability. AKV Auto Transport, Inc. v. Syosset Truck Sales Inc., 24 A.D.3d 833, 835, 806 N.Y.S.2d 254 (3d Dept 2005). Furthermore, this rule applies both to economic losses with respect . - . ~. to the product itself and consequential damages resulting from the alleged defect. New York Methodist Hosp. v. Currier Corp., 68 A . 6 3 d 830, 831, 892 N.Y.S.2d 110 (2d Dept 2009). In opposition to Defendant s motion, Plaintiff asserts that his tort claims are for negligent misrepresentation and negligent failure to disclose, which Plaintiff alleges are not contractually based [* 5] c and therefore are not barred by the economic loss doctrine. Plaintiff claims that AS1 made misrepresentations prior to and after the flooring being ordered and installed related to the quality and suitability of thc flooring for the residence. Specifically, Plaintiff alleges that AS1 knew or should have known that, due to the humidity levels in the New York area, the flooring would not be suitable for Plaintiffs residence, but failed to convey this information to Plaintiff s architect, Richard Khan,who is not a party to this action. Plaintiff explains in his deposition that the decision to use the flooring in question was made by the Plaintiff and his architect (See Deposition of Kevin Neznek, 37:3). Plaintiff s architect confirms in his deposition that Plaintiff selected the flooring in question based on the architect s recommendation (See Deposition of Richard Khan, 22:2). Plaintiff asserts that these alleged misrepresentations made by AS1 to his architect are the basis o f his tort claims and are not barred by the economic loss doctrine. However, this court finds Plaintiffs argument to be unavailing. New York Courts have held the economic loss rule reflects the principle that damages arising from the failure of the bargainedfor consideration to meet the expectations of the parties are recoverable in contract, not tort. Bristol- MeyersSquibb, Indus. Div. v. Deltastar, Inc. 206A.D.2d 177,181,620N.Y.S.2d 196(4Dept 1994) . Furthermore, it is a well established principle that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract has been violated. The legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent on the contract . Id at 179. In the instant case, ---- Plaintiff attempts to establish that the alleged representations by AS1 to Plaintiffs architect represent extraneous circumstances that are independent of the contract. However, issues related to the quality and suitability of the flooring are clearly covered in the contract of sale between AS1 and Plaintiffs contractor, City Landmark C o p / BNY Construction Inc. For example, Section 11 of the contract [* 6] explicitly states that the seller docs not warrant that the goods are fit for any particular purpose. Furthermore, the contract expressly states that any of the contractual warranties contained in the contract will be void when damages result from environmental factors, such as exposure to extreme sunlight, heat, moisture or dryness. Thus, issues regarding the quality and suitability of the flooring for use in the Plaintiff s residence, particularly as they relate to environmental conditions, are clearly covered in the contract of sale for the flooring, and therefore cannot be considered extraneous or independent of the contract. Therefore, as Plaintiff has only claimed an economic loss arising from an alleged failure of a bargained-for consideration to meet the Plaintiffs expectations, Plaintiffs tort claims are deficient as a matter of law. Accordingly, Plaintiffs tort causes of action (the first and fourth causes of action alleged in Plaintiffs complaint) are hereby dismissed. Plaint&T s Status as a Third Party Beneficiary In the second branch of ASI s motion for summaryjudgment, AS1 asserts that Plaintiff is not a third- party beneficiary of the contract between AS1 and City Landmark Corp. and BNY Construction. Accordingly, ASI s asserts that Plaintiffs causes of action based on ASI s alleged breach of warranties are deficient as a matter of law as Plaintiff lacks privity. Indeed, the flooring installed in Plaintiffs residence was purchased in accordance with contracts between AS1 and CITY LANDMARK CORPJBNY CONSTRUCTION, However, a determination as to Plaintiffs status as a third-party beneficiary with respect to the contract between AS1 and CITY LANDMARK I I CORP./BNY CONSTRUCTION is irrelevant as the terms of said contract specifically bar the type of contract claims now asserted by the Plaintiff. Thus, even if this court was to hold that Plaintiff is a third-party beneficiary of the contract, Plaintiffs breach of warranty claims would be barred. [* 7] The crux of Plaintiffs claims for breach of warranty is that (1) the flooring sold by AS1 experienced defects as a result of the flooring being unsuitable for use in Plaintiffs residence due to environmental conditions present in the residence and (2) AS1 failed to inform Plaintiffs architect of this information. Plaintiff asserts that as a result of ASI s alleged breach, Plaintiff sustained damages including the cost of replacing the flooring and consequential damages. As previously mentioned, Section 1 1 of the contract in question states, seller warrants that the goods conform to the description stated on the face hereof. No other warranty, express or implied, is made by seller including warranty of merchantability or warranty that the goods are fit for any particular purpose. Furthermore, Section 12 of the contract specifically states that seller shall not be liable for any indirect, special, incidental, consequential or punitive damages. Thus, even if this court was to allow Plaintiff to proceed as a third-party beneficiary of the contract, Plaintiffs claims for consequential damages, which account for a substantial portion of Plaintiffs total damage assessment, would be barred by the terms of the contract. Plaintiff seeks to avoid the confines of the limited warranties and limitations on damages contained in the contract of sale by asserting that, if Plaintiff was held to be a third-party beneficiary, UCC 2-719 allows Plaintiff to avoid those contractual limitations. However, this cowt finds no such allowance in the UCC s provision. For example, UCC 2-7 19(3) states, consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Unconscionability requires some showing of an absence of meaningful choice on the part of the parties together with contract terms which are unreasonably favorable to the other party. State v. Avco Finuncial Service afNew Y ~ r Inc., 50 N.Y.2d 383,429 N.Y.S.2d 181. In the instant case, Plaintiff has not alleged, k nor has there been any evidence which suggest, that the contract of sale for the flooring was [* 8] r * unconscionable. Thus, without a showing of unconscionabilty, Plaintiff would be precluded from seeking consequential damages by the terms of the contract. However, Plaintiffs causes of action based on breach of warranty must be dismissed in their entirety. Section 11 of the contract of sale for the flooring states, seller warrants that the goods conform to the description stated on the face hereof. No other warranty, express or implied, is made by seller including warranty of merchantability or warranty that the goods are fit for any particular purpose. Furthermore, Section 11 explicitly states that any warranties for the flooring will be void under certain circumstances, including L environmental factors such as exposure to extreme sunlight, heat, moisture or dryness. Plaintiffs causes of action based on breach of warranty are based on Plaintiffs cantention that flooring sold by AS1 experienced defects ag a results of local environmental conditions. However, the terms of the contract explicitly preclude recovery under any warranty that may have existed when environmental conditions, such as moisture or dryness, are the cause of the alleged damages. Thus, per the terms of the contract, Plaintiff cannot maintain a breach of warranty claim based on the flooring s alleged incompatibility with certain local environmental factors. Therefore, Plaintiff s causes of action for breach of warranty are hereby dismissed. 111. CITY LANDMARK CORP., AND BNY CONSTRUCTION, INC. S MOTION FOR SUMMARY JUDGMENT In support of their motion for summary judgment, third-party Defendants CITY LANDMARK CORP. and BNY CONSTRUCTION, INC. allege that there is no evidence that the flooring in question was either selected by them or improperly installed. Accordingly, third-party .. . . . . . . - . .. _ . - [* 9] Defendants assert that ASI s third-party complaint for contribution and indemnification should be dismissed. However, given that this court is granting summary judgment to AS1 with respect to the claims asserted against it by Plaintiff Neznek, AS1 will not be found liable for the same. Thus, ASI s claims for contribution and indemnification are no longer relevant. Accordingly, ASI s third-party complaint is hereby dismissed. IV. AS TO PLAINTIFF NEZNEK S MOTION FOR SUMMARY JUDGEMENT With respect to PlaintiffNeznek s motion for summaryjudgment, Plaintiff asserts, as he did in his opposition papers to ASI s motion for summary judgment, that AS1 breached warranties by allegedly providing defective materials. Howwer, given that this court has addressed precisely those issues in ASI s motion for summary judgment, there is no need for further discussion of the same. Accordingly, Plaintiffs motion for summary judgment is hereby denied. V. CONCLSUION For the reasons stated herein, Plaintiffs complaint against AS1 is hereby dismissed. Furthermore, as AS1 will not be found liable to Plaintiff, ASI s third-party complaint against CITY LANDMARK COW. and BNY CONSTUCITION INC. is dismissed. Finally, Plaintiffs motion for summary judgment is denied. Clerk is directed to enter judgment ac o in FPtED Dated: October 10,2012

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