Baillie Lbr. Co. v A.L. Burke, Inc.

[*1] Baillie Lbr. Co. v A.L. Burke, Inc. 2006 NY Slip Op 50654(U) [11 Misc 3d 1082(A)] Decided on February 8, 2006 Supreme Court, Erie County Fahey, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 8, 2006
Supreme Court, Erie County

Baillie Lumber Co., Plaintiff,

against

A.L. Burke, Inc., Robertson-Ceco Corporation and Star Building Systems, Individually and/or as a Division of Robertson Ceco Corporation, Defendants.



2004/579



Hodgson Russ, LLP

Benjamin M. Zuffranieri, Esq.

Thomas M. Krol, Esq.

One M&T Plaza, Suite 2000

Buffalo, New York 14203

Attorneys for Plaintiff

Wilson, Elser, Moskowitz, Edelman & Dicker LLP

William G. Gandy, Esq.

Jason R. Waters, Esq.

The Colorado Building, Suite 500

1341 G Street, N.W.

Washington, D.C. 20005

Attorneys for Defendants Robertson-Ceco Corp.

and Star Building Systems Friedman, Hirschen, Miller & Campito, P.C.

Andrew Lind, Esq.

131 State Street, P.O. Box 1041

Schenectady, New York 12301

Attorneys for Defendant/Third-Party Plaintiff

A.L. Burke, Inc.

Goldberg Segalla, LLP

Dennis P. Glascott, Esq.

554 Main Street, Suite 400

Buffalo, New York 14203

Attorneys for Third-Party Defendant

Mucher Erectors, Inc.

Eugene M. Fahey, J.

This matter comes before the Court upon the motion of Defendants, Robertson-Ceco Corporation and Star Building Systems, for an order granting summary judgment and dismissing Plaintiff, Baillie Lumber Co.'s complaint and all pending cross-claims. Defendant and Third-Party Plaintiff, A.L. Burke, Inc., moves for summary judgment dismissing the claims against it, as does Third-Party Defendant, Mucher Erectors, Inc. Plaintiff, Baillie Lumber Co., filed papers in opposition to the motion of Star Building, Star Building filed a response to the motion of A.L. Burke, and A.L. Burke filed a response to the motion of Mucher Erectors.

Oral argument took place on November 15, 2005 and the Court reserved decision. After due consideration, the Court denies Star Building's motion for summary judgment. The Court grants in part and denies in part the motion of A.L. Burke for summary judgment, and grants in part and denies in part the motion of Mucher Erectors for summary judgment dismissing the third-party complaint.

The ultimate question that the trier of fact must answer is: what failed first, the roof panels or the supporting structure?

BACKGROUND

In 1995, Baillie Lumber entered into a contract with A.L. Burke for the construction of two metal buildings at Baillie Lumber's location in Smyrna, New York (see Krol Affirm. Exhibit B [the "Contract"]). At its Smyrna location, Baillie Lumber processes lumber for resale, by drying it in kilns (see Gandy Affirm, Exhibit G [hereinafter Steiner EBT] at 6). The cost of the buildings, including erection, was $1.36 million (see Contract at 14). In 2003, Baillie Lumber experienced extensive leaking of the roof on one of the buildings, as detailed herein.

Procedural History

Baillie Lumber sued A.L. Burke, the construction manager on the project, and Star Building [*2]Systems, a division of Robinson-Ceco Corporation (hereinafter Star Building), the company that supplied the materials for the building, including the roof system. The complaint alleged breach of contract, breach of express and implied warranties, negligence, and strict liability (see Krol Affirm. Exhibit A). A.L. Burke impleaded Mucher Erectors, Inc., the subcontractor that erected the building (see Gandy Affirm. Exhibit D).

Star Building moved to dismiss the causes of action for breach of contract, breach of implied warranties, negligence, and strict liability, alleging that the claims were barred inter alia by the Statute of Limitations and by the economic loss rule. That motion was granted (see Gandy Affirm. Exhibit K [Order of Makowski, J., granted Feb. 4, 2005]). The sole remaining cause of action against Star Building is based upon a twenty-year express warranty given to A.L. Burke and assigned to Baillie Lumber.

Construction

Baillie Lumber engaged A.L. Burke to erect two structures, including a main building (240 feet wide, 500 feet long and 26 feet high on the low side) with an adjoining loading area, described in the Contract as follows: [f]rame type to be STAR Building Systems' Multi-Span * * * tapered column with a single slope roof with one (1) row of columns down the middle of the structure

(Contract § 5/01 [A] [1], at 10). The Buildings were "to be rigid frame, designed to support 40 pounds per square foot live load, 70 MPH wind load. ½"/12" roof slope" (id. section 5/01 [A] [3], at 10).

In further details concerning the building, the Contract states: STAR Manufacturing Company shall have on file complete design calculations of all structural components on your building and shall furnish same upon request. Your STAR building carries a three year factory guarantee, and Contractor shall provide such a guarantee to Owner.

(Contract, § 5/01 [B] [emphasis supplied]). That warranty is not the subject of this lawsuit.

An additional warranty was to be provided by Star Building concerning the roof. The Contract provides that "[t]he roof shall be covered with STARSHIELD standing seam roof panels as manufactured by STAR" (id. § 5/01 [C] [1] at 11), and further that: STAR Building Systems guarantees that the material used in manufacturing these roof panels will not rupture, fail structurally or perforate for a period of twenty (20) years from the date of shipment. Contractor shall provide such guarantee to owner.

(Contract § 5/01 [C] [2], at 12).

The roof system of the metal building designed by Star Building, according to its Director of Business Affairs, David Rutherford: * * * consisted of metal purlins built on structural members. The purlins were Z-shaped members that created the frame for the roof's panels. The panels were placed on top of the purlins and secured by a two-piece StarShield clip.

* * * The top-piece of the StarShield clip secured the standing seam on the outside of the panels. The bottom portion of the Star Shield clip was attached to the purlins on the inside of the roof. Together the two pieces of the StarShield clip secured the panels to the purlins without the need for pre-drilled holes in the roof's panels.[*3]

(Rutherford Affid. ¶¶3, 5).

The promotional materials attached to Rutherford's affidavit contain a picture of a cross section of a roof panel secured by means of the StarShield Clip to what is labeled a purlin (see Rutherford Affid. Exhibit A). The document states: The panel itself is supported by horizontal clip shoulders that suspend it one inch above the roof structural members. This stand-off feature allows space for greater insulation capability and efficiency. (id.).

As provided in the contract, an Express Warranty was purchased by A.L. Burke from Star Building in connection with the roof (hereinafter "the Express Warranty"). Baillie Lumber asserts that the Express Warranty assignment was not given to it until June 9, 2004, over eight years after construction (see Krol Affirm. ¶ 8 & Exhibits D & E). The one-page Warranty is labeled "Alum-Zinc Twenty Year Material Warranty for Roof Panels". It states in pertinent part: Star * * * has sold to the STAR BUILDER or other Star customer metal panels made of hot dipped Aluminum-Zinc Alloy coated sheet steel to be used on the roof of a building.Star * * * guarantees that the material used in manufacturing these roof panels ...WILL NOT RUPTURE, FAIL STRUCTURALLY OR PERFORATE... for twenty (20) years from date of shipment.If the material covered by this guarantee should fail to meet the above guarantee, Star Building Systems' sole responsibility shall be limited to the direct cost of labor and materials required to repair, repaint, replace or otherwise treat the affected area on site. It shall be determined by Star Building Systems how such panels will be repaired, repainted, replaced or otherwise treated. Panels repaired, repainted, replaced or otherwise treated hereunder shall be guaranteed only for the unexpired balance of the original guarantee period.

(Krol Affirm. Exhibit E [emphasis in original]). In addition, the Express Warranty provides in pertinent part: This warranty applies only to panels:* * *5.Installed in strict accordance with Star Building Systems' erection drawings and instructions, with fasteners provided by Star Building Systems or an equal approved by Star. (id.)

The Warranty disclaims liability for consequential or special damages (id.).

In March 2003, according to Baillie Lumber, the roof on one of the buildings failed. Specifically, Robert Steiner, Yard Manager for the Smyrna location, testified at a deposition that there was massive leakage of water on the north side of the building (which is 500 feet long), and water was coming down from the roof as far as 40 feet from the outside wall (Gandy Affirm., Exhibit G [hereinafter Steiner EBT] at 28-30). Steiner hired a local contractor to remove ice and the approximately 10 inches of snow that was then on the roof (Steiner EBT at 31-32). Thereafter, the leaking continued but was reduced (Steiner EBT at 41-42).

According to Steiner, there has been a deflection or bending of the roof; the purlins have turned and are sagging (Steiner EBT at 91, 93, 96). There is also deflection in the [*4]

supporting members, the angle brackets that attach from the purlins to the structural steel (id.). [FN1]

Walt Rogers, Baillie Lumber's Maintenance Supervisor at the Smyrna location, testified at his deposition that he climbed up on the roof of the building in question in the spring of 2003, after the snow melted (Gandy Affirm. Exhibit F [hereinafter Rogers EBT] at 6, 33). He asserted that he observed no punctures, tears, or perforations of the roof panels (Rogers EBT at 39-40).

After the roof leaked, Baillie Lumber hired a licensed structural engineer, Raymond Cudney of Beardsley Design, to analyze any problem with the roof (see Krol Affirm. ¶ 11). Cudney inspected the building and issued a report in May 2003 summarizing his findings and recommendations (see Cudney Affid. ¶ 6 & Exhibit A [Report]).[FN2] In an affidavit in

opposition to the instant motion, Cudney provided the following opinion: * * * First, the roof panels had deflected from their designed position. It is my opinion, based upon my experience as a structural engineer, that this deflection which appeared to have been caused by the weight of snow and ice, amounted to a failure of the roof panels and also the supporting structures. It is also my opinion, based upon my experience as a structural engineer, that the roof panels failed because the supporting roof structure does not appear to be sufficiently designed to meet the New York State Building Code. Specifically, the supporting roof structure failed due to its inability to withstand foreseeable snow load as anticipated by New York's Building Code. * * ** * * When subjected to gravity loading, such as snow and ice, a supporting roof structure will deflect downward in a vertical direction. A properly designed roof structure will restrict the magnitude of the vertical deflection so as to maintain positive drainage of the roof surface and to prevent permanent bending and distortion of structural members. It is my opinion, based upon my experience as a structural engineer, that the roof failed due to deflections that allowed ponding of water on the roof surface and permanent distortion of structural members

(Cudney Affid. ¶¶8- 9 [emphasis supplied]). Finally, Cudney opined that the alleged structural failure of the roof could only be remedied by repair of or replacement of the roof panels and the purlins (id. ¶ 11). [*5]

Baillie Lumber tendered a claim under the Express Warranty to Star Building in May 2003; that claim was rejected (see Krol Affirm. Exhibits G-L). This suit followed.

In support of its motion, Star Building submitted the affidavit of David Rutherford, its Director of Business Affairs. Rutherford avers that the "Alum-Zinc" roof panels, which are the subject of the Express Warranty, are only one component of the standing seam roof system. However, he asserts, "the Alum Zinc panels were never the subject of Baillie Lumber's complaint. When [Baillie Lumber] contacted Star Building in May 2003, Bailie Lumber asserted that the roof's purlins were defective and contributed to the leaking" (Rutherford Affid. ¶ 6).

Rutherford purports to offer an opinion on the "likely source" of the leaks; however, his affidavit identifies him as only the Director of Business Affairs at Star Building, without any allegations concerning his expertise in identifying the cause.[FN3] He stated: I traveled to Smyrna, New York in December 2003 to inspect the buildings. While I noted a slight rolling of the purlins, within acceptable limits of design, I also observed daylight between the rubber plugs and the roof's panels, indicating a likely source of the leaks. However, neither of these issues is addressed by the Alum Zinc Twenty Year Material Warranty for Roof Panels.

(Rutherford ¶ 7). Note that Rutherford did not state that the gap between the rubber plugs at the eaves and the roof panels was the cause of the leak, nor that that gap necessarily existed in March 2003, at the time of the initial leak. In addition, as noted, he failed to allege his expertise in determining that a "slight rolling of the purlins" as he deemed it, was within acceptable limits of design.

DISCUSSIONStar Building contends that the unambiguous terms of the Express Warranty do not apply to the circumstances of Baillie Lumber's claim. Specifically, Star Building asserts that the Express Warranty applies only to the "material used in manufacturing these roof panels" (see Krol Affirm. Exhibit E), and therefore the only product subject to the warranty was the "metal roof panels". Star Building's counsel contends that the Warranty "did not guarantee the purlins or structural members", "[n]or did Star guarantee the performance or integrity of the standing seam roof system" or its weather tightness (see Gandy Affirm ¶ 14 & Memo of Law at 4). Star Building points out that, in pre-lawsuit correspondence, Baillie Lumber's counsel raised as a defect only the load bearing capacity of the purlins (Gandy Affirm ¶ 15 & Exhibit J [correspondence]) and, further, Baillie Lumber's engineering firm, Beardsley Design, found that the purlins in its roof were not strong enough; this, Star Building asserts, is not a claim covered by the Express Warranty (see Star Memo of Law at 4-5).

Baillie Lumber responds that its claim is based upon a structural failure of the roof panels and the supporting purlins which hold the roof panels in place; it asserts that the roof failed structurally when the roof panels and supporting structures deflected causing a failure of the panels to support the expected roof snow loads. Thus, Baillie Lumber asserts that Star Building has failed [*6]to meet its burden of establishing its entitlement to judgment as a matter of law, and Star Building's motion must be denied (see Baillie Memo of Law at 1, 8-10).

Under the New York Uniform Commercial Code, covering sales of goods: (1) Express warranties by the seller are created as follows:(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. (UCC § 2-313 [1] [a]).

Because an express warranty is part of the "basis of the bargain", its interpretation is governed by the rules of contract interpretation (see Star Memo of Law at 2; see also Prudential Ins. Co. v Premit Group, Inc., 270 AD2d 115 [1st Dept], lv denied 95 NY2d 756 [2000]). However, the substantive question of interpretation here is complicated by the fact that the Express Warranty at issue was given to A.L. Burke, and, although A.L. Burke covenanted to assign that Warranty, it was not actually given to Baillie Lumber until eight years after the sale of the building materials (see Krol Affirm. Exhibit D). It is undisputed that Baillie Lumber is entitled to enforce the Warranty, but there remain two questions: one, what precise language is the Court interpreting and two, is that language ambiguous.

Although no party has rebutted Baillie Lumber's averment that it did not receive a copy of the Express Warranty until June 9, 2004 (see Krol Affirm. ¶ 8 & Exhibit D), Baillie Lumber does not contend, and could not logically contend, that it is not bound by all of the provisions of the Express Warranty, simply because it failed to obtain or maintain a copy of it at the time of contracting with A.L. Burke. Thus, the Court's job is to interpret the language of the Express Warranty, and not simply that portion of it which was recited in the Contract (see generally American Express Bank, Ltd. v Uniroyal, Inc., 164 AD2d 275, 277 [1st Dept 1990], lv denied 77 NY2d 807 [1991] [contract should be construed so as to give full meaning and effect to all of its provisions]). A familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing * * *.Whether or not a writing is ambiguous is a question of law to be resolved by the courts (W.W.W. Assocs., Inc. v Giancontieri, 77 NY2d 157, 162 [1990]). Further, extrinsic evidence is inadmissible to create an ambiguity in an otherwise unambiguous document (see id. at 163).

Baillie Lumber contends that the Express Warranty is plain and unambiguous on its face (see Baillie Lumber's Memo of Law at 14-15), and Star Building agrees (see Star Building's Memo of Law at 4), but the two parties differ in their interpretation of that "plain" meaning. On that point, Baillie Lumber asserts that Star Building's submission of a different warranty Baillie Lumber might have purchased is an attempt to introduce parol evidence to create an ambiguity in the Warranty where one does not exist. Star Building counters by deeming the additional warranty as mere evidence of custom and usage (see Gandy Reply Affirm ¶ 22). The Court agrees with Baillie Lumber that the additional warranty constitutes extrinsic evidence which is inadmissible to add to or vary the terms of what is according to both Baillie Lumber and Star Building an unambiguous document. [*7]

It follows from the parties' assertion of a lack of ambiguity that the interpretation of the Warranty is an issue of law for the court (see Village of Hamburg v American Ref-Fuel Co. of Niagara, L.P., 284 AD2d 85, 88 [4th Dept], lv denied 97 NY2d 603 [2001]). "In seeking summary judgment, each party bears the burden of establishing that its construction of the * * * agreement is the only construction which can fairly be placed thereon'" (St. Mary v Paul Smith's College of Arts and Sciences, 247 AD2d 859, 860 [4th Dept 1998] [internal citations omitted]).

The Court determines that Star Building has established as a matter of law that, under the plain terms of the Express Warranty, it guaranteed that "the material used in manufacturing the[] roof panels" would not "RUPTURE, FAIL STRUCTURALLY OR PERFORATE... for twenty (20) years" (Gandy Affirm., Exhibit I [emphasis in original]). However, in the Court's view, Baillie Lumber has raised a material issue of fact for trial whether the defect in the roof was caused by a structural failure of the roof panels or of some other part of the building not covered by the Express Warranty. On the record before the Court, on this motion for summary judgment, the Court is unable to separate the roof panels from the purlins, or to decide that it was the panels rather than the purlins, or vice versa, that, as a matter of law, deflected and/or caused the leaking.

The Court notes that Star Building submitted no opinion of any person except its Director of Business Affairs concerning the condition of the roof.[FN4] On the other hand, Baillie Lumber asserts, through its Expert, that the "deflections that allowed ponding of water on the roof surface and permanent distortion of structural members" either render the roof unsafe and/or cause it to leak. Thus, reading the terms of the Warranty together and as a whole, as the Court must, it is clear that the Warranty covers only the "material used in manufacturing the[] roof panels", but there is a question of fact whether that material ruptured, failed structurally or perforated.

The Court denies Star Building's motion for summary judgment.

CROSS MOTIONS

A.L. Burke moves for summary judgment on all of the causes of action in the complaint that are asserted against it. It asserts that all of the causes of action accrued at the completion or substantial completion of the building project in 1996 (see A.L. Burke Memo of Law at 4). Thus, since the complaint was not filed and served until 2003, more than six years after accrual of the claims (some of which had a three year statute of limitations), the entire complaint with the exception of the claim for Express Warranty i.e. the causes of action for breach of contract, breach of implied warranties, negligence and strict products liability must be dismissed as time-barred (see CPLR 214; Gandy Affirm. Exhibit K [Order & Judgment, with attached Decision of Makowski, J., at 6, 15]; see also UCC 2-725 [1], [2]).

In addition, A.L. Burke adopts the contentions raised by Star Building in its current motion for summary judgment, with respect to the Express Warranty claim against both Defendants (see A.L. Burke Memo of Law at 6). That part of the motion is denied, by the same reasoning that the Court denies Star Building's motion for summary judgment on the Express Warranty Claim.

In the alternative, A.L. Burke seeks a conditional order of implied or common law indemnity [*8]against Star Building, on any causes of action that remain. The sole remaining cause of action is the second cause of action, insofar as it is based upon the Express Warranty.[FN5] Although Star Building does not directly address that issue, Third-Party Defendant Mucher Erectors does: it asserts that, despite A.L. Burke's assertion that it was not at fault, because it neither designed nor erected the building, issues of fact exist concerning A.L. Burke's role in the development of the specifications for the building (see Glasscott Affirm. ¶ 18).

In order for a party to obtain common law indemnification, that party must be free from active negligence and the indemnitor, on the other hand, must be at least partly at fault (see Correia v Professional Data Mgmt. Inc., 259 AD2d 60, 65 [1st Dept 1999]; see also 17 Vista Fee Assoc. v Teachers Insurance and Annuity Ass'n, 259 AD2d 75, 80 [1st Dept 1999] ["a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine" of indemnification (internal citation omitted)]"; see generally Mas v Two Bridges Assoc., 75 NY2d 680 [1990]). According to the deposition of David Rutherford, Star's Director of Business Affairs, A.L. Burke had the opportunity to submit modifying criteria for the building's specifications based upon information received from the customer (see Glascott Affirm, Exhibit H [excerpts from Rutherford EBT] at 210-213). Mucher asserts that A.L. Burke failed to provide any such modifying criteria with respect to the purlins on this roof system, and therefore the design parameters in the software A.L. Burke used for ordering Star Buildings reverted to the "default criteria" for the purlins (see id. at 208-210, 212-213, 238-243). Thus, although A.L. Burke may have no specific liability under the Express Warranty, there is a question of fact whether it bore some fault for the problems with the roof in question and, therefore, its request for an order of conditional indemnification is denied.

Likewise, A.L. Burke is not, on this record, entitled to a conditional order of indemnity against Third-Party Defendant Mucher Erectors, against whom no liability has yet been proven.

Third-Party Defendant Mucher Erectors also moves for summary judgment, adopting the arguments made by Defendant/Third-Party Plaintiff A.L. Burke against Baillie Lumber and also seeking to dismiss the third-party complaint. Again, the sole remaining claim by Baillie Lumber against A.L. Burke is based upon the Express Warranty.

To the extent that A.L. Burke may have liability under the Express Warranty, it should be entitled to maintain its third party action against Mucher Erectors, but only to that extent (see Lind Reply Affirm. ¶ 2 [in opposition to motion of Mucher Erectors]). Further, Mucher has established as a matter of law that A.L. Burke is not entitled to an order of contractual indemnity against Mucher (see Glascott Affirm. ¶¶14-17 & Exhibit G). As noted, however, there are questions of fact in the record whether A.L. Burke and/or Mucher Erectors were or were not at fault with respect to the problems with the roof, and therefore the Court denies that part of Mucher's motion that seeks to dismiss the third-party complaint, but only insofar as A.L. Burke seeks an order of common law [*9]indemnification; the motion is otherwise granted.

Defendant Star Building's counsel to submit order on notice to all other counsel.

Dated: February 8, 2006

EUGENE M. FAHEY, J.S.C. Footnotes

Footnote 1:From the inside, the roof panels are not visible because there is insulation between the panels and the supporting members (Steiner EBT at 92-93). Steiner had not viewed the top of the roof since the 2003 leaking (Lind Affirm. Exhibit F [Steiner EBT] at 70).

Footnote 2:In his May 2003 report to Baillie Lumber, after his review of the roof, Mr. Cudney had written: [t]he analysis * * * indicate[s] that the 8 ½" roof purlins on the Star Building are significantly overstressed when subjected to a load that includes the design snow load of 40 psf [per square foot] and a roof dead load (decking and insulation) of 6 psf. The calculations suggest that the purlins are overstressed by at least 1.5 times the allowable stress. In addition, the calculations indicate that the purlins will deflect over 4" under design loads, which exceeds the allowable deflection criteria of 1.4". (Gandy Affirm. Exhibit M).

Footnote 3:Rutherford in his examination before trial indicated that he has no engineering background (see Lind Affirm. in Support of A.L. Burke Cross Motion for Summary Judgment, Exhibit J, at 22-23).

Footnote 4:The Court notes that Defendant A.L. Burke submitted the examination before trial of Dan DeKalb, a Star Employee and an engineer, in conjunction with its cross motion, but Star does not rely on that testimony in its motion.

Footnote 5:The Court notes that, insofar as the second cause of action against A.L. Burke is based upon A.L. Burke's allegedly having "expressly warranted that all applicable statutes, rules, ordinances, and/or regulations laws [sic] bearing on the conduct of the work as drawn and specified would be complied with", that part of the cause of action must be dismissed based upon the running of the statute of limitations. The Court notes that Baillie Lumber filed no response to the cross motions of A.L. Burke or of Mucher Erectors.