FGR Realty, LLC v Verizon, NY, Inc.

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[*1] FGR Realty, LLC v Verizon, NY, Inc. 2007 NY Slip Op 52517(U) [18 Misc 3d 1119(A)] Decided on December 3, 2007 Supreme Court, Broome County Rumsey, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 3, 2007
Supreme Court, Broome County

FGR Realty, LLC, Plaintiff,

against

Verizon, New York, Inc., Defendant. =========================================== Verizon New York, Inc., Third-Party Plaintiff, v McFarland-Johnson, Inc., Third-Party Defendant.



2006-1225



APPEARANCES:

McDONOUGH & ARTZ, P.C.

By:Kevin F. McDonough, Esq.

Attorneys for Plaintiff

P.O. Box 1740

117 Hawley Street

Binghamton, New York 13902-1740

PHILLIPS LYTLE, LLP By:William D. Christ, Esq.

Attorneys for Defendant/Third-Party Plaintiff

3400 HSBC Center

Buffalo, New York 14203

LEVENE, GOULDIN & THOMPSON, LLP

By: Michael R. Wright, Esq.

Attorneys for Third-Party Defendant

P.O. Box F-1706

Binghamton, New York 13902-0106

Phillip R. Rumsey, J.

The present action has its genesis in a construction project undertaken by plaintiff FGR Realty, LLC, owner of a shopping plaza, in 2003. Plaintiff apparently contracted with the third-party defendant McFarland-Johnson, Inc. (hereinafter McFarland), a professional engineering firm, to perform specified services in connection with the project, which involved bridging over and enclosing an open storm water channel. Among other things, McFarland was to draw up plans for the project and coordinate with other entities such as utility companies with underground facilities in the area, that might be affected by the construction activities (Affidavit of Michael R. Wright, Esq., dated June 4, 2007, ¶ 17).

To that end, a utility coordination meeting was commenced on October 29, 2003, and continued the following day at the construction site. A representative of defendant Verizon New York, Inc. (hereinafter Verizon) was present at both meetings (Wright Affidavit, Exhibit B [Answer to Amended Complaint, dated October 24, 2006], ¶¶ 10, 17), but allegedly failed to inform plaintiff of the location of an underground utility line belonging to that company (Wright Affidavit, Exhibit A [Amended Complaint, dated September 29, 2006], ¶¶ 20-21). The line was discovered after the excavation had begun, in a location inconsistent with the planned modifications. Plaintiff alleges that Verizon's negligence and trespass caused delay, additional planning and construction expense, and damage to plaintiff's property.

Verizon then commenced a third-party action against McFarland, seeking indemnification and/or contribution (Wright Affidavit, Exhibit C [Third-Party Complaint, dated May 9, 2007]). McFarland now moves for dismissal of the Third-Party Complaint, pursuant to CPLR 3211 (a), on the ground that it fails to state a viable cause of action.

The indemnification claim must be dismissed. There is no allegation of any contractual obligation undertaken by McFarland to indemnify Verizon. Nor has Verizon alleged facts that would establish a basis for implied indemnification, which is generally available only to a party that may be found liable without actual fault, as, for example, where the law imposes vicarious liability (e.g., liability of an employer for the acts of its employee, or liability of a vehicle's owner for the acts of a driver) (see, Trustees of Columbia Univ. v Mitchell/Giurgola Assocs., [*2]109 AD2d 449, 452-453 [1985]). In this case, plaintiff is suing Verizon for its own wrongdoing, not on the basis of vicarious or other legal liability without fault. Plaintiff will only succeed on its claim if there is a finding of actual fault (e.g., negligence, or other tortious conduct) by Verizon, in which case Verizon will not be entitled to indemnification. And if Verizon is found to be without fault, it will not have to pay any damages to plaintiff, that could be recovered over from McFarland (see, id., at 453-454; Board of Educ. of City of New York v Mars Assocs., Inc., 133 AD2d 800, 801 [1987]).

Turning to the claim for contribution, McFarland maintains that because it had a contractual relationship with plaintiff, and contribution is only available in cases of tort liability, the claim must be dismissed. A contribution claim may only be sustained where (1) the plaintiff's claim against the defendant sounds (at least partly) in tort (see, Board of Educ. of the Hudson City School Dist. v Sargent, Webster, Crensaw & Folley, 71 NY2d 21, 28 [1987]; Tower Bldg. Restoration, Inc. v 20 E. 9th St. Apt. Corp., 295 AD2d 229, 230 [2002]), (2) the third-party defendant allegedly breached a duty, separate from any contractual obligation, either to the plaintiff or to the defendant (see, Garrett v Holiday Inns, Inc., 58 NY2d 253, 261 [1983]; Trustees of Columbia Univ., at 454), and (3) that breach allegedly caused or contributed to the injury for which plaintiff seeks to recover in the main action (see, Nassau Roofing & Sheet Metal Co. v Facilities Dev. Corp., 71 NY2d 599, 603 [1988]).

The first criterion (which addresses the issue of whether the damages sought in the underlying claim are those for which contribution may be sought) is clearly met here, for plaintiff's claim against Verizon sounds only in tort - negligence and trespass. No contract between plaintiff and Verizon has been alleged, nor does it appear that there was one. If plaintiff does not succeed in proving negligence (i.e., the existence of a duty owed by Verizon to plaintiff, and a breach of that duty resulting in damages) or trespass - both torts - there will be no recovery on the main claim. And if plaintiff does establish the elements of one or both of its causes of action, the resulting liability will necessarily be of the type with respect to which contribution may be sought.

The second criterion (which, in essence, constitutes an analysis of whether the third-party defendant is also a "tortfeasor," from whom contribution may be sought) may be satisfied by proof that the third-party defendant breached a tort duty owed to the plaintiff, or to the defendant seeking contribution. At this early stage of the litigation, neither of those possibilities can be ruled out. Although McFarland evidently had a contract with the plaintiff, neither the existence of a contract, nor the fact that the contract may expressly obligate a professional to act in a manner consistent with the standards governing the profession, eliminates the independent duty arising from the professional relationship (breach of which would constitute the tort of malpractice) (see, Matter of R.M. Kliment & Frances Halsband, Architects and McKinsey & Co., Inc., 3 NY3d 538, 542-543 [2004]; Tower Bldg. Restoration, at 229-230). The allegations of the third-party complaint, that McFarland was negligent in "designing, planning and/or coordinating the project," and more specifically, in failing to provide Verizon with copies of the plans for the project, and failing to ask Verizon to identify its facilities at or near the existing storm water channel, could state a claim of malpractice, provided Verizon is able to prove that the alleged omissions constituted a breach of McFarland's duty to comply with professional standards, which would have been applicable even in the absence of any contract (see also, Robinson Redevelopment Co. v Anderson, 155 AD2d 755, 757 [1989]). [*3]

That duty (to perform in a manner consistent with reasonable standards of engineering practice) plainly ran to the plaintiff, and if McFarland breached it, and the breach caused or contributed to the damages claimed in the complaint (as Verizon alleges), contribution could be had. Moreover, there may be a factual question as to whether, under the circumstances, McFarland also had a duty to Verizon. In order for a professional to have a duty to a third party, not a client, the circumstances must be such as to forge a bond "so close as to approach that of privity" (Ossining Union Free School Dist. v Anderson LaRocca Anderson, 73 NY2d 417, 425 [1989], quoting Glanzer v Shepard, 233 NY 236, 238-239). In determining whether such a relationship exists, three criteria are considered: whether there is an awareness, on the part of the professional, that its reports are to be used for a particular purpose; whether there was reliance on the report, by the third party, in furtherance of that purpose; and whether there was "some conduct by the [professional] linking them to the [third party] and evincing [the professional's] understanding of their reliance" (id., at 425).

Here, the facts as alleged in the complaint and in the third-party complaint could, if proven, satisfy all three of these requirements. In particular, the occurrence of direct meetings between McFarland and the utility representatives, at which McFarland apparently provided information about the project to the utility representatives, and sought information in return regarding the location of utility fixtures, might support an inference that McFarland knew the utility providers were relying on its plans and explanations as to the nature and location of the project, and that the utilities actually did rely on that information. The meetings themselves might constitute the type of "linking" conduct, demonstrating McFarland's understanding of defendant's reliance, contemplated by the third criterion (cf., Board of Mgrs. of Astor Terrace Condominium v Schuman, Lichtenstein, Claman & Efron, 183 AD2d 488, 489-490 [1992]).

Should a factfinder conclude that these criteria have been satisfied, that could demonstrate the existence of a duty running from McFarland to Verizon, which Verizon has alleged was breached, causing the damages alleged in the complaint. Such a breach could, even in the absence of any showing of a direct breach by McFarland of its tort duty to plaintiff, form the basis for a claim of contribution by Verizon.

Accordingly, McFarland has not demonstrated that Verizon's third-party claim for contribution is deficient as a matter of law, and that portion of the third-party complaint shall not be dismissed.

The motion is therefore granted, insofar as it seeks dismissal of Verizon's third-party claim for indemnification, and otherwise denied. This decision shall constitute the order of the court.

Dated:December 3, 2007

Cortland, New York_______________________________

HON. PHILLIP R. RUMSEY

Supreme Court Justice

ENTER

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