Nassau County v New York State Urban Dev. Corp.

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Nassau County v New York State Urban Dev. Corp. 2011 NY Slip Op 33392(U) December 19, 2011 Sup Ct, Nassau County Docket Number: Judge: Ira B. Warshawsky 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. ..................................... ......................... [* 1] 1" nf".4R..' '1\U. SHORT FORM ORDER SUPREME COURT STATE OF NEW YORK COUNTY OF NASSAU PRESENT: HON. IRA B. WARSHAWSKY Justice. TRIAL/IAS PART 7 NASSAU COUNTY Plaintiff - against - INDEX NO. : 002750/2004 MOTION DATE: 10/21/2011 SEQUENCE NO. : 018 019 NEW YORK STATE URBAN DEVELOPMENT CORPORATION dl/aEMPIRE STATE DEVELOPMENT CORPORATION , DORMITORY AUTHORITY OF THE STATE OF NEW YORK RICHARD DATTNER ARCHITECT , P. , TISHMAN CONSTRUCTION CORPORATION OF NEW YORK CSA GROUP NY ARCHITECTURE , ENGINEERIG MARIANO D. & CONSULTATION , P. MOLINA , P. C. and COUNCILMAN HUNSAKER & ASSOCIATES C. f/k/a Defendants. The following documents were read on these motions: Motion by Richard Dattner & Partners Architects , P. , s/h/a Richard Dattner Architect C. and CSA Engineering & Consulting, P. , f/ka Mariano D. Molina C. to dismiss cross- claims ofNYS Urban Development Corporation , and DASNY Affdavit of Richard Dattner in Support of Motion Memorandum of Law in Support of Motion ................................................... Affidavit in Opposition to Motion of Tishman Construction Affirmation in Opposition by Counsel for Tishman Construction Tishman Construction Memorandum of Law in Opposition to Motion ......... Reply Memorandum of Law in Further Support of Motion Reply Affirmation in Further Support of Motion [* 2] Cross-motion of Empire State Development (ESD) and DASNY to amend answer and dismiss cross-claims ........................................................................................ 9. Memorandum of Law in support of Cross-motion ........................................ Tishman Memorandum of Law in Opposition to Cross-motion 10. ............... 11. CSA Group Memorandum of Law in Opposition to Cross-motion ............... 12. Affrmation in Opposition to Cross-motion to Amend on behalf of Tishman 13. Affirmation in Opposition to Cross-motion to Amend on behalf of Dattner 14. Affdavit in Opposition to Cross-motion to Amend on behalf of Tishman 15. Reply Affirmation in Further Support of Cross-motion ........................... 16, PRELIMINARY STATEMENT This motion by the defendants Richard Dattner Architect , P. , and CSA Group NY Architecture , Engineering & Consultation , P. c., f/ka Mariano D. Molina, P. C. (" Molina ) for an order pursuant to CPLR 3212 granting them summary judgment dismissing the defendants New York State Urban Development Corporation d//a Empire State Development Corporation ESDC" ) and the Dormitory Authority of the State of New York' s (" DASNY" ) cross- claims sounding in contribution and indemnification and the defendant Tishman Construction Corporation of New York' s (" Tishman ) cross- claims sounding in breach of contract , negligence contribution and indemnification is granted. This cross-motion by the defendants ESDC and the DASNY is for an order pursuant to CPLR 3025(b) granting them leave to serve an Amended Answer to the Amended Complaint to advance cross- claims against Dattner and Tishman sounding in breach of contract , and an order pursuant to CPLR 3212(e) granting them partial summary judgment dismissing the defendants Richard Dattner Architect P. , Tishman , Molina , Councilman Hunsaker & Associates CHA" cross- claims and third- party defendant Dectron Intemationale third- party claims sounding in contribution and indemnification as against them is granted to the extent provided herein. The facts pertinent to the determination of this motion were set forth in this court' s May [* 3] 2011 decision and wil not be restated here. DISCUSSION On a motion for summary judgment pursuant to CPLR 3212 , the proponent must make a prima facie showing of entitlement to judgment as a matter of law , tendering sufficient evidence to demonstrate the absence of any material issues of fact." affd. as , 74 (2d Dept. 2004), NY2d 320 , 324 (1986); citing Alvarez v Prospect Hosp. , 68 mod. , 4 NY3d 627 (2005), Wine grad v New York Univ. Med. Ctr , 64 NY2d 851 , 853 (1985). prima facie Failure to make such Sheppard- Mobley v King , 10 AD3d showing requires a denial of the motion , regardless of the sufficiency of the opposing papers. Sheppard- Mobley v King supra , at p. 74; Alvarez v Prospect Hosp. supra Wine grad v New York Univ. Med. Ctr. supra . Once the movant's burden is met the burden shifts to the opposing party to establish the existence of a material issue of fact. Alvarez v Prospect Hosp. supra , at p. 324. The evidence presented by the opponents of summary judgment must be accepted as true and they must be given the benefit of every reasonable inference. See Demishick v Community Housing Management Corp. , 34 AD3d 518 , 521 (2d Secofv Greens Condominium , 158 AD2d 591 (2d Dept. 1990). Dept. 2006), citing Breach of Contract Generally, construction contracts which do not express an intention to benefit third parties do not give rise to third parties ' rights to enforce them. 40 NY2d 652 (1976); Dept. 2001). " In See Port Chester Elec. Const. Co. v Atlas Perron v Hendrickson! ScalamandrelPosilico (TV) , 283 AD2d 627 (2 order to recover as third-party beneficiaries to a contract , plaintiffs ' must establish: (1) the existence of a valid and binding contract between other parties , (2) that the contract was intended for their benefit , and (3) that the benefit to them is sufficiently immediate [* 4] . .. to indicate the assumption by the contracting parties of a duty to compensate them if the Saratoga Schenectady Gastroenterology Associates. P. c. v Bette & Cring , LLC, benefit is lost.' " 83 AD3d 1256 (3 (2011), citing Dept. 2011), quoting IMS Engrs. Mandarin Trading Ltd. v Wildenstein 16 NY3d 173 , 178 Architects. P. c. v State of New York 51 AD3d 1355 , 1357 (3 Dept. Iv den . 11 NY3d 706 (2008). 2008), The Statute of Limitations for damages for architectural and engineering malpractice is three years. CPLR 214(6). Such a claim accrues upon the completion of the contract and the Vlahakis v Belcom Dev LLC , 86 AD3d termination of the parties ' professional relationship. 567 (2 Dept 2011), citing Frank v Mazs Group. LLC 30 AD3d 369 , 369- 370 (2 Dept 2006). The completion of an architect' s obligations must be viewed in light of the particular circumstances of the case. Frank v Mazs Group. LLC supra , at p. 370. A Certificate of Occupancy coupled with a cessation of obligations under the contract gives rise to accrual. Vlahakis v Belcom Dev. LLC supra , at p. 568 , citing City School Dist. of City of New burgh v Stubbins & Assoc. , 85 NY2d 535 538 (1995). The parties ' obligations under the contract are key. 2008); Town ofWawarsing v Camp. Dresser & McKee. Inc. , 49 AD3d 1100 , 1100- 1102 (3 Dept City of Binghamton v Hawk Eng g. P. , 85 AD3d 1417 (3 Dept 2011). It is not clear when Tishman s breach of contract claim against Dattner and Molina accrued. There are allegations that their work continued beyond the opening of the Aquatic Center and that their contractual obligations and payment arrangements have not been addressed. Assuming, arguendo , that the relation- back doctrine applies here , Tishman s cross- claims for breach of contract against Molina and Dattner may be 4timely. Tishman s cross- claim sounding in breach of contract against Dattner and Molina is [* 5] nevertheless dismissed. Tishman has failed to identify any provisions in either the Molina or Dattner contracts with ESDC/DASNY that " contain language evincing an intent to benefit it beyond its status as incidental beneficiary. 1357 , citing IMS Engineers- Architects. P. C. v State supra , at p. Fourth Ocean Putnam Corp. v Interstate Wrecking Co. , 66 NY2d 38 , 44 (1985); Aymes v Gateway Demolition. Inc. , 30 AD3d 196 (1 st Dept. 1996). Tishman s reliance on the requirement in Dattner s agreement with ESDC that Datter cooperate with Tishman does not suffice to establish his status as a third- party beneficiary. And , Tishman is not the " Owner Representative " referenced in the "hold harmless " clause. See Regatte Condominium Association v Vilage of Mamaroneck , 303 AD2d 739 (2 Dept. 2003). ESDC and DASNY' s reliance on this court' s September 15, 2010 order , which permitted the County to amend its complaint as support for its present motion for Leave to Amend its complaint is misplaced. Leave was granted the County to discontinue against a number of defendants pursuant to CPLR 3217 , not CPLR 3025(b), which ESDC and DASNY rely on now. Lucido v Mancuso , 49 Motions for leave to amend pleadings should be freely granted. AD3d 220 , 226- 227 (2 1985); Norman v Ferrara , 107 AD2d 739 , 740 (2 Dept K. Alan Assoc.. Inc. v Lazzari , 44 AD3d 95 (2 A part seeking instance. Dept 2008), citing Dept 2007), affd , 10 NY3d 941 (2008). leave to amend to advance a claim is not required to establish its merit in the first Lucido v Mancuso , supra , at p. 221 , 232 , citing K. Alan Assoc.. Inc. v Lazzari supra , at p. 99. Leave should be denied only when the proposed amendment is "palpably insuffcient" or "patently devoid of merit." Lucido v Mancuso supra at p. 221 232 , citing Alan Assoc.. Inc. v Lazzari supra , at p. 99. ESDC is denied leave to amend its Amended Answer to interpose a cause of action [* 6] sounding in breach of contract against Dattner and Tishman. ESDC assigned , transferred and set over to DASNY " all of its rights under the contract" and , in so doing, lost standing. James McKinney &I Son. Inc. v Lake Placid 1980 Olympic Games , 61 NY2d 836 (1984); see also Aaron Ferer & Sons Ltd. v Chase Manhattan Bank Nat. Ass , 731 F2d 112 , 115 (2d Cir. 1984). DASNY' s motion for leave to amend its complaint to advance a cross- claim against Datter sounding in breach of contract is granted. Again , at this juncture , it is unclear that DASNY" s contract claim against Dattner accrued when the Aquatic Center opened. Accordingly, it is not clear that the Statute of Limitations bars that claim. It may be timely if the relation back doctrine applies. DASNY' s motion for leave to amend its complaint to advance a cross- claim against Tishman sounding in breach of contract is also granted. The Statute of Limitations for that claim is six years. CPLR 213. The completion date of Tishman s work may have been as late as the Fall of 1998. DASNY' s breach of contract claim against Tishman may relate back to the commencement ofthis action in 2004. Accordingly, DASNY' s proposed breach of contract claim against Tishman is not barred , as a matter of law, by the Statute of Limitations. Negligent Misrepresentation The elements of negligence representation are (1) a relationship approaching privity, (2) incorrect information and (3) reasonable reliance. 144 , 148 (2007); A.O. Acquisition Corp. v Stavitsky , 8 NY3d see also Prudential Ins. Co. of America v Dewey. Ballanstine. Bushby. Palmer & Wood , 80 NY2d 377 384 (1992), rearg den , 81 NY2d 955 (1993). "' (B)efore a party may recover in tort for pecuniary loss sustained as a result of another s negligent misrepresentations there must be a showing that there was either actual privity of contract between the parties or a [* 7] Marcellus Const. Co.. Inc. v Vilage relationship so close as to approach that of privity.' " Broadalbin 302 AD2d 640 (3rd Dept. 2003), quoting Ballantine. Bushby. Palmer & Wood supra , at p. 382; Hanson Industries , 274 AD2d 892 , 895 (3 Prudential Ins. Co. of Am. v Dewey. see CFJ Associates of New York v Dept 2000). "' Where , as here , no privity of contract exists between the parties , the Court of Appeals has identified three criteria for imposing liability upon the maker of a negligent misrepresentation: " ( 1) an awareness by the maker of the statement that it is to be used for a particular purpose; (2) reliance by a known party on the statement in furtherance of that purpose; and (3) some conduct by the maker ofthe statement linking it to the relying part and evincing Vilage of Broad its understanding of that reliance. albin supra , quoting AD2d 664 , 665 (3 Dept. 1999), quoting Marcellus Const. Co.. Inc. v Rayco of Schenectady. Inc. v City of Schenectady , 267 Prudential Ins. Co. of Am. v Dewey. Ballantine. Bushby. Palmer & Wood supra , at p. 384. The Statute of Limitations for this claim is also three years. CPLR 213(6). Dept. 1999). Assuming, IFD Constr. Corp. v Coddry Carpenter. Dietz & Zack , 253 AD2d 89 , (1 st arguendo , that this claim related back to the County s original complaint of 2004 , it may be timely as against Dattner and Molina as again , it is not clear when it accrued. Nevertheless , privity here is wanting. Tishman , therefore , lacks standing to advance a claim for negligent misrepresentation against Molina and Dattner. Tishman s reliance on the County classification of Datter , Molina and Tishman as the design team to establish privity fails. And again , a requirement of cooperation does not constitute privity. In fact , Tishman s agreement with ESDC expressly excluded Tishman s liability for design errors and omissions , confirming a lack of privity between Tishman and Dattner and/or Molina. When analyzing the propriety of the defendant/third-party plaintiffs ' contribution and [* 8] indemnification claims , the County s Amended Complaint supersedes its original complaint Mendrzycki v Cricchio , 58 AD3d 171 , 173 leaving the original complaint of " no legal affect." Dept. 2008). Thus , in fashioning their third- party contribution/indemnification claims , the third-part plaintiffs may not rely on the County s allegations in its original complaint nor may they rely on the County' s 2006 Bil of Particulars. Since that Bil complaint which is now a nullty, it has also become a nullty itself. Indem. Company , 90 AD2d 684 (3 of Particulars amplified a See Hawley v Travelers Dept. 1982). Contribution Contribution is available under CLR 1401 where " two or more persons. . . are subject liability for damages for the same personal injury, injury to property or wrongful death. (P)urely economic loss resulting from a breach of contract does not constitute ' injury to Board of Educ. of Hudson City School Dist. v property ' within the meaning of' CLR 1401." Sargent. Webster. Crenshaw & Folley , 71 NY2d 21 26 (1987). Furthermore (t)ort language (in the plaintiffs complaint) notwithstanding. . . absent some form of tort liability, contribution is unavailable. Dept. 1996), Rockefeller University v Tishman Const. C011 of New York, 232 AD2d 155 (pt Iv den Bocre Leasing Corp. v General Motors Corp. , 89 NY2d 811 (1997), citing Board of Educ. v Sargent. Webster. Crenshaw (Allison Gas Turbine Div ), 84 NY2d 685 (1995); & Folley supra see also Trump Vilage Section 3. Inc. v New York State Housing Finance Agency , 307 AD2d 891 (1 st Dept. 2003), Iv den , 1 NY 3d 504 (2003). " Where a plaintiffs direct claims. . . seek only a contractual benefit ofthe bargain recovery, their tort language notwithstanding, contribution is unavailable. Housing Finance Agency supra , at p. 897 , citing Trump Vilage Section 3. Inc. v New York State Rothberg v Reichelt , 270 AD2d 760 , 762 (3 ," ' " [* 9] Rockefeller University v Tishman Constr. Corp supra, at p. 155. In fact the mere Dept. 2000); potential for serious physical injury or property damages is not enough to create a duty independent of the contract thereby authorizing recovery in tort. Tishman Const. C011. of New York supra, at p. 155, citing Rockefeller University v Sommer v Federal Signal Corp , 79 NY2d 540 (1992). (T)he doctrine of the law of the case ' applies to legal determinations that were necessarily resolved on the merits in a prior decision. quoting Powell v Kasper , 84 AD3d 915 (2 Dept 2011), Lehman v North Greenwich Landscaping. LLC , 65 AD3d 1293 , 1294 (2 Dept 2009). In its May 23 2010 order , this cour held: " (i)t is clear that the County is seeking the benefit of its contractual bargain from the defendants, in paricular Tishman , DASNY and ESDC. That the County seeks damages to ' maintain , repair , replace or otherwse remediate the Aquatic Center hardly transposes its claim against (them) to a tort claim. The County' s damages are sought pursuant to a contractual duty only. In fact , ESDC and DASNY do not oppose Dattner and Molina s motion to dismiss their cross- claim seeking contribution claim pursuant to CPLR 3212 and Dattner , Molina , CHA and Dectron do not oppose ESDC and/or DASNY' s motion to dismiss their cross- claims seeking contribution. Pursuant to this cour' s aforementioned finding, ESDC, DASNY and Tishman claims for contribution from Dattner and Molina and Dattner , Tishman , Molina , CHA and Dectron s claims for contribution from DASNY and ESDC are dismissed. See Board of Educ. of the Hudson City School Dist. v Sargent . Webster. Crenshaw & Folley supra It is clear that the County is seeking the benefit of its contractual bargain from the defendants , in paricular Tishman, DASNY and ESDC. That the County seeks damages to [* 10] maintain , repair , replace or otherwise remediate the Aquatic Center" hardly transposes its claim against the defendants to a tort claim. The County' s damages are sought pursuant to a contractual duty only. Accordingly, Tishman may not seek contribution from Dattner , Molina, ESDC or DASNY. Allegations that defendants Dattner and Molina violated a Building Code does not convert a breach of contract claim to a tort claim nor does the County' s use ofthe word negligent in describing Dattner and Molina s wrongdoings in its Interrogatories convert the County s claim so as to enable Tishman to recover of them for contribution. The Dattner/ESDC Agreement contains , in relevant par , the following contractual indemnification provision: Article XI , of the Dattner/ESDC Agreement , dated July 17 2010. The ARCHITECT (Dattner) hereby agrees to indemnify and hold harless the OWNER (NYSUDC , now EDSC), the Client (Organizing Committee for the 1998 Goodwil Games , Inc. and Nassau County and its Deparments ' of Public Works and Recreation and Parks), the OWNER' s Representative (DASNY), and all of their servants and employees , against all claims arising out of the negligent acts , or failure to act , by the ARCHITECT and shall pay any of them ainst any judgment or expense , including interest imposed propert damaee and to defend for personal injury. wroneful death or and pay the costs and expenses thereof, any action , proceeding or lawsuit brought against the paries indemnified and held harless herein. The plain language of the written indemnity clause provides that Dattner s obligation to indemnify ESDC and DASNY is expressly limited to claims for personal injur, wrongful death or propert damage. It is law of the case that the damages sought by Nassau County herein are economic loss. Thus , to the extent relied upon by ESDC and DASNY , the indemnification provision is inapplicable to the pending litigation. There is no contractual provision that is 10- [* 11] against Dattner. Indemnification (I)n idemnity, the part held legally liable shifts the entire loss to another. Practor & Schwartz. Inc , 66 NY2d 21 24 (1995), citing Rosado v Ambrosio v City of New York , 55 McDermott v City of New York , 50 NY2d 211 216- 217 (1980), NY2d 454 460- 461 (1982); rearg den , 50 NY2d 1059 (1980). It " arises out of a contract which may be express or may be implied in law ' to prevent a result which is regarded as unjust or unsatisfactory (citations Rosado v Practor & Schwartz. Inc supra at p. 24 , quoting Prosser and Keaton , Torts omitted). 51 at p. 341 (5th Ed. Common law indemnity only lies where one who has done no wrong is nevertheless held liable solely due to another s negligence. Glazer v M. Fortunoff of Westbury C011 , 71 NY2d 643 646 (1988). " Since the predicate of common law indemnity is vicarious liabilty without actual fault on the part of the proposed indemnitee , it follows that ' (a) party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the Trump Vilage Section 3. Inc. v New York State Housing Finance Agency supra , at doctrine.''' p. 895 , quoting Trustees of Colombia University in City ofN. Y. v Mitchell/Giurgola Associates 109 AD2d 449 453 (pt Dept. 1985); see also Broyhil Furniture Industries. Inc. v Hudson Furniture Galleries. LLC , 61 AD3d 554 (pt Dept. 2009). (T)he doctrine of the law of the case ' applies to legal determinations that were necessarily resolved on the merits in a prior decision. quoting Powell v Kasper supra , at p. 915 Lehman v North Greenwich Landscaping. LLC supra , at p. 1294. In its May 23 , 2010 order, this court also held: " in light of the County s allegations against Tishman , DASNY and ESDC , that they have caused the County s damages by breach of contract and negligent 11- [* 12] misrepresentation , their liability cannot possibly be predicated solely upon the negligence or wrongdoing of others. " Pursuant to this finding, ESDC, DASNY and Tishman s claims for indemnification from Dattner and Molina and Dattner, Tishman , Molina , CHA and Dectron claims for indemnification from DASNY and ESDC are dismissed. ESDC and DASNY do not oppose Dattner and Molina s motion to dismiss their indemnification claims and Dattner , Molina , CHA and Dectron do not oppose ESDC and/or DASNY' s motion to dismiss their cross- claims for indemnification. There are no written agreements to indemnify between these parties. The predicate for common law indemnification , vicarious liabilty without fault on the indemnitee s part Trustees of Columbia University in City ofN. Y. v Mitchell/Giurgola Associates, supra) , is not possible here. ESDC, DASNY , Tishman , Dattner , Molina , CHA and Dectron s potential liability are all predicated on their own wrongdoings. 626 (2 Dept 1992); See Mount Vernon Fire Ins. Co. v Mott , 179 AD2d Politte v Sherman , 168 AD2d 761 (3 Dept 1990). Tishman has not cited any provisions from its three (3) agreements with ESDC that identifies Tishman as anything other than the Constrction Manager. The contractual indemnification provision contained within Dattner/ESDC' s agreement runs in favor of the owner (NYSUDC , now ESDC), clients (Organizing Committee for the 1998 Goodwil Games , Inc. and Nassau County and its Department of Public Works and Recreation and Parks), the Owner Representative (DASNY) and all of their servants and employees. Tishman , who was not even retained at the time the Dattner/ESDC agreement was executed , is not the owner s representative. Indeed , even Tishman s three (3) separate agreements with the ESDC clearly note that Tishman was retained as the Construction Manager and provided services of a Construction Manager. 12- [* 13] fact , the Tishma/ESDC agreements specifically prohibit Tishman from identifying itself as an agent of the owner (i. , Owner s Representative) for any purpose: The relationship created by this Agreement between the Owner and nor is it to be construed as. Construction Manager is one of independent. . . in any way or under any circumstances. creating or appointing the Construction Manager as an agent of the Owner for any purpose whatsoever. In light ofthe County s allegations against Tishman , that it has caused the County damages by breach of contract and negligent misrepresentation , its liabilty cannot possibly predicated solely upon the negligence or wrongdoing of others: Accordingly, vicarious liability by the defendants Dattner , Molina , ESDC and/or DASNY is not possible. Tishman s crossclaims for indemnification against Dattner , Molina , ESDC and DASNY fail and are also dismissed. citing See Vilage of Palmyra v Glazer v M. Fortnoff Hub Langie Paving. Inc , 81 AD3d 1352 (4 of Westbury. Corp Authority , 280 AD2d 985 (4th Dept. 2001); Dept. 2011), supra Brickel v Buffalo Mun. Housing Colyer v K Mart C011 , 273 AD2d 809 (4 Dept 2000). In conclusion: Dattner and Molina s motion is granted to the extent that defendants ESDC , DASNY and Tishman s claims against them for contribution and common law and/or contractual indemnification are dismissed and defendant Tishman s claims for breach of contract and negligent misrepresentation are dismissed. ESDC and DASNY' s motion is granted to the extent that Dattner , Tishman , Molina , CHA and Dectron s claims against them for contribution and common law and/or contractual indemnification are dismissed; the defendant ESDC is denied leave to amend its complaint against Dattner and Tishman and the defendant DASNY is granted leave to amend its complaint 13- ,\ , .. [* 14] against Dattner and Tishman. Submit Judgment on Notice. This constitutes the Decision and Order of the Court. Dated: December 2011 C. ENTe.REO QEC 2. , 20\\ COUNT'c NASSAUe.RK' s OFF\CE COUN1'( CL 14-

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