Sachem Cent. Sch. Dist. v Manville

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Sachem Cent. Sch. Dist. v Manville 2013 NY Slip Op 30039(U) January 2, 2013 Supreme Court, Suffolk County Docket Number: 14704-2011 Judge: Emily Pines 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] SHORT FORM ORDER lNDEXNo.: 14704-2011 SUPREME COURT - STATE OF NEW YORK COMMERCIAL DIYISION, PART 46, SUFFOLK COUNTY Motion Date: Submit Date: Morion Nos.: PRESENT: HON. EMILY PINES 08-05-2011 01-02-2013 001 MOTO JUSTICE Stfl'REME COURT [ ] Final [x INon Final x SACHEM CENTRAL SCHOOL DISTRICT, ON ITS OWN AS ASSIGNEE OF AURORA CONTRACTORS, INC., Plaintiff, -againstJOHNS MANVILLE, GIAQUINTO MASONRY, INC., RESTOR TECHNOLOGIES, INC., HST ROOFING, INC., CORD CONTRACTING CO., INC, INTERCOUNTY GLASS, INC., and VIPA RESTORATION,INC., Defendants. x ORDERED that the motion (Mot. Scg. # 00 I) hy defendant Johns Manville to dismiss the complaint as asserted against it is decided as set forth herein. Factual and Procedural Background According to the Verified Complaint, in 2002 Sachem Central School District [* 2] ("'Sachcm") entered into a construction contract with Aurora Contractors, Inc, C'Auronl'} that included the installation orthe roof and the exterior wall systcm at a nc\v high school building. Aurora then entered into subcontracts with HST Rool1ng. Inc. ('"liST''), Giaquinto Masonry. Inc. ("(Jiaquinto"). Restor Technologies, Inc. ("Restor"). Cord Contracting Co. ('"Cord"). Intercounty Glass, Inc. ('"Intercounty") and VIPA Restoration. Inc. ("VIPA"), for wall. roof and other construction work and material production at the high school. Aurora subcontracted the roof work to HST. a rooting contractor allegedly certified and approved by Johns Manville ("JM"), the manufacturer of the rooting system installed on the building. Sachem further alleges that at the completion of the installation or the ruof-ing systcm, Aurora was required to furnish Sachem with a written guarantee ti'om JM for thc roof. Sachem claims that in 2004, JM issued a 20-year guarantee agreement entitled "UltraGard Roofing Systems Guarantee" ("Guarantee") aftcr .1M inspected the roof installation. The Guarantee allegedly provides, among other things, that JM would: "pay for the materials and labor required to promptly repair the rooting system to return it to a watel1ight condition if leaks occurred due to: ordinary wear and tear, or deficiencies in any or all of thc component materials of the roofing system. or workmanship deficiencies in the application of the roofing systcm." Sachem alleges that since 2004, the high school has been plagued with water leaks from the roof and wall systems, as well as widespread disbonding of the roof system. From 2004 until October 2008. JM responded to Sachem's requests for repairs to the roof. However, after October 2008, JM allcgedly refused to recognize that the Guaramee was in ellcct and failed to inspect and/or repair the roof. Sachem alleges that the leaks and rcsulting property damagcs werc the rcsult of defects in the roofing system and/or construction/workmanship and/or material deficiencies by the defendants. Additionally. Sachem claims Lhatthe wall systems and roof system werc improperly prepared, installed and/or constructed by Giaquinto, Restor, HST, Cord, Intercounty and VIPA causing extcnsive water/wind damage at the high school. Page20F 14 [* 3] In J\ugust 2006. Aurora commenced an action in this Court under Index No. 21012/06 against Sachem to recover damages for work performed for which it claimed it \\'as not paid C·Aurora Action·'). Sachem asserted a counterclaim against Aurora to rc<.;overdamages for de!cl:tive work. On August 28,2009. Sachem commenced a thirdparty action against JM Jor breach of warranty and negligence. JM counterclaimed against Aurora J{)findemnification or contribution. In reply. Aurora asserted claims against JM for. among other things. indemnification. contribution and breach of contract. Thcreaher, Aurora commenced a fourth-party action against Giaquinto. Restor, I-IST, Cord. Intercounty and VIPA ("Fourth-Parry Defendants") for breach of contract, negligence. indemnification and contribution. On July 8, 2010, this Court (Emerson. J.) heard oral argument on whether to dismiss the third- and fourth-party actions on the ground that they were procedurally Improper. As part of a settlement of the Aurora Action between Aurora and Sachem, Aurora assigned to Sachem its claims against all of its subcontractors and material men who performed work and/or furnished materials on the high school project, including its claims for indemnity, contribution and breach of contract asserted in the fourth-party action against the fourth-Party Defendants. By Decision Aller Oral Argument dated Decembcr 2, 20 I0, this Court (Emerson, J.) dismissed the third and fourth-party complaints in the Aurora Action "with leave to commence a new action pursuant to CPL.-I<. in accordance herewith." [n its Decision, 205 the Court stated, in relevant part: Insofar as Aurora sought to recover from its subcontractors in the event that it was liable to Sachem on the counterclaims, Aurora properly impleaded the subcontractors. However, Aurora and Sachem have now scIlled the claims and counterclaims assertcd by them in the main action vvith Aurora receiving $400,000 and assigning to Sachem all oi'its rights and claims against its subcontractors and materialmen. Page 3 of 14 [* 4] Thu·s.1\urOnl·S claims against Manville and the suhcontractors. as well as Sachem's claims against Manville. may now be asserted by Sachem in an action against Manville and the subcontractors. and Manville's claims against Aurora l'or indemnification and contribution may be asserted in a third-partyactioJ1. In vleyv of the foregoing. the court dismisses the thirdand fourth-party actions with leave to commence a new action pursuant to CPLR 205 in accordance herewith. On May 3. 20 I], Sachem. on its own and as assignee of Aurora, commenced this action against JM. Giaquinto, Restor, I-1ST,Cord, Intercounty, and VIPA. The Veritied Complaint contains four causes of action. The tirst cause of action is asserted only against JM for breach of "the express and implied warranty and guarantee." The second cause or action is asserted against all defendants for negligence in the performance of construction and installation of the rooting and wall systems and the issuance of the guarantee. The third calise of action is asserted against all defendants for negligence in the "performance of the work, labor, service and furnishing of materials and equipment" at the high school. The fourth cause of action is asserted by Sachem, as assignee of Aurora, against Giaquinto, Restor, Cord, I-1ST,Intercounty, and VIPA for breach of contract, warranties, and negligence in the construction and installation of the roofing and \vall systems . .1M 11m\' moves, pursuant to CPLR 3211(a)(l), (5) and (7), to dismiss the Verilied Complaint as asserted against it. In support of the motion, JM submits, among other things, a copy of the Guarantee and an aflidavit from Donn Cornman, r ,ead for the Northeast Region of JM's Roofing Systems Group. Cornman states, among other things. that after installation of the roar was completed by I-1STon February 17.2004, JM received an application for a twentyyear guarantee !~lf the rooting system. On February 24, 2004,.IM issued a Guarantee Application Confirmation to liST stating, in relevant part: Page 4 of 14 [* 5] We require the following information before issuance ufyour guarantee: * Please forward Tax Exemption Certificate. * Please forward roof plan and SPM sheet layoUl (I r hallasted). * * [-"inalInspection by Sales Rep. or Tech Rep. (*Upon Issuancc*) Payment of Balance Due: $21.300.00 Also on February 24, 2004, JM issued an invoice to HST rel1ecting a charge for the Guarantee of $12,425.00. Cornman states that JM 's records reflect that JM never received payment for the Guarantee from or on behalf of Sachem. Nevertheless, annexed as an exhibit to Cornman's affidavit is an undated Guarantee issued by 1M for the high school roofing system installed by HST. The Guarantee states, in relevant part: Johns Manville guarantees to the original Building Owner that during the 'rerm commencing with the Date of Completion, JM wi II pay for the materials and labor required to promptly repair the Roofing System to return it to a watertight condition if leaks occur due to: ordinary wear and tear, or deficiencies in any or all or the component materials of the Roofing System, or workmanship deficiencies in the npplication orthe Roofing System. * * * This Guarantee becomes effective when (1) it is delivered to Owner: and (2) all bills for installation, materials, and services have been paid in full to the Approved Roofing contractor and to JM. Unlil that time, this Guarantee is not in h:)]"ce and has no errect. ¢ ¢ ¢ Page 5 of 14 [* 6] TO TilE I'UI LEST EXTENT PERMITTED BY I.AW. JM DISCLAIMS ANY IMPLIED WARRANTY. INCLUDING TilE WARRANTY OF MICRCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. AND LIMITS SUCH WARRANTY TO THE DURATION AND TO TilE EXTENT OF THE EXPRESS WARRANTY CONTAINED IN TillS GUARANTEE. * *' *' JM AND ITS AFFILIATES WILL NOT liE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE BUILDING STRUCTURE ... OR ITS CONTENTS, LOSS OF TIME OR PROFITS OR ANY INCONVENIENCE. JM AND ITS AFFILIATES SHALL NOT BE LIABLE FOR ANY DAMAGES WHICH ARE BASED UPON NEGLIGENCE, BREACH OF WARRANTY, STRICT LIAIiILITY OR ANY OTHER THEORY OF LIABILITY OTHER THAN THE EXCLUSIVE LIABILITY SET FORTH IN nus GUARANTEE. Comman further slates that although not obligated to do so. following a roof leak at the high school first reported on November 16,2004. "1M assigned contractors to effect emergency repairs in a good faith effort to stabilize the situation and to avoid disruption or school activities." Cornman claims that ·'JM did so with a full and express reservation of rights based on the fact that no valid guarantee existed for the building because.lM was never paid tor one." Cornman provides a copy of a letter dated December 13, 2006. he sent to Sachem staling. among other things: Johns Manville rcgrets that the school has experienced wind related problems with the roofing systcm on this project. As discussed during the Deeember)lt! rooftop meeting. we Page 6 of 14 [* 7] arc a fair company and understand the importance of not disrupting your students' education and protecting the contents of your facility. In good faith. we have chosen to arlCct emergency repairs with out full knowledge of the circumstances and with out investigation. The purpose or my visit was tworold: to direct Nationwide Contracting to perform emergency repairs and to stabilize the situation and to investigate and determine a root cause of the wind l~li[ure. At this writing, r am told that the emergency repairs have been completed. These repairs will be at no cost to the school. A review of r J M's] file indicates, however, that Johns Manville was never paid for the guarantee of this roofing system. As a result there is no valid guarantee on this building. Cornman also provides copies of additionalletters from 1M to Sachem dated February 12. 2007, Marcb 9, 2007, Marcb 21, 2007, and November 14,2008, each of \vhich states, among other things, that the Guarantee never became effective because JM never received payment for it. .1M argues. among other things, that the Guarantee it issued to Sachem never hcc;)l11c effective because JM never received payment for it and the Guarantee specifically provides that it only becomes effective after it is delivered and: "all bills lor installation, materials, and services have been paid in full to the Approved Roollng Contractor and JM. Until that time. this Guarantee is not in force and has no eflect." Thus . .IM contends that Sachem's claim for breach of express warranty should be dismissed . .1M argues that Sachems' claim j(Jr breach of implied warranlY should be Page 7 oJ' 14 [* 8] c!lsllliSSL'dcc<.lllse Cjuarantee expressly "disclaims any implied \varranty, including b the the warranty of merchantability and the warranty of fitness for a particular purpose " Additionally, .Jl\1 contends that the first cause of action is barred by the four-year stntutc or limitations contained in UCC ~ 2~72S, as the claim accrued no later than February 17, 2004, and Sachem did not commence an action against JM until August 26,2009, \\"hen it commenced a third~paI1y action against.lM in the Aurora Action. With regard to the second and third causes of action for negligence, .1Margues that it \\'as a fL'lTIotc lnanubcturer and owed no duty of care to Sachem with respect to the issuance of the Guarantee or otherwise, and that any negligence claim against JM for property damage \vould be barred by the express terms orthe Guarantee and by the economic loss doctrine, \vhich .1Mcontends precludes recovery under a tort theory for purely economic damages. In opposition to JM's motion, Sachem submits, among other things, an affidavit from Bruce Singer, Sachem's Associate Superintendent for Business. Mr. Singer states, among other things, that at the time that 1M issued the Guarantee, it did not notify Sachcm that the Guarantee had not been paid for, nor did Sachem receive such a notification 1'romAurora or lIST. Singer states that Sachem had already paid the minimal amount due for the Guarantee to HST, \vhich he claims was JM's agent. Accordmg to Singer, in accordance with the terms of the Guarantee, Sachem contacted JM's Guarantee Services Unit on various occasions from 2004 to 2008 for repairs, Additionally, Singer states: Each time, Johns Manville dispatched an approved contractor to the site to inspect the roof. Repairs for leaks found by Johns Manville to be its responsibility \vere authorized and paid for by Johns Manville. On other occasions, where Johns Manville determined leaks were not its responsibility under the guarantee, Johns Manville recommended the method of repair and repairs would be made to the rooL ] 3. Johns Manville's own documents prove that it provH:lcdthe School District \\lith an "ACTIVE" guarantee and Johns Manville further provided serviccs in accord with an active guarantee for nearly five years. Page 8 of 14 [* 9] Sachem also provides copics of multiple complaint forms prepared by .1M n:garding complaints made by Sachcm from 2004 through 2007. which. among other things. list the number assigned to the Guarantee and list its status as '"Active.·· Additionally. Sachem annexes copies of Inspection Reports prepared by 1M in 2004 and 2005 which identify the Guarantee by its number. Three of the Inspection Repons mention coverage under the Guarantee. Sachem also provides a copy of a lener Irom .1M to Aurora dated I\pril 7. 2005. which references the Guarantee by number and --the applicable Johns Manville Rool'ing Systems Guarantee or Warranty," Singer also states in his affidavit that when Sachem !earned that ,1Mclaimed that it was never paid for the Guarantee, it offered to pay.JM but ,1Mrefused. Based upon the doctJlllentation showing the Guarantee was Active, Sachem argues that.lM has failed to meet its burden of demonstrating that the documentary evidence uuerly refutes Sachem's allegations that the Guarantee is valid and effective. With regard to the statute of limitations, Sachcm argues that the Guarantee at issue is for a period of twenty years and that the four-year statute of limitations set forth in UCC § 2·275 is not applicablc. Thus, Sachem contends its claims are timely. As to the second and third causes of action alleging negligence, Sachem argues that 1M owed it a duty of care to protect the roof and interior of the building from harm, and that 1M breached that duty in 2008 when it refused to fulfill its obligations under the Guarantee. Discussion '"A motion to dismiss a complaint pursuant to CPLR 3211 (a)( I) may be granted only \.vhcrethe docum~ntary evidence submitted by the movant utterly refutes the plaintiff's allegations against it and conclusively establishes a dcfense as a matter of law" (Cog-Nel B!dg Corp. v. Travelers Inde",. Co., 86 AD3d 585 [2d Dcpt 2011]). ""IAJllidavits arc not documentary evidence" (Fontanetta v. Doe, 73 AD3d 78, 85 [:2d Dept 20 I OD. Additionally. letters do not constitute documentary evidence for purposes of CPLR 3211 (a)( I) (Id. at 86; citing Frenchman v. Queller, Fisher. Dienst, Serrins, Washor & Koo!. LLp. 24 Misc3d 495 n. 2 [Sup Ct NY County 2009]). "[1']0 be considered -documentary'- evidence must be unambiguous and of undisputed authenticity" (Jd). I lerc, thc only "documentary evidence" relied upon by 1M in support of that Page90f 14 [* 10] hranch of its motion pursuant to CPLR 3211(a)(I) is the Guarantee. The affidavit and other documents (Completion Notice. Guarantee Application Contirmation. invoice, and letters) arc not documentary evidence within thc intendment of CPLR 3211 (a)(I) (see FoJlfanefla v. Doe. supra: Jones v. Rochdale Village, Inc .. 96 AD3d 1014. 10l7 [2d Dept 2012]). The Guarantee in and of itself does not utterly refute Sachem's allegation lhal.JM issued a written guarantee for the roof and that JM has failed to perform its obligations under the Guarantee. Thus, tllat branch of.JM's motion which seeks to dismiss Sachem's complaint under CPU{ 3211(a)(1) is denied. Although couched as a motion to dismiss under CPLR 3211 (a)( I). JM's argument that the Guarantee never becamc effectivc because it was never JHlidfor is really an argument for summary judgment pursuant to CPLR 3212. which is premature as issued has not been joined. Additionally, the parties dispute whether the Guarantee \vas paid for and became effective. JM's contention that Sachem's claim for breach of implied warranty should be dismissed because the Guarantec expressly disclaimcd all implied warranties is without mcrit. Presumably. JM bases this argument on CPLR 3211(a)(1) based upon the language ohhe Guarantee. However, if JM is ultimately successful in demonstrating that the Guarantee ncvcr became effective because it was never paid for, the terms of the Guarantee would not operate to bar a claim for breach of implied warranty, because it never became effective . .1M's allernative argument that the claims asserted in Sachem's first cause of action arc time-harred is without merit. "An action for breach of contract for sale must be commenced within four years after the cause of action has accrued'~ (UCC § 2-725[1]). UCC ~ 2-725(2) provides: "J\. cause of action accrues when the breach occurs, regardless of the aggrieved party's lack ofknowlcdge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance urthe goods and discovery of the breach musl await the timc of such performance the cause of action accrues when the breach is or should have been discovered." Page lOaf 14 [* 11] Howcvcr. for statutc of limitations purposes, contracts to supply goods and contracts to provide subsequent repair services for such goods are distinguishable (see BIIIO\-'(I Watch Co., Inc. v. Cc/otex Corp., 46 NY2d 606 r1979"]). Here, contrary to .1M's contention. the first cause of m:tion for breach of ··the express and implied \-varran!yand guarantee" is not pled as based on a contract ofsak between Sachem and .1Mfor the roo ling system materials. In fact. no such contract be1\veen the parties has been provided to the Court \vith the motion papers. Rather, Sachem claims that JM breached the Ciumantee. which was allegedly issued in 2004 aiter installation of the Roofing System had been completed. The Guarantee is separate and distinct from any contract of sale for the Rooj-ing System. In fact, .1Missued a separate invoice for the cost of the Guarantec. Thus, the separate Guarantee, as an agreement contemplating repair services, is subject to the six-year statute of limitations set forth in CPLR 213(2), running separately for the damages each time a oreach of the obligation to repair the Roofing System (see lJu!ova Watch Co., Inc. v. Cdotex Corp., supra at 611; Meran v. Ward Lumber Co., Inc., 8 AD3d 805 [3,J Dcpt 2004]). However, to the extent that the first cause of action asserts breach of warranty claims premised upon a contract of sale for the RooJ1ng System, they are time-barred (see Board o/Educ. Plainview-Old Bethpage Cent. Schoo! Dist. v. Celotex, 151 AD2d 536 [2d Dept 1989]), as an agreement to repair does not amount to an explicit warranty oCtile future performance ufthe goods (Shapiro v. Long /.'1, Lighting Co., 7l AD2d 671 [2d Dcpt 1979]), That branch of JM's motion seeking dismissal of the second and third causes of action as asserted against is granted. "The economic loss rule provides that tort recovery in strict products liability and negligence against a manufacturer is not availahle to a downstream purchaser where the claimed losses Jlow from damage to the property that is the subject of the contract and personal injury is not alleged or at issue (see Bocre Leasing Corp. v General .Motors Corp. [Alltson Gas Turhine Div), 84 NY2d 685 [1995]; Amin Realty v K & R Cons!r. Corp., 306 AD2d 230, 231 [2003]). The rule is applicable to economic losses to the product itself as well as consequential damages resulting from the defect (see Bocre Leasing Corp_ v General Motors Corp. IAllison Gas Turbine Div.J, supra at 693; Amin Realty v K & R Constr. COljJ., Page 11 of 14 [* 12] supra at 231). (Af/us Air, /nc v General Elee. Co., ]6 AD3d 444. 445 [1d Dept 2005]). I !ere. Sachem claims economic losses vvith respect to its building and tixtures allegedly n:suIting from the failure of the Roofing System to perform properly in a watertight condition. Sachem's from the alleged defectIvely alleged losses constitute consequential manufactured Roofing System and Hmv from damage lO property vvhich was the subject of its contract with Aurora. loss rule bars Sachem's negligence damages resulting Accordingly, the economic causes of action against JM, and the second and third causes of action as asserted against JM are dismissed (see Archslone v. Tocci Bldg. Corp. ojNJ, Inc, - AD3d -, 2012 NY Slip Op 09015 [2d Dep! 20] 2]) This constitutes the DEClt',,'[ON and ORDER of the Court. <-\ Dated: January 2, 2013 ;_L) Riverhead, New York \' \ ','cO/ , ]:MIL Y PINES l S, C [ ] Final r x] Non Final Page 12 of 14 [* 13] To: ,\llnrw:'· Illr t'laintitT Small. LLl' hlg>:rman ..\1111·1I.'lary Ann S'IUnwskl. Esq. 150 MUlor I'arkway Suit>: ·WO llaupp<1u~<:.NCII' York llnX 1\ll.ml~'· for Iklc'illiallt.luiliis Mall.'ivill~ 1\:ppLT I lalllil1\lll. UY Michad S, 1tino.l':stj. ·100 Ikrwyn Park K99 Cassall Road Ikrwyn.I'A 19312-IIK3 Altomc\' for Dcfendant (ii"lyuinlo Masonrv PC" J.:I1rc)' S. ShCln & Associatcs. lIy: R{lnald W. Landau. I::sq. 575 [llllkrhili Blvd. Suitc 112 SynSSd. Ncll' YOl"k I 17')0 ,'lIomc\' lill'l)clcm1<lnt R"sIOl' T..:..:h I..::st<.:r SCilW;lb Kat/. & Tholllas 1.1,I' 1)"')'.11" ll. COPP(ll<1. r-:s<.]. 120 Ilroadway NCII York. Nc\\ ,'!lomc' Md,1alulil. V,lrk 111271 ti:>rIklt;nd;11\1 (·nrd Martine & Ci<lll<lgh,lr II): William D.liall'lghcr. 55 W,lshingioll (·lllllT<lclin!!. 1.1.1' Esq. Slrecl 7th F\. J1]'(lokl)'Il. N.::w Vork I 1:'.0 I Page 13 of 14 [* 14] I IUlllmil!. (nlri<':11 ('IOlllin Demps<.:y. 1'<':lllkr f(o<.:hl<':1 I'.C IJ;" t'vliehClcl J. ['ell,kr, !.:sq, (,):\ I .Inil'lw S\I ilc; 'l'lIl'Jlllikc;. ~5() liST IWUI-'IN(j,INC ~ Yc;(JI1l,1I1 Ilriv<.: l':aSl Northport. ,I\uol'nel' New Y <'Il.: 1173 1 1'01'I kklL(1<1Il1 Vipa R<.:slormion VIllA RESTORATION, INC. 100 East Industry Court Deer Park, New York 11729 Page 14 or 14

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