W 106 Dev. LLC v Pilla

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W 106 Dev. LLC v Pilla 2018 NY Slip Op 32596(U) October 10, 2018 Supreme Court, New York County Docket Number: 654801/2016 Judge: Debra A. James Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 COURT OF THE STATE OP NIWVORK NEW YORK COONTV PART Justloe ..-.------------------~~~~~~~~~~x. INDIKMO~ MO"tloN OATE 65480112&16 06l't3t2017 Pfiimiff, MOTION SEQ. NO. 001 -vDOMINICK R. PIL~. ARCHrrECTURE-ENGtNEERING P.C. D/B/A DOMINICK R. PILLA ASSOCIATES P.C., DOMINtCK R. PILLA, XVZ CORP., DECISION AND ORDER Defendant. x .f*':~ e-fifed Cf«Un'tents, listed by NYSCEF document number (Motion 001) 10, 11, 12, 13, 14, 15,16, 17, 18, 19,20;21,22,23,24,25,26,27, 30, 31, 32 DISMISSAL ORDER Upon th~ foregoing documents, it is ORDERED that the motion, pursuant to CPLR 3211 (a) (7), of defendants Dominick R. Pilla, Architecture-Engineering, P.C., d/b/a Dominick R. Pilla Associates, P.C. and Dominick R. Pilla is granted to the extent that the second, third, fourth and fifth causes of action in the complaint are dismissed in their _,/ entirety and the complaint as against defendant Dominick R. Pilla only is dismissed in its entirety, and the motioh is otherwise denied; and it is further ORDERED that defendants are directed to serve an answer to the complaint within 20 days after service of a copy of this order with notice of entry; and it is further 86480112018 W 10l~kew.;OOlllNICK ft PILLA Motion No. 001 · · · 1 of 15 Page1 of15 [* 2] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 .... RECEIVED NYSCEF: 10/12/2018 ; 2 I Qat)EREl'J'ltftat counsel are directed to appear t:fir a . :prel'iminary ,~- ~ confe~nce in Room 331, 60 Centre Street" on No~r ,,15, 2018, at 9: 30 AM. DECISION \ In this·action·fQr breach of contract and related relief, co-defendan_,ts Dominick R. Pilla, Architecture-Engineering, P. C., d/b/a Dominick R. Pilla Associates, P.C. {Pilla PC) and Dominick R. Pilla (Pilla) move to dismiss a portion of the complaint, ( r· pursuant to CPLR 3211 (a) (7) (motion sequence nwnber 001). · Background Plaintiff W 108 Development LLC (West 108), a real estate development corporation, is the owner of a building complex (the property} located at 324-326 West 108th Street in the County, City and State of New York. In this .action, plaintiff alleges that defendants did not carry out its obligations to develop the· property during the West 108 project. In its complaint, West 108 first states that, 25, ·201s, it "engaged defendants, as architect on F~bruary . , to complete five separate phases of architectural work" as part of its development project. These comprised: 1) preldesign; 2) schematic design; 3) design development; 4) construction 1 document; and 5} construction administration. Defendants note . ~. ' .. ·~ that there wa's ne~er'~yformall~ executed'$Qjit::r!~t'.j'and aver __/ Pidt21)ffl 2 of 15 [* 3] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 that, although the complaint draws no distinction between Pilla and''P·flla PC, "to the extent that- an agreement existed between :p:laintiff and any party, that agreement was between. plaintiff and [Pilla ,J?CJ, and not with Pilla, individually." West lOB does not dispute these. facts, although it raises other arguttl.ents regarding liability. The court observes that West 108 has not presented a copy of a contract, but rather copies of an email trail, exchanged from February-March 2015, that indicates that I West 108 had retained Pilla PC as its architect. West 108 next alleges that due to defendants' negligence and/or malpractice, defendants failed to discharge their professional services, and thereby caused the development project to suffer undue delays and cost overruns. West 108 also claims that, despite its growing dissatisfaction, it ultimately paid defendants $233,803.00 of their agreed on architectural fee ) .. of $248,000.00. West 108 finally claims that, on September 19, 2016, defendants served an inaccurate invoice for $19,847.63 in unpaid fees, and thereaftEf!r, on September 28, 2016, filed a mechanic's lien against the property for $193,532.62. For their part, defendants deny West 108's allegations of negligence and malpractice. Defendants also deny West 108's allegations regarding payment and assert that the entirety of the $193,532.62 sought in the meehanic's lien represents unpaid invoices. Defetn:tants have since commenced a sepa.r~te action .in Page3of15 3 of 15 [* 4] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 AX'chit~cture .. Enfirteering, RECEIVED NYSCEF: 10/12/2018 P. c. v.· Orly Gilat, et al, Index N¢. l'.$9613/16}. Ott'Oct()ber 28, 2016, West 108 filed a complaint that sets forth causes· of action for: 1) breach 'of contract; ~) professional malpractice; 3) fraud; 4) breach of the implied covenant of good faith and fair dealing; and 5) attorney's fees. Defendants hav.e submitted the instant motion to dismiss, pursuant to CPLR 3211 (motion sequence number 001). Discussion Defendants' motion specifically seeks the dismissal of the entire complaint as against Pilla individually, and dismissal of the second through fifth) causes of .action as against Pilla PC. WeS't 10"8 states that it has no objection to the dismissal of the first (breach of contract) and fourth {breach of implied covenant) causes of action as against ··Pilla. ..,.~t'.,;·f.~~ initial matter, the court shall: grant det'endantst:' tnetlorr . to t:tie extent of dismissing'these two causes of action as against Pilla, without objection, and now turns to the balance of the motion. When evaluating a .defendant's motion to dismiss; pursuant to CPLR 321i (a), the court ~must give the pleadings a liberal construction, accept the allegations as true and accord the plaintiffs evar"y possible favorable inference. u 4 of 15 . Se~>C,hanke v [* 5] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 American Brocadcasting Cos. Inc., 27 NY3d 46, 52 (2016), citing Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 (2002). 'However, where the documentary evidence submitted flatly contradicts the plaintiff's factual claims, the entitlement to the presumption of truth and the favorable inferences are both rebutted. Scott v Bell Atl. Corp., 282 AD2d 180, 183 (1st Dept 2001), affd as mod, Goshen, 98 NY2d 314, citing Ullmann v Norma Kamali, Inc., 207 AD2d 691, 692 (1st Dept 1994). Here, as there is no remaining· dispute regarding the first cause of action in the court will confine its analysis to the second the~complaint, through fifth causes of action therein. West 108'S second cause of action asserts a claim of "professional malpractice" against both defendants. New York law treats architectural malpractice as a species of "'professional negligence [which] requires proof that there was a departure from the accepted standards of practice and that the departure was a 143 Bergen proximate cause of the injury.'" St., LLC v Ruderman, 144 AD3d 1002, 1003 (2d Dept 2016), quoting Kung v Zheng, 73 AD3d 862, 863 (2d Dept 2010). Here~ the complaint alleges that defendants committed four negligent departures from architectural standards, including misunderstanding and misapplication of: 1) the "Sliver Law" (New York City Zoning Resolution§ 23-692); 2) the portion of the Zoning Resolution th.at governs parking in the rtei<jhborhoodwhere 664801/2018 W 108 OMt.--1 UC vs. DOMINICIUl"PILLA Motion No. 001 . . I 5 of 15 Page5of15 [* 6] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 t~~ RECEIVED NYSCEF: 10/12/2018 property is situated; 3) the Americans with Disabilities Acti and 4) the portion of the New York City Building Code that governs egress requirements for renovated buildings. The complaint also alleges that these departures were the proximate cause of the financial injuries that West 108 consequently suffered. Id. As a result, the 'court finds that the complaint satisfies the legal pleading requirements for this cause of action. Defendants, nevertheless, raise two arguments for its dismissal. First, defe'ndants cite the decision of the Appellate Division, First Department, in Southern Wine & Spirits of Arn., Inc. v Impact Envtl. Eng'g, PLLC (104 AD3d 613, 614 [1st Dept 2013]) to argue that the architectural malpractice claim should be dismissed, as against Pilla, because it is barred, as a matter of law, since there is no privity of contract between Pilla and West 108. That case did,. indeed, uphold the dismissal of an architectural malpractice claim on the grotinds ~f lack of privity where there was no evidence that the plaintiffs were the intended beneficiaries of the contract at issue therein. West 108 responds that this holding is inapposite, however, and that the instant action is instead governed by Business Corporation Law (BCL) § 1505 (a), which provides that: "Each shareholder, employee or agent of a profel?sional service corporation and a design profe$sional service corporation shall be personally and fully liable and 854801/2011 W 108 DEYEtoPMliff'U.C vs. DOMtNfCK R. PILLA Motion No. 001 6 of 15 [* 7] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 ac:countable for any negligent or wrongful act or miscoridu.ct committed by·him or by any person under his direct supervision and control while rendering professional · services on behalf of such corporation."" In Crystal Clear Dev., LLC v Devon Architects of N.Y., P.C. ( 97 AD3d 716 (2d Dept 2012]), the Appellate Divisi'on, Second Department ruled that this statute precluded the dismissal 6f an architectural malpractice claim against the individual principal of an architecture PC, despite the absence of privity between the plaintiff and that individual, l:;>ecause: "the record indicates that [the individual] handled and supervised the architectural planning and represented the professional corporation, . . . throughout the contractual relations·hip. As such, Business Corporation Law § .1505 (a) renders .[the individual] potentially liable for the malpractice of [the PC] to the extent of his own personal il~lfgence or to the extent of negligent acts committed at his direction." 97 A'D3d at 719-720. Here, the record has not yet been developed, but the comp]..aint certainly alleges that Pilla "handled," "supervised" and/or "directed"' the work performed by Pilla PC. The court finds that these allegations are sufficient to support West 108's architectural malpractice component of its breach of contract claim against Pilla, personally. The court also notes that defendants unaccountably chose to completely ignore West 108's BCL § 1505 (a) argument in their opposition papers. In any case, for the foregoing rea$ons, the court wjects ._...12811 W 181DIM!lcN MD1lon flfo. ·. 001 J!Jlf:··· OOMHCK 1'"·1'11.LA 7 of 15 Plle70ff$·· [* 8] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 , I defeh\:l~ts' !i:rst argument to dismiss West 108' s arch±ttect·ural - ,jji,.ctp~~ctice cla~m. _-/._ . ·l)efendants next argue that West 108' s arcihitectul:'cll malpr.acti-~ :~laim should be dismissed against.~ti::,;~f~m.iant.!f ·· becau:se tliil.t:.claim is duplicative of West 108'~ breach of. contract cla,:Lm. They cite the general rule, promulgated 161\-g ago by· the Cou,rt of Appeals in Clark""".Fitzpatrick, Inc. v Long Is. R.R. Co. (70 NY2d 382, 389 [1987]), that "a simple breach of contract is hot i~dependent "' ri•Pbnns 'to be considered a tort unless a legal duty of the contract its~lf nas been violated." West 108 by citing the portion of CPLR 3014, which provide$ that .· "fc]auses of action or defenses may be stated alternatively. or hypothetically," and arguing that New York courts routinely - '\{.~; .: ,. . i~t:erpret the statute as permitting an exception, at t.he pl~ad:ihg stage of litigation, to tne gen~ra1 .tQ:J;'e t+rat ,t~rt . based eiaifu.s should .be dismissed when they al,:ft' ~l'iCati Ve 9~ breach of contract claims. correct. West 108 • s statement of the law.,,is· See .e.g. Citi Mgt. Group, Ltd. v Higti?riQ.9e House Ogden, LLC, 45 AD3d 487, 487 (1st Dept.2007). Furthermore, the instant complaint does contain t,he allegation that defendants committed protessi·Onal malpractice, which certainly constitutes the violation of a duty separate from a contractual obligation. ( 8 of 15 [* 9] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 . · ~wever, RECEIVED NYSCEF: 10/12/2018 ' a review of the complaint shows that as', to such to.rt claim plaintiff seeks "only a benefit of the baJ:gain recovery, viz, economic loss under the contract", 17. Vista Fee A$SOCi&t6$ v Teachers Ins .. and Annuity Ass' n of An\erica·, (259 AD2d 75, 83 [1st Dept. 1999]) as opposed to damaqes for personal injury or property loss. Therefore, the cdurt accepts defendants' second dismissal argument, and finds that their motion should be granted with respect to West 108's architectural malpractice claim. ) West 108's third cause of action alleges fraud. The '.>proponent of a claim for fraud "must allege misrepresentation or coltcealtiEmt: of a material fact, falsity, sci enter by the · w~ongdoer, :£1\ju~y." justifiable reliance on the deception, and resulting zanett Lombardier, Ltd. v Maslow, 29 AD3d 495, 495 (1st Dept 2006). Here, too, defendants argue that West 108's fraud claim should be dismissed as duplicative of its breach of contract claim. It is indeed the catJethat a fraud claim will, be. dismissed as duplicative of a breach of contract claim where it does not allege any tortious conduct separate or distinct from the breach of contract claim. See ~ 20 Pine St. Homeowners Assn. v 20 Pine St. LLC, 109- AD3d 733, 735 (1st Dept 2013). Oefendants argue that the complaint contains no such allegations. West YOB responds that its fraud claim is not impermissibly dupll'cat·ive because it is based on 9 of 15 [* 10] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 I ; mis'represeritations or omissions of contemporaneous facts that wer~ collateral to the agreement. Specifically, th~s·e ~ / ~eohtemrx.>raneous facts" include the .allegati6ns;, tlfa't! · 1) "[d}Etfehdant~ intentionally allowed development of,. eotr'Struction docum~nts ; .. ;" . to commence and continue without infot.'ntlng [West 108] that 'the [p]lans. ~ . were unapproved and ... materially defective"; and 2) : "[d]efendants intentionally induced [West 108] to enter into and continue under the [a}greement by \ il:'ltentiona:lly concealing or misrepresenting the [p] laris" .· various f'*aws·. ·,.· 1' #, West- 108 then argues that "[d] efendants' alle<jed . mi~represertifations or omissions related· to contemporane'oliS facts --- not fd] efendants' intention to perform 'eolla'\;eral' to the (a]greement." ~ and w.ere, therefoi:e, Defendants re.ply that "plaintiff has failed to articulate a distinction [between their contractual obligations and the aforementioned 'contemporaneous fabts'] sufficient to establish that its cause of action for fraud is based on a duty which is separate from [defendants'] contractual obligations." The court agrees. The "contemporane°Ous facts" that West.108 bases its ~rgument on consist of al,legations that the architectural plans that defendan1ts prepared were "defective" or "flawed." However, promulgating proper architectural pl.ans was what defendants had contracted to do, and to allege that they instead p~r.omulg<a.ted impro.per plans me~:l;y alleges that :~y·:br~~cnedf.tl\i*1· cbnt~!lct•.':f ''·.,,, . 10 of 15 ~. -, .;.,.~,,· [* 11] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 It does.not "allege tortious conduct separate and distinct from its breach of contract claim." 109 AD3d at 735. 20 Pine St. Homeowners A;ssn., Therefore, the court rejects West 108's opposition argument, and finds that the portion of defendants' motion that seeks dismissal of West 108's cause of action for fraud should be granted. West 108's fourth cause of action alleges breach of the implied covenant of good faith and fair dealing. The Appellate Division, First Department holds that "all contracts imply a Covenant of good faith and fair dealing in the course of p•rfor~ance, and 'neither party shall do anything which will have the effect of. destroying or injuring the right of the other party to receive the fruits of the contract.'" Seturity :eac. Nat. Bank v Evans, 62 AD3d 512, 514 (1st Dept 2009), quoting Dalton v Educational Testing Serv., 87 NY2d 384, 389 (1995), quoting Kirke La Shelle Co. v Armstrong Co., 263 NY 79, 87 (1933). The First Department alsQ holds that the covenant "is breached when a party acts in a manner that-although not expressly forbidden by any contractual provision-would deprive the other party of receiving the benefits under their agreement." Sorenson v Bridge Capital Corp., 52 AD3d 265, 267 (1st Dept 2008), citing Ellenberg Morgan Corp. v Hard Rock Cafe Assoc., 116 AD,ia 266, 271 (1st Dept 1986). Here, defendants argue.that We-st 108's fourth cause of action for breacb of' the 11 of 15 [* 12] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 implied covenant should be dismissed as duplicative of its first cause of action for breach of contract. They .cite the First 0epartment's decision in Bostany v Trump Org. LLC (73 AD3d 479 [1st Dept 2010]) for the proposit1on that "[s] uch ·a claim cannot be maintained where, .the alleged breach is 'intrinsically tied to the damages allegedly resulting from a breach of the contract.'" 73 AD3d at 481, quoting Canstar v Jones Constr. Co., 212 AD2d 452, 453 (1st Dept 1995). They then argue that such an "intrinsic connection" exists here, because West 108's claim "is derived of an alleged breach of [defendants'] agreement for the [p]roject." West 108 responds that its breach of covenant claim is separate from its breach of contract claim _) because it "arises specifically from the allegation that [defendants] improperly invoiced [West 108] for numerous unauthorized charges, including . . . attorney's fees and costs incurred in preparing the [l]ien (i.e., after the termination of the (a] greement); and . . . charges related to several e.ntirely new phases of work that were neither contemplated in the [a]greement nor approved by [West 108]." Defendants' reply papers merely restate their original argument. After review, the court finds in favor of defendants. The fourth cause of action duplicates the first cause of action for breach of oral contract in that plaintiffs are alleging that / .defendants breached such agreement by pEtrforminq unauthorized 12 of 15 [* 13] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 ~oik, overcharging them, and filing a baseless lien. See, e.g., B.r4.l·:l.• .Americarr Tobacco Company, Ltd. v United Stat:e.s.. Fidel"i ty \ an<;l Guafanty Company, 177 AD 582 (l5t Dept ·1917)<. The eftiaals that memorialize the agreement between Aihe parties to this action stated that there would be five phase$of" architectural work and a contract price of $248,000.-00. The complaint alleges that due to their professional misconduct, defendants obliged West 108 to delay its development project to perform additional, unplanned architectural work, and that defendants eventually filed a lien for $193,532.62 to cover the cost. of this work, despite having previously received payments from West 108 of $233,803.00 toward that $248,000.00 contract price. These allegations clearly state a claim that defendants' actions caused West 108 to lose the benefit of its original bargain; i.e., a set amount of work to be performed for a set price during a set time frame. Further, these allegations clearly allege that West 108 suffered money damages that are beyond the scope of the original contract. As a result, reading such allegations in the light most favorable to West 108, the court believes that they state a claim that defendants violated the implied· covenant of good faith and fair dealing of the parties' agreement. Therefore, the court concludes that defendants' motion should be granted with respect to plaintiff's 13 of 15 [* 14] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 ,' , >'fQ-;Cp{iS~ Of'' cf:ctl'On, which merely replicates the first cause ·~. -·< ·'~> /··.~,,_ ,-. :~~;~:~~~n f,or ·breach of contract. -::';,~_\t'."•st roe 1 ,::S final, cause of action is a claim for attoin~y'':g f~'., c'~~ts< 1and expenses. Defendants argue that this. eli~im' .i;S "not <lognizable:u, because of the general ruley $'E!t ' Court of Appeals in Chapel ~-Mitchell l, [fQ~tJ')J.~1~~t]le -.· ··-< - (84 NY2d 345, 349 [1994]), that "absent a contractual or statutory basis, a successful litigan·t may not r1cover legal fees from another party." West ,108 r-esponds that defendants' argument is "premature at this ' j-UtJ,c~re, and, at a minimum, ··is an issue of fact.". However, ' different ground than arEJUed by either party, i.e., that a claim for a\torney fees is not a separate cause of action but if permitted.by statutory or common law, available should plaintiff prevail on any of the remaining Inc., claim.s~ · See La Porta v Alacra, (142 AD3d 881, 853 [ist Dept 2016]). Thus, the court finds that defendants'- motion should be granted· ~~th respect to Wes't 108's fifth cause of action. ' ;~,~' <;,'.;i~·~, i~- '• ~'·,: _ _ _2,'>'.c 14 of 15 [* 15] INDEX NO. 654801/2016 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 10/12/2018 .As a final matter, West, 108 requests that, should tne coort 1 dtJ:l?ide to grant all or any portion of defend~nts' motion, West · io~L.shoula be given leave to amend the complaint. However, ··West 108 does nG>:!:. stilte 'What amendments to the complaint make, nor does it wishes t<)·' it attach a copy of such proposed amendments to its opposition papers, as is required by CPLR 3025 (b). 10/1812818 ··DAfi ··CHICK- CMEDl8P08E.D GRANTED 0 DENIED ~ SETTLE ORDER Gtll<*w APPllOMIAll: INCLUDU~ ) \ \ 15 of 15

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