Board of Mgrs. of the 650 Sixth Ave. Condominium v K-W 650 Assoc. LLC

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Board of Mgrs. of the 650 Sixth Ave. Condominium v K-W 650 Assoc. LLC 2018 NY Slip Op 33050(U) November 30, 2018 Supreme Court, New York County Docket Number: 153801/2016 Judge: O. Peter Sherwood 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. [*FILED: 1] NEW YORK COUNTY CLERK 12/03/2018 11:30 AM INDEX NO. 153801/2016 NYSCEF DOC. NO. 160 RECEIVED NYSCEF: 12/03/2018 c;oUl{T 011~ THE STATE ()F NEW YORK OF NEW Y<>RK: COI\1ME.RCIAL 01\'ISION SlJJ)l~EME C<>lJN]~\'r PAR]~ 49 ~~~--~.--~~~-----~-~-~--~~----------~-------~~~-~---~~~-~-----~--M------~-~x IJOAllll O•" MA·N-A<;EJ{S ()F ~fflF: 650 SlX1"H A VENLJF: (~ONDOMINllJM, l>F:-CISION .it\NI> ORDER Index No.: 153801/2016 l)laintiff, Motion Sequence No.: 002 - against K-\\l 65f) ASSOCl.c\~rES LI"(~, et 11/., Defendants. --------------------·----------------------------------------~--x. <J. l>f~]'EI~ SJ·IER\VOOI>, .J.: In n1otion sequence 002, defendants Goldstein Associates Consulting r:nginccrs . l>t.J...(~ and C11\t~l~ C:onsulting E.ngincers., I). P.C. (collectively, o;"(1.AC~f.:''} n1ovc pursuant to (~PLl~ 3211. (a) ( 1) and (7) for an order dis1nissing the two cross-claims asserted by defendants K-W 650 Associates LJ~C~, Kun1kang 650 Manager ·c:orp., T«1c-..Woo Kin1" Kcurnkang ·Housing Co., ·Ltd., \Vestport 650 C'o1npany. L.I)C, l(un1kang llousing NY l.J..1C., Klaus Krc1sch1natm, \\lestpt1rt 650 l .. LC, Keun1l\van £3ae. Kun1kang Housing (~o.~ Ltd., L.ivcin Inc. and Westport Group~ Inc. (collectively '"Sponsor"). F'ot the follov.1ing reasons, the n1otinn shall be granted as to the second cross-clain.1 f()r co1nn1on la\V inden1nilication <Jn)y. B~4.CK(;·ROUNJ) --rhis case arises out of purportedly defective ·renovation \Vork done on a condon1iniun1 located at 650 Sixth Avenue in M.rulhattan (the ''Building''). SpcciiicaJly, plaint.ill. alleges that the ceilings in the n1ajority of the units in the. Building were '~insufficiently anchored lo the structural ceiling slab'~ \vhich plaintifl"becan1e aware of on f)cce111bcr 24'.t 2015, \Vhen a }X)rtion of sheetrock in one unit coJla.psed vlithout warning (cotnplaint ~ 2). Although the con1plaint originally asserted clain1s against both (_fAC.~I·: and Sponsor. plaintiff has since discontinued its clain1s against G1\Cf~ (see NYS(~EF' f)oc. No. 88 tst.ipulation of discontinuance \Vilh re111aining clain1s against C1AC:E are Sponsor~s l\VO l 2 of 7 prejudice])~ Accordingly, the only cross.-clai1ns for contribution and c.ontractual [*FILED: 2] NEW YORK COUNTY CLERK 12/03/2018 11:30 AM INDEX NO. 153801/2016 NYSCEF DOC. NO. 160 RECEIVED NYSCEF: 12/03/2018 and/or co1nn1on fa\v inden1nification. 1 1\s discussed further belo\v, Sponsor has abandoned the first of these t\\iO (i1\C~E clain1s, leaving only its clain1 f(Jr inde1nnitication. entered into an Engineering Services Agreen1cnt dated January 20'.' 2005 \Vith non- party 650 Partners l.JJ(~ to 1)erforn1 engineering services in relation to the Building~ s renovation (see ·NYSC~EF l)oc. No. 82 [the '~l~S1\ '']). In relevant portion" that agreement rcquir~s C1r-\C~E '•to inden1ni(y a11d hold harn1lcss f650 Partners LL.Cl ti·om and against any and all liabiliiy ... arising or in connection \Vith the performance of the services furnished by Engineer or its consultants under this i\grecn1cnf'' (itl. i1 s.1 ). T'hc I~SA also provides that the agreement: ''constitutes the entire understanding of the parties concerning the Project and supersedes all prior negotiations. statcn1ents . instructions, representations or agreen1cnts, either oral or \Vritten~ '' and that the 1:-'~S.A ··n1ay be a1ncnded only by a \Vritten instrun1ent expressly stated to be an an1endmcnt and signed by both f650 J>artncrs LLC] and Engineer'~ (id. ,I 15.13). 'fhe ESA further provides that 650 J>artncrs Ll..C: ~·n1ay assign this Agreenlcnt ... to any other cotnpany, entity or person upon thirty (30) days \vritten notice to l~nginccr"'" (id ii 14.2). As relevant to this n1otion, <Jr\CE also issued several proposals for engineering services at the lluilding bet\vccn January .2005 an<l July 2007 (see NYS(~EF l)oc. Nt>S. 27, 28). ·rhe first of these prop<lsals \Vas integrated into the ESA, "'ith the ESA "s tern1s governing where there \Vas any conflict (see r··::St'\ ii' I 5.13~ exhibit A). Each of the prop()safs incorporated Cil\C=I::'s 'fern1s and c:onditions, which })rovidc that ""the (~tienl shall inden1nify and hold harn1less the l~ngi11eer against all clain1s ... to \\··hich the Engineer may ·be subjected ... which were cause in whole or in part by any act, error or otnission of tJ1e c~Iient or any of its con.tractors, or anyone retained ·by or employed by the C~licnt. in the pcrti>r1nance of its \\i(lrk for this f>rojcct, '~ (see e.~. hi., exhibit A at 3 ir 6.2). l.>ISCUSSION ()n a motion to disn1iss a plaintiff~s claim pursuant to CPlJ{ 3211 (a) (7) for t11ilurc to state a cause of action, the court is not called upon to determine tl1e truth of the allcgatior1s (see. ( .,tlm[Jc.Ji?,ll .fhr FisC(I/ Equif)' v tf)ft1fe. 86 NY2d 307" 3 I 7 r19951; 219 Brotldll'l.(V (,lOr/J. v i1/exanLler 's~ Inc .. 46 N.Y2d 506<! 509f1979]). Rather, the court is required to '~affclrd the pleadings a liberal construction.~ take-the allegations Qf thecon1plaint as true and provide plaintilTthe benefit 1 In .June 2018,. plaintiffs an1end.cd their cotnpJaint. lo add Island Acoustics.as a defendant. T'his delendant is not involved in this n1otilll1, 2 3 of 7 [*FILED: 3] NEW YORK COUNTY CLERK 12/03/2018 11:30 AM INDEX NO. 153801/2016 NYSCEF DOC. NO. 160 RECEIVED NYSCEF: 12/03/2018 of ev~ry possible inference t·citation omitted]. Whether a plaintiff can ultimately establish its allegations is not part of the calculus in dctern1ining a tnotion to disn1iss~' (h,B(: Iv ("'ioltlmt1n, ,Saths & (.·~o .. 5 NY3d I I~ 19 [2(J05 ]). 'fhc court.'s role is lirtlited lo dcterinining "vhether the pleading stat.cs a cause or action, not \vhcther there is evidentiary support to establish a. n1critorious. cause of action (see (iu<'{«f;enhein1er v (linzhurg. 43 NY2d 268, 275 [I 977.J; 5I<>kol v /Jea~der. 74 A.l)3d 1180 f 2d Dept 201 OJ). i\. Contract11t1/ ln1len1nificatio11 (i.t\CE. contends that th.e tern1s of its proposals apply, not the concedes that none of the proposals \Vere signed by the Sponsor . C.1AC~E l~S/\. f\lthough (11\C~l: argues that the unsigned agrcen1ents are enforceable on the basis that Sponsor "n1anifcsted its inte11t t.o be bound by the ... J)roposals by accepting ·work, n1aking payn1ents and requesting additional work" (NYSCEf~ Doc. No. (}6 r~sup 111cn1~'] at 7-8, citing e.g. f7ore.s v LOHler E. ,Si<fe S'erv. (~~Ir., lnc., 4 NY3d 363, 369 [2005] [noting that .. 1.an unsigned contract. nlay be enfc)rceable., provided there is o~jcctive evidence establishing that t.he parties intended to be bound''j). Conversely., C1ACE contends the ESA does not control because 650 ['artncrs 8-9). LL(~ never properly assigned that agreen1ent to Sponsor (id at ·ro this end., (iAC~E argues that, u11der paragraph vvithout 30 days" \Vritten notice to (~onsulting Engineers, D.P.(.~. GAC~·E. 14.2 of the ESA.'l no assigntnenl is valid In support, the ()ff1ce Adtninistrator fo.r CIA(:E states in ·her affidavit that she had conducted a search of GAC~E's records and tound no \.Vrittcn record of any assignment (N YSC~EF. l)oc. No. 65 ~I 4). In opposition, Sponsor not.es that a conlrltctual provision that. an agreement \Vhich ~"onJ y containl.sl a covenant not. to assign, and d[ocs] not provide that an.Y assigntnent \VOuld be void or invalid,. the assignn1ent Ii]s not void~ but only gives rise to a cJain1 for dan1agcs against fthc assign<)rl for violation of the covenant not to assign'' (N YSC~E:t" Doc. No. 87 ('~opp me1n ~--] at 6-7} quoting ~4!111eich1 ()i/ (,''o;. Inc. ,. '"~inger f!oldlng (:011-1. ~ 51 1\D3d 604, 6()0 [2d Dcpl 2008]). 'l'hus, Sponsor argues~ since paragraph 14.2 contains no provision voiding-any assign1ncnt made vvithout notice, Sponsor c<Jntcnds a11y such assignment would still be valid. \Vtlojin .Jang, an cinployce of Sponsor, states in his aftida\1it that "650 Part11crs LLC' assigned the ESA to -K-W Associates 1. LJC: 011 or about ()ctohcr J, 20CJ5'.,. and that at --~all ti1nes relevant to the instant Ja\VSltit in their dcaJings \vith CiAC~E. fSponsor] operated und-cr and pursuant to the ESA ~, (NYSC:EI; Doc.. N<>. 85 ir~ 4-5). Sponsor fu11hcr argues that the unsigned proposals do not goven1 in Iigl1t of paragraph 15.13 of the ESA. .... .J 4 of 7 [*FILED: 4] NEW YORK COUNTY CLERK 12/03/2018 11:30 AM INDEX NO. 153801/2016 NYSCEF DOC. NO. 160 RECEIVED NYSCEF: 12/03/2018 In reply, (1/\(:E contends this ct>url sh(lUJd disregard Jang's affidavit since he does not ' clain1 t.o have any personal kno\vlcdge of the assignn1ent (N\"SCEF' IJoc. No. r-rcply 1nen1'"] at 3 ). (1AC"l~ further argues that the cascfa\v Sponsor relies on to establish the assignn1ent 's validity is i nappositc because'! the ESA docs not contain a covenant not to assign. Instead . ""the .f~SA provides that it is freely assignable by Sponsor, as long as a single condition is n1ct, to wit: 30 days' notice to (JACE'" (ill at 4). CJ:AC~E does not provide any J-urtl1er explanation as to hO\V a provision stating that assign1ncnt n1usl he 1nade \vith notice is ditlcrent tl1an a covenant against assig1uncnt \·Vilhout notice. (i.A.C.'E further argues that" even if t.he ti:SA applied~ paragraph l 5.13 docs not invalidate any proposals other than the single proposal that \Vas included as an exhibit to the ES.t\ (it/. at 5). 'rhis argu111cnt does not address that paragraph . s provision that the ESA ''1nay be an1endcd only by a \Vritten instru111ent cxt1ressl)1 stated to be an an1endn1cn1 and signed by both ()\\·11er and Engineer.~ . 'f'hc n1otion shall be denied. As stated in I2d ~5ulliva11 l' Jn/I. f?itJ. ins. (_."o. (96 Al)2d 555, 556 [)ept 1983] ).. ',;it l1as been consistently held that assignn1cnts made in contravention of a prohibition clause in a contract are void if the contract contains clear.. definite and appropriate language declaring tht: invalidity of such assign1ncnts'' but ~~,vhere the language employed constitutes 1nerely a personal covenant agai11st assignn1ents~ an assignlncnt n1ade in violation of such covenant gives rise only to a clain1 for dan1agcs against the assignor 1or violation of the covenant."" In that case, the court found that under this principle~ an assignment was not void~ even \Vherc it \vas n1nde in contravention lo a covenant prohibiting assignments without defendant's \Vrittcn consent. The san1e holding applies \vith greater torce here, 'vhere at best the relevant clause operated as a covenant ·against assignn1enls without notice to {_lAC E. 1 (}ACl-<:'s atteinpt to distinguish betvvecn a covenant again~t assignn1cnts made without written notice and a provision aJlo\vi11g tor assignmenls \vi th written notice is cquivocaJ and 1nust fail. Additiona]ly, the fac.t that Jang -:s affidavit docs not assert personal know·lcdge of the assignn1e11t is noi t~ttal lo Sp<)nsor''s opposition .. since at this st.age, Sponsor need not 1nake an cvidentiary sho\ving to support its clain1 (see Rove/lo v f)rr~fino Real(v (~o., Jncq 40 NY2d 633" 635 [1976] ["·;.unless the n1otion to disn1iss is converted by the court to a n1otion for stu11n1ary .Judginent, he v.ti11 not be p·enalized because he has not n1adc an evidentiary showing in support of his con1pla.-inf'J). 4 5 of 7 [*FILED: 5] NEW YORK COUNTY CLERK 12/03/2018 11:30 AM INDEX NO. 153801/2016 NYSCEF DOC. NO. 160 RECEIVED NYSCEF: 12/03/2018 Com1non Lau1 ln1lem11ification IJ. 'l'o the extent. Sponsor's second cross . .clain1 is based on con11non CiAC~I~-: I~\v indcn1ni1ication, argues that the. clain1 should be disn1issed since the direct claims do not seek to hold Sponsor vicariously liabJc for GA<:E"s wrongdoing~ but rather allege Spo.nsor v~zas the actual \Vrongdoer (sup n1e111at9-10). GAC:E notes that'"'[s]incc. the predicate of con1rnon-la\v indcn1nity is vicarious liability \Vithotit actual lault on the part of the proposed inde111nitcc . it follo\vs that a party \-vho has itself actually participated in the \vrongdoing cannot rccci ve the benefit of this 41 doctrinc ~ (id. quoting 7.run'lfJ /fi/. S~eclion 3, !11c. v J\leu: }rork $'tale Hou.Y. Fin. /lgenc,J'., 307 AD2d 891 . 895 [I st [)cpl 2003]). G;\C:E also notes that plah1liJT has brought. an1ong others, a breach of contract clain1 against Sponsor \Vhich alleges that Sponsor breached its obligation to '"ensure that the Building was c.onstru\;ted in accordance with it.s Plans and Spcc.it1cations'' (id. at 9, quoting ·co1nplaint il 57). In opposition . Sponsorarguessi1nplythat its clain1 forcon1rnon law· indcmniticati<>n should not be disn1issed because~ at this stage in the litigation . there has been no findit1g of wr<Jngdoing against Sp<Jnsor (opp n1en1 at 8-9)~ Sponsor also argues that, un-der section 2.7 of the ESA, (iJ\(~E and not Sponsor is responsible tor ensuring tl1at \.Vork on the. Project \\'as being perf{)rn1cd in ac~ordance with the Construction Docu1ncnts. Ho\v.cver, alth<lugh that section describes (iA(~E' s supervisory responsibilities during the construct.ion phase, it does not s.peak to Sponsor's obligations to plaintitl: ln reply, CiA(~l:i. notes that the viability of -a clain1 for con11non la\.V inden1nification is deter1nincd by the allegations in th.e con1plaint, not by later findings of fault (reply r:ncn1at6, citing ("J1a1han1 Tolvers. Inc. v ( . 'c1stle Restor1..1tion & (, onsl., Inc., 1 151A1)3d419~ 420f1st Dept 2017] Iaf1irn1ing disn1issal of con11non-law indcn1nitication clai1n where plaintitI· sought recovery from Idefendant I because t)f the latter's al1cgcd wrongdoing ·--breach of contract-· ·and not vicariously because of uny negligence on the part of [countcr-clain1 dctcndant l; see ti/so t.5Jructure To11e. Inc. v lfnirersal S'ervices (lrou1>. Lit/., 87 AD3d 909, 912 [I st Dept 2011 J [plaintiff ~~seeks recovery frorn (_defendant] solely because of [defendant's] alleged wrongdoing. 1·hus, the motion court properly disn1issed [defendant~ s] ~t\dditi(JnalJy, GA(~J~ notes that paragraph 2. 7.1 of the ESA provides that (.JACE . ~\\'ill not be third-party clairns for co1nn1<)n-la'v indcn111ification"]). required to make exhaustive or continuous onsite· inspections t() check the quality or qua11tity of 5 6 of 7 [*FILED: 6] NEW YORK COUNTY CLERK 12/03/2018 11:30 AM INDEX NO. 153801/2016 NYSCEF DOC. NO. 160 RECEIVED NYSCEF: 12/03/2018 the \vork' .. and that GACE .... is not rcsptlnsible for the contractor'!s failure to perJorn1 the \vork itl l)~)cuments. , . accordance with the rcquiren1ents set forth in the ·construction i\s f},l\C.~E correctly notes, con11non-Ja\v indc:n1nilication is unavailable \vhere the direct claims against a defendant seek recovery f(Jr defendant's own \vrongdoing (see (;"hatham l'oivers. Inc.. 15 I Al)3d at420). ·rhc motion n1ust be granted disinissing the second cross-clain1 as against (i;\CE. c:. Abantlt111e1l Co11trihution Clt1i111 ()i\C:r: argues that Spon.S(lr's cross-claiin fiJr contribution 1~1ils because it is based on a purely ec<)non1ic loss'.) and a ""purely economic loss rcsttlting .fi·c>m a breach of contract does not constitute ,.i11jury to property" v~1 ithin the 1nea11ing of Nc\v York's contribution statute" (sup n1en1 at 5~6, qut}ling Bll. '?./.Elluc. l~/·lfiufson (~i(V S'chool Dist. v ,)argent, ftVebsler. ('rensha1v & f"'olleJ\ 71 N"\/2d I l, 26J1987]). Sponsor's opposition fails to address~ and thus abandons, this clairn (see e)(. i'lusillo v .~fc1rist (~'oil. . 306 AD2d 782\ 784 [3d [Jcpt 2003 J [plaintiff abandoned clai1n 'by failing to address it in his brieJ]).. ·rhis cross-claim shall be disn1issed. Accordingly it is hereby 't ()Rl).ERED that the n1otion of defendants (ioldstein l\ssociates C:onsulting Engineers, Pl J . (~ and (}J\(~·i--: C~onsulling F:ngineers, f)P(~ (together •'GAC. •~'") is GRAN'rEIJ to the extent of 1 disn1issing the Second Cross-(~lah11 and the claim f(lr contrib:utiont)f the Sponsor defendants as to GAC.~J..: and is otherwise n·ENil:~D; and it is further ORD'l~RED that defendants \Vho have -notyel done so shall tile ansvvers \vifhin twenty (.20) days of the date of this Decision and Order; and it is further Ol{Dl~RED that all counsel for the respective parties shall appear for a prcli1ninary conference on ·rue·sday . January 8~ 2019 at 9:30 AIV1 jn I>art 49~ c:ourlroon1 252, 60 (.~cntre Street, Ne\V York . Ne\v York. ·rhis constitutes the decision and order of the court Dated: November 30, 2018 s·u·1;;..,R·'·w·. 00· 0. • ·····ETER· . ... r-1 . D ' I ....·s· "4 •c·""-'• 6 7 of 7

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