22 Gramercy Park LLC v Michael Haverland Architect, P.C.

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22 Gramercy Park LLC v Michael Haverland Architect, P.C. 2020 NY Slip Op 32362(U) July 20, 2020 Supreme Court, New York County Docket Number: 155017/2019 Judge: Robert R. Reed 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 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON.ROBERTR.REED PART IAS MOTION 43EFM Justice ---------------------------------------------------------------------------------X 22 GRAMERCY PARK LLC,ERIC ELLENBOGEN, Plaintiff, INDEX NO. MOTION DATE MOTION SEQ. NO. 155017/2019 03/23/2020 003 -vDECISION + ORDER ON MOTION MICHAEL HAVERLAND ARCHITECT, P.C., Defendant. ---------------------------------------------------------------------------------X MICHAEL HAVERLAND ARCHITECT, P.C. Third-Party Index No. 595848/2019 Plaintiff, -againstLEHR ASSOCIATES CONSULTING ENGINEERS LLP Defendant. --------------------------------------------------------------------------------X MICHAEL HAVERLAND ARCHITECT, P.C. Second Third-Party Index No. 595028/2020 Plaintiff, -againstINTEGRITY CONTRACTING, INC. Defendant. --------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 003) 78, 79, 80, 81, 82, 83,84,85,86,87,88,89,90,91,92 were read on this motion to/for DISMISSAL Third-Party Defendant Lehr Associates Consulting Engineers LLP (LACE) moves, pursuant to CPLR 3211 (a) 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 1 of 13 (7), to dismiss the Page 1of13 [*FILED: 2] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 Third-Party Complaint of Michael Haverland Architect, P.C. (Haverland) BACKGROUND This third-party action for common law indemnification and contribution relates to a construction project undertaken in connection with the development of a condominium located at 22 Gramercy Park South, New York, New York (the Condominium), by plaintiffs 22 Gramercy Park, LLC (22 Gramercy) and its sole member, Eric Ellenbogen (Ellenbogen). According to the complaint underlying this third-party action (Underlying Complaint), third-party plaintiff Haverland was the architect of record for the project for the eight-year construction period from 2004-2012 and performed architectural services including "as to the Condominium's mechanical and other building systems, facades, building-wide schematic design and interior designu (NYSCEF Doc. No. 2, Underlying Complaint, ~ 16) and was responsible for supervising the construction of the Condominium. According to the Underlying Complaint, third-party defendant LACE served as mechanical design engineer on the Condominium project. The Underlying Complaint alleges that, as a result of Haverland's negligence in connection with both architectural design and construction supervision, there were defects in the Condominium's air conditioning, humidity and temperature 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 2 of 13 Page 2of13 [*FILED: 3] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 controls, heating system, windows and other miscellaneous defects. The Underlying Complaint further alleges that, as a result 9f the various defects, the Condominium's Board of Managers (the Board) and the owner of Unit 2 in the Condominium, 22GramercyParkSouthGroup, LLC (22Group), had to undertake remedial measures to cure the defects at their own expense. Those remedial measures included "remov[ing] the existing ceilings and walls, fabricat[ing] and install[ing] seven access panels, and replac[ing] or servic[ing] the existing air conditioning units throughout the Condominium and the individual units." Underlying Complaint, ~ 27. As a result, the Board and 22Group threatened to sue 22 Gramercy and Ellenbogen to recover the funds that they expended to remedy the defects in the building. 22 Gramercy and Ellenbogen acknowledged the defects and settled the matter for $250,000 as partial reimbursement for the out-of-pocket expenses of the Board and 22Group. 22 Gramercy and Ellenbogen then sued Haverland for common law indemnification for the settlement amount of $250,000 plus attorney's fees and expenses in the amount of $23,869.75. 1 1 The Underlying Complaint states that it is substantively nearly identical to the amended complaint that plaintiffs previously filed on April 20, 2017 in the action entitled 22 Gramercy Park, LLC v Michael Haverland Architect, P.C., Sup Ct, NY County, Index No. 151756/2017, which was dismissed without prejudice for procedural reasons. Since it is not necessary for the determination of this motion, the court will not discuss the 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 3 of 13 Page 3of13 [*FILED: 4] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 In this third-party action, Haverland sues LACE for common law indemnification and contribution, alleging that LACE "was responsible for, among other things, the design of the Condominium's HVAC system plumbing, fire protection and electrical systems and oversight of the construction and installation of its HVAC system and other mechanical systems." NYSCEF Doc. No. 80, Third-Party Complaint, ~ 10. Haverland contends that if plaintiffs sustained damages as alleged in the Underlying Complaint, they did so as a result of LACE's negligence, and if judgment is rendered against Haverland it is entitled to be indemnified by LACE and/or is entitled to contribution from LACE for any portion of the judgment attributable to or caused by LACE. FIRST CAUSE OF ACTION: COMMON LAW INDEMNIFICATION In its motion to dismiss the Third-Party Complaint, LACE first argues that Haverland's cause of action for indemnification must be dismissed because it cannot sufficiently allege a basis for recovery against Haverland by plaintiffs in the underlying action for any damages that are allegedly attributable to LACE. Quoting Trustees of Columbia Univ. v Mitchell/Giurgola Assoc. (109 AD2d 449, 453 [1st Dept 1985]), LACE notes that the principles of common law indemnification previous litigation further. 155017/2019 22 GRAMERCY PARK LLC Motion No. 003 vs. MICHAEL HAVERLAND ARCHITECT, 4 of 13 Page 4of13 [*FILED: 5] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 "permit one who is held vicariously liable solely on account of the negligence of another to shift the entire burden of the loss to the actual wrongdoer." As the Court further states in Trustees of Columbia Univ., "[s]ince the predicate of common-law indemnity is vicarious liability 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 doctrine." Id. LACE argues that Haverland has failed to allege that it is free from fault, and, therefore, common law indemnification is not available to it. But, as the Court of Appeals stated in Mas v Two Bridges Assoc. (75 NY2d 680, 690 [1990]), "authorities have noted that 'the principle [of indemnification] is not . those who are personally free from fault.'" omitted). limited to Id. (citation Indemnification may also be available "in favor of a tort-feasor liable for damages arising for breach of a particular duty owed to the injured plaintiff and seeking indemnity over from another who has breached a related duty owed to the injured plaintiff." Id. That, however, has not been alleged here. In addition, "the key element of a common-law cause of action for indemnification is not a duty running from the indemnitor to the injured party, but rather is 'a separate duty 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 5 of 13 Page 5of13 [*FILED: 6] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 owed the indemnitee by the indemnitor.'" Raquet v Braun, 90 NY2d 177, 183 (1997), quoting Mas v Two Bridges Assoc., 75 NY2d at 690. LACE argues that Haverland fails to allege that it has any relationship with LACE on which indemnification could be based and, therefore, the cause of action for indemnification must be dismissed. Haverland contends that a third-party complaint is entitled to "a more liberal reading" than a complaint in the main action, citing Braun v City of New York (17 AD2d at 268 ["the mere possibility of a claim over sustains the sufficiency of the third-party pleading"]). Although Haverland does not deny any possible responsibility for the damages alleged in the Underlying Complaint, it contends that at this stage of the litigation it is too early to determine whether there is no possibility that it may be found liable to plaintiffs and it should not be required to spell out its cause of action with the same precision that is applicable to the Underlying Complaint. With respect to LACE's argument that Haverland fails to allege any relationship with LACE on which indemnity could be based, Haverland contends that the Underlying Complaint alleges that "[n]on-party [LACE] was at all relevant times an engineering consulting firm that, pursuant to a letter agreement dated July 10, 2003 between [LACE] and Ellenbogen, as supplemented by letter agreement dated November 19, 2004 between 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 6 of 13 Page 6of13 [*FILED: 7] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 [LACE] and Haverland Architect, served as the mechanical design engineer for the Condominium project." 12. Underlying Complaint, ~ According to Haverland, that "letter agreement," which was on LACE's letterhead, addressed to Haverland, and signed by representatives of LACE and Haverland, related to "services which include the very items that Plaintiffs allege were defective." NYSCEF Doc. No. 90, third-party plaintiff's memorandum at 11. "Generally, [indemnification] is available in favor of one who is held responsible solely by operation of law because of his relation to the actual wrongdoer." Mas v Two Bridges Assoc., 75 NY2d at 690; see also Guzman v Haven Plaza Hous. Dev. Fund Co . , 6 9 NY 2 d 5 5 9 , 5 6 7 - 6 8 ( 1 9 8 7 ) ( "where one j o int tort - feasor is held liable solely on account of the negligence of another, indemnification, not contribution, principles apply to shift the entire liability to the one who was negligent" [internal quotation marks and citations omitted]). Indemnification could be triggered if LACE had contracted with Haverland to perform the work for plaintiffs and Haverland was found vicariously liable for LACE's work in the underlying litigation. See McDermott v City of New York, 50 NY2d 211, 216 ( 1980) ("The right to indemnity, as distinguished from contribution, is not dependent upon the legislative will. It springs from a contract, express or implied, and full, 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 7 of 13 not Page 7of13 [*FILED: 8] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 partial, reimbursement is soughtu). Such a contractual relationship between Haverland and LACE has not, however, been alleged here. As LACE argues, and as Haverland asserts in its third-party complaint, LACE was hired by plaintiff Ellenbogen, not by thirdparty plaintiff Haverland, to serve as the mechanical design engineer. Moreover, the document that Haverland relies on as a "letter agreementu between Haverland and LACE states that it is an "Authorizationu for additional engineering services for additional services to be performed by LACE (See NYSCEF Doc. No. 86) signed by Haverland, which served as the project architect. There is no indication in the document that it altered the underlying business relationship between LACE and Ellenbogen or between LACE and Haverland, that Haverland would be paying LACE, or that LACE had any direct responsibility to Haverland. As this court raised in oral argument, there is no allegation by Haverland that it ever paid LACE, or that LACE owed a duty to Haverland, thus, no contractual basis has been alleged by Haverland on the basis of which Haverland could be found vicariously liable for the any alleged negligence by LACE. Haverland contends it should not be required to admit it had a contractual relationship with LACE, but since such a relationship is a necessary element of vicarious liability, 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 8 of 13 Page 8of13 [*FILED: 9] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 in the absence of an allegation of such a relationship, there is no basis for a claim of common law indemnification by Haverland against LACE, and the first cause of action must be dismissed. SECOND CAUSE OF ACTION: CONTRIBUTION LACE contends that Haverland's claim for contribution must be dismissed because plaintiffs' Underlying Complaint seeks purely economic loss arising from Haverland's breach of its contractual obligations to plaintiffs. See Galvin Bros., Inc. v Town of Babylon, N.Y., 91 AD3d 715, 715 (2d Dept 2012) {dismissing cross claim for contribution where plaintiff's complaint sought recovery of damages from defendant for breach of contract stating that "[p]urely economic loss resulting from a breach of contract does not constitute 'injury to property' within the meaning of New York's contribution statute [CPLR 1401)" [internal quotation marks and citation omitted]). According to LACE, the Underlying Complaint claimed economic injuries and not personal injury or property damage as contemplated by the statute. Quoting Children's Corner Learning Ctr. v A. Miranda Contr. Corp. (64 AD3d 318, 324 [1st Dept 2009)), LACE also contends that "the touchstone for purposes of whether one can seek contribution is not the nature of the claim in the underlying complaint but the measure of damages sought therein." However, as the Court notes in Children's Corner Learning Ctr., although the plaintiff there sued 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 9 of 13 Page 9of13 [*FILED: 10] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM INDEX NO. 155017/2019 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 07/20/2020 fendant/third-party plaintiff for professional malpractice, also alleged two causes of action against defendant/third-party pla iff for breach of contract for failure to obt n construction permits and licenses which were necessary to enable the plaintiff daycare center to open on a t ly basis. Furthermore, plaintiff sought the same damages for the professional malpract claims. claim as r the breach of contract The Court distinguished the case of Tower Restoration v 20 E. 9th St. Apt. Corp. dg. (295 AD2d 229 [l 5 t Dept 2002]), where a claim for contribution was permitted, noting that the underlying briefs in that case indicated that traditional tort damages were sought where the architect's alleged breach of duty had resulted in damage to the roof of one of the apartments in the building. oor and Children's Corner Learning Ctr., 64 AD3d at 324. Here, as Haverland argues, the Underlying Complaint does not allege breach of contract by Haverland, but negligence. NYSCEF Doc. No. 2 (Underlying Comp common law indemni int), ~ See 2 (uThis action for cation arises from the negligence with which Haverland Architect designed and supervised the construction of the heating, venti ion and air conditioning ['HVAC'] systems, windows and other parts of the condominium building located at 22 Gramercy Park South New York City (the 'Condominium'u)]. Furthermore, as this court pointed out during oral argument, 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 10 of 13 Page 10of13 [*FILED: 11] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 there are allegations that, for example, problems with the HVAC caused kage which damaged the property. The Underlying Complaint alleges that, as a result of Haverland's alleged negligence, the Board and 22Group had to undertake remedial work which included "remov[ing] the existing ceilings and walls, fabricat[ing] and install[ing] seven access panels, and replac[ing] or service[ing] the existing air conditioning units throughout the Condominium and the individual units." Underlying Complaint, ~ 27. In contrast with indemnification, "in contribution, tort- sors responsible for plaintiff's for Mas v Two " forth a ss share liability Assoc., 75 NY2d at 689. To set able claim for contribution the third-party plaintiff must show that both it and the third-party defendant contributed to the plaintiff's harm by breaching their respective dut plaintiff. Tower Bldg. Restoration v 20 E. 9th St. Apt. Corp., 295 AD2d at 229. "Although a tort claim against [the third- party plaintiff] may not ultimately be pending and, thus, cont s to ished, one is still 'the necessary predicate tort liability r a Id. at 230 (internal ion action remains in the case.'" quotation marks and citation omitted). "On a motion to dismiss a complaint we accept the facts alleged as true and determine simply whether the facts alleged fit wi n any cognizable legal theory." Marone v Marone, 50 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 11 of 13 Page 11of13 [*FILED: 12] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 NY2d 481, 484 (1980) ( tations omitted). The standard of on a motion to dismiss a third-party complaint is even more liberal. suffi "[T]he mere possibility of a claim over sustains the ency of the third-party pleading." Braun v City of New York, 17 AD2d at 268. As the Appellate Department explained sion, First Humble Oil & Ref. Co. v Kellogg Co., "We should not expect the third-party complaint to spell out a cause of action against the third-party fendant with the same precision required of the complaint in the main action. To compel it to do so would be to compel it to make out the aintiff's case advance. To compel it to ead with sion could well lay a foundation a motion by the plaintiff for summary judgment or judgment on pleadings aga t it. Its compla is really a fensive measure its protection only in the event should, upon t 1, be held liable to the plaintiff solely because of another's primary negligence." 13 AD2d 754, 754 (1st Dept 1961). Here, Haverland al s that LACE was responsible for "design of the Condominium's HVAC system, plumbing, fire protection, and electrical systems and oversight of the construction and installation of its HVAC system and other mechanical systems" that ted in the damages for which the underlying plaintiff is now seeking indemni Haverl Accepting allegations as true, and even assuming that Haverland, too, was responsible damages, it has suffi cation from some of those alleged a cause of action for contribution. 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 12 of 13 Page 12of13 [*FILED: 13] NEW YORK COUNTY CLERK 07/20/2020 05:00 PM NYSCEF DOC. NO. 104 INDEX NO. 155017/2019 RECEIVED NYSCEF: 07/20/2020 Accordingly, it is hereby ORDERED that the motion of third-party defendant Lehr Associates Consulting Engineers LLP to dismiss the third-pa complaint is granted as to the first cause of action for indemnification and is otherwise denied. This constitutes the Decision and Order of the court. ~~ 7/20/2020 DATE CHECK ONE: ROBERT R. REED, J.S.C. CASE DISPOSED GRANTED D NON-FINAL DISPOSITION DENIED GRANTED IN PART APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 155017/2019 22 GRAMERCY PARK LLC vs. MICHAEL HAVERLAND ARCHITECT, Motion No. 003 13 of 13 D D OTHER REFERENCE Page 13of13

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