Morse/Diesel, Inc. v. Trinity Industries, Inc., s. 841
| Decision Date | 26 September 1988 |
| Docket Number | Nos. 841,D,792,s. 841 |
| Citation | 859 F.2d 242 |
| Parties | MORSE/DIESEL, INC. and Helena Erectors, Incorporated, Plaintiffs, Helena Erectors, Incorporated, Plaintiff-Appellee, v. TRINITY INDUSTRIES, INC., Aetna Insurance Co. and Mosher Steel Company, Defendants, Trinity Industries, Inc., Defendant-Appellee. TRINITY INDUSTRIES, INC., Third-Party Plaintiff-Appellee, v. JOHN PORTMAN ASSOC., Weidlinger Assoc., Inc., Helena Erectors, Incorporated, St. Lawrence Cement Co., A.J. McNulty & Co., Inc., Blakeslee Prestress, Inc. and Morse/Diesel, Inc., Third-Party Defendants, Helena Erectors, Incorporated, Third-Party Defendant-Appellee. Appeal of ST. LAWRENCE CEMENT CO., A.J. McNulty & Co., Inc. and Blakeslee Prestress, Inc., Third-Party Defendants-Appellants. ockets 87-7660, 87-7662. |
| Court | U.S. Court of Appeals — Second Circuit |
Harold F. McGuire, Jr., New York City (McGuire & Tiernan, Arthur V. Nealon, New York City, Heron, Burchette, Ruckert & Rothwell, Thomas A. Rothwell, Jr., Joseph A. Vicario, Jr., Joseph P. Esposito, Washington, D.C., of counsel), for third-party defendant-appellant St. Lawrence Cement Co.
Kevin D. Slakas, New York City (Peckar & Abramson, New York City, of counsel), for third-party defendants-appellants Blakeslee Prestress, Inc. and A.J. McNulty & Co., Inc.
Andrew Fisher, Brooklyn, N.Y. (Fisher & Fisher, Freddy R. Weidmann, Brooklyn, N.Y., of counsel), for third-party plaintiff-appellee Trinity Industries, Inc.
Cecil Holland, Jr., New York City (Hart & Hume, New York City, Watt, Tieder, Killian & Hoffar, Robert K. Cox, John B. Tieder, Jr., Douglas C. Proxmire, Vienna, Va., of counsel), for plaintiff and third-party defendant-appellee Helena Erectors, Inc.
Before TIMBERS, KEARSE and MAHONEY, Circuit Judges.
Third-party defendants-appellants Blakeslee Prestress, Inc. ("Blakeslee"), St. Lawrence Cement Co. ("St. Lawrence") and A.J. McNulty & Co., Inc. ("McNulty") appeal from an interlocutory order of the United States District Court for the Southern District of New York, Shirley Wohl Kram, Judge, denying their motions to dismiss the third-party claims of third-party plaintiff-appellee Trinity Industries, Inc. ("Trinity"), and the claims and cross-claims of plaintiff and third-party defendant-appellee Helena Erectors, Inc. ("Helena"), for failure to state a claim upon which relief can be granted.
In two diversity actions, Morse/Diesel, Inc. v. Trinity Industries, Inc. ("Morse/Diesel") and Helena Erectors, Incorporated v. Trinity Industries, Inc. ("Helena Erectors"), Trinity and Helena assert claims for negligent performance of contractual duties or negligent misrepresentation against Blakeslee, St. Lawrence and McNulty. Trinity sought direct damages, indemnity and contribution from Blakeslee, St. Lawrence and McNulty. Helena sought direct damages from Blakeslee, and contribution from Blakeslee, St. Lawrence and McNulty. Despite the absence of contractual privity between the adverse parties, the district court held that the complaints alleged sufficiently close working relationships among the parties, who were subcontractors with various roles in the same construction project, to allow recovery for economic loss under New York law.
Pursuant to 28 U.S.C. Sec. 1292(b) (1982 and Supp. IV 1986), the district court certified to this court, and a panel of this court permitted appeal of, "that portion of [the district court's] order which ruled that Blakeslee, McNulty and St. Lawrence could be held liable to Trinity and Helena for economic loss in the absence of privity of contract." Morse/Diesel, Inc. v. Trinity Indus., Inc., 664 F.Supp. 91, 95 (S.D.N.Y.1987). We reverse and remand for dismissal of all claims by Trinity and Helena against Blakeslee, St. Lawrence and McNulty.
Morse/Diesel and Helena Erectors arise out of various alleged construction defects, delays, and other problems relating to a project for the construction of a hotel, the Times Square Hotel (now the Marriott Marquis), located on Broadway between West 45th and West 46th Streets in New York, New York. In 1982, the Times Square Hotel Company, a partnership and owner of the hotel, entered into a prime contract with Morse/Diesel, Inc. ("Morse"), the general construction contractor on the project. The owner also entered into a separate contract with an architect, John Portman Associates, Inc. ("Portman"), which in turn entered into a subcontract with a structural engineer, Weidlinger Associates, Inc. ("Weidlinger"). Morse, as general contractor, also entered into agreements with several subcontractors for various aspects of the construction:
1. Trinity--furnishing, fabrication and erection of structural steel; installation of precast concrete plank and metal deck; fabrication of steel connector clips;
2. Blakeslee--manufacture and shipping of precast concrete planks;
3. St. Lawrence--fabrication of precast concrete panels; design of steel connector clips to attach panels to structural steel; and provision of plans, drawings and specifications for their use;
4. McNulty--installation of precast concrete panels.
Finally, Trinity entered into a subcontract with Helena to hoist, erect and install the structural steel, metal decking and precast concrete planks, and receive and hoist the steel stairs.
In the two main actions for breach of contract, both commenced in August, 1984, Morse is suing Trinity in Morse/Diesel for "failing to complete its work in a timely manner, completing other work in a defective manner, and failing to pay for work performed by others;" and Helena is suing Trinity in Helena Erectors for "inter alia, failing to deliver structural steel in a timely manner, delivering nonconforming structural steel, failing to coordinate Helena's work with that of other subcontractors, and failing to provide Helena with accurate drawings and specifications." Morse/Diesel, Inc. v. Trinity Indus., Inc., 655 F.Supp. 346, 351 (S.D.N.Y.1987).
Trinity filed various counterclaims against Morse in Morse/Diesel and Helena in Helena Erectors. In both actions, Trinity also filed third-party claims against a number of parties. Trinity's third-party claims against Blakeslee, St. Lawrence and McNulty are before us on this appeal. With respect to each of these third-party defendants, Trinity sought damages for negligence in connection with the performance of their subcontracts with Morse, and indemnity 1 or contribution with respect to any ultimate liability on Trinity's part to Morse and/or Helena.
Trinity also filed a third-party claim against Helena in Morse/Diesel, thus making Helena a third-party defendant in that action. Helena then filed, inter alia, cross-claims against third-party defendants Blakeslee, St. Lawrence and McNulty which are before us on this appeal. In each instance, Helena alleged negligence by the subcontractor in the performance of its subcontract with Morse, and sought contribution with respect to any ultimate liability on Helena's part to "Trinity or others." A direct claim for damages resulting from negligence, however, was pleaded only against Blakeslee.
In Helena Erectors, after Trinity filed third-party claims against Blakeslee, St. Lawrence and McNulty, Helena filed claims against these third-party defendants which paralleled Helena's cross-claims against these parties in Morse/Diesel.
The gist of Trinity's and Helena's claims for negligence against Blakeslee is that Blakeslee delivered concrete planks--which Trinity and Helena had contractual duties to erect and install--in an untimely manner, in improper sequence, and in defective condition. As a result of Blakeslee's alleged negligence, Trinity and Helena claim that they incurred additional expenses and suffered substantial delay.
Trinity's and Helena's negligence claims against St. Lawrence allege that St. Lawrence failed to provide the plans, drawings and specifications for steel connector clips--which were to be fabricated by Trinity--in a timely manner. As a result, they claim that Trinity had to install the clips at the construction site instead of at its manufacturing facility, thus causing additional expense and substantial delays in Trinity's performance and possible liability of Trinity and Helena to third parties.
Finally, Trinity's and Helena's claims against McNulty are essentially for negligent misrepresentation. It is alleged that prior to commencing attachment of the precast concrete panels to the steel structure of the hotel, McNulty surveyed the steel structure and advised Morse that the placement of the steel connector clips was improper, and that McNulty was therefore unable to install the precast concrete panels. They allege that McNulty's survey was erroneous, and that as a result of McNulty's negligent misrepresentations to Morse, Trinity was required by Morse to retain another firm to survey the steel structure and the placement of connector clips. They further allege that McNulty's negligent misrepresentations caused substantial delay of the project, thereby exposing Trinity and Helena to liability to third parties.
Neither Trinity nor Helena is in direct privity of contract with either Blakeslee, St. Lawrence or McNulty. Rather, Trinity, Blakeslee, St. Lawrence and McNulty are all subcontractors of Morse, and Helena is a subcontractor of Trinity. In an effort to overcome the conceded lack of contractual privity, however, Trinity and Helena point to the following provisions of the subcontracts between Morse and Blakeslee, St. Lawrence and McNulty:
ARTICLE 4--Scheduling
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The Contractor [Morse] shall have the right to schedule other work at the same time and in the same area as the Subcontractor's Work. The Subcontractor shall coordinate its Work with any other subcontractors' work in such manner as the Contractor may direct to avoid conflict or interference with such work of others, shall participate in the preparation of coordinated drawings...
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