RH Macy & Co. v. Williams Tile & Terrazzo

• Decision Date: 29 March 1984
• Docket Number: Civ. A. No. C79-1998A.
• Citation: 585 F. Supp. 175
• Parties: R.H. MACY & CO., INC., d/b/a Davison's, Plaintiff, v. WILLIAMS TILE & TERRAZZO COMPANY, INC., Defendant and Third-Party Plaintiff, v. W.D. VIRTUE COMPANY, INC., Defendant and Third-Party Defendant, v. COPELAND, NOVAK & ISRAEL, Third-Party Defendant and Fourth-Party Plaintiff, v. CUSTOM TILE COMPANY, Fourth-Party Defendant.
• Court: U.S. District Court — Northern District of Georgia

585 F. Supp. 175

R.H. MACY & CO., INC., d/b/a Davison's, Plaintiff, v. WILLIAMS TILE & TERRAZZO COMPANY, INC., Defendant and Third-Party Plaintiff, v. W.D. VIRTUE COMPANY, INC., Defendant and Third-Party Defendant, v. COPELAND, NOVAK & ISRAEL, Third-Party Defendant and Fourth-Party Plaintiff, v. CUSTOM TILE COMPANY, Fourth-Party Defendant.

Civ. A. No. C79-1998A.

United States District Court, N.D. Georgia, Atlanta Division.

March 29, 1984.

Ronald L. Reid, Nill V. Toulme, Ben S. Williams, Atlanta, Ga., for Copeland, Novak & Israel.

Edward L. Savell, Atlanta, Ga., for Williams Tile & Terrazzo Co. and W.D. Virtue Co.

ORDER OF COURT

HORACE T. WARD, District Judge.

This action arose out of a series of events involving the renovation of the Davison's Lenox store. The case specifically concerns the selection and installation of defective ceramic tile. Copeland, Novak & Israel ("CNI"), an architectural firm, entered a contract with Davison's to design the renovation. Davison's contracted independently with Williams Tile & Terrazzo Company ("Williams") to install the tile. CNI designated "Virtue Summer Wheat 102" as the tile to be used, based upon past experience with the tile at other locations. Williams, in turn, ordered the tile from W.D. Virtue Company ("Virtue"). With knowledge only of the color and finish chosen by CNI, Virtue ordered the tile directly from a manufacturer, Custom Tile Company ("Custom Tile"). The tile turned out to be defective.

Davison's initially filed suit against Williams on its installation contract, in which Williams guaranteed the quality of the tile.¹ Williams then filed third-party complaints against Virtue for furnishing defective tile and against CNI for negligent selection of tile. Virtue filed a fourth-party complaint against Custom Tile and a cross claim against CNI alleging negligence for failure to have the tile tested. Davison's added Virtue as a party defendant.

In February of 1982 several claims were dismissed pursuant to a "Covenant Not to Sue and Assignment." CNI declined to enter the agreement. Davison's dismissed its claims against Williams and Virtue, and Williams dismissed its third-party complaint against Virtue. Still pending are Williams' third-party complaint against CNI and Virtue's cross-claim against CNI, as well as the claims against Custom Tile and its various counterclaims and cross-claims.

Currently before the court is the motion of CNI for summary judgment against both Virtue and Williams, originally filed on May 20, 1981. CNI contends that it owed no duty to either Williams or Virtue and that contribution and/or indemnity are unavailable under these circumstances. In November of 1983 CNI renewed its motion against Virtue; its defenses against Williams' third-party complaint were supplemented in September of 1983. Also before the court is CNI's motion to file depositions in support of its motions, which is unopposed and is hereby GRANTED.

FACTS

The relevant facts of this case are relatively simple and substantially undisputed. CNI, a New York firm, had done previous interior design work for Macy's in the northeast before contracting with Davison's for the Lenox renovation. David Leitner, a CNI employee, was the decorator assigned to the Davison's job and had also worked for Macy's on a Bamberger store in Toms River, New Jersey. Leitner had selected a tile supplied by Virtue for use at the Toms River store, and apparently sought to use the same tile on the Davison's project. It is not clear whether Davison's requested that the same tile be used or whether CNI recommended it based on its successful use at the Toms River store.

Virtue was given a request for a specific color tile with a non-abrasive surface (tile similar to that used at Toms River). Virtue sent samples of tile to CNI which were labelled "W.D. Virtue Summer Wheat 102." The tile used as a color guide by CNI and Davison's (used at Toms River) had been manufactured by Maybrick Manufacturing Company, but by the time the selection was made by CNI for the Davison's project it was no longer manufactured by Maybrick. Virtue ordered the tile from Custom Tile Company.

Before installation began, Virtue apparently did inquire as to the quality of the tile and questioned Custom Tile by letter regarding "specifications." There is no indication that any assurances of compliance were given.

CNI contends it did not know who manufactured the tile.² CNI did not request and did not test the samples before deciding to use the tile. It appears that CNI assumed it was dealing with a product it had previously used and with which it was satisfied.

Shortly after installation began, problems with the tile surfaced.³ CNI did not recommend testing of the remaining tile nor did it conduct any tests before proceeding with the installation.

Virtue and Williams both contend that CNI was responsible to ensure that materials used complied with national codes and standards. They claim that CNI was negligent for failing to provide specifications or to investigate the tile before making a final selection, and for not inspecting or testing the tile. It is argued that CNI knew or should have known that the tile was unsuited to the purpose for which it was selected and that CNI failed to exercise the degree of care required of professionals under the same or similar conditions.

The alleged negligence of CNI purportedly contributed to the damages sustained by the plaintiff; both Virtue and Williams seek to recover from CNI based upon their theory that CNI owed them a duty as well and should share the responsibility for damages. CNI contends that its only duty was to its client (Davison's), that there is no privity of contract between itself and the other parties, and that therefore a tort claim is precluded. The company argues that Williams and Virtue, who handled the tile directly, had the opportunity to test it and should have done so. They assert that they did not actually select the defective tile, since Virtue switched manufacturers, and that there was no reason for them to test tile which they assumed was identical to that used at Toms River.

CNI also contends that it cannot be liable for contribution unless it committed a tort against Davison's, which it argues is impossible since their relationship was contractual. CNI further argues that the claims against it are precluded by Rule 14 because they did not arise out of the plaintiff's original claim.

ISSUES

There are three central issues to be addressed by the court, which are:

1) Did CNI owe a legal duty of care to Virtue and/or Williams despite the absence of privity?

2) If so, was this duty breached?

3) Is the third-party complaint or crossclaim a proper mechanism for stating a claim against CNI in this case?

DISCUSSION

The threshold issue raised by CNI in its summary judgment motion is not easily identified or resolved. The parties have misdirected some of their arguments toward the question of when a negligence action may be sustained between parties to a contract in a breach of contract case, which is not the question before the court. That issue is addressed in cases such as E & M Construction Company, Inc. v. Bob, 115 Ga.App. 127, 153 S.E.2d 641 (1967); Orkin Exterminating Co., Inc. v. Stevens, 130 Ga.App. 363, 203 S.E.2d 587 (1973); Long v. Jim Letts Oldsmobile, Inc., 135 Ga.App. 293, 217 S.E.2d 602 (1975). These cases all involve disputes between parties in privity.

CNI is not in privity with Williams or Virtue. Under Ga.Code Ann. § 51-1-11(a),⁴ the right of action in tort is confined to parties to (and those in privity to) a contract if such tort arises out of a duty which is the consequence of the contract. The contractual relationships in this case were between CNI and Davison's, Williams and Davison's, and Williams and Virtue. The "duty" allegedly owed by CNI, if it exists, would arise out of its contract with Davison's. Therefore, there could be no right of action between CNI and Williams or Virtue because there is no privity of contract between them, unless the exception applies. O.C.G.A. § 51-1-11 also provides that where the party would have a right of action for the injury done independently of the contract an action in tort may be sustainable.

Thus, the question here becomes whether CNI owed a duty of care to Williams and/or Virtue such that an action for negligence will lie. None of the parties have cited any authority directly applicable to the facts of this case, but some court decisions do provide guidance. The cases most relevant to this issue concern the duty of care owed by professionals to third parties with whom they have no "professional relationship." These decisions are factually distinguishable from each other and from the present case. To complicate matters further, there is substantial conflict among them.

It is clear that the Georgia courts recognize the existence of a duty of care owed by professionals, even in the absence of privity. In Bodin v. Gill, 216 Ga. 467, 117 S.E.2d 325 (1960) a landowner was allowed to recover for the negligence of an architect who was employed by a church to design its building and landscaping on the property adjoining hers. In recognizing a legal duty of care despite the absence of privity, the court held:

"The undertaking of an architect implies that he possesses skill and ability, including taste sufficient to enable him to perform the required services at least ordinarily and reasonably well, and that in a given case he will exercise his skill and ability, his judgment and taste, reasonably and without neglect." Block v. Happ, 144 Ga. 145, 146(2) (86 S.E. 316). "The law imposes upon persons performing architectural, engineering, and other professional and skilled services the obligation to exercise a reasonable degree of care, skill, and ability, which generally is taken and considered to be such a degree of care and skill as, under similar conditions and like surrounding

...