All Am. Moving & Storage, Inc. v. Andrews

• Citation: 96 A.D.3d 674,2012 N.Y. Slip Op. 05241,949 N.Y.S.2d 17
• Parties: ALL AMERICAN MOVING AND STORAGE, INC., et al., Plaintiffs, v. W. Reilly ANDREWS, et al., Defendants. [And Other Actions] Jerome Ackerman, et al., Plaintiffs–Respondents, v. D'Agostino Supermarkets, Inc., et al., Defendants–Respondents, Allstate Sprinkler Corp., Defendant–Appellant, New York Marine and General Insurance Company, Defendant–Respondent.
• Decision Date: 28 June 2012
• Court: New York Supreme Court — Appellate Division

96 A.D.3d 674

949 N.Y.S.2d 17

2012 N.Y. Slip Op. 05241

ALL AMERICAN MOVING AND STORAGE, INC., et al., Plaintiffs,

v.W. Reilly ANDREWS, et al., Defendants.

[And Other Actions]

Jerome Ackerman, et al., Plaintiffs–Respondents,

v.D'Agostino Supermarkets, Inc., et al., Defendants–Respondents,Allstate Sprinkler Corp., Defendant–Appellant,New York Marine and General Insurance Company, Defendant–Respondent.

Supreme Court, Appellate Division, First Department, New York.

June 28, 2012.

Armienti DeBellis Guglielmo & Rhoden LLP, New York (Vanessa M. Corchia of counsel), for appellant.

Salamon, Gruber, Blaymore & Strenger, P.C., Roslyn Heights (Sanford Strenger of counsel), for Ackerman respondents.

Torino & Bernstein, P.C., Mineola (Charles R. Strugatz of counsel), for D'Agostino Supermarkets, Inc., respondent.

Lester Schwab Katz & Dwyer LLP, New York (Steven B. Prystowsky of counsel), for Metropolitan Security Storage, Ltd., respondent.

Speyer & Perlberg, LLP, Melville (Marie E. Garelle of counsel), for New York Marine & General Insurance Company, respondent.

MAZZARELLI, J.P., FRIEDMAN, RICHTER, ABDUS–SALAAM, JJ.

Order, Supreme Court, Bronx County (Dominic R. Massaro, J.), entered June 17, 2010, which, insofar as appealed from as limited by the briefs, denied defendant Allstate Sprinkler Corp.'s motion for summary judgment dismissing the claims and cross claims asserted against it in action No. 3 and for conditional summary judgment on its cross claim for contractual indemnification against defendant D'Agostino Supermarkets, Inc., in action No. 3, unanimously affirmed, without costs.

In this action to recover damages arising out of a warehouse fire, Allstate failed to establish as a matter of law that it did not owe the non-contracting respondents a duty of care or breach any duty owed. The record shows that Allstate owed plaintiffs—owners of the property—a duty of care, as plaintiffs were third-party beneficiaries to the sprinkler inspection services contract between Allstate and defendant-tenant D'Agostino. Indeed, D'Agostino entered into the contract to fulfill its duty to maintain the sprinklers pursuant to its lease with plaintiffs, who were required by law to have the sprinkler systems inspected at least once a month by a person holding a certificate of fitness ( see former Administrative Code of the City of New York, § 27–4265). Thus, D'Agostino clearly intended to benefit plaintiffs by engaging Allstate to inspect the sprinklers ( see MK W. St. Co. v. Meridien Hotels, 184 A.D.2d 312, 313, 584 N.Y.S.2d 310 [1992] ) [“the intention which controls in determining whether a stranger to a contract qualifiesas an intended third-party beneficiary is that of the promisee”], and the benefit to plaintiffs was “sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [the non-contracting parties] if the benefit is lost” ( Burns Jackson Miller Summit & Spitzer v. Lindner, 59 N.Y.2d 314, 336, 464 N.Y.S.2d 712, 451 N.E.2d 459 [1983] ).

Furthermore, while “a contractual obligation, standing alone, will generally not give rise to tort liability in favor of a third party” ( Espinal v. Melville Snow Contrs., 98 N.Y.2d 136, 138, 746 N.Y.S.2d 120, 773 N.E.2d 485 [2002] ), there are three exceptions to this general rule pursuant to which a party may be said to have assumed a duty of care to third parties ( id. at 140, 746 N.Y.S.2d 120, 773 N.E.2d 485). One of those exceptions is where the third party has detrimentally relied on the continued performance of the contracting party's duties ( id.). Given Allstate's admitted failure to inspect the sprinkler system for months before the fire, despite its contractual obligation to perform monthly inspections, and evidence of its failure to report to the owner and the Fire Department that it had found the sprinkler system shut off on several inspections, we agree with the motion court that issues of fact exist as to whether plaintiffs and defendant-subtenant Metropolitan detrimentally relied on Allstate's continued performance of its contractual duties.

However, we find that the other two Espinal exceptions do not apply. Any failure by Allstate to inspect the sprinklers did not launch a force or instrument of harm ( see Church...