Board of Educ. of Hudson City School Dist. v. Sargent, Webster, Crenshaw & Folley

• Decision Date: 12 February 1987
• Citation: 125 A.D.2d 27,511 N.Y.S.2d 961
• Court: New York Supreme Court — Appellate Division
• Parties: , 37 Ed. Law Rep. 651 BOARD OF EDUCATION OF the HUDSON CITY SCHOOL DISTRICT, Plaintiff, v. SARGENT, WEBSTER, CRENSHAW & FOLLEY, a Partnership, Defendant and Third-Party Plaintiff-Respondent; Skyway Roofing Company, Inc., et al., Third-Party Defendants, and Thompson Construction Corporation, Third-Party Defendant-Appellant. (And a Fourth-Party Action.)

Page 961

511 N.Y.S.2d 961

125 A.D.2d 27, 37 Ed. Law Rep. 651

BOARD OF EDUCATION OF the HUDSON CITY SCHOOL DISTRICT, Plaintiff, v. SARGENT, WEBSTER, CRENSHAW & FOLLEY, a Partnership Defendant and Third-Party Plaintiff-Respondent Skyway Roofing Company, Inc., et al., Third-Party Defendants and Thompson Construction Corporation, Third-Party Defendant-Appellant. (And a Fourth-Party Action.)

Supreme Court, Appellate Division Third Department.

Feb. 12, 1987.

Couch & Howard, P.C., (McNamee, Lochner, Titus & Williams, Albany by George Carpinello, Albany, of counsel), Albany, for third-party defendant-appellant.

Hesson, Ford, Sherwood & Whalen (Michael J. Hutter, Jr., and Donald P. Ford, Jr., of counsel), Albany, for Philip Carey Corporation, third-party defendant.

Donohue, Donohue & Sabo, P.C. (Bruce S. Huttner and Fred J. Hutchinson, of counsel), Albany, for defendant and third-party plaintiff-respondent.

Before MAHONEY, P.J., and CASEY, MIKOLL, YESAWICH and LEVINE, JJ.

LEVINE, Justice.

In 1980, plaintiff brought suit against defendant, Sargent, Webster, Crenshaw & Folley (Sargent), the architect, and third-party defendant Thompson Construction Corporation (Thompson), the general contractor, arising out of a project for the construction of a new high school. The action centered on claimed defects in the roof of the new high school building, which plaintiff attributed to the failure of both Sargent and Thompson to perform their respective obligations under separate contracts with plaintiff. Sargent and Thompson each moved to dismiss before Special Term on the ground that plaintiff's action was barred by the six-year period of limitations for contract actions (CPLR 213[2] ). Special Term granted Thompson's motion to dismiss. As to Sargent, however, the court held that the continuous treatment doctrine applied to a breach of contract action brought by a client against its architect and that, hence, Sargent's post-breach activities on behalf of plaintiff with respect to the project served to toll the Statute of Limitations.

On appeal, this court agreed that the gravamen of plaintiff's causes of action against both Sargent and Thompson sounded in contract and affirmed in all respects (Board of Educ. of Hudson City School Dist. v. Thompson Constr. Corp., 111 A.D.2d 497, 488 N.Y.S.2d 880). Thereafter, Sargent initiated a third-party action against Thompson for contribution or indemnification, alleging that Thompson caused or contributed to whatever damages plaintiff incurred by reason of Sargent's alleged culpability. Thompson then moved to dismiss the third-party complaint for failure to state a cause of action, and now appeals from the denial of its motion.

We have concluded that dismissal should have been granted. To the extent that the third-party complaint seeks contribution, it is concededly based solely on New York's contribution statute (CPLR art. 14), under which "two or more persons who are subject to liability for damages for the same * * * injury to property * * * may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought" (CPLR 1401 [emphasis supplied] ). If liability for contribution attaches, the statute directs apportionment of a plaintiff's damages "in accordance with the relative culpability of each person liable for contribution" (CPLR 1402 [emphasis supplied] ).

In our view, CPLR article 14 does not and was never intended to apply where, as here, the potential liability to the plaintiff of both the defendant and the third-party defendant is purely for contractual benefit of the bargain (see, Martin v. Dierck Equip. Co., 43 N.Y.2d 583, 589, 403 N.Y.S.2d 185, 374 N.E.2d 97) or loss of the value of promised performance (see, 5 Corbin, Contracts § 1004, at 38) damages. The legislative history of CPLR article 14 clearly shows that the sole purposes (relevant here) of sections 1401 and 1402 were, first, to codify the changes in the substantive law of torts for equitable contribution among tortfeasors which the Court of Appeals announced in Dole v. Dow Chem. Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288, and second, to eliminate the procedural barriers to recovery for contribution among joint tortfeasors which existed under CPLR former article 14. As stated in the Report of the CPLR Advisory Committee to the Judicial Conference, which proposed and drafted the legislation, the primary goals of the new statute were to:

* * * codify and clarify the fundamental rule embodied in Dole and its progeny (1) that there is no longer the requirement of a joint money judgment against tortfeasors if contribution is to be allowed among them; and (2) that the courts are no longer restricted to either apportioning liability for contribution on a pro rata basis, if the statutory prerequisites for contribution have been met, or shifting responsibility entirely from one tortfeasor to another under the primary-secondary tortfeasor doctrine of indemnification (Twentieth Ann Reports of NY Judicial Conference, 1975, at 211).

(See also, Green Bus Lines v. Consolidated Mut. Ins. Co., 74 A.D.2d 136, 148-149, 426 N.Y.S.2d 981, lv. denied 52 N.Y.2d 701, 436 N.Y.S.2d 1025, 417 N.E.2d 572.)

True, the contribution statute has been held to apply when an injured plaintiff asserts rights under a breach of warranty or strict products liability theory. But by now, it should be abundantly clear that the reason contribution is enforced is that the underlying act of manufacturing and delivering a dangerously defective product causing injury is not only a breach of contract, but also a tortious wrong, and thus, gives rise to the full panoply of rights and remedies under the common law and statutory law of torts, including those created under CPLR article 14. " 'A breach of warranty, it is now clear, is not only a violation of the sales contract out of which the warranty arises but is a tortious wrong suable by a noncontracting party whose use of the warranted article is within the reasonable contemplation of the vendor or manufacturer' " (Victorson v. Bock Laundry Mach. Co., 37 N.Y.2d 395, 402, 333 N.Y.S.2d 39, 335 N.E.2d 275, quoting Goldberg v. Kollsman Instrument Corp., 12 N.Y.2d 432, 436, 240 N.Y.S.2d 592, 191 N.E.2d 81).

The case law is also clear that there are no remedies afforded under the law of torts where a plaintiff's claim is, as is conceded to be the case here, solely for benefit of the bargain, economic loss damages arising from a breach of contract (see, Schiavone Constr. Co. v. Mayo Corp., 56 N.Y.2d 667, 351 N.Y.S.2d 720, 436 N.E.2d 1322, revg. on dissenting opn. below 81 A.D.2d 221, 227-234, 439 N.Y.S.2d 933).

In addition to the foregoing legislative history on the limited purposes of CPLR article 14, the language of CPLR 1401 is equally inappropriate to extend contribution to pure breach of contract claims. The use of the phrase "injury to property", according to the drafters, was not intended to effect a substantive change from the words "property damage" contained in CPLR former 1401, a phrase hardly lending itself to inclusion of benefit of the bargain contract damages (Twentieth Ann Report of NY Judicial Conference, 1975, at 218). Significantly, the general statutory definition of "injury to property" defines the phrase as "an actionable act, whereby the estate of another is lessened, other than a personal injury, or the breach of a contract" (General Construction Law § 25-b [emphasis supplied] ). Moreover, to whatever extent elements of plaintiff's contract damages may overlap in its claims for the separate and distinct breaches of separate contracts by Sargent, as the architect, and by Thompson, as the general contractor, the harms, i.e., the losses of the respective values of their totally different performances under the separate contracts, are not the same (see, Jakobleff v. Cerrato, Sweeney & Cohn, 97 A.D.2d 786, 468 N.Y.S.2d 894).

To apply CPLR article 14 where the plaintiff's claims against the third-party plaintiff and the third-party defendant are for economic loss would work major modifications in the substantive law of contracts as to contribution among breaching parties to joint or several contracts (see, 4 Corbin, Contracts, ch. 52) and as to contract damages. To illustrate, CPLR 1402 directs that contribution is to be enforced in accordance with the "relative culpability" of each wrongdoer. If this were to be applied to pure contract claims, relative culpability would necessarily focus on the respective conduct of the parties constituting the breach. Contract damages, however, are limited to the economic...