Church v. Callanan Indus.

Decision Date21 February 2001
Citation729 N.Y.S.2d 545
CourtNew York Supreme Court — Appellate Division
Parties(A.D. 3 Dept. 2001) NED S. CHURCH, an Infant, by WENDY SMITH, His Guardian ad Litem, et al., Respondents, v CALLANAN INDUSTRIES INC., Appellant, and SAN JUAN CONSTRUCTION AND SALES COMPANY, Appellant-Respondent, and CLOUGH, HARBOUR & ASSOCIATES, Respondent. (And a Third-Party Action.) 88475 : THIRD JUDICIAL DEPARTMENT Calendar Date:
OPINION AND ORDER

Before: Mercure, J.P., Crew III, Mugglin, Rose and Lahtinen, JJ.

Mercure, J.P.

Appeal from an order of the Supreme Court (Teresi, J.), entered September 7, 2000 in Albany County, which, inter alia, denied a motion by defendant San Juan Construction and Sales Company for summary judgment dismissing the complaint against it.

In this action to recover for injuries sustained in a December 26, 1992 motor vehicle accident on the Thruway, plaintiffs seek to impose tort liability against a subcontractor based upon its alleged failure to install the full length of guiderail specified in a State construction contract that was completed, inspected, accepted and paid for years earlier. We conclude that plaintiffs' theory of liability against such a party expands the zone of duty beyond acceptable public policy limits and that Supreme Court therefore erred in denying the motion for summary judgment dismissing the complaint against it.

The essential facts as alleged by plaintiffs, and credited for the purpose of this appeal, may be briefly stated. In April 1985, defendant Callanan Industries Inc.1 contracted with the Thruway Authority to, among other things, install new guiderails along a portion of the Thruway in Albany County and Greene County. Callanan subsequently subcontracted the guiderail installation work to defendant San Juan Construction and Sales Company (hereinafter defendant). Although the guiderail portion of the project called for the removal of 275 feet of existing guiderail in the vicinity of mile marker 132.7 and the installation of 312.5 feet of new guiderail in its place, it appears that defendant installed only 212.5 feet of guiderail at that location. The Thruway Authority's engineering inspector, defendant Clough, Harbour & Associates (hereinafter Clough Harbour),2 nonetheless advised the Thruway Authority that Callanan had completed the project according to the contract specifications, and the Thruway Authority made final payment to Callanan in 1987.

On December 26, 1992, third-party defendant, Barbara S. Church, was driving southbound on the Thruway with her husband, plaintiff Gilbert P. Church, and their nine-year-old son, plaintiff Ned S. Church. At approximately 3:00 P.M., while traveling in the area where the subject guiderail project had been performed by defendant, Barbara Church fell asleep at the wheel. The vehicle thereupon moved onto the right-side shoulder of the road, struck the concrete anchor at the northern end of the guiderail, slid across 200 feet of grass, became airborne and eventually crashed into the bottom of an embankment. Although Barbara Church and Gilbert Church suffered relatively minor injuries, their son was rendered a quadriplegic as a result of the collision. Plaintiffs assert, and we will assume for the purpose of our analysis, that if defendant had installed the full length of guiderail called for in the contract, plaintiffs' injuries would have been substantially diminished.

In support of its contention that Supreme Court erred in denying its summary judgment motion, defendant relies upon a number of Court of Appeals cases for the proposition that it owed plaintiffs no duty of care (see, e.g., Palka v Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579; Eaves Brooks Costume Co. v Y.B.H. Realty Corp., 76 N.Y.2d 220; Strauss v Belle Realty Co., 65 N.Y.2d 399; Moch Co. v Rensselaer Water Co., 247 N.Y. 160). For their part, plaintiffs predicate their defense of the motion on the products liability principle, embodied within PJI 2:130 (see, 1A N.Y. PJI 2:130, at 604-606 [3d ed 2001]), that a building or construction contractor is liable for injury or damage to a third person as a result of the condition of the work, even after completion of the work and its acceptance by the owner, where it is reasonably foreseeable that a third person would be injured as a result of the contractor's negligent performance of the work.3 This so-called "modern rule" (see, Annotation, Modern Status of Rules Regarding Tort Liability of Building or Construction Contractor for Injury or Damage to Third Person Occurring After Completion and Acceptance of Work; "Foreseeability" or "Modern" Rule, 75 ALR 5th 413) has support in several New York cases, including Colonno v Executive I Assocs. (228 A.D.2d 859), Marrero v Marsico (218 A.D.2d 226), Sternbach v Cornell Univ. (162 A.D.2d 922), Roberts v MacFarland Constr. Cos. (102 A.D.2d 981) and Cubito v Kreisberg (69 A.D.2d 738, affd 51 N.Y.2d 900). Notably, the "modern rule" merely dictates that an owner's approval of work performed by a contractor does not, in and of itself, absolve that contractor of liability to a third party injured subsequent to such acceptance. In fact, defendant makes no argument to the contrary. Further, to the extent that the theory espoused by plaintiffs remains grounded in negligence, defendant's duty of care is an essential element of the cause of action (see, Annotation, Modern Status of Rules Regarding Tort Liability of Building or Construction Contractor for Injury or Damage to Third Person Occurring After Completion and Acceptance of Work; "Foreseeability" or "Modern" Rule, 75 ALR 5th 413, 438, § 2 [a]).

There can be no question that New York courts have long struggled to define the appropriate boundaries of third-party tort liability arising out of the breach of a contract. Although the issue appears to have arisen most frequently in connection with ongoing service contracts (see, e.g. Milliken & Co. v Consolidated Edison Co. of N.Y., 84 N.Y.2d 469 [contract to supply electricity]; Palka v Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579, supra [contract to perform a hospital's nonmedical preventative, safety inspection and repair service functions]; Eaves Brooks Costume Co. v Y.B.H. Realty Corp., 76 N.Y.2d 220, supra [contracts for periodic inspection of sprinkler system and for installation and maintenance of central station fire alarm system]; Strauss v Belle Realty Co., 65 N.Y.2d 399, supra [contract to supply electricity]; Moch Co. v Rensselaer Water Co., 247 N.Y. 160, supra [contract to provide water]), our reading of those cases evidences no intention to so limit them, and the issue has occasionally arisen in connection with construction contracts (see, e.g., Inman v Binghamton Hous. Auth., 3 N.Y.2d 137 [construction of apartment building]; Koeppel v City of New York, 200 A.D.2d 477 [construction of sidewalk]; Einhorn v Seeley, 136 A.D.2d 122] [installation of lock]).

Quite recently, the Court of Appeals gave extensive consideration to the issue of duty of care in connection with an action to recover damages from firearms manufacturers resulting from individuals' illegal use of handguns (see, Hamilton v Beretta U.S.A. Corp., 96 N.Y.2d 222 [Apr. 26, 2001]) and delineated the governing standard in the following terms:

The threshold question in any negligence action is: does defendant owe a legally recognized duty of care to plaintiff? Courts traditionally "fix the duty point by balancing factors, including the reasonable expectations of parties and society generally, the proliferation of claims, the likelihood of unlimited or insurer-like liability, disproportionate risk and reparation allocation, and public policies affecting the expansion or limitation of new channels of liability" * * *. Thus, in determining whether a duty exists, "courts must be mindful of the precedential, and consequential, future effects of their rulings, and 'limit the legal consequences of wrongs to a controllable degree'" * * *.

Foreseeability, alone, does not define duty -- it merely determines the scope of the duty once it is determined to exist * * *. The injured party must show that a defendant owed not merely a general duty to society but a specific duty to him or her, for "[w]ithout a duty running directly to the injured person there can be no liability in damages, however careless the conduct or foreseeable the harm" * * *. That is required in order to avoid subjecting an actor "to limitless liability to an indeterminate class of persons conceivably injured by any negligence in that act" * * *. Moreover, any extension of the scope of duty must be tailored to reflect accurately the extent that its social benefits outweigh its costs * * * (id., at 232, 727 N.Y.S.2d, quoting Lauer v City of New York, 95 N.Y.2d 95, 100; Palka v Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579, 586, supra; Eiseman v State of New York, 70 N.Y.2d 175, 187 [citations omitted]).

We believe that certain essential considerations can be gleaned from the existing authority which will assist in determining whether a duty of care was owed by defendant in this case. First, although apparently no longer constituting an absolute bar (see, Roberts v MacFarland Constr. Cos., 102 A.D.2d 981, supra; but see, Colonno v Executive I Assocs., 228 A.D.2d 859, supra; Sternbach v Cornell Univ., 162 A.D.2d 922, supra), the fact that the defect giving rise to a plaintiff's injury was open and apparent is an important consideration mitigating against the imposition of...

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