Clover Cmtys. Beavercreek v. Mussachio Architects P.C.

• Docket Number: 5:22-cv-278 (BKS/ML)
• Decision Date: 07 June 2023
• Parties: CLOVER COMMUNITIES BEAVERCREEK, LLC, et al., individually and as assignees of the claims of CNY Fair Housing, Inc. et al., Plaintiffs, v. MUSSACHIO ARCHITECTS P.C. and MARC MUSSACHIO, Defendants.
• Court: U.S. District Court — Northern District of New York

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CLOVER COMMUNITIES BEAVERCREEK, LLC, et al., individually and as assignees of the claims of CNY Fair Housing, Inc. et al., Plaintiffs,
v.
MUSSACHIO ARCHITECTS P.C. and MARC MUSSACHIO, Defendants.

No. 5:22-cv-278 (BKS/ML)

United States District Court, N.D. New York

June 7, 2023

Elizabeth A. Kraengel Gregory P. Photiadis Duke Holzman Photiadis & Gresens LLP For Plaintiffs

Conor V. McDonald Christopher Albanese Milber Makris Plousadis & Seiden, LLP For Defendants

MEMORANDUM-DECISION AND ORDER

Hon. Brenda K. Sannes, Chief United States District Judge

I. INTRODUCTION

Plaintiffs, twenty-eight entities who own senior housing complexes, filed an amended complaint against Defendants Mussachio Architects P.C. and Marc Mussachio alleging claims for breach of contract; professional malpractice; contribution under New York Civil Practice Law and Rules (“CPLR”) 1401; violation of the Fair Housing Act of 1968 (“FHA”), as amended,

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42 U.S.C. § 3601 et seq.; violation of the New York State Human Rights Law (“NYSHRL”), N.Y. Exec. Law § 296 et seq.; violation of Ohio's unlawful discriminatory practices statute, Ohio Rev. Code § 4112.02 et seq.; violation of Indiana Fair Housing Law, Ind. Code § 22-9.5-5-5 et seq.; and violation of Kentucky unlawful housing practices, Ky. Rev. Stat. § 344.360 et seq. (Dkt. No. 71).^[1] Presently before the Court is Defendants' motion to dismiss the amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. No. 74). The motion is fully briefed. (Dkt. Nos. 75, 76). For the following reasons, the Court grants Defendants' motion to dismiss in part.

II. BACKGROUND

A. Procedural Background

This action was commenced in March 2022 by a group of Fair Housing Organizations (the “Original Plaintiffs”)^[2] alleging violations of the FHA and NYSHRL against Defendants, the property manager, contractors, and various property owners. (See generally Dkt. No. 1). The Original Plaintiffs alleged that the original defendants “designed or constructed, or own[ed] or operate[d] multi-family rental housing complexes that do not comply with the FHA's accessibility requirements.” (Id. ¶ 1). On August 4, 2022, the present Plaintiffs and others settled the claims against them with the seven Original Plaintiffs as well as five additional Fair Housing Groups. (See Dkt. No. 71-1 (Settlement Agreement dated August 4, 2022)).^[3] Plaintiffs agreed to

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(1) undertake a number of “alterations to improve accessibility for the exterior of the Properties” set forth in a “Punch List” and with an estimated value of at least $3 million; (2) provide an “Individual Unit Modification Fund” to be used for individual unit modifications requested by residents or potential residents on account of disability; and (3) make a settlement payment to the Fair Housing Groups in the amount of $750,000. (Id. at 6-15). The settlement agreement expressly excluded all claims against Defendants Mussachio Architects, P.C. and Marc Mussachio, who were not parties to the agreement. (Id. at 18 (“Nothing in the above releases shall be construed as any party to this Agreement releasing any claims . . . that any party to this Agreement may have against Mussachio Architects, P.C., or Marc Mussachio.”)).

Subsequently, on August 17, 2022, the Original Plaintiffs and the five additional Fair Housing Groups (collectively, the “Assignors”) assigned to Plaintiffs, “as it relates to the subject housing complex owned by each [Plaintiff],” “all right, title to and interest in (1) all of the claims and causes of action the [Assignors], or any of them, have against Mussachio Architects, P.C. and Marc Mussachio” that are set forth in the original complaint in this action, and (2) “all of the claims and causes of action the [Assignors], or any of them, may have against [Defendants] for design and construction-related violations of the FHA” relating to the identified properties. (Dkt. No. 71-2, at 2 (Assignment)).

By Text Order dated February 14, 2023, Magistrate Judge Miroslav Lovric granted Plaintiffs leave to file an amended complaint. (Dkt. No. 70).

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B. Amended Complaint^[4]

The amended complaint alleges that Plaintiffs entered into various written contracts with Mussachio Architects, P.C., of which architect Marc Mussachio is a principal, between August 2, 2010 and September 9, 2021 to “perform certain design services” relating to housing complexes as set forth in each contract. (Dkt. No. 71, ¶¶ 51-52, 61-94); see also Appendix. These contracts were “in the form of AIA Document B102-2007 (Standard Form of Agreement Between Owner and Architect without a Predefined Scope of Architect's Services) and AIA B201-2007 (Standard Form of Architect's Services).” (Dkt. No. 71, ¶¶ 61-94). Each contract provides that Mussachio Architects “shall perform its services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances.” (Id. ¶ 120). Each contract further provides that Mussachio Architects “shall incorporate the design requirements of governmental authorities having jurisdiction over the Project into the Construction Documents.” (Id. ¶ 121). Plaintiffs allege that each contract required Mussachio Architects to visit the subject site at “appropriate” intervals, “keep the Owner reasonably informed about the progress and quality of the portion of the Work completed,” and “promptly report” “known deviations” and “defects and deficiencies observed.” (Id. ¶ 122). Contracts entered into after August 2019 “incorporated provisions expressly referencing FHA as applicable to the Projects.” (Id. ¶¶ 124-26).

Plaintiffs allege that “each unit at each Project” and the “public and common use areas of each Project” are all subject to the FHA's accessibility requirements. (Id. ¶¶ 104-07). However, “[m]ultiple features” designed by Defendants “do not comply with the FHA” and other

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accessibility guidelines and standards. (Id. ¶ 108). On August 29, 2019, counsel for the Original Plaintiffs sent a letter to certain Plaintiff entities and Mussachio Architects, “placing them on notice of the alleged design and construction violations under the FHA at various properties” and demanding that they be remedied. (Id. ¶ 109). “All Mussachio designs” following this letter were also “non-compliant with FHA requirements.” (Id. ¶ 110).

More specifically, Plaintiffs allege that Defendants “defectively designed accessible routes to: interior amenities in interior common use areas as required by the FHA,” balconies, and patios. (Id. ¶ 112). Defendants also designed bathrooms that are not accessible because they “lack required clear floor space” and do not have reinforced walls that “allow the installation of grab bars.” (Id. ¶¶ 113-14). Defendants “also designed mailboxes that do not comply with the FHA's accessibility requirements.” (Id. ¶ 115). Plaintiffs allege that they have incurred (1) “extensive remediation costs to fix the FHA design and construction violations Defendants created,” (2) “defense costs” related to “the litigation to which those violations gave rise,” and (3) as to defects not capable of correction, the “difference in value between properly constructed buildings and those that were in fact built.” (Id. ¶¶ 3, 129).

The amended complaint asserts direct claims for: (1) contribution under CPLR 1401 for “an amount [of Plaintiffs' settlement with the Assignors] commensurate with Defendants['] own negligence or wrongdoing, up to 68%” of damages paid; (2) breach of contract against Mussachio Architects; and (3) professional malpractice against both Defendants, (id. ¶¶ 118-43), and assigned claims for violation of the FHA, NYSHRL, Ohio's unlawful discriminatory practices statute, Indiana Fair Housing Law, and Kentucky unlawful housing practices, (id. ¶¶ 144-61).

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III. STANDARDS OF REVIEW

Rule 12(b)(1), which provides that a court may dismiss a claim for lack of subject matter jurisdiction, is the proper procedural route to bring a standing challenge. All. for Env't Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 88 n.6 (2d Cir. 2006); see also Lyons v. Litton Loan Servicing LP, 158 F.Supp.3d 211, 218 (S.D.N.Y. 2016) (noting that a lack of standing “may be addressed through a Rule 12(b)(1) motion”). “In resolving a motion to dismiss under Rule 12(b)(1), the district court must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction.” Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). A defendant may make “a fact-based Rule 12(b)(1) motion, proffering evidence beyond the complaint and its exhibits.” Nicholas v. Trump, 433 F.Supp.3d 581, 586 (S.D.N.Y. 2020) (citation omitted). A plaintiff must then “come forward with evidence of [its] own to controvert that presented by the defendant, or may instead rely on the allegations in [its] [p]leading if the evidence proffered by the defendant is immaterial because it does not contradict plausible allegations that are themselves sufficient to show standing.” Katz v. Donna Karan Co., L.L.C., 872 F.3d 114, 119 (2d Cir. 2017) (citation and internal quotation marks omitted). The “party invoking federal jurisdiction bears the burden of establishing” the elements of Article III standing. Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016) (citation omitted).

To survive a motion to dismiss under Rule 12(b)(6) for failure to state a claim, “a complaint must provide ‘enough facts to state a claim to relief that is plausible on its face.'” Mayor & City Council of Balt. v. Citigroup, Inc., 709 F.3d 129, 135 (2d Cir. 2013) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff must provide factual allegations sufficient “to raise a right to relief above the speculative level.” Id. (quoting Twombly...