Lake Placid Club Attached Lodges v. Elizabethtown Builders, Inc.

• Decision Date: 05 November 1987
• Citation: 131 A.D.2d 159,521 N.Y.S.2d 165
• Parties: LAKE PLACID CLUB ATTACHED LODGES, Appellant, v. ELIZABETHTOWN BUILDERS, INC., et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 165

521 N.Y.S.2d 165

131 A.D.2d 159

LAKE PLACID CLUB ATTACHED LODGES, Appellant, v. ELIZABETHTOWN BUILDERS, INC., et al., Respondents.

Supreme Court, Appellate Division Third Department.

Nov. 5, 1987.

Hancock & Estabrook (Robert A. Small, of counsel), Syracuse, for appellant.

Miller, Mannix, Lemery & Pratt (Benjamin R. Pratt, Jr., of counsel), Glens Falls, for Elizabethtown Builders, Inc., respondent.

Sugarman, Wallace, Manheim & Schoenwald (Timothy J. Perry, of counsel), Syracuse, for Wallace, McHarg, Roberts & Todd, respondent.

Before PAUL KANE, J.P., and MAIN, MIKOLL, LEVINE and HARVEY, JJ.

LEVINE, Justice.

Plaintiff is an unincorporated joint venture, the members of which are owners of residential condominium units in a four-building project in the Village of Lake Placid, Essex County, developed by Lake Placid Company (hereinafter the developer). Plaintiff's members either purchased directly from the developer or are successors in interest to the original purchasers. Plaintiff was formed solely for the purpose of prosecuting damage claims for structural defects and resultant damages with respect to the condominium units against defendant Elizabethtown Builders, Inc., the builder for the project (hereinafter the builder), and defendant Wallace, McHarg, Roberts & Todd, the architectural firm (hereinafter the architects) which designed and supervised construction of three of the four buildings and whose plans were used for the construction of the fourth building. The complaint alleges causes of action for (1) breaches of the construction contract between the developer and the builder, and of the professional architectural contract between the developer and the architects for design and supervision of construction, and (2) negligence against the builder for alleged improper construction and against the architects for alleged improper design and supervision. After joinder of issue and pretrial discovery, defendants successfully moved for summary judgment dismissing the complaint. This appeal by plaintiff ensued.

There should be an affirmance. As to plaintiff's breach of contract claims, it is conceded that, since there was no contractual relationship between plaintiff's members and defendants, recovery is dependent upon a showing that plaintiff's members were third-party beneficiaries of the developer's contracts with defendants. In Fourth Ocean Putnam Corp. v. Interstate Wrecking Co., 66 N.Y.2d 38, 44, 495 N.Y.S.2d 1, 485 N.E.2d 208, it was held that the Restatement (Second) of Contracts (ch. 14 [1979] ) essentially summarizes New York law on the subject of contractual liability to third-party beneficiaries. Nonparty enforcement of a contractual promise is limited to an "intended" as contrasted with an "incidental" beneficiary (Restatement [Second] of Contracts §§ 302, 304 [1979] ). One is an intended beneficiary if one's right to performance is "appropriate to effectuate the intention of the parties" to the contract and either the performance will satisfy a money debt obligation of the promisee to the beneficiary or "the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance" (Restatement [Second] of Contracts § 302[1][a], [b] [1979] ). There are no facts set forth in the complaint or plaintiff's papers on the motion establishing the existence of the developer's obligation to pay money to any of plaintiff's members. Likewise, plaintiff has failed to submit any evidence from the contractual language ^* or other circumstances manifesting a mutual intent of the contracting parties to confer rights to performance on the ultimate owners of the units (see, Isbrandtsen Co. v. Local 1291 of Intl. Longshoremen's Assn., 204 F.2d 495, 498 n. 13; see also, 4 Corbin, Contracts § 776, at 18), nor is there any showing of an intent on the part of the developer to give such nonparties any benefits from the performances promised it by the builder and the architects. Indeed, there is nothing whatsoever in the record to suggest that the developer had in mind anything but the normal business motive to obtain a construction product of sufficient quality for ready marketability of the...