Plancher v. Gladstein

• Decision Date: 11 October 1988
• Citation: 143 A.D.2d 740,533 N.Y.S.2d 730
• Parties: Michael PLANCHER, et al., Respondents, v. Sheila GLADSTEIN, et al., Defendants, Linda Denker, et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 730

533 N.Y.S.2d 730

143 A.D.2d 740

Michael PLANCHER, et al., Respondents, v. Sheila GLADSTEIN, et al., Defendants Linda Denker, et al., Appellants.

Supreme Court, Appellate Division Second Department.

Oct. 11, 1988.

Epstein, Reiss & Goodman, New York City (Ronald B. Goodman, of counsel), for appellants.

Estrin, Sackstein & Kenny, Port Jefferson (Eric A. Sackstein, of counsel), for respondents.

Before WEINSTEIN, J.P., and RUBIN, SPATT and SULLIVAN, JJ.

MEMORANDUM BY THE COURT.

In a negligence action, inter alia, to recover damages for economic loss, the defendants Linda Denker, Decoray International, Inc., and F & D Associates, Inc., appeal from an order of the Supreme Court, Suffolk County (Doyle, J.), dated April 2, 1987, which denied their motion to dismiss the complaint insofar as it is asserted against them.

ORDERED that the order is reversed, on the law, with costs, the motion is granted, the complaint is dismissed insofar as it is asserted against the appellants, and the action against the remaining defendants is severed.

This negligence action arises out of an agreement between the plaintiffs and the defendant Sheila Gladstein to decorate a media room in the plaintiffs' home. The first cause of action alleges that "defendant SHEILA GLADSTEIN, working in concert with the other defendants in this action * * * negligently built and designed a cabinet and furniture in said room". The second cause of action seeks to recover attorneys' fees.

The appellants moved to dismiss the complaint on the ground, inter alia, that it failed to state a cause of action in that there was no claim of privity between the plaintiffs and the appellants. The Supreme Court denied the motion, holding that "a person can be liable for economic loss caused by negligence even in the absence of contractual privity with the injured party". We disagree.

The law is now settled in New York that recovery will not be granted to a third party for economic loss arising from negligent design or manufacture of products or negligent construction of a structure in the absence of contractual relationship (see, Fitzpatrick Jr. Constr. Corp. v. County of Suffolk, 138 A.D.2d 446, 525 N.Y.S.2d 863; Ossining Union Free School Dist. v. Anderson LaRocca Anderson, 135 A.D.2d 518, 521 N.Y.S.2d 747). The rationale for this rule is that to allow tort recovery under these circumstances would undermine the law of warranty as codified in the Uniform Commercial Code. Notably, the cases relied upon by the Supreme Court, i.e., Glanzer v. Shepard, 233 N.Y. 236, 135 N.E.2d 275 and Rosenbaum v. Branster Realty Corp., 276 App.Div. 167, 93 N.Y.S.2d 209, predate the adoption of the Uniform Commercial Code. Although, in the case of accountants, the Court of Appeals has carved out a limited exception to the general rule that an action to recover damages for negligence will not lie under these circumstances, that exception is based upon the "accountant's central role in the financing and investment industry" (Ossining Union...