R.H. Sanbar Projects, Inc. v. Gruzen Partnership

• Decision Date: 07 March 1989
• Citation: 538 N.Y.S.2d 532,148 A.D.2d 316
• Parties: R.H. SANBAR PROJECTS, INC., Plaintiff, and Dag Hammarskjold Tower, N.V., Plaintiff-Appellant, v. The GRUZEN PARTNERSHIP et al., Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 532

538 N.Y.S.2d 532

148 A.D.2d 316

R.H. SANBAR PROJECTS, INC., Plaintiff, and Dag Hammarskjold Tower, N.V., Plaintiff-Appellant, v. The GRUZEN PARTNERSHIP et al., Defendants-Respondents.

Supreme Court, Appellate Division,

First Department.

March 7, 1989.

M. Aieta, New York City, for plaintiff-appellant.

W.C. Teleisha, M. Byrne, for defendants-respondents.

Before ROSS, J.P., and ASCH, KASSAL, ELLERIN and SMITH, JJ.

MEMORANDUM DECISION.

Order of the Supreme Court, New York County (Harold Baer, Jr., J.), entered on or about March 30, 1988, which, inter alia, granted the motion of defendant Philip Birnbaum & Associates, P.C. for an order dismissing the complaint of plaintiff Dag Hammarskjold Tower, N.V. as against it, pursuant to CPLR 3211(a)(7), and the order of the same court, entered on or about October 18, 1988, which granted the motion by defendant The Gruzen Partnership dismissing the complaint of plaintiff Dag Hammarskjold Tower, N.V. as against it, pursuant to CPLR 3211(a)(7) and 3212, are unanimously reversed, on the law, to the extent appealed from, and the complaint reinstated against both defendants, with costs and disbursements payable to appellant.

Plaintiff Dag Hammarskjold Tower, N.V. (DHT) owns the premises on Second Avenue between 46th and 47th Streets in Manhattan. It retained co-plaintiff R.J. Sanbar Projects, Inc. (Sanbar) as its developer and coordinator to build a residential condominium apartment building at that location. The parties entered into a Project Development Agreement which provided, inter alia, that Sanbar was to perform all of its duties under the contract subject to DHT's direction and control.

The Agreement also allowed Sanbar, inter alia, to retain qualified architects and engineers. Sanbar, by a letter agreement, hired defendant Philip Birnbaum & Associates, P.C. (Birnbaum) to assist in the development of layouts for the floors and the apartments and to provide general review and guidance with respect to maximizing the floor area bonus that was available to the developer and owner for the construction of a public plaza. Defendant The Gruzen Partnership (Gruzen) was the main design architect for the buildings.

The Department of Buildings subsequently rejected plaintiffs' application for a Certificate of Occupancy and informed them that the floor area bonus would be unavailable. No sales of units in the building could be made without the Certificate of Occupancy, and the plaintiffs had to redesign the public plaza and reconstruct part of the building at additional cost.

Consequently, the plaintiffs commenced this lawsuit. As a first cause of action, plaintiffs sought damages from the main design architects, Gruzen, based upon its negligent design of the public plaza, which failed to meet the statutory requirements which would have entitled the plaintiffs to the floor area bonus. Plaintiffs' second cause of action sought damages from defendant Birnbaum based upon its breach of the written retainer agreement, in that it failed to provide proper review and advice regarding the rules, regulations and laws applicable to the public plaza and the floor area bonus plaintiffs sought.

Birnbaum moved for an order dismissing the complaint of DHT for failure to state a cause of action pursuant to CPLR 3211(a)(7) and for an order granting it summary judgment against DHT pursuant to CPLR 3212. The IAS court granted the motion to dismiss on CPLR 3211(a)(7) grounds.

Thereafter, defendant Gruzen moved for an order dismissing the complaint of DHT pursuant to CPLR 3211(a)(7) and for summary judgment against DHT pursuant to CPLR 3212 and the IAS court granted Gruzen's motion for summary judgment as against DHT.

The order of March 30, 1988 ostensibly dismissed the complaint of DHT as against Birnbaum pursuant to CPLR 3211(a (7) for failure to state a cause of action. It did not consider the alternative CPLR 3212 ground. The IAS court made findings that there was no nexus between DHT and Birnbaum and that DHT was in fact not a third-party beneficiary of the agreement between Sanbar and Birnbaum. It also reached these conclusions based upon "a close examination of the DHT-Sanbar contract" and the agreement between Birnbaum and Sanbar.

Initially, we note that the complaint, however inartfully drawn, does state a cause of action sufficient to withstand a motion pursuant to CPLR 3211(a)(7) on behalf of DHT. A complaint should not be dismissed on a pleading motion so long as, when the plaintiff's allegations are given the benefit of every possible inference, a cause of action exists (Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 634, 389 N.Y.S.2d 314, 357 N.E.2d 970). Affidavits and other evidence may be used freely to preserve inartfully pleaded but potentially meritorious claims, and the court's attention should be focused on whether the plaintiff has a cause of action rather than on whether he has properly stated one (id., at p. 636, 389 N.Y.S.2d 314, 357 N.E.2d 970).

The complaint alleges that DHT is the owner of the premises and Sanbar is the developer. While not specifically alleging that an agency relationship existed, the complaint expressly alleges that Sanbar entered into a retainer agreement with Birnbaum and that DHT consented to it. Examination of the affidavits and the agreement between DHT and Sanbar submitted upon the motion shows that an agency relationship between the plaintiffs is sufficiently pled so as to establish the necessary privity between DHT and Birnbaum.

The IAS court had before it the Project Development Agreement and the retainer agreement between Sanbar and Birnbaum. The Project Development Agreement does have some evidence of the existence of an agency relationship between DHT and Sanbar. Thus, article 4 of this Agreement providing that Sanbar is to perform its duties subject to the direction...