Schottland v. Brown Harris Stevens Brooklyn, LLC

• Decision Date: 16 March 2016
• Citation: 137 A.D.3d 997,27 N.Y.S.3d 634
• Parties: Joseph SCHOTTLAND, et al., plaintiffs-respondents, v. BROWN HARRIS STEVENS BROOKLYN, LLC, et al., defendants, Jenny Netzer, etc., et al., defendants third-party plaintiffs-respondents; Timothy M. Costello, etc., third-party defendant-appellant.
• Court: New York Supreme Court — Appellate Division

137 A.D.3d 997

27 N.Y.S.3d 634

Joseph SCHOTTLAND, et al., plaintiffs-respondents,

v. BROWN HARRIS STEVENS BROOKLYN, LLC, et al., defendants,Jenny Netzer, etc., et al., defendants third-party plaintiffs-respondents;Timothy M. Costello, etc., third-party defendant-appellant.

Supreme Court, Appellate Division, Second Department, New York.

March 16, 2016.

Lewis Brisbois Bisgaard & Smith, LLP, New York, N.Y. (Mark K. Anesh and Rebecca A. Barrett of counsel), for third-party defendant-appellant.

Joseph N. DiGrazia, Brooklyn, N.Y., for plaintiffs-respondents.

Tane Waterman & Wurtzel, P.C., New York, N.Y. (Stewart E. Wurtzel and Irma M. Akansu of counsel), for defendants third-party plaintiffs-respondents.

WILLIAM F. MASTRO, J.P., JOHN M. LEVENTHAL, LEONARD B. AUSTIN, and HECTOR D. LaSALLE, JJ.

In an action, inter alia, to recover damages for breach of a covenant against grantor's acts, the third-party defendant appeals from an order of the Supreme Court, Kings County (Lewis, J.), dated January 29, 2014, which denied his motion pursuant to CPLR 3211(a)

to dismiss the third-party complaint.

ORDERED that the order is reversed, on the law, with costs, and the motion of the third-party defendant pursuant to CPLR 3211(a)

to dismiss the third-party complaint is granted.

This action arises out of the sale in 2010 of a residential property located on Clinton Street in Brooklyn, by the defendants third-party plaintiffs, Jenny Netzer and Carol R. Nezter (hereinafter together the sellers), to the plaintiffs. The deed for the property delivered to the plaintiffs contained a covenant against grantor's acts, pursuant to which the sellers asserted that they had not done anything to encumber the property in any way (cf. Real Property Law § 253[6]

). The deed did not acknowledge the existence of a conservation easement on the property which the sellers had previously executed in favor of a third party. The plaintiffs subsequently commenced this action against, among others, the sellers. The only cause of action remaining against the sellers alleges breach of the covenant against grantor's acts set forth in the sellers' deed to the plaintiffs (see Schottland v. Brown Harris Stevens Brooklyn, LLC, 107 A.D.3d 684, 968 N.Y.S.2d 90

).

The sellers commenced a third-party action against the third-party defendant, Timothy M. Costello, the attorney who represented them with regard to the sale of the subject property and who drafted the deed. The third-party complaint asserted causes of action to recover from Costello any sum which the plaintiffs may recover against them in the main action on theories of common-law contribution and indemnification. Costello moved to dismiss the third-party complaint pursuant to CPLR 3211(a)

, and the Supreme Court denied the motion.

On a motion to dismiss pursuant to CPLR 3211

, the complaint is to be afforded a liberal construction (see CPLR 3026 ). The court must accept the facts as alleged in the complaint as true, accord the plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ).

"[P]urely economic loss resulting from a breach of contract does not constitute ‘injury to property’ within the meaning of New York's contribution statute" (Board of Educ. of Hudson City School Dist. v. Sargent, Webster, Crenshaw & Folley, 71 N.Y.2d 21, 26, 523 N.Y.S.2d 475, 517 N.E.2d 1360

, quoting CPLR 1401 ). CPLR 1401 does not apply to a breach of contract cause of action where the only potential liability to the plaintiff is for the contractual benefit of the bargain (see Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 557, 583 N.Y.S.2d 957, 593 N.E.2d 1365 ; Board of Educ. of Hudson City School Dist. v. Sargent, Webster, Crenshaw & Folley, 71 N.Y.2d at 28, 523 N.Y.S.2d 475, 517 N.E.2d 1360 ; Sound Refrig. & A.C., Inc. v. All City Testing & Balancing Corp., 84 A.D.3d 1349, 1350, 924 N.Y.S.2d 172 ). In the main action, the plaintiffs' potential recovery against the sellers is limited to the purely economic loss, if any, resulting from the sellers' alleged breach of the covenant against grantor's acts by encumbering the property with a conservation easement (see McGuckin v. Milbank, 152 N.Y. 297, 302, 46 N.E. 490 ; 487 Elmwood v. Hassett, 161 A.D.2d 1171, 556 N.Y.S.2d 425 ; Nuzzo v. Thornwood Acres B, 18 A.D.2d 1000, 238 N.Y.S.2d 542 ). Consequently, the sellers cannot maintain a cause of action against Costello for contribution (see Children's Corner Learning Ctr. v. A. Miranda Contr. Corp., 64 A.D.3d 318, 324, 879 N.Y.S.2d 418 ; Trump Vil. Section 3 v. New York State Hous. Fin. Agency, 307 A.D.2d 891, 897, 764 N.Y.S.2d 17 ; Rothberg v. Reichelt, 270...