Sears, Roebuck & Co. v. Enco Associates, Inc.

• Decision Date: 21 December 1977
• Citation: 401 N.Y.S.2d 767,43 N.Y.2d 389,372 N.E.2d 555
• Court: New York Court of Appeals Court of Appeals
• Parties: , 372 N.E.2d 555 SEARS, ROEBUCK & CO., Appellant, v. ENCO ASSOCIATES, INC., Respondent.

Page 767

401 N.Y.S.2d 767

43 N.Y.2d 389, 372 N.E.2d 555

SEARS, ROEBUCK & CO., Appellant, v. ENCO ASSOCIATES, INC., Respondent.

Court of Appeals of New York.

Dec. 21, 1977.

Robert J. Aurigema, Albert L. Bases, Garden City, and Stephen J. Smirti, Jr., Williston Park, for appellant.

Roger A. Goodnough, New York City, for respondent.

OPINION OF THE COURT

JONES, Judge.

We hold that, inasmuch as the relationship between Sears, Roebuck as property owner and Enco Associates as architects had its genesis in the contract between them, in an action commenced more than three but less than six years after the completion of the ramp system with respect to which the architects' services were rendered, the owner may recover contract damages against the architects either on the theory of breach of a particular contract provision or on the theory of failure to exercise due care in the performance of the contract services.

On the present motion to dismiss the complaint we accept the factual allegations set forth in the complaint as amplified by the bill of particulars. It is alleged that on May 15, 1967 Sears, Roebuck, owner, and Enco Associates, Inc., a firm of architects, entered into a contract under which the architects were to design and to supervise the construction of a system of ramps to provide ingress and egress for a parking deck to be constructed over Sears, Roebuck's White Plains store. The contract contemplated an elaborate system of exposed ramps with snow-melting pipes to assure ease of snow removal. Defendant corporation held itself out to have architects and engineers qualified to design and to supervise the construction of the ramps and to provide appropriate design, mechanical and electrical engineering services. The architect-engineers prepared the plans and specifications and supervised the construction of the ramp system. Work on the project was commenced in 1967 and was completed in the spring of 1968.

In early May, 1970 cracks appeared in the ramps that endangered the structural integrity of the ramp system. It was alleged that the cracks were due to improper design of the snow-melting pipes contained in the ramps in that the architects had failed to include expansion joints and had provided for monolithic pouring of concrete for the ramps.

The complaint sets forth three separately stated causes of action. In the first liability is grounded on allegations of "the carelessness and negligence of defendant in prepari the design and engineering, plans and specifications of the said ramps". It is alleged that the cost of removal of the existing ramps and the cost of construction of proper ramps will be $1,000,000, and that in the course of removal of the defective ramps the owner will lose the business of customers resulting in loss of anticipated profits of $350,000.

The second cause of action contains a claim for breach of implied warranty of fitness for the purposes intended and claims damages in the lump sum of $1,350,000.

The third cause of action, with prior allegations incorporated by reference, alleges that the architects contracted to provide design, normal structural, mechanical and electrical engineering services and that they breached the contract by neglect or lack of professional care and in improperly designing the ramps, all to the owner's damage in the sum of $1,350,000.

The action was commenced in June, 1972. After service of the answer and the bill of particulars, defendant architects moved under CPLR 3211 (subd. (a), pars 5, 7) to dismiss the complaint on the grounds that the action was barred by the applicable three-year Statute of Limitations and that the second cause of action for breach of implied warranty failed to state a cause of action. Special Term granted the motion, concluding that, while the first cause of action was for professional malpractice, the second for breach of implied warranty and the third for breach of contract, in essence Sears, Roebuck's claim was one for professional malpractice and as such was barred by the applicable three-year Statute of Limitations. Additionally Special Term dismissed the second cause of action on the ground that no cause of action lies against an architect for breach of implied warranty. The Appellate Division affirmed and we granted leave to appeal. We conclude that the order of the Appellate Division should be modified to the extent of denying the motion to dismiss as to the first and third causes of action.

The disposition in this case is governed by our recent decision in Matter of Paver & Wildfoerster (Catholic High School Assn.), 38 N.Y.2d 669, 382 N.Y.S.2d 22, 345 N.E.2d 565. We had previously held in Sosnow v. Paul, 36 N.Y.2d 780, 369 N.Y.S.2d 693, 330 N.E.2d 643, that owners' claims against architects arising out of alleged defective construction of buildings, however verbally classified, accrue for purposes of all Statutes of Limitations on completion of construction. Thus, here any claims Sears, Roebuck has against Enco Associates accrued in 1968. Although the issues in Paver were presented in the context of arbitration, we expressly recognized the command of CPLR 7502 (subd. (b)) that the Statute of Limitations to be applied by the courts in arbitration is the same as that in judicial proceedings (38 N.Y.2d 669, 672, 673-674, 382 N.Y.S.2d 22, 23-24, 345 N.E.2d 565, 566-567).

As we observed in Paver, the choice of applicable Statute of Limitations is properly related to the remedy rather than to the theory of liability. "(T)he general principle (is) that time limitations depend upon, and are confined to, the form of the remedy" (38 N.Y.2d 669, 672, 382 N.Y.S.2d 22, 23, 345 N.E.2d 565, 566). We took note, however, of the cases in our courts in which the choice of Statute of Limitations had turned on what was termed the "reality" or the "essence" of the particular theory of liability on which the plaintiff relied. We observed that "many of these cases were decided in the context of causes of action to recover damages for direct or underlying personal injury", and recognized that different policy considerations were involved and often different results reached in actions for damages to property or pecuniary interest only (38 N.Y.2d 669, 675, 382 N.Y.S.2d 22, 25, 345 N.E.2d 565, 568). In particular we held that the rule of Webber v. Herkimer & Mohawk St. R. R. Co., 109 N.Y. 311, 16 N.E. 358 a personal injury action and the cases in its wake should not be blanketed to cover all cases; that in Paver it should not be extended to a case arising in arbitration (38 N.Y.2d 669, 675-676, 382 N.Y.S.2d 22, 24-25, 345 N.E.2d 565, 568-569). But as noted above, CPLR 7502 (subd. (b)) commands that, when the courts invoke a Statute of Limitations, its period in arbitration and in judicial proceedings shall be the same.

Without intending to disturb the holdings in the line of cases that deal with claims for personal injuries for malpractice on the part of members of one of the professions and acknowledging the Legislature's general address to malpractice claims (CPLR 214, subd. 6), ¹ we reaffirm our holding in Paver that claims by owners against architects arising out of the performance or nonperformance of obligations under contracts between them are governed by the six-year contract Statute of Limitations (CPLR 213, subd. 2), except with respect to the issue of damages as described below.

All obligations of the architects here, whether verbalized as in tort for professional malpractice or as in contract for nonperformance of particular provisions of the contract, arose out of the contractual relationship of the parties i. e., absent the contract between them, no services would have been performed and thus there would have been no claims. It should make no difference then how the asserted liability is classified or described, or whether it is said that, although not expressed, an agreement to exercise due care in the performance of the agreed services is to be implied; it suffices that all liability alleged in this complaint had its genesis in the contractual relationship of the parties. (Cf. Brick v. Cohn-Hall-Marx Co., 276 N.Y. 259, 263-264, 11 N.E.2d 902, 903-904; see Prosser, Torts, (4th ed), § 92, p. 613.)

As a consequence, the range of proof to be adduced to establish liability will be correspondingly broad. That is to...