Sokoloff v. Harriman Estates

• Court: New York Court of Appeals
• Writing for the Court: LEVINE, J.
• Citation: 96 N.Y.2d 409,729 N.Y.S.2d 425,754 N.E.2d 184
• Decision Date: 10 July 2001
• Parties: ADAM D. SOKOLOFF et al., Appellants, v. HARRIMAN ESTATES DEVELOPMENT CORP., Respondent, et al., Defendant.

96 N.Y.2d 409
754 N.E.2d 184
729 N.Y.S.2d 425

ADAM D. SOKOLOFF et al., Appellants,
v.
HARRIMAN ESTATES DEVELOPMENT CORP., Respondent, et al., Defendant

Court of Appeals of the State of New York.

Argued June 6, 2001.

Decided July 10, 2001.

96 N.Y.2d 411

Sidney A. Weisberg, Great Neck, R. Bertil Peterson and Daniel J. Weisberg for appellants

Conforti, Waller & Kaplowitz, L. L. P., Hauppauge (Jack A. Kaplowitz of counsel), for respondent.

Chief Judge KAYE and Judges SMITH, CIPARICK, WESLEY, ROSENBLATT and GRAFFEO concur.

96 N.Y.2d 412

OPINION OF THE COURT

LEVINE, J.

On this appeal, we review the dismissal on the pleadings, pursuant to CPLR 3211 (a) (7), of plaintiffs' cause of action seeking specific performance of an alleged contract. The facts as alleged in the complaint and other averments submitted in opposition to the motion to dismiss are as follows. In March 1998, plaintiffs purchased land in the Village of Sands Point, Nassau County, in contemplation of building a new home on the property. For a total of $65,000, defendant Harriman Estates Development Corp., a residential contractor, offered to provide plaintiffs with certain pre-construction services, including furnishing an "architectural and site plan/landscape design" and assisting them in obtaining a building permit. The

96 N.Y.2d 413

offer was set forth by Harriman in a March 12, 1998 letter, which established a payment schedule and requested payment of a $10,000 retainer fee. Plaintiffs accepted the offer by paying Harriman the retainer fee. Thereafter, following several meetings between plaintiffs, Harriman and defendant Frederick Ercolino, an architect, the architectural plans were finalized, filed with the Village and approved

Although plaintiffs paid Harriman a total of $55,000 for the architectural plans and other services, and tendered the remaining balance due under the terms of their agreement with Harriman, Harriman and Ercolino refused to allow plaintiffs to use these plans to build their home. After plaintiffs rejected Harriman's offer to build the home for an estimated cost of $1,895,000 (a sum significantly greater than Harriman's earlier estimates), Harriman for the first time informed plaintiffs that the architectural plans could not be used to construct the house unless it was hired as the builder. Harriman predicated its claim to the exclusive use of the plans on the terms of a contract it had entered into with Ercolino in May 1998 for the "Sokoloff Residence."

Plaintiffs then brought this action against Harriman and Ercolino for specific performance of the "contract dated March 12, 1998" (the first cause of action) and for replevin of the architectural plans (the second cause of action). With respect to the first cause of action, seeking specific performance, plaintiffs alleged that Harriman was acting as their agent in procuring architectural drawings and plans from Ercolino, that the plans were unique and based upon a design conceived by them and that they had no adequate remedy at law. Plaintiffs requested an order directing Harriman and Ercolino to permit them to use the architectural plans. In their second cause of action, for replevin, plaintiffs alleged that they owned the architectural plans "by reason of being a third-party beneficiary" of the contract between Harriman and Ercolino.

Harriman moved to dismiss the complaint pursuant to CPLR 3211 (a) (7) for failure to state a cause of action. Supreme Court granted the motion in part by dismissing the cause of action for replevin, leaving intact plaintiffs' cause of action for specific performance. On Harriman's appeal from Supreme Court's failure to grant the motion to dismiss in its entirety, the Appellate Division reversed, dismissed the specific performance claim and severed the action against Ercolino. The court reasoned that even plaintiffs' first cause of action was barred by a provision in the Harriman-Ercolino contract stating that "[n]othing

96 N.Y.2d 414

contained in this Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Client [Harriman] or Architect." We granted leave to appeal and now reverse.¹

On a motion to dismiss pursuant to CPLR 3211, we must accept as true the facts as alleged in the complaint and submissions in...