Strauss v. Belle Realty Co.

• Decision Date: 02 July 1985
• Citation: 65 N.Y.2d 399,492 N.Y.S.2d 555
• Parties: , 482 N.E.2d 34, 54 A.L.R.4th 655 Julius STRAUSS, Appellant, v. BELLE REALTY COMPANY, Defendant, and Consolidated Edison Company of New York, Inc., Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 555

492 N.Y.S.2d 555

65 N.Y.2d 399, 482 N.E.2d 34, 54

A.L.R.4th 655

Julius STRAUSS, Appellant, v. BELLE REALTY COMPANY, Defendant and Consolidated Edison Company of New York, Inc., Respondent.

Court of Appeals of New York.

July 2, 1985.

Bruce L. Birnbaum and Benjamin J. Golub, New York City, for appellant

William E. Hegarty, Ernest J. Williams, Thomas J. Kavaler, Stanley K. Shapiro and Lisa Schilit, New York City, for respondent.

OPINION OF THE COURT

KAYE, Justice.

On July 13, 1977, a failure of defendant Consolidated Edison's power system left most of New York City in darkness. In this action for damages allegedly resulting from the power failure, we are asked to determine whether Con Edison owed a duty of care to a tenant who suffered personal injuries in a common area of an apartment building, where his landlord--but not he--had a contractual relationship with the utility. We conclude that in the case of a blackout of a metropolis of several million residents and visitors, each in some manner necessarily affected by a 25-hour power failure, liability for injuries in a building's common areas should, as a matter of public policy, be limited by the contractual relationship.

This court has twice before confronted legal questions concerning the 1977 blackout (see, Koch v. Consolidated Edison Co., 62 N.Y.2d 548, 479 N.Y.S.2d 163, 468 N.E.2d 1, cert. denied 469 U.S. 1210, 105 S.Ct. 1177, 84 L.Ed.2d 326, Food Pageant v. Consolidated Edison Co., 54 N.Y.2d 167, 445 N.Y.S.2d 60, 429 N.E.2d 738).

Plaintiff, Julius Strauss, then 77 years old, resided in an apartment building in Queens. Con Edison provided electricity to his apartment pursuant to agreement with him, and to the common areas of the building under a separate agreement with his landlord, defendant Belle Realty Company. As water to the apartment was supplied by electric pump, plaintiff had no running water for the duration of the blackout. Consequently, on the second day of the power failure, he set out for the basement to obtain water, but fell on the darkened, defective basement stairs, sustaining injuries. In this action against Belle Realty and Con Edison, plaintiff alleged negligence against the landlord, in failing to maintain the stairs or warn of their dangerous condition, and negligence against the utility in the performance of its duty to provide electricity.

Plaintiff moved for partial summary judgment against Con Edison (1) to estop it from contesting the charge of gross negligence in connection with the blackout, and (2) to establish that Con Edison owed a duty of care to plaintiff. He argued that Con Edison was prohibited from denying it was grossly negligent by virtue of the affirmed jury verdict in Food Pageant v. Consolidated Edison Co., 54 N.Y.2d 167, 445 N.Y.S.2d 60, 429 N.E.2d 738, supra, and that it owed plaintiff a duty even though he was "not a customer of Consolidated Edison in a place where the accident occurred." Con Edison cross-moved for summary judgment dismissing the complaint, maintaining it had no duty to a noncustomer.

The court granted the motion insofar as it sought collateral estoppel regarding gross negligence, ¹ and denied Con Edison's cross motion to dismiss the complaint, finding a question of fact as to whether it owed plaintiff a duty of care. The Appellate Division reversed and dismissed the complaint against Con Edison. Citing Moch Co. v. Rensselaer Water Co., 247 N.Y. 160, 159 N.E. 896, the plurality concluded that "Con Ed did not owe a duty to plaintiff in any compensable legal sense" (98 A.D.2d 424, 428, 469 N.Y.S.2d 948). Justice Gibbons dissented, finding extension of the duty tolerable here because "tenants of the building in question constitute a defined, limited and known group of people" (id., at p. 437, 469 N.Y.S.2d 948). On public policy grounds, we now affirm the Appellate Division order dismissing the complaint against Con Edison.

A defendant may be held liable for negligence only when it breaches a duty owed to the plaintiff (Pulka v. Edelman, 40 N.Y.2d 781, 782, 390 N.Y.S.2d 393, 358 N.E.2d 1019). The essential question here is whether Con Edison owed a duty to plaintiff, whose injuries from a fall on a darkened staircase may have conceivably been foreseeable, but with whom there was no contractual relationship for lighting in the building's common areas.

Duty in negligence cases is defined neither by foreseeability of injury (Pulka v. Edelman, supra, at p. 785, 390 N.Y.S.2d 393, 358 N.E.2d 1019) nor by privity of contract. As this court has long recognized, an obligation rooted in contract may engender a duty owed to those not in privity, for "is nothing anomalous in a rule which imposes upon A, who has contracted with B, a duty to C and D and others according as he knows or does not know that the subject-matter of the contract is intended for their use" (MacPherson v. Buick Motor Co., 217 N.Y. 382, 393, 111 N.E. 1050). In Fish v. Waverly Elec. Light & Power Co., 189 N.Y. 336, 82 N.E. 150, for example, an electric company which had contracted with the plaintiff's employer to install ceiling lights had a duty to the plaintiff to exercise reasonable care. And in Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275, a public weigher, hired by a seller of beans to certify the weight of a particular shipment, was found liable in negligence to the buyer. (See also, Wroblewski v. Otis Elevator Co., 9 A.D.2d 294, 296, 193 N.Y.S.2d 855, Rosenbaum v. Branster Realty Corp., 276 App.Div. 167, 93 N.Y.S.2d 209).

But while the absence of privity does not foreclose recognition of a duty, it is still the responsibility of courts, in fixing the orbit of duty, "to limit the legal consequences of wrongs to a controllable degree" (Tobin v. Grossman, 24 N.Y.2d 609, 619, 301 N.Y.S.2d 554, 249 N.E.2d 419; see also, Howard v. Lecher, 42 N.Y.2d 109, 397 N.Y.S.2d 363, 366 N.E.2d 64), and to protect against crushing exposure to liability (see, Pulka v. Edelman, 40 N.Y.2d 781, 390 N.Y.S.2d 393, 358 N.E.2d 1019, supra; Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441). "In fixing the bounds of that duty, not only logic and science, but policy play an important role" (De Angelis v. Lutheran Med. Center, 58 N.Y.2d 1053, 1055, 462 N.Y.S.2d 626, 449 N.E.2d 406; see also, Becker v. Schwartz, 46 N.Y.2d 401, 408, 413 N.Y.S.2d 895, 386 N.E.2d 807). The courts' definition of an orbit of duty based on public policy may at times result in the exclusion of some who might otherwise have recovered for losses or injuries if traditional tort principles had been applied.

Considerations of privity are not entirely irrelevant in implementing policy. Indeed, in determining the liability of utilities for consequential damages for failure to provide service--a liability which could obviously be "enormous," and has been described as "sui generis," rather than strictly governed by tort or contract law principles (see, Prosser and Keeton, Torts § 92, at 663 )--courts have declined to extend the duty of care to noncustomers. For example, in Moch Co. v. Rensselaer Water Co., 247 N.Y. 160, 159 N.E. 896, supra, a water works company contracted with the City of Rensselaer to satisfy its water requirements. Plaintiff's warehouse burned and plaintiff brought an action against the water company in part based on its alleged negligence in failing to supply sufficient water pressure to the city's hydrants. The court denied recovery, concluding that the proposed enlargement of the zone of duty would unduly extend liability. Similarly, in Beck v. FMC Corp., 42 N.Y.2d 1027, 398 N.Y.S.2d 1011, 369 N.E.2d 10, affg. 53 A.D.2d 118, 385 N.Y.S.2d 956), an explosion interrupted a utility's electrical service, which in turn resulted in the loss of a day's pay for hourly workers at a nearby automobile plant. In an action brought by the workers, the court denied recovery on the basis of controlling the unwarranted extension of liability (see also, Nicholson v. City of New York, 271 App.Div. 899, 67 N.Y.S.2d 156, affd. 297 N.Y. 548, 74 N.E.2d 477; Kraye v. Long Is. Light. Co., 42 A.D.2d 972, 348 N.Y.S.2d 16; Shubitz v. Consolidated Edison Co., 59 Misc.2d 732, 301 N.Y.S.2d 926).

Moch involved ordinary negligence, while Con Edison was guilty of gross negligence, but the cases cannot be distinguished on that basis. In reserving the question of what remedy would lie in the case of "reckless and wanton indifference to consequences measured and foreseen" (247 N.Y. at p. 169, 159 N.E. 896), the court in Moch contemplated a level of misconduct greater than the gross negligence involved here (cf. Matter of Almgren v. Fletcher, 304 N.Y. 547, 110 N.E.2d 396; Weld v. Postal Telegraph-Cable Co., 210 N.Y. 59, 103 N.E. 957; 1 N.Y. PJI2d 2:10A Prosser and Keeton, Torts § 34, at 208 ). The court in Food Pageant, in upholding the jury's verdict against Con Edison, noted as instances of Con Edison's misconduct its employee's failure to follow instructions to reduce voltage by "shedding load" after lightning had hit the electrical system, and its staffing decisions (54 N.Y.2d at pp. 173-174, 445 N.Y.S.2d 60, 429 N.E.2d 738, supra). Though found by the jury to constitute gross negligence, this behavior was not so consciously culpable as to fall into the category of conduct contemplated as "reckless and wanton" by the court in Moch (compare, Hall v. Consolidated Edison Co., 104 Misc.2d 565, 428 N.Y.S.2d 837).

In the view of the Appellate Division dissenter, Moch does not control because the injuries here were foreseeable and plaintiff was a member of a specific, limited, circumscribed class with a close relationship with Con Edison. The situation was thought to be akin to White v. Guarente, 43 N.Y.2d 356, 401 N.Y.S.2d 474, 372 N.E.2d 315, where an accounting firm was retained by a limited partnership to perform an audit and prepare its tax returns. As the court noted there, the parties to the agreement contemplated that individual limited partners would rely on the tax...