Structure Tone Inc. v. Universal Serv. Group

• Decision Date: 15 September 2011
• Citation: 2011 N.Y. Slip Op. 06459,929 N.Y.S.2d 242,87 A.D.3d 909
• Parties: STRUCTURE TONE, INC., Plaintiff–Respondent,v.UNIVERSAL SERVICES GROUP, LTD., Defendant–Appellant.Universal Services Group, Ltd., Third–Party Plaintiff–Appellant,v.Pace Plumbing Corp., et al., Third–Party Defendants–Respondents.Universal Services Group, Ltd., Second Third–Party Plaintiff–Appellant,v.Prep–Crete, Inc., Second Third–Party Defendant–Respondent.
• Court: New York Supreme Court — Appellate Division

87 A.D.3d 909

929 N.Y.S.2d 242

2011 N.Y. Slip Op. 06459

STRUCTURE TONE, INC., Plaintiff–Respondent,

v.UNIVERSAL SERVICES GROUP, LTD., Defendant–Appellant.Universal Services Group, Ltd., Third–Party Plaintiff–Appellant,

v.Pace Plumbing Corp., et al., Third–Party Defendants–Respondents.Universal Services Group, Ltd., Second Third–Party Plaintiff–Appellant,

v.Prep–Crete, Inc., Second Third–Party Defendant–Respondent.

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

Sept. 15, 2011.

Ahmuty, Demers & McManus, New York (Deborah A. Del Sordo of counsel), for appellant.Barry, McTiernan & Moore, New York (Mark A. Collesano of counsel), for Structure Tone, Inc., respondent.Bonner Kiernan Trebach & Crociata, LLP, New York (Mindy L. Jayne of counsel), for SBLM Architects, P.C., respondent.Rivkin Radler, LLP, Uniondale (Merril S. Biscone of counsel), for Pace Plumbing Corp., respondent.Herzfeld & Rubin, P.C., New York (Michael B. Sena of counsel), for Tremco Incorporated, respondent.Goldberg Segalla, LLP, White Plains (Matthew J. McDermott of counsel), for Prep–Crete, Inc., respondent.MAZZARELLI, J.P., CATTERSON, MANZANET–DANIELS, ROMÁN, JJ.

Order, Supreme Court, New York County (Carol Edmead, J.), entered June 3, 2010, which, to the extent appealed from as limited by the briefs, granted the motions of third-party defendants Pace Plumbing Corp., SBLM Architects, P.C., and Tremco Inc., for summary judgment dismissing the third-party complaint, and denied defendant Universal Service Group's (USG) motion for summary judgment dismissing all claims for damages associated with redesigns and upgrades and for summary judgment on USG's affirmative defenses, unanimously affirmed, with costs.

This action arises out of the construction of a Whole Foods market on the concourse of the AOL/Time Warner Center at Columbus Circle in Manhattan. Plaintiff Structure Tone, Inc. (STI), the general contractor for the work, retained USG to waterproof the market. The agreement provided that USG would be liable to STI for any damages incurred as a consequence of the failure by USG to comply with its obligations under the agreement. In the event that USG failed to promptly correct defective work, STI, at its option, could correct the work and deduct the cost from any money due to USG; if the cost of finishing the work exceeded the unpaid balance of the contract, USG was to pay the difference.

STI commenced this action in May 2006. STI's complaint alleges that on 15 occasions from February 19, 2004 through February 24, 2005, the waterproofing failed causing water to leak from the Whole Foods market into various tenant spaces below. STI stated that the leaks caused damage to an Equinox gym as well as to the Time Warner security center and a physical therapy center. As a result, STI undertook to remedy the problem, and allegedly sustained damages of $1.2 million. For each of the leaks, the complaint alleges both a cause of action for negligence and for breach of contract. STI specified its damages as the costs of remediation, future construction, loss of profit, recovery of the amounts paid to USG, and contract balances not paid by Whole Foods.

In its answer, USG interposed a number of affirmative defenses. These included: 1) STI's failure to mitigate damages; 2) interference; 3) frustration of performance; 4) waiver; and 5) breach of the covenant of good faith and fair dealing. It subsequently abandoned its claims of failure to mitigate damages and interference.

In August 2006, USG commenced a third-party action against, inter alia, Pace, the plumbing subcontractor, SBLM, the architect, and Tremco, which supplied the waterproofing material. USG stated causes of action for contribution and indemnification. In addition, USG alleged separate causes of action for negligence against SBLM, and for negligence, strict products liability, and breach of warranty against Tremco.

In February 2010, Pace, Tremco, and SBLM moved for summary judgment dismissing the third-party complaint. The third-party defendants asserted, inter alia, that USG's claims for contribution were barred because STI sought to recover only damages for “economic loss.” Further, they asserted that the claims for common-law indemnification were improper since, in the underlying action, USG was alleged to have been actively at fault.

In the same month, USG moved for partial summary judgment. USG sought dismissal of plaintiff's claims for damages resulting from four of the alleged leak occurrences. It also sought dismissal of all claims associated with redesigns and upgrades, and summary judgment on its affirmative defenses.

The motion court properly granted third-party defendants summary judgment as to USG's claims for contribution because despite USG's attempts at casting its claims in tort, the claims are based on alleged breaches of an express contract. Claims for contribution are governed by CPLR 1401 and apply to damages for personal injury, injury to property or wrongful death. Here, there was no personal injury, and a purely economic loss resulting from a breach of contract does not constitute an “injury to property” within the meaning of CPLR 1401 ( see 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 [1987]; see also Trump Vil. Section 3 v. New York State Hous. Fin. Agency, 307 A.D.2d 891, 897, 764 N.Y.S.2d 17 [2003], lv....