WMC Realty Corp. v. City of Yonkers

• Decision Date: 21 April 2021
• Docket Number: Index No. 65933/17,2019-01113
• Citation: 193 A.D.3d 1018,148 N.Y.S.3d 161
• Court: New York Supreme Court — Appellate Division
• Parties: WMC REALTY CORP., etc., et al., appellants, v. CITY OF YONKERS, et al., respondents.

193 A.D.3d 1018

148 N.Y.S.3d 161

WMC REALTY CORP., etc., et al., appellants,

v.CITY OF YONKERS, et al., respondents.

2019-01113

Index No. 65933/17

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

Argued—February 2, 2021

April 21, 2021

Stephen A. Cerrato, Yonkers, N.Y. (Brian William Warwick, pro hac vice, of counsel), for appellants.

Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carrone, LLP, White Plains, N.Y. (Robert A. Spolzino of counsel), for respondents.

MARK C. DILLON, J.P., LEONARD B. AUSTIN, COLLEEN D. DUFFY, PAUL WOOTEN, JJ.

DECISION & ORDER

In a putative class action, inter alia, for declaratory relief, the plaintiffs appeal from an order of the Supreme Court, Westchester County (Helen Blackwood, J.), dated December 13, 2018. The order, insofar as appealed from, granted those branches of the defendants' motion pursuant to CPLR 3211(a)(7) which were to dismiss the third, fourth, fifth, and sixth causes of action.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendants' motion pursuant to CPLR 3211(a)(7) which was to dismiss the sixth cause of action, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

In October 2017, the plaintiffs, WMC Realty Corp. and T.A.C. Realty Corp., commenced this putative class action against the defendants, City of Yonkers, Yonkers City Council, and Mike Spano, the City's mayor, alleging, inter alia, that although the plaintiffs were required to pay an annual inspection fee pursuant to the New York State Uniform Fire Prevention and Building Code (hereinafter the Uniform Code) (see Executive Law § 370 et seq. ) and the Yonkers Fire and Building Code (hereinafter the Yonkers Fire Code) (see Yonkers Fire Code § 55–1 et seq. ), the defendants failed to ensure that the annual inspections were performed as required by Yonkers Fire Code § 55–7. The plaintiffs asserted causes of action, inter alia, to recover damages for breach of contract (third cause of action), negligence (fourth cause of action), and breach of fiduciary duty (fifth cause of action), and for a judgment, among other things, declaring that the Yonkers Fire Code provisions requiring the plaintiffs to pay the inspection fee is a violation of the New York State Constitution (sixth cause of action). The defendants moved pursuant to CPLR 3211(a)(7) to dismiss the complaint. By order dated December 13, 2018, the Supreme Court, inter alia, granted the defendants' motion and directed dismissal of the complaint in its entirety. The plaintiffs appeal from so much of the order as directed dismissal of the third, fourth, fifth, and sixth causes of action.

The Supreme Court properly determined that neither the Uniform Code nor the Yonkers Fire Code creates a private right of action. In 1981, the New York State Legislature (hereinafter the legislature) enacted the Uniform Fire Prevention and Building Code Act (hereinafter the Uniform Act), providing, inter alia, for local enforcement of a uniform code addressing building constructions and fire prevention (see Executive Law § 371 ; Town of Carmel v. Melchner, 105 A.D.3d 82, 100, 962 N.Y.S.2d 205 ). Executive Law § 381(1) provides that "[t]he secretary of state shall promulgate rules and regulations prescribing minimum standards for administration and enforcement of the [Uniform Code]." Pursuant to the regulations promulgated by the secretary of state, "[e]very city, village, town, and county" must enact such "local law, ordinance or other appropriate regulation" as necessary to administer and enforce the Uniform Code, including, inter alia, fire safety and property maintenance inspections ( 19 NYCRR 1203.2 [a]; see 19 NYCRR 1203.3 ). "Buildings shall be subject to periodic inspections for compliance with the Uniform Code on a yearly basis" ( 19 NYCRR 1202.4 [b]). Executive Law § 381(2) provides that "[l]ocal governments or counties may charge fees to defray the costs of administration and enforcement."

The City of Yonkers enacted the Yonkers Fire Code to implement, enforce, and administer the Uniform Code (see Yonkers Fire Code § 55–3). "In order to pay for the City of Yonkers Fire and Building Safety Inspection Program, pursuant to which authorized officers and employees of the City of Yonkers inspect residential and business and commercial properties to ensure compliance with applicable codes," the Yonkers Fire Code established a schedule of fees for classes of occupancies (Yonkers Fire Code § 55–7).

The Uniform Act provides the secretary of state with enforcement authority if the secretary determines that a local government failed to administer and enforce the Uniform Code in accordance with minimum standards (see Executive Law § 381[4] ).

"Where, as here, a statute does not explicitly provide for a private right of action, recovery may only be had under the statute if a legislative intent to create such a right of action may ‘fairly be implied’ in the statutory provisions and their legislative history" ( Kamins v. United Healthcare Ins. Co. of N.Y., Inc., 171 A.D.3d 715, 716, 98 N.Y.S.3d 96, quoting Sheehy v. Big Flats Community Day, 73 N.Y.2d 629, 633, 543 N.Y.S.2d 18, 541 N.E.2d 18 ). This inquiry involves three factors: " ‘(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme’ " ( Haar v. Nationwide Mut. Fire Ins. Co., 34 N.Y.3d 224, 229, 115 N.Y.S.3d 197, 138 N.E.3d 1080, quoting Sheehy v. Big Flats Community Day, Inc., 73 N.Y.2d at 633, 543 N.Y.S.2d 18, 541 N.E.2d 18 ). "The third factor is often noted to be the ‘most important’ " ( Ader v. Guzman, 135 A.D.3d 671, 673, 23 N.Y.S.3d 292, quoting Cruz v. TD Bank, N.A., 22 N.Y.3d 61, 70, 979 N.Y.S.2d 257, 2 N.E.3d 221 ).

Where, as here, administrative enforcement of the statute was contemplated by the legislature, " ‘[t]he question then becomes whether, in addition to administrative enforcement, an implied private right of action would be consistent with the legislative scheme’ " ( AHA Sales, Inc. v. Creative Bath Prods., Inc., 58 A.D.3d 6, 16, 867 N.Y.S.2d 169, quoting Uhr v. East Greenbush Cent. School Dist., 94 N.Y.2d 32, 40, 698 N.Y.S.2d 609, 720 N.E.2d 886 ).

Here, the plaintiffs are not members of a class for whose particular benefit the statutes were enacted (see Ahmad v. Nassau Health Care Corp., 8 A.D.3d 512, 513, 779 N.Y.S.2d 520 ; Hudes v. Vytra Health Plans Long Is., 295 A.D.2d 788, 789, 744 N.Y.S.2d 80 ). Executive Law § 371(2)(b) declares that it is the public policy of the state to, inter alia, "[p]rovide for the promulgation of a uniform code addressing building construction and fire prevention in order to provide a basic minimum level of protection to all people of the state from hazards of fire and inadequate building construction." Similarly, the Yonkers Fire Code provides that its purpose, inter alia, is to "establish reasonable safeguards for the safety, health and welfare of the occupants and users of the buildings, land, staging and structures" (Yonkers Fire Code § 55–3). Accordingly, the Uniform Code and the Yonkers Fire Code were enacted to benefit the general public, and not to benefit a particular class of persons (see Pelaez v. Seide, 2 N.Y.3d 186, 200, 778 N.Y.S.2d 111, 810 N.E.2d 393 ).

Further, as Executive Law § 381(4) empowers the Secretary of State to take a number of actions to ensure local government compliance (see Town of Carmel v. Melchner, 105 A.D.3d at 100, 962 N.Y.S.2d 205 ), the creation of a private right of action would not be consistent with the legislative scheme (see generally Cruz v. TD Bank, N.A., 22 N.Y.3d at 72, 979 N.Y.S.2d 257, 2 N.E.3d 221 ; Sheehy v. Big Flats Community Day, 73 N.Y.2d at 635, 543 N.Y.S.2d 18, 541 N.E.2d 18 ).

Although the plaintiffs' causes of action are based on the defendants' alleged violations of the Uniform Code and the Yonkers Fire Code and neither creates a private right of action, under the circumstances here, that does not end the analysis. In considering a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), we must accept the facts as alleged in the complaint as true, accord the plaintiff 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 ; Izmirligil v. Steven J. Baum, P.C., 180 A.D.3d 767, 770, 119 N.Y.S.3d 503 ).

Nonetheless, dismissal of the cause of action alleging breach of contract was properly granted. The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach (see Meyer v. New York–Presbyterian Hosp. Queens, 167 A.D.3d 996, 997, 88 N.Y.S.3d 900 ; Reznick v. Bluegreen Resorts Mgt., Inc., 154 A.D.3d 891, 893, 62 N.Y.S.3d 460 ). The defendants established that neither the Uniform Code nor the Yonkers Fire Code constitute a valid contract with the plaintiffs (see Meyer v. New York–Presbyterian Hosp. Queens, 167 A.D.3d at 997, 88 N.Y.S.3d 900 ; Reznick v. Bluegreen Resorts Mgt., Inc., 154 A.D.3d at 893, 62 N.Y.S.3d 460 ). Contrary to the plaintiffs' contentions, Yonkers Fire Code § 55–7 does not provide that the defendants will provide fire and safety inspections in exchange for an annual fee. Instead, it merely established a "schedule of fees for classes of occupancies inspected" to offset the cost of administering and enforcing the program (Yonkers Fire Code § 55–7[A]; see Executive Law § 381[2] ).

Dismissal of the cause of action alleging...