Opinion
100640/2019
05-05-2020
Alfonse Fiorino and Ann Fiorini, Plaintiffs, v. Jonathan Gravatt and Solitude Catering, LLC, Defendants. Jonathan Gravatt and Solitude Catering, LLC, Third-Party Plaintiffs, v. Tammy Rocque, Third-Party Defendant.
Gregory V. Canale, Queensbury, for plaintiffs and third-party defendant. Flink Maswick Law PLLC, Lake Placid (James L. Maswick of counsel), for Jonathan Gravatt and Solitude Catering LLC (named incorrectly herein as Solitude Catering, LLC), defendants/third-party plaintiffs.
Gregory V. Canale, Queensbury, for plaintiffs and third-party defendant. Flink Maswick Law PLLC, Lake Placid (James L. Maswick of counsel), for Jonathan Gravatt and Solitude Catering LLC (named incorrectly herein as Solitude Catering, LLC), defendants/third-party plaintiffs. Martin D. Auffredou, J.
During the spring of 2018, plaintiffs purportedly entered into a contract with defendants/third-party plaintiffs ("defendants") to perform catering services for their daughter's wedding, to be held on September 29, 2018 ("the wedding"). Plaintiffs claim, inter alia, that the quality of the catering services provided by defendants was negligent, substantially below industry standards, inadequate and defective and that the food served was defective, not fit for its intended and particular purpose and deviated from the standard of merchantability. Plaintiffs commenced this action on or about March 5, 2019, seeking damages for breach of contract and breach of the implied warranty of merchantability.
On or about November 22, 2019, defendants commenced a third-party action against third-party defendant ("third-party defendant" or "Ms. Rocque"). Defendants assert that prior to the wedding, plaintiffs contracted with Ms. Rocque to act as the planner and decorator for the wedding. Defendants contend, inter alia, that Ms. Rocque did not contact defendant/third-party plaintiff Jonathan Gravatt ("Mr. Gravatt") prior to the wedding and that Ms. Rocque concealed her role as the planner and decorator from defendant until the wedding reception was underway. Defendants allege that Ms. Rocque's failure to coordinate with defendants is a breach of the standard of care and general practices in the industry. Defendants claim that if plaintiffs sustained damages as alleged, those damages were brought about by the negligence of Ms. Rocque and demand judgment over, contribution from and indemnification by Ms. Rocque for the amount of any judgment plaintiffs recover against defendants.
Third-party defendant moves for an order, pursuant to CPLR 3211 [a] [7], dismissing the third-party complaint for failure to state a cause of action. Defendants oppose the motion and cross-move for an order, granting leave to defendants to amend their third-party complaint and to amend their answer to amplify one of the affirmative defenses and add another affirmative defense, with respect to Ms. Rocque's alleged actions. Third-party defendant consents to defendants being granted leave to amend their answer, but contends defendants should be required to pay costs, pursuant to CPLR 3025 [b], and otherwise opposes the cross-motion.
In deciding the motion and cross-motion, the Court has reviewed and considered the following: the affirmation of Gregory V. Canale, Esq., dated December 17, 2019, with exhibits, in support of the motion; the affirmation of James L. Maswick, Esq., dated January 25, 2020, with exhibits, in opposition to the motion and in support of the cross-motion; the reply affirmation of Gregory V. Canale, Esq., dated February 11, 2020, with exhibit, in further support of the motion and in opposition to the cross-motion; and the reply affirmation of James L. Maswick, Esq., dated February 17, 2020, in further support of the cross-motion.
Initially, third-party defendant alleges that defendants cannot state a claim for contribution. Ms. Rocque argues that she is not "subject to liability for damages for the same personal injury, injury to property or wrongful death" as defendants (CPLR 1401). Ms. Rocque contends that plaintiffs' claims against defendants arise from the contractual relationship between the two parties, and any obligation defendants owed plaintiffs was contractual in nature. Ms. Rocque claims that if plaintiffs recover damages from defendants, it would be on the basis that defendants breached their contract with plaintiffs, not a breach of some other, independent duty, and, as such, defendants are not entitled to seek contribution from Ms. Rocque. Third-party defendant further contends that the third-party complaint fails to state a claim for either express or implied indemnification. Third-party defendant argues that the third-party complaint does not allege that a contract existed between defendants and Ms. Rocque and, therefore, it does not set forth any facts to support an argument that third-party defendant expressly agreed to indemnify defendants. Third-party defendant further alleges that defendants have no right of implied indemnity against Ms. Rocque because defendants and Ms. Rocque are each responsible for the portion of economic loss caused by that party(ies) and not for any portion of the economic loss caused by the other(s) and, since liability against defendants would be as actual wrongdoers, defendants are precluded from recovering against Ms. Rocque on the basis of common-law indemnity.
Defendants do not offer any legal authority in opposition to third-party defendant's motion. Rather, defendants oppose the motion upon the basis of equity and fairness.
On this motion to dismiss pursuant to CPLR 3211 [a] [7], the Court must afford the third-party complaint a liberal construction, accept the allegations as true, and accord defendants the benefit of every possible inference (see, e.g., Chanko v Am. Broadcasting Companies, Inc., 27 NY3d 46, 52 [2016]; McFadden v Amodio, 149 AD3d 1282, 1283 [3d Dept 2017]).
As indicated above, in the third-party complaint, defendants seek contribution and/or indemnification from Ms. Roque for any damages for which they are held liable to plaintiffs. "Basically, in contribution the loss is distributed among tort-feasors, by requiring joint tort-feasors to pay a proportionate share of the loss to one who has discharged their joint liability, while in indemnity the party held legally liable shifts the entire loss to another" (Rosado v Proctor & Schwartz, Inc., 66 NY2d 21, 23-24 [1985] [internal citations omitted]).
CPLR 1401 provides, in relevant part, that "two or more persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death, may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought."
"[P]urely economic loss resulting from a breach of contract does not constitute 'injury to property' within the meaning of New York's contribution statute'" (Facilities Dev. Corp. v Miletta, 180 AD2d 97, 102 [3d Dept 1992] quoting Board of Educ. v Sargent, Webster, Crenshaw & Folley, 71 NY2d 21, 26 [1987], citing CPLR 1401). "[T]he existence of some form of tort liability is a prerequisite to application of the statute" (Sargent, 71 NY2d at 28). Thus, "a defendant may not seek contribution from other defendants where the alleged tort is essentially a breach of contract" (Westbank Contr., Inc. v Rondout Val. Cent. School Dist., 46 AD3d 1187, 1190 [3d Dept 2007] [internal quotation marks and citations omitted]).
Although defendants assert that Ms. Rocque was negligent and refer to her as a tortfeasor, "the determining factor as to the availability of contribution is not the theory behind the underlying claim but the measure of damages sought" (Rothberg v Reichelt, 270 AD2d 760, 762 [3d Dept 2000] [internal quotation marks and citations omitted]). The damages plaintiffs seek to recover from defendants, and which defendants then seek to recover from Ms. Rocque, are purely economic loss resulting from alleged breach of contract by defendants. "In short, plaintiff[s] [are] seeking the benefit of [their] contractual bargain and, as such, no claim for contribution lies" Rothberg v Reichelt, 270 AD2d at 762; see also Westbank, 46 AD3d at 1190 [while defendant owner employed language asserting negligence in some of its causes of action against co-defendant architectural firm, damages it sought were for economic loss and, accordingly, Supreme Court properly concluded contribution was inapplicable]).
Defendants cannot seek contribution from Ms. Roque, pursuant to CPLR 1401. As such, defendants' claim for contribution must be dismissed. The Court, thus, turns to whether defendants set forth sufficient allegations to establish a viable claim for indemnification.
"A party's right to indemnification may arise from a contract or may be implied based upon the law's notion of what is fair and proper as between the parties" (McCarthy v Turner Const., Inc., 17 NY3d 369, 374-75 [2011] [internal quotation marks and citations omitted]).
In this case, the third-party complaint does not set forth any allegations upon which a claim for express indemnification could be based. Thus, if defendants have any claim for indemnification, it is one implied by law.
"Implied, or common-law, indemnity is a restitution concept which permits shifting the loss because to fail to do so would result in the unjust enrichment of one party at the expense of the other. Common-law indemnification is generally available in favor of one who is held responsible solely by operation of law because of his relation to the actual wrongdoer" (McCarthy, 17 NY3d at 375 [internal quotation marks, brackets and citations omitted]). "Stated another way, one is entitled to implied indemnification where he or she has committed no wrong but is held vicariously liable for the wrongdoing of another." (Westbank 46 AD3d at 1189-90 [internal quotation marks, brackets and citations omitted].)
"In the classic indemnification case, the one seeking indemnity had committed no wrong, but by virtue of some relationship with the tort-feasor or obligation imposed by law, was nevertheless held liable to the injured party. In other words, where one is held liable solely on account of the negligence of another, indemnification, not contribution, principles apply to shift the entire liability to the one who was negligent." (Glaser v M. Fortunoff of Westbury Corp., 71 NY2d 643, 646 [1988] [internal quotation marks and citations omitted]).
In this case, defendants' liability to plaintiffs, if any, will be based upon defendants' own active failure to perform their contractual obligations to plaintiffs and not purely vicarious to any fault attributable to Ms. Rocque. In other words, defendants will not be responsible for that portion of plaintiffs' economic loss caused by Ms. Rocque's wrongdoing, if any. Therefore, common-law indemnification against Ms. Rocque does not lie. (see, Facilities Dev. Corp. v Miletta, 180 AD2d 97, 104 [3d Dept 1992]; Politte v Sherman, 168 AD2d 761, 762 [3d Dept 1990]; see also Land, Air, Water Envtl. Services, Inc. v Britelite Elec., Plumbing & Heating, Inc., 252 AD2d 573, 574 [2d Dept 1998] [cross-claim seeking indemnity or contribution failed to state a cause of action; complaint and cross claims sought damages for economic loss resulting from alleged breach of contract, and presented no issue of tort liability; "[t]herefore, a claim for contribution or indemnity [was] legally untenable"]). As such, defendants' claim for indemnification must be dismissed.
The Court, thus, turns to that branch of defendants' cross-motion which seeks leave to amend the third-party complaint.
Pursuant to CPLR 3025 [b], leave to amend a pleading "shall be freely given upon such terms as may be just." The determination of an application for leave to amend a complaint rests soundly within the trial court's discretion (E.g., Lakeview Outlets Inc. v Town of Malta, 166 AD3d 1445, 1446 [3d Dept 2018]). Leave to amend a pleading should be freely granted in the absence of prejudice or surprise resulting from the delay except in situations where the proposed amendment is palpably insufficient or patently devoid of merit (E.g., Perkins v Town of Dryden Planning Bd., 172 AD3d 1695, 1697 [3d Dept 2019]; Lakeview, 166 AD3d at 1446).
In opposition to defendants' cross-motion to amend the third-party complaint, third-party defendant does not even argue, let alone establish, that she will be prejudiced or surprised if defendants are permitted to amend the third-party complaint. Thus, the inquiry is whether the proposed amendment is palpably insufficient or patently devoid of merit.
Defendants seek to amend their third-party complaint to include a cause of action alleging that if plaintiffs prove their case against defendants, Ms. Rocque's intentional interference with the contract between plaintiffs and defendants caused defendants damages. The proposed new amended third-party complaint appears to allege that Ms. Rocque's intentional acts caused defendants to breach their contract with plaintiffs, resulting in damages to defendants.
"To sustain a cause of action for tortious interference with contract, a plaintiff must show (1) the existence of a valid contract between the plaintiff and a third party, (2) the defendant's knowledge of that contract, (3) the defendant's intentional [and improper] inducement of the third party to breach that contract, and (4) damages. This tort is not satisfied by conduct that is merely negligent or incidental to some other, lawful, purpose; rather, the plaintiff must establish that the defendant's procurement of the alleged breach was solely malicious." (Schmidt & Schmidt, Inc. v Town of Charlton, 103 AD3d 1011, 1013 [3d Dept 2013] [internal quotation marks and citation omitted]; see also White Plains Coat & Apron Co., Inc. v Cintas Corp., 8 NY3d 422, 426 [2007]).
In this case, although defendants question the existence of a contract, assuming such a contract existed, defendants have failed to set forth in the proposed amended third-party complaint any allegation that Ms. Rocque intentionally procured a breach of that contract. Defendants allege only that Ms. Roque "intentionally changed the plans that had been approved by plaintiffs and third-party plaintiffs." As pointed out by Ms. Roque's counsel, while such allegation may form the basis of an affirmative defense, the Court does not find that defendants have set forth facts alleging any cognizable legal theory and, as such, the proposed amendment is palpably insufficient and/or devoid of merit. As such, defendants' cross-motion for leave to amend the third-party complaint must be denied.
Third-party defendant's request that defendants be required to pay costs in connection with amendment of their answer, pursuant to CPLR 3025 [b], is denied. The proposed amendment did not substantially change the nature of defendants' defenses to plaintiffs' claim and does not cause any delay or prejudice and defendants should not be punished for asserting their legal rights (see Paolucci v Mauro, 74 AD3d 1517, 1521-22 [3d Dept 2010]).
The remaining arguments raised by the parties have been examined and found to be unavailing. Any requested relief not specifically addressed herein has nonetheless been considered and is hereby denied.
Based upon the foregoing, it is hereby
ORDERED that third-party defendant's motion to dismiss, pursuant to CPLR 3211 [a] [7], is granted and the third-party complaint is dismissed; and it is further
ORDERED that the branch of defendants' cross-motion seeking leave to amend the third-party complaint is denied; and it is further
ORDERED that the branch of defendants' cross-motion seeking leave to amend their answer is granted; and it is further
ORDERED that third-party defendant's request for costs is denied; and it is further
ORDERED that defendants shall file and serve an amended answer, in the form attached to the affirmation of James L. Maswick, Esq., dated January 25, 2020, as Exhibit C, within ten (10) days following the date of this Decision and Order.
The within constitutes the Decision and Order of this Court. Dated: May 5, 2020 Lake George, New York. HON. MARTIN D. AUFFREDOU JUSTICE OF THE SUPREME COURT