Opinion
41891/07.
Decided August 11, 2008.
Seth Eisenberger, Esq., Law Office of Seth Eisenberger, Plaintiff Attorney.
Raphael S. Berlin, Esq., Tratner Molly, LLP, Defendant Attorney.
Counsel for David Shteierman has moved this court (by notice of motion, dated January 17, 2008), pursuant to CPLR 3211 (a) (1), (4), and (7), for an order dismissing counts one through 5, inclusively, of the plaintiff's complaint, in the matter of Ruach Chaim Institute v. David Shteierman, Index No. 41891/07, on the grounds that the plaintiff's claims are time barred and fail to state the causes of action asserted; to wit, breach of contract, negligence, breach of fiduciary duty, malpractice, and negligent misrepresentation. In the alternative, the defendant seeks, pursuant to CPLR 602, to consolidate the matter sub judice with that of DJ Associates Architect, P.C. v. Ruach Chaim Institute, Simcha Klor, and Fidelity and Deposit Company of Maryland, Index No. 33730/07, wherein DJ Associates Architect, P.C. seeks foreclosure of a mechanic's lien against the within plaintiff for breach of contract and unjust enrichment in the sum of $64,435.00. Finally, Mr. Shteierman requests that this court strike and/or limit the plaintiff's claim for damages pursuant to the parties' agreement. In support of his various petitions, just mentioned, Mr. Shteierman notes that his architectural services were retained in 1997, that his boring test (revealing that the ground soil was sandy and required shoring) was in the plaintiff's possession in 2002, and his project plans (indicating need for shoring, bracing, and underpinning) were approved by the Department of Buildings (hereinafter referred to as DOB) on June 18, 2004, all of which occurred three years prior to the institution of this action in November 2007, in violation of CPLR § 214 (6), which provides in pertinent part that an action to recover for malpractice, other than medical, dental, or podiatric, regardless of whether the underlying theory is based in contract or tort, must be commenced within three years. In addition, the defendant asserts 1. that the plaintiff never abided by their 1977 agreement inasmuch as required payments were never timely made and less than half ($37,500.00) of the entire contractual amount ($80,500.00 plus expenses) due was paid; 2. that the plaintiff's second cause of action for negligence, predicated on the fact that he ignored the boring test, is merely duplicative of its malpractice claim and should therefor be dismissed; 3. the plaintiff's third cause of action for breach of fiduciary duty is dismissable since the law recognizes no such relationship between architect and client (citing Cinque v. Schieferstein, 292 AD2d 197, 738 NYS2d 214 [1st Dept., 2002]), and is duplicative of its negligence and malpractice claims. In addition, such claim should be dismissed pursuant to CPLR 3016(b) for lack of specificity; 4. the plaintiff's fourth claim for malpractice should be dismissed for lack of particularity inasmuch as it is based on conclusory allegations lacking in factual support, in contravention of CPLR 3013, and fails to establish that the defendant "deviated from locally prevailing standards of architectural practice; "and, 5. the plaintiff's fifth cause of action for negligent misrepresentation should be dismissed as no misrepresentation has been alleged and it is merely duplicative of its malpractice claim. The defendant also asserts that the plaintiff has failed to establish that he was the proximate cause of any damages; to wit, any change in soil or the rising costs of construction and/or prices. Mr. Shteierman also notes that since the plaintiff's engineer modified his plans from seventeen foot to twenty-one foot excavations, the shoring need would have been affected. In addition, Mr. Shteierman maintains that the plaintiff's instant action is belied by a second "services" agreement with his professional corporation, DJ Associates Architect, P.C., dated March 16, 2003, which contemplated that the project could last "at least four additional years" and wherein the plaintiff agreed to be responsible for all necessary engineering services, inclusive of shoring, and waived all its claims for consequential damages. Furthermore, Mr. Shteierman notes that since all of the plaintiffs' current claims are identical to its asserted counterclaims in the pre-existing matter of DJ Associates Architect, P.C. v. Ruach Chaim Institute, Simcha Klor, and Fidelity and Deposit Company of Maryland, Index No. 33730/07 currently before this court, said action if permitted warrants consolidation with the said pending matter in the interest of judicial economy as they concern the same transactions; but, more appropriately, constitutes frivolous conduct calling for the imposition of sanctions and costs.
In opposition to the foregoing, plaintiff's attorney begins by noting that his counterclaims were asserted against DJ Associates Architect, P.C.; however since at the time the parties entered into this contract, Mr. Shteierman was unincorporated and remained as such until March 14, 2002, a third-party action against the corporation was improper as procedurally barred. Accordingly, the plaintiff does not oppose the defense request for consolidation of the mentioned actions. With regards to the parties contract, the plaintiff asserts that the defendant, for $80,500.00, agreed in March, 1997 to provide seventeen separate services, including architectural plans and specifications, structural engineering, boring test reports, and the filing of plans and applications, for the construction of a new school building; that said contract established a payment schedule upon completion of listed services; that the defendant was paid $67,500.00 on his representation that certain work had been completed from March 20, 1997 to September 6, 2005, although that turned out not to be the case; that an additional $8,000.00 was paid to Efraim Goldstein, P.E. at the defendant's directive in a letter, dated October 1, 2002, for new structural engineering services, plus an additional $325.00 for a sewer application in July, 2004; that in June 2004, the DOB approved the defendant's plans via an examiner's basic certification of ensuring minimal code violations; however, an approval determining the appropriateness of the plans for the specific project occurred eight years after the contract and revealed that the defendant's shoring and underpinning design was not workable for the project in light of the results of his boring test, which failing was uncovered only after commencement of construction in 2006 following the plaintiff's acceptance of EH General Contractor's bid for $6,708,718.00; and that once its general contractor uncovered the incomplete and unusable nature of the defendant's plans for the actual project, the plaintiff had to engage a new architect for $30,000.00 to complete and coordinate the same, as well as a new structural engineer for $35,000.00; that as a result of the need to change the construction contract to include additional work not taken into account in the plans because of the adverse ground soil condition shown in the boring test, the plaintiff incurred additional construction costs of $900,000.00, an additional 30% surcharge; that the plaintiff specifically rejected the defendant's attempt to amend the parties' original agreement with a new proposed contract, dated December 13, 2006, in the amount of $115,000.00; and, that the plaintiff denies the defendant's 2006 invoice for additional expenses of $64,435.00 for work that was allegedly completed prior to October 2002, especially given the defendant's letter confirming the contract sum as $80,500.00. On the basis of the foregoing, the plaintiff asserts that it has clearly demonstrated that the defendant breached their contract, was negligent, and committed malpractice in the preparation and design of plans, drawings, and specifications for the project, and that the defendant's motion for dismissal should therefore be denied. In addition, its claim for negligent misrepresentation is borne out by the fact that the defendant, who possessed unique/specialized knowledge in a position of trust and confidence, knew that his plans were to be utilized in the construction project and relied on by the plaintiff for that purpose. The plaintiff further notes that while it is true that a claim for professional malpractice involving an architect is governed by a three year statute of limitations, the accrual of such a claim occurs upon the completion of performance under the contract and the consequent termination of the parties' professional relationship, which in this case (and contrary to the defendant's assertions) was January 2007 when Mr. Shteierman was terminated, corroborated by the fact that the defendant was involved in the process of choosing a general contractor, was present at the September 27, 2005 ground breaking and delivered the approved drawings required to be on site during construction, signed the August 9, 2006 architect's certificate, and corresponded via e-mails with the plaintiff's president as late as December 2006. In response to the defendant's contention of payments not effectuated as contracturally required, the plaintiff notes that its $9000.00 check was dated and mailed November 25, 2002 (not December 12, 2003) and cashed by the defendant on February 12, 2003; its $24,000.00 payment was due not "upon approval of plans," but "upon completion of Structural Mechanical Plans." In any event, although the plans were approved by the DOB on June 8, 2004, the said plans were never completed in a usable manner for use in the construction project; e.g. required safe areas were not included though needed for the issuance of a public assembly permit, not to reiterate the extra costs, hereinabove discussed, which resulted from the defendants's incompleteness. So too, the defendant failed to interpret the boring test and use the (ground soil condition) findings in preparing its plans, or to provide an adequate underpinning and shoring design as contracturally required. An affidavit by the principal of its replacement architect, Rybak Architects, P.C. not only substantiated the various omissions and the difference in DOBs' approvals aforementioned, but makes note of the fact that the design spaces did not comply with code requirements for means of egress, spaces requiring place of assembly permits, and/or overhead, size of threads risers, and occupant load for stairs. In addition, the plaintiff asserts that all its alleged damages were proximately caused by the defendant's failure to take into account the type of soil found at the construction site, thereby resulting in a defective design which did not arise after his replacement. Insofar as any alleged second agreement is concerned, plaintiff's president, who was not elected as such until July 10, 2006, avers that he entered into no such contract, and that the same is belied by the fact that 1. although it was purportedly entered into and dated March 16, 2003, the bottom of each page reads that the document was produced by AIA software at 11:05:06 on 6/14/06, and 2. defendant proferred a new contract on December 13, 2006 for $115,000.00 though claiming a second 2003 contract already exists for $140,000.00.
In reply, counsel for Mr. Shteierman observes that the latter incorporated on March 14, 2002 and since that time furnished services through DJ Associates Architect, P.C.; hence all claims accruing on or prior to said date are subject to the three year statute of limitation and should be dismissed against him individually. Mr. Shteierman also asserts that his request for dismissal should be granted inasmuch as documentary proof rebuffs the plaintiff's claims in their entirety. More specifically, Mr. Shteierman underscored his entitlement to dismissal on the following grounds; to wit, that the plaintiff's payment of only $37,500.00 on a contract calling for $80,500.00 constitutes a breach of contract; that the plaintiff does not dispute that its second claim for negligence, fourth claim for malpractice, and fifth claim for negligent misrepresentation are duplicative; that the plaintiff's complaint lacks particularity; that his plans were approved by the DOB and not subject to random audit (as per DOB guidelines) since they were not self certified; that the plaintiff has not established that undue delay constitutes malpractice or that he was the proximate cause of any damages; that no fiduciary relationship has been shown to exist between them as architect and client; and/or that he deviated from any locally prevailing standards of architectural practice.
In the matter of DJ Associates Architect, P.C. v. Ruach Chaim Institute, Simcha Klor, and Fidelity and Deposit Company of Maryland, Index No. 33730/07, the plaintiff has moved this court (by notice of motion, dated March 18, 2008) for an order dismissing the defendants' counterclaims on the grounds that they are time barred and deficient, in that the first fails to establish a breach of contract; the second, any negligence; the third, any breach of fiduciary duty; the fourth, any malpractice; and the fifth, any negligent misrepresentation. In addition, the plaintiff seeks to have this court strike and/or limit the defendants' damages pursuant to the parties' subsequent agreement. The arguments in support of the just mentioned reliefs are identical to those enumerated in Mr. Shteierman's request for dismissal of the complaint in the matter of Ruach Chaim Institute v. David Shteierman, Index No. 41891/07, as are the arguments raised in the defendants' affirmation in opposition and the plaintiff's reply, none of which therefore need be restated here.
Mr. Shteierman and his corporate entity have both, respectively, sought dismissal herein of the plaintiff's complaint and the defendants' counterclaims as time barred, and on the basis of CPLR 3211 (a) (1), (4) and (7); to wit, a defense founded on documentary evidence; that another action is pending between the same parties for the same cause of action in this state; and, the failure to state cause(s) of action.
Ab initio, this court is unaware of any legal principle holding that a person who contracts in his individual capacity is relieved of personal liability upon his subsequent incorporation. Mr. Shteierman has supplied no statutory or case law basis for that assertion. As a result it cannot be gainsaid that Mr. Shteierman is an individual defendant in one matter and a corporate plaintiff in the other, and hence two separate legal entities in the cases presently before this court. His additional contention that the parties' initial agreement was superseded by a second contract entered into with his professional corporation is belied by the affidavit of Ruach Chaim Institute's current president to the effect that he was not president at the time of this purported second agreement and that his signature thereon is a forgery.
CPLR § 214(6) clearly provides, in pertinent part, that actions to recover damages for malpractice other than medical, dental, or podiatric malpractice, regardless of whether the underlying theory is based in contract or tort, are to be commenced within three years. The commentaries to said section provide that it was amended on September 4, 1996 to make clear that the three year period of limitations for claims of non-medical malpractice "applies regardless of whether the underlying theory is based in contract or tort," and in response to the New York Court of Appeals holding that malpractice claims against architects and lawyers, among others, were governed by a six-year statute of limitations for breach of contract, pursuant to CPLR § 213(2). The commentaries add that ". . . the legislature intended to benefit only a discreet group of persons,' and the qualities shared by the groups identified in the legislative history are as follows:"extensive formal learning, licensure and regulation indicating a qualification to practice, a code of conduct imposing standards beyond those accepted in the marketplace and a system of discipline for violation of those standards. . . Additionally, a professional relationship is one of trust and confidence, carrying with it a duty to counsel and advise clients." 96 NY2d at 29, 725 NYS2d at 597, 749 NE2d at 167. This definition, said the court, provides a relatively bright line test for CPLR § 214(6) that can be fairly and uniformly applied until legislative clarification, if any, is provided.
CPLR § 203(a) provides that the time within which an action must be commenced, except as otherwise expressly prescribed, shall be computed from the time the cause of action accrued to the time the claim is interposed. Subdivison (b) (1) and ( c) add that in an action commenced by service, a claim asserted in the complaint is interposed against the defendant. . . when the summons is served upon the defendant [and when commenced by filing]. . . is interposed against the defendant. . . when the action is commenced. The commentaries note that "New York Courts have repeatedly held that, in the absence of legislation to the contrary, the statute of limitations begins to run when the wrong occurs despite the victim's lack of awareness of injury." In addition, "[a] long line of cases holds that an owner's action against an architect. . . for faulty construction accrues upon completion of the building, even if the defects are not discovered until some time later,"( Citing Cabrini Medical Center c. Desina, 1985, 64 NY2d 1059, 489 NYS2d 872, 479 NE2d 217; State v. Lundin, 1983, 60 NY2d 987, 471 NYS2d 261, 459 NE2d 486; Sosnow v. Paul, 1975, 36 NY2d 780, 369 NYS2d 693, 330 NE2d 643; Sears, Roebuck Co. v. Enco Associates, 1977, 43 NY2d 389, 401 NYS2d 767, 372 NE2d 555), or on the architect's fulfillment of contractual obligations and the consequent termination of the professional relationship between the architect and the owner ( See e.g. Frank v. Mazs Group, LLC, 30 AD3d 369, 815 NYS2d 738 [2d Dept., 2006]; Matter of Kohn Pederson Fox Associates, P.C. (FDIC), 189 AD2d 557, 592 NYS2d 16 [1st Dept., 1993] architect was contracturally required to, respectively, issue certificate of occupancy and final certificates to the owner before the project was deemed finally completed ).CPLR Rule 3211(h) provides, in pertinent part, that a motion to dismiss based on CPLR Rule 3211 (a) (7), in which the party has demonstrated that the action, claim, cross-claim, or counterclaim subject to the motion is an action in which the notice of claim must be served on a licensed architect shall be granted unless the party responding to the motion demonstrates that a substantial basis in law exists to believe that the performance, conduct, or omission complained of such licensed architect as set forth in the notice of claim was negligent and that such performance, conduct, or omission was a proximate cause of personal injury, wrongful death or property damage complained of by the claimant. It is also clearly established that ". . . in addressing a motion for dismissal under CPLR 3211 (a) (7), the narrow question is not whether the plaintiff will ultimately prevail in the litigation, but whether the complaint states a cause of action.' ( See Becker v. Schwartz, 46 NY2d 401, 413 NYS2d 895). It is also the case, that as with a motion for summary judgment, the submissions of the opposing party should be viewed in the most favorable light ( Leon v. Martinez, 84 NY2d 83, 614 NYS2d 972 [1994]).
Although, this court believes that additional discovery is warranted to ascertain when exactly the owner/architect relationship ceased in the within matters, it nevertheless finds that Rauch Chaim Institute has set forth sufficient facts in its complaint and counterclaims to undergird its claims of negligence, negligent representation, breach of contract, and malpractice as a consequence of its reliance on Mr. Shteierman's faulty contract design plans, which he knew were being relied on (for bidding purposes, building plans, etc.), and the pecuniary losses resulting therefrom ( compare Reliance Insurance Company v. Morris Associates, P.C., 200 AD2d 728, 607 NYS2d 106 [2d Dept., 1994] contractor entitled to sue design and engineering consulting firm for faulty contract plans and supervision of the subject construction work).
Wherefore, on the basis of the foregoing, Mr. Shteierman and DJ Associates Architect, P.C.'s respective motions for dismissal of the underlying action and counterclaims as time barred and for failing to state causes of action are denied in that the applicable three year statute of limitations therefor have not expired, and the proffered documentary evidence has not refuted the viable claims of malpractice, breach of contract, negligence, and negligent misrepresentation as asserted herein. In addition, this court agrees that the consolidation of the subject actions, as requested by Mr. Shteierman and unopposed by the defendants, is warranted by judicial economy inasmuch as the underlying issues in said matters are identical. Accordingly, Mr. Shteierman's request for consolidation, pursuant to CPLR 602, is granted. These matters shall henceforth be consolidated under Index No. 33730/07, and counsel for Mr. Shteierman is hereby directed to forthwith prepare an order of consolidation for this court's signature. This constitutes the decision and Order of this Court.