Opinion
No. 26964/11.
2013-03-22
143 BERGEN STREET LLC, et al., Plaintiffs, v. Herbert RUDERMAN R.A., et ano., Defendants.
Stuart Klein, Esq., New York, for Plaintiffs. Giaimo Associates, LLP, Kew Gardens, for Defendants.
Stuart Klein, Esq., New York, for Plaintiffs. Giaimo Associates, LLP, Kew Gardens, for Defendants.
DAVID I. SCHMIDT, J.
Upon the foregoing papers, defendants Herbert Ruderman R.A. and George Restivo R.A. move for an order, pursuant to CPLR 3211(a)(1), (3) and (7), dismissing the complaint with respect to plaintiff Lorraine Gerrity, dismissing the second cause of action as to Restivo and dismissing in their entirety the third, fourth, fifth, sixth, seventh, eighth and tenth causes of action. Plaintiffs 143 Bergen Street LLC, Edward Gerrity and Lorraine Gerrity cross-move, pursuant to CPLR 3212, granting summary judgment on their first and second causes of action for breach of contract and professional malpractice.
Plaintiffs commenced this action to recover damages incurred as a result of the alleged malfeasance of defendants, who were registered architects involved in a construction project at the subject residential property at 143 Bergen Street in Brooklyn. According to the complaint, in or about September or October 2008, plaintiffs met with Ruderman to discuss the project which involved, among other things, the extension of the building to the rear and construction of bedrooms on each floor. Plaintiffs allege that they informed Ruderman the building is located in a landmark district and that they would be relying on Ruderman's expertise to assure that the building would be built in accordance with all relevant laws, rules and regulations of the City of New York. Plaintiffs allege that Ruderman assured them that he had sufficient experience with landmarks and was qualified to complete the project.
In or about October 2008, plaintiffs and Ruderman entered into an oral agreement whereby Ruderman allegedly agreed to prepare necessary architectural plans and drawings in connection with the project, obtain construction permits from the Department of Buildings (DOB) and other municipal agencies, prepare necessary DOB filings, obtain necessary DOB approvals, obtain a Certificate of Occupancy (CO) and provide other architectural services necessary for the project in exchange for a fee of approximately $12,000. At the time of the alleged agreement, the property was owned by Edward Gerrity.
On or about January 7, 2009, the Landmarks Preservation Commission (LPC) approved the initial plans for the project. The plans submitted to the LPC contemplated a ten-foot extension in the rear of the property with a five-foot setback on the third floor (i.e. a five-foot extension of the roof and third floor). Plaintiffs allege that the plans submitted to the LPC differed significantly from what they requested, particularly with respect to the number of bedrooms and bathrooms and interior layouts and configurations.
On or about August 27, 2009, the DOB approved plans (1st DOB plans) that were self-certified by Restivo.
The 1st DOB plans included the ten-foot extension with a five-foot setback on the third floor and, additionally, a fire escape ladder as requested by plaintiffs. Plaintiffs state that the 1st DOB plans contained numerous significant variations from the plans submitted to the LPC, and from what plaintiffs requested. Plaintiffs allege that they informed Ruderman of their dissatisfaction with the 1st DOB plans. Plaintiffs maintain that Ruderman instructed them to build as they wish and assured them that he would file amended plans and have them approved by the DOB.
Self-certification is a process by which licensed professionals may bypass a full review of a building project by the Department of Buildings by certifying that a project complies with all applicable laws and codes.
Plaintiffs further allege that they expressed to Ruderman their desire to extend the third floor and roof a full ten feet (rather than the five foot extension included in the LPC and 1st DOB plans) and to excavate the rear yard to install a stairway from the basement to the cellar. Ruderman allegedly stated that he secured approval for the full ten-foot extension and staircase and instructed plaintiffs to build accordingly. Plaintiffs allege that they proceeded to build as per Ruderman's instruction.
Plaintiffs state that on or about October 5, 2009, Restivo filed, signed and sealed a Technical Report Statement of Responsibility (“TR–1”) for the project, which indicated that the project required special inspections for underpinning, structural safety structural stability, and excavation—sheeting, shoring, and bracing (collectively “special inspection work”). Plaintiffs allege that Restivo knowingly signed as the responsible party for all the special inspection work despite the fact that he was not a professional engineer as required by the Rules of the City of New York (“RCNY”) and the New York City Building Code.
On or about December 17, 2009, DOB approved post-approval amended plans (“2nd DOB plans”) that were self-certified by Restivo. The 2nd DOB plans were substantially similar to the 1st DOB plans, except that they included a ten-foot rear extension for the entire building and indicate that the fire escape ladder in the rear of the building was removed. Plaintiffs allege that the 2nd DOB plans contained numerous significant variations from the LPC plans, which fact was known by defendants. Plaintiffs state that the 2nd DOB plans also differed significantly from what they requested, and that they expressed their dissatisfaction to Ruderman. Plaintiffs allege that Ruderman informed them to build as they wished, and that he would file amended plans and have them approved by the DOB. On or about August 9,2010, defendants filed an application for a second post-approval amended plan (“3rd DOB plans”), for which Restivo was the applicant and Ruderman the filing representative. On or about August 12, 2010, the DOB approved the 3rd DOB plans that were self-certified by Restivo and allegedly drawn by Ruderman. The 3rd DOB plans included, among other things, a ten-foot rear extension for the entire building, an excavation in the rear of the building with a staircase from the basement leading down to the cellar and the elimination of the fire escape ladder in the rear of the building. Plaintiffs allege that defendants knew the 3rd DOB plans varied significantly from the plans approved by the LPC.
On or about October 28, 2010, plaintiffs submitted front and rear pictures of the building to the LPC, which reflected that they had repaired existing violations and completed the project in compliance with the LPC building permit. Several days later, a representative from the LPC contacted plaintiffs to inform them that the building was not constructed in conformance with the LPC plans or the LPC building permit. Specifically, the LPC representative stated that plaintiffs did not have authorization to construct the ten-foot rear extension for the entire building. Plaintiffs state that they informed the LPC representative of Ruderman's alleged assurance that amended plans had been submitted to the LPC, but the representative denied that the commission received such plans. Thus, plaintiffs never obtained approval from the LPC for the full ten-foot rear extension.
The LPC requested a meeting with plaintiffs and Ruderman on December 7,2010 to discuss the unauthorized work performed on the building. The LPC also requested a letter from Ruderman describing the circumstances of the alleged LPC approval of the full ten-foot rear extension and identifying the LPC representative who spoke to Ruderman regarding such approval. Ruderman initially informed plaintiffs that he was not available to attend the LPC meeting and that Lorraine Gerrity should write the letter requested by the LPC. Ruderman subsequently agreed to attend the LPC meeting and write the letter. In a letter to the LPC dated November 11, 2010, Ruderman explained that he was orally advised by a LPC representative that the full ten-foot rear extension for the entire building would be permissible as long as the extension was not visible from the exterior of the building.
Plaintiffs allege that during the course of the LPC meeting they discovered for the first time that all of the DOB plans were self-certified, and were explained the consequences of self-certification. It was also determined that there were significant deviations between the LPC plans and the as-built conditions, and that the only possible solution was to request permission to maintain the as-built conditions at a presentation before the Community Board and subsequently at a public hearing,. According to plaintiffs, Ruderman refused to attend or prepare any materials for the presentation and thereafter ceased contact with plaintiffs. Plaintiffs further allege that they contacted Restivo several times requesting his assistance for the presentation, and further requesting his assistance in contacting Ruderman regarding the presentation and remedying the non-compliant aspects of the building. Plaintiffs state that Restivo likewise ceased all contact with plaintiffs in February 2011.
Plaintiffs allege that on or about March 2011, they retained the services of Michael Zenreich Architect, P.C. (“Zenreich”), an architectural firm, to draw new plans for the building, remedy the non-compliant aspects of the building caused by defendants and to obtain a CO for the Building. After discussions with the LPC, Zenreich determined that an extensive amount of work would be needed to remedy the various city and state violations, along with the significant discrepancies between the LPC Plans, 3rd DOB Plans and as-built conditions. This work included demolishing the unauthorized ten-foot rear extension on the 3rd floor to provide for a five-foot setback, filling the unauthorized excavation in the rear of the building, constructing a storage room in the cellar to decrease the excess floor area ratio (FAR), or alternatively, replacing any glass doors and side windows with solid doors and walls, constructing wheelchair accessibility to the basement and increasing the amount of space between the doorways in the vestibule on the 1st floor.
In their complaint, plaintiffs set forth causes of action against Ruderman for breach of contract and against both Ruderman and Restivo for professional malpractice. In their cause of action for breach of contract, plaintiffs allege that Ruderman had a duty to perform various services pursuant to the agreement, but breached his duty by failing to:
a.Prepare appropriate and sufficient construction and design documents for the project;
b.Provide services in accordance with the applicable standard of care;
c.Provide appropriate specifications for the project;
d.Properly inspect the work of the contractors;
e.Conform the as-built conditions to plaintiffs' clear and specific instructions, the 3rd DOB plans and the LPC plans;
f.Conform the 3rd DOB plans and LPC plans to each other;
g.Conform the as-built conditions, LPC plans and 3rd DOB plans to all relevant provisions of the law, rules and regulations of the City and State of New York, including, but not limited to the New York City Administrative Code, zoning regulations (ZR), RCNY and the Multiple Dwelling Law (MDL);
h.Secure approval of the as-built conditions from the LPC and the DOB;
i.Provide proper authorization for all work performed pursuant to the project, including, but not limited to conducting special inspections for the special inspection work;
j.Obtain a CO for the building;
k.Inform plaintiffs that all the DOB plans were self-certified and explain the ramifications for such self-certification;
l.Make himself available and accessible to respond to plaintiffs' inquiries regarding the project and its non-compliant aspects within a reasonable period of time; and
m.Provide guidance and counsel regarding non-compliant aspects of the building, especially after the LPC meeting.
In their cause of action for malpractice, plaintiffs allege that defendants failed to use that degree of professional skill and care applicable to said professional standards in the provision of their architectural services with respect to the project, but rather performed said services carelessly and negligently and contrary to accepted practices and standards of the architectural profession, in that, among other things, they failed to:
a.Prepare appropriate and sufficient construction and design documents for the project;
b.Provide services in accordance with the applicable standard of care;
c.Provide appropriate specifications for the project;
d.Properly inspect the work of the contractors;
e.Conform the as-built conditions to plaintiffs' clear and specific instructions, the 3rd DOB Plans, and the LPC Plans;
f.Conform the 3rd DOB plans and the LPC plans to each other;
g.Ensure that the as-built conditions, LPC plans, and 3rd DOB plans comply with all relevant provisions of the laws, rules, and regulations of the City and State of New York, including, but not limited to the New York City Administrative Code, ZR, RCNY and the MDL;
h.Secure approval of the as-built conditions from the LPC and the DOB;
i.Provide proper authorization for all work performed pursuant to the project,
including, but not limited to conducting special inspections for the special inspection work;
j.Obtain a CO for the building;
k.Inform plaintiffs that all the DOB plans were self-certified and explain the ramifications for such self-certification;
l.Make themselves available and accessible to respond to plaintiffs' inquiries regarding the project and its non-compliant aspects within a reasonable period of time; and
m.Provide guidance and counsel regarding the non-compliant aspects of thebuilding, especially after the LPC meeting.
Plaintiffs further allege causes of action for unjust enrichment against Ruderman (third), fraudulent/negligent representation against Ruderman (fourth), fraudulent/negligent representation against Restivo (fifth), fraud in the inducement against Ruderman (sixth), rescission and disgorgement against Ruderman (seventh), breach of fiduciary duty against Ruderman and Restivo (eighth), breach of the duty of good faith and fair dealing against Ruderman (ninth) and violation of General Business Law [GBL] § 349 against Ruderman (tenth).
Defendants move to dismiss the complaint, pursuant to CPLR (a)(1), (a)(3) and (a)(7), with respect to Lorraine Gerrity on the ground that documentary evidence establishes she has no standing to join in the action. Defendants maintain that title to the property, as evidenced by recorded deeds, was initially held by Edward Gerrity before it was transferred to 143 Bergen Street LLC, but was never held by Lorraine Gerrity at any relevant time. Defendants further contend that Lorraine was not a party to the contract, which was between only Edward Gerrity and Ruderman.
In determining whether a complaint is sufficient to withstand a motion pursuant to CPLR 3211(a)(7), “the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail” (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275 [1977] ). The court must accept the facts alleged in the complaint to be true and determine only whether the facts alleged fit within any cognizable legal theory ( see Dye v. Catholic Med. Ctr. of Brooklyn & Queens, 273 A.D.2d 193 [2000] ). The court “is not concerned with determinations of fact or the likelihood of success on the merits” (Detmer v. Acampora, 207 A.D.2d 477 [1994]see Stukuls v. State of New York, 42 N.Y.2d 272, 275 [1977] ). “Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss” (EBC I, Inc. v. Goldman Sachs & Co., 5 N.Y.3d 11, 19 [2005] ). To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), the documentary evidence which forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim ( see Trade Source v. Westchester Wood Works, 290 A.D.2d 437 [2002] ).
While it is conclusive and not in dispute that the property was formerly owned by Edward Gerrity and subsequently transferred to 143 Bergen Street LLC, plaintiffs expressly allege in their complaint that Lorraine Gerrity was a party to the oral contract with Ruderman. Because this contract was not reduced to writing and this court must accept the allegations in the complaint as true, there are factual issues as to Lorraine's privity and standing which are not conclusively disposed of by documentary evidence. Accordingly, that part of defendants' motion to dismiss the complaint with respect to Lorraine Gerrity is denied.
Defendants further seek dismissal of plaintiffs' claims for professional malpractice as against Restivo on the ground that there is no privity between plaintiffs and Restivo. However, while there is no allegation that there was any type of agreement or contract between plaintiffs and Restivo, a professional may be liable for malpractice to those in which he or she has a “relationship approaching privity.” A relationship approaching privity is demonstrated by: (1) awareness that the professional's work was to be used for a particular purpose or purposes; (2) reliance by a known party or parties in furtherance of that purpose; and (3) some conduct by the defendants linking them to the party or parties and evincing defendants' understanding of their reliance ( see Ossining Union Free School Dist. v. Anderson LaRocca Anderson, 73 N.Y.2d 417, 425 [1989];Credit Alliance Corp. v. Andersen & Co., 65 N.Y.2d 536, 551[1985] ).
In their complaint, plaintiffs have adequately pleaded the existence of a relationship approaching privity between themselves and Restivo. By self-certifying the plans submitted to the DOB, Restivo should have been aware that his services were for a particular purpose-to facilitate construction. It is alleged in the complaint that plaintiffs relied on Restivo's expertise in his obtaining all relevant permits. Finally, plaintiffs allege that Restivo self-certified the amendments to the plans and filed, signed and sealed a “TR–1” indicating that the project required special inspections, for which he would be responsible. Considering the scope of his involvement with the project, Restivo should have understood that his services were being relied on by the owners of the property (which would appear on the documents) and/or any party who had contracted with Ruderman, the alleged drafter of the plans.
As a result, that part of defendants' motion to dismiss the professional malpractice cause of action against Restivo for lack of privity is denied.
The remainder of defendants' motion seeks dismissal, under CPLR 3211(a)(7), of plaintiffs' causes of action for unjust enrichment, fraudulent/negligent representation, fraud in the inducement, rescission, breach of fiduciary duty and violation of General Business Law [GBL] § 349. Defendants do not seek dismissal of the ninth cause of action for breach of the duty good faith and fair dealing.
Unjust Enrichment
While a party may plead “alternatively or hypothetically,” and state several causes of action “regardless of consistency” (CPLR 3014), “the existence of a valid contract governing the subject matter generally precludes recovery in quasi contract for events arising out of the same subject matter” (EBC I, Inc. v. Goldman Sachs & Co., 5 N.Y.3d 11, 23 [2005] ). A plaintiff may state alternative causes of action for breach of contract and unjust enrichment that are predicated on the same facts only “where there is a bona fide dispute as to the existence of a contract or where the contract does not cover the dispute in issue” (Joseph Sternberg, Inc. v. Walber 36th Street Assoc., 187 A.D.2d 225, 228 [1993] ). Plaintiffs' allege the existence of an oral contract between themselves and Ruderman and there is no allegation of a particular dispute between the parties which was not covered by the contract.
As a result, the third cause of action for unjust enrichment is dismissed.
Fraudulent/Negligent Misrepresentation
In their fourth cause of action against Ruderman for negligent and/or fraudulent representation, plaintiffs refer to Ruderman's alleged misrepresentations regarding his competency and skill and in his obtaining LPC approval for the full ten-foot extension and staircase. Plaintiffs also note Ruderman's failure to explain to plaintiffs the process of self-certification and its ramifications. However, this cause of action is duplicative of plaintiffs' cause of action for breach of contract in that it arises from that same allegations which constitute the contract claims. In their breach of contract cause of action, plaintiffs allege that Ruderman was required under the contract to provide services with the applicable standard of care, conform plaintiffs' instructions, the LPC plans and DOB plans with each other and secure approval of the as-built conditions from the LPC and DOB. Plaintiffs do not allege that Ruderman made a material representation concerning an intention to perform a duty which was collateral or extraneous to the contract ( see Lee v. Matarrese, 17 A.D.3d 539, 540 [2005] ). Further, there is no allegation that plaintiffs suffered distinct and separate damages as a result of the alleged misrepresentations.
The additional request for punitive damages is not enough to make the damages recoverable for fraud different from contract damages ( see Krantz v. Chateau Stores of Can., Ltd., 256 A.D.2d 186 [1998];Waggoner v. Caruso, 20 Misc.3d 1146[A]; 2008 N.Y. Slip Op 51891[U] [2008], *22).
With respect to the fifth cause of action against Restivo, plaintiff's refer to the misrepresentations he allegedly made in self-certifying the plans with the DOB (i.e. that the plans complied with all relevant laws and code provisions). Similarly, the cause of action against Restivo for fraudulent/negligent misrepresentation is duplicative of the malpractice cause of action in that it arises from the same facts which form the basis of the professional malpractice claim and does not allege distinct damages ( see Bruno v. Trus Joist a Weyerhaeuser Bus., 87 A.D.3d 670, 674 [2011] ).
As a result, the fourth and fifth causes of action for fraudulent/negligent misrepresentation against Ruderman and Restivo are dismissed.
Fraud in the Inducement
Plaintiffs also allege that they were fraudulently induced to enter the contract based on Ruderman's assurances of his expertise with regard to landmarks and qualifications to complete the project However, such a statement amounts only to a misrepresentation of the “intent or ability to perform under the contract” (Gorman v. Fowkes, 97 A.D.3d 726, 727 [2012];see Lax v. Design Quest N.Y. Ltd., 101 A.D.3d 431 [2012][plaintiffs' fraud in the inducement claim based on the alleged misrepresentation by defendants of their expertise and licensing was properly dismissed as duplicative of the breach of contract claims] ). Moreover, the damages sought under this cause of action are identical to those sought for the breach of contract. Therefore, the cause of action against Ruderman for in the inducement is duplicative of the breach of contract claim.
Accordingly, the sixth cause of action for fraud in the inducement is dismissed.
Rescission
Plaintiffs allege that they are entitled to rescission of the contract and the return of a $10,000 fee paid to Ruderman based on the false representations, fraud and deceit of Ruderman. However, the complaint does not properly state a cause of action for rescission as plaintiffs “failed to allege that there is lacking complete and adequate remedy at law' “ (Weinstein v. Natalie Weinstein Design Associates, Inc., 86 A.D.3d 641, 643 [2011] quoting Rudman v. Cowles Communications, 30 N.Y.2d 1, 13 [1972] ). To the contrary, plaintiffs may be fully compensated by monetary damages ( see MBIA Ins. Corp. v. Lynch, 81 A.D.3d 419, 420 [2011] ).
As a result, plaintiffs' seventh cause of action for rescission is dismissed.
Breach of Fiduciary Duty
“[A] cause of action alleging breach of a fiduciary duty, which ... is merely duplicative of a breach of contract claim, cannot stand” (Hylan Elec. Contr., Inc. v. MasTec N. Am., Inc., 74 A.D.3d 1148, 1150 [2010] ). Similar to the causes of action sounding in fraud, the claim for breach of fiduciary duty arises from the same facts giving rise to the claims for breach of contract and professional malpractice and does not allege any distinct damages.
As a result, the eighth cause of action for breach of fiduciary duty is dismissed. GBL § 349
To state a cause of action under GBL § 349, a plaintiff “must, at the threshold, charge conduct that is consumer oriented. The conduct need not be repetitive or recurring but defendant's acts or practices must have a broad impact on consumers at large; [p]rivate contract disputes unique to the parties ... would not fall within the ambit of [General Business Law § 349]' “ (New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 320 [1995], quoting Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 25 [1995] ). In their complaint, plaintiffs make no allegation that the conduct of defendants had a broad impact on consumers at large. Even viewing the complaint most favorably to plaintiffs, it is clear that the dispute herein is private and unique to the parties.
As a result, the tenth cause of action is dismissed.
Plaintiffs' Cross Motion for Summary Judgment
In support of their cross motion for summary judgment on their first and second causes of action, plaintiffs submit the affidavits of Lorraine Gerrity and Michael Zenreich which, as defendants point out, are largely a rehashing of the allegations in the complaint. There has been little, if any, discovery conducted in this matter, and it is noted that plaintiffs have served discovery demands upon defendants despite their contention that no triable issues of fact exist with respect to the breach of contract and malpractice claims. Under the circumstances, plaintiffs' motion for summary judgment is denied without prejudice to renew upon completion of discovery ( see Hall Enters., Inc. v. Liberty Mgt. & Const., Ltd., 37 A.D.3d 658, 659 [2007] ).
The foregoing constitutes the decision and order of the court.