Marc H. Pillinger, Smith Mazure Director Wilkins Young Yagerman Tarallo P.C., New York, New York, for Arthur Femenella and the association of Restoration Specialists, Inc.

Stephen M. Marcusa, Bigham Englar Jones Houston, New York, New York, for Nippon Express Co., Ltd.

OPINION

DEBORAH A. BATTS, United States District Judge.

Chubu-Nippon Broadcasting Company, Ltd. ("CBC") and Tokio Marine and Fire Insurance Company, Ltd., ("Tokio Marine") (collectively "Defendants"), move for Summary Judgment against David Bellis, ("Bellis" or "Plaintiff"), on all claims contained in the Plaintiff's Complaint pursuant to Rule 56 of the Federal Rules of Civil Procedure. Arthur Femenella, ("Femenella"), and The Association of Restoration Specialists, Inc., ("ARS") join the Defendants' summary Judgment Motion and move for Summary Judgment and or to Dismiss the cross-claims asserted by J. Alastair Duncan, ("Duncan"), and J. Alastair Duncan, Ltd., ("JAD"). Nippon Express U.S.A., Inc., ("Nippon" or "NEC") also joins the Defendants' Summary Judgment Motion and moves pursuant to 12(b)(6) to dismiss the Femenella and ARS Third-party Complaint, as well as the Duncan/JAD cross-claims.

At the outset, this Court wishes to comment on the 56.1 Statements submitted by the parties in this case. Defendants Tokio Marine and CBC along with Femenella and ARS filed a joint statement pursuant to Local Civil Rule 56.1 totaling 393 paragraphs and 69 pages, to which Plaintiff responded. plaintiff's response to each paragraph totaled 61 pages. However, instead of citing these lengthy 56.1 statements where Plaintiff's admissions or denials are clearly and easily cross-referenced with the moving parties' statements, both parties submitted separate Notices of Motion laying out the facts each believed to be relevant, and containing no citations to the 56.1 statements already prepared. Defendants also submitted a separate Reply Affidavit totaling 95 pages. By the manner of their submissions the parties have in large part defeated the purpose and utility of Rule 56.1, i.e., to facilitate the determination of summary judgment motions. Further, most facts cited in the Defendants' Memoranda of Law are unaccompanied by any citation to the record. The parties are hereby directed to refrain henceforth from submitting papers to this Court without citations to the record that support the assertions of fact made therein.

The Tokio Marine and CBC Motion for Summary Judgment is DENIED; the Femenella and ARS Motion for Summary Judgment and or to Dismiss is GRANTED; and the NEC Motion to Dismiss is GRANTED.

This case arises as the result of alleged damage sustained by certain Tiffany glass objects owned by Bellis. In his Complaint Plaintiff alleges negligence, bailment, and breach of contract claims against Defendant CBC as well as a breach of contract claim against Defendant Tokio Marine. Tokio Marine asserts a counterclaim against plaintiff for breach of certain duties allegedly owed to it by plaintiff. Defendants collectively, as Third-party Plaintiff 5, assert claims against Duncan (an appraiser of decorative works of art, and President of J. Alastair Duncan, Ltd.), and JAD for fraudulent misrepresentation, negligent misrepresentation, and breach of fiduciary duty. CBC also alleges a breach of contract claim against JAD, and a separate breach of contract claim against ARS. Finally, Tokio Marine and CBC as alleged third-party beneficiaries to a contract between ARS and Femenella assert a breach of contract claim against Femenella as a result of Femenella breaching his obligations to ARS.

ARS, as a Third-party Defendant/Second Third-party Plaintiff asserts two breach of contract counterclaims against CBC. ARS and Femenella also allege two separate contribution and indemnification counterclaims, one against Tokio Marine and the other against both Tokio Marine and CBC. ARS and Femenella allege a counterclaim against Bellis and a cross-claim against Duncan and JAD for complete indemnification, and in the alternative demand judgment over Bellis, Duncan and JAD on the basis of an apportionment of responsibility for any damages suffered by Tokio Marine and CBC. Femenella and ARS also filed a Third-party Complaint against Nippon in which they allege that Nippon acted negligently with respect to the handling and transportation of the Bellis Tiffany, and that they are entitled to indemnification and contribution as a result thereof. Finally, Femenella and ARS assert that as third-party beneficiaries to a contract between Nippon and CBC, an alleged breach of contract by Nippon provides yet an additional basis for recovery against Nippon.

Duncan and JAD assert a cross-claim against Femenella, ARS, and Nippon for complete indemnification or apportionment of responsibility from any judgment against Duncan and JAD and in favor of CBC and Tokio Marine. Duncan and JAD also assert a bad-faith breach of the Insurance Policy counterclaim and an unfair practices counterclaim against Tokio Marine. Against CBC, Duncan and JAD allege a breach of contract counterclaim.

I. BACKGROUND

This dispute involves alleged damage to certain pieces of the Bellis Tiffany Collection exhibited in Japan (the "Japanese Exhibition"). At issue is the amount of damage certain pieces of the Bellis Collection sustained during the time the pieces were in transit to and from the Japanese Exhibition, as well as the time in between — a period beginning September 21, 1990 and ending September 20, 1991 or at such time that the Bellis pieces were returned to the Plaintiff (the "Insurance Period"). However, under its terms, the Insurance Policy that CBC obtained from Tokio Marine not only excluded pre-existing damage, but also damage caused by "inherent vice," that is, the damage caused by the normal wear and tear or an inherent defect in an object. (56.1 Stmts. ¶ 35).

There are only two 56.1 Statements before the Court, one submitted on behalf of CBC, Tokio Marine, Femenella and ARS and the other submitted by Bellis. Where there is no dispute, the 56.1 Statements are cited as "(56.1 Stmts. ¶ ___)", otherwise the CBC et al., 56.1 Statement will be cited as "(Defs.' 56.1 Stmt. ¶ ___)" and the Bellis 56.1 Statement will be cited as 56.1 Stmt. ¶ ___.

The Plaintiff in this civil action, David Bellis, is a collector of glass objects created by Tiffany Company. (56.1 Stmts. ¶ 7). Defendant CBC is a Japanese broadcasting and media company that sponsors major art exhibitions in Japan. (56.1 Stmts. ¶ 1). Defendant Tokio Marine is a Japanese company that provides insurance services and underwrites insurance risks, (56.1 Stmts. ¶ 2), and provided the Insurance Policy for the Tiffany pieces included in the Japanese Exhibition. (56.1 Stmts. ¶ 48). Duncan, an author of several books on Louis Comfort Tiffany and Tiffany Company, is a dealer of Tiffany goods, an appraiser of decorative works of art and the President of JAD. (56.1 Stmts. ¶ 3). JAD organizes and promotes art exhibitions. (56.1 Stmts. ¶ 4). Femenella restores and conserves stained glass and was the President of ARS from 1983 to November 1993. (56.1 Stmts. ¶ 5). ARS was a New Jersey corporation specializing in stained glass restoration, conservation and consultation. (56.1 Stmts. ¶ 6). Nippon is the Company that was hired by CBC to pack, unpack, install, de-install and transport the Tiffany objects selected for the Japanese Exhibition. (56.1 Stmts. ¶ 76).

The parties refer to this as "the Tiffany Company."

In September 1989 to March 1990, certain pieces of the Bellis Collection were displayed in the Smithsonian Museum as part of the American Tiffany Glass Exhibition. (56.1 Stmts. ¶ 9, 10, 14). CBC, through Yoichi Oishi, an employee assigned to CBC's New York branch, learned of the American Tiffany Glass Exhibition and of the possibility that the Exhibition could travel to Japan. (56.1 Stmts. ¶ 22). Oishi and Joichi Kudo, President of Fuji Art, Inc., approached Duncan and asked that he prepare a proposal for a Japanese Tiffany Exhibition which CBC could sponsor. (56.1 Stmts. ¶ 23). On September 19, 1989, Duncan provided Oishi the proposal in which he detailed a 100 piece Tiffany Exhibition in Japan that would include three to four venues. (56.1 Stmts. ¶ 24). Duncan agreed to assume the obligation of selecting the Tiffany objects for the Japanese Exhibition, arranging for the transportation of the Tiffany pieces to be included and supervising the exhibition and installation of the Tiffany pieces while in Japan. (56.1 Stmts. ¶ 25). The formal agreement between the parties was executed on October 19, 1989 (the "JAD/CBC Agreement"). (56.1 Stmts. ¶ 27). Under the terms of the JAD/CBC Agreement CBC agreed to arrange and coordinate at least 3 and no more that 8 exhibitions for the Tiffany pieces in Japan, while JAD agreed to provide a pool of Tiffany work from which CBC could select the Japanese Exhibition pieces. (56.1 Stmts. ¶ 28). In addition, JAD agreed to handle "packing and crating the Tiffany Artwork for shipment to Japan and for return shipment to New York." (Id.). Duncan later received a proposal from Femenella for ARS to provide Duncan with services that Duncan and JAD were required to provide to CBC pursuant to the JAD/CBC Agreement, i.e., picking up the Tiffany Artwork, preparation of initial condition reports and packing the items for overseas shipping. (56.1 Stmts. ¶¶ 29, 31).

One of the Bellis pieces exhibited by the Smithsonian, "Lava Vase #2," sustained damage that Bellis believed resulted from someone banging, bumping, or knocking into it. (56.1 Stmts. ¶ 17). Bellis made a claim for the damage sustained by this Vase and received $80,000 as a result. (56.1 Stmts. ¶ 68). Bellis claims to have intended to send his non-damaged Lava Vase, ("Lava Vase #1"), to Japan, but instead decided to replace it with Lava Vase #2, the damaged vase. (Pl.'s 56.1 Stmt. ¶ 63). Lava Vase #2 possessed a post-damage value of no more than $5,000. (56.1 Stmts. ¶ 65). The "Lava Vase" included in the Japanese Exhibition was insured for $185,000 under the Insurance Policy. (Defs.' 56.1 Stmt. ¶ 69). Plaintiff disputes whether the Lava Vase was in fact insured for $185,000 since he contends, as will be explained in greater detail infra, that the Insurance Policy merely established the limits for any potential claim.

The Agreement also required that JAD "cause Duncan to supervise the packing and crating and shipping of the Tiffany Artwork in Japan." (56.1 Stmts. ¶ 28).

On January 22, 1990, Kudo informed Duncan that CBC was planning to use six exhibition venues for the Japanese Exhibition. (56.1 Stmts. ¶ 32) Duncan sent a facsimile to Kudo on July 24, 1990 and advised him that there were too many cities on the schedule and that the number of venues would have to be reduced so that there could be proper time to "dismantle, crate and reinstall the objects properly." (56.1 Stmts. ¶ 33). CBC decided to limit the Exhibition to just four venues, the Teien Museum in Tokyo, the Kobe City Museum in Kobe, the Electricity Museum Building in Nagoya, and the Citizens Plaza in Toyama. (56.1 Stmts. ¶ 34). Plaintiff claims that although the number of venues was reduced, the time for installation and de-installation was grossly insufficient. (Pl.'s 56.1 Stmt. ¶ 34).

In September 1990, CBC and ARS executed an agreement (the "CBC-ARS Agreement"), (56.1 Stmts. ¶ 36), whereby ARS agreed to "furnish all labor, materials, transportation costs and expert supervision for the proper and complete performance of the . . . (2) Preparation of initial condition reports for all of the objects." (56.1 Stmts. ¶ 38). The CBC-ARS Agreement also required ARS to provide the expert services of Femenella and to supervise the "[i]nspect[ion] of the objects (while) being unpacked, and [to] assist CBC personnel in the annotation of the initial condition reports." (56.1 Stmts. ¶ 38). Under the CBC-ARS Agreement ARS assumed liability for any damage to the objects in the Exhibition directly resulting from the willful destruction by or the gross negligence of ARS or its employees that was not covered by the All-Risk insurance policy provided by CBC. (56.1 Stmts. ¶ 39). CBC agreed to provide an insurance policy that would "cover all of the objects it he [sic] traveling exhibition from the time they are picked up from the lenders . . . until they are returned to the lenders after the exhibition in Japan." (56.1 Stmts. ¶ 40). The CBC-ARS Agreement stated that Duncan would provide "the appropriate values for which the objects will be insured," and that CBC would "be responsible for the objects during the [Insurance Period] . . . ." (Id.; see also 56.1 Stmts. ¶¶ 41, 42). A final list of the eighty Tiffany works slated for the Japanese Exhibition, as well as their insurance values was provided by McCaffrey on behalf of Duncan to Tokio Marine in late September 1990. (56.1 Stmts. ¶ 46).

McCaffrey appears to be either an employee of JAD or an assistant to Duncan.

CBC selected Tokio Marine to insure the Tiffany glass objects to and from Japan and while on exhibition there. (56.1 Stmts. ¶ 48). On September 26, 1990, Tokio Marine issued the Insurance Policy for the Japanese Exhibition. (56.1 Stmts. ¶ 49). Defendants and the Plaintiff disagree on the import of the valuations of the Bellis Tiffany provided to Tokio Marine. According to Defendants, the insurance values were supposed to be and in fact did equal the fair market values of the Bellis pieces to be included in the Exhibition. (Defs.' 56.1 Stmt. ¶ 47). Plaintiff, however, denies that the values were supposed to equal the fair market value of his pieces, and asserts that the fair market value of the pieces was at least $29,650,000. (Pl.'s 56.1 Stmts. ¶ 47). The parties also disagree on the type of policy issued. Plaintiff contends that Tokio Marine issued an "open" policy which set the policy limits for the Bellis objects as a group. (Pl.'s 56.1 Stmt. ¶ 50). Under the Bellis conception of the policy, the value given to any one piece was immaterial since values were assigned arbitrarily so long as the total value would not exceed the limit set for the Policy. Defendants contend that the policy was an agreed value Policy where Tokio Marine agreed to insure the Tiffany objects at their individual fair market values. (Defs.' 56.1 Stmts. ¶ 50). Whatever the nature of the policy issued by Tokio Marine, it is undisputed that each of Bellis' 16 Tiffany pieces selected for the Japanese Exhibition were given values, the sum of which totaled $12,615,000. (56.1 Stmts. ¶ 51). However, Bellis was never consulted regarding the amounts established for the individual pieces. (Pl.s' 56.1 Stmts. ¶ 51). Apparently, Duncan notified Plaintiff that he believed the Insurance Policy undervalued the Plaintiff's Tiffany pieces traveling to Japan. (Pl.'s 56.1 Stmt. ¶ 53). Bellis later contacted Duncan and instructed him to have the Insurance Policy values increased. (Id.). Although Duncan was under pressure to submit low valuations since the premium had already been established by CBC and could not be modified, (Id.), after several hours of negotiations on December 4, 1990, CBC representatives nevertheless agreed to modify the values of the Bellis Tiffany. (56.1 Stmts. ¶¶ 59, 60). The values were modified for each of the Bellis pieces, with the new aggregate value totaling $15,920,000. (56.1 Stmts. ¶ 61). According to Plaintiff, this negotiation did not change the "open" nature of the Insurance Policy. (Pl.'s 56.1 Stmt. ¶¶ 60).

In what is a somewhat confused response, the Plaintiff represents that "the proposed list reflected what a buyer was willing to pay and what a seller was willing to accept." (56.1 Stmts. 47). This formulation appears to approximate the fair market value concept.

The Insurance Policy was formally revised by Tokio Marine on February 28, 1991. (56.1 Stmts. ¶ 66).

In December, ARS arranged for the 52 crates containing the Japanese Exhibition pieces to be shipped to the Narita Airport in Tokyo. (56.1 Stmts. ¶ 71). In January 1991 the Tiffany objects were transported from the Narita Airport to a customs warehouse and then to the Teien Art Museum in Tokyo, the site of the first exhibition. (56.1 Stmts. ¶ 73). After the Tiffany pieces arrived at the Teien Museum, Femenella and Machiko Takanami, a curator hired by the Teien Museum, inspected each of the Tiffany pieces. (56.1 Stmts. ¶ 74). Femenella did not observe any new damage at the time the Tiffany pieces were unpacked and mounted by NEC. (56.1 Stmts. ¶¶ 75-6). However, Plaintiff contends that these inspections were too cursory, making it impossible to identify the new damage, if any, that was present at that time. (Pl.'s 56.1 Stmt. ¶ 74-5).

CBC hired NEC to pack, unpack, install, de-install and transport the Tiffany objects selected for the Japanese Exhibition. (56.1 Stmts. ¶ 76). According to Defendants, NEC is known in Japan to be a first-class handler and transporter of art objects. (56.1 Stmts. ¶ 77). Plaintiff denies knowledge sufficient to form a belief as to the truth of NEC's reputation and states that NEC was in fact not a first-class handler of Tiffany pieces. (Pl.'s 56.1 Stmt. ¶ 77).

Apparently, a proper inspection would have taken 5 five to six days to complete. (Pl.'s 56.1 Stmt. ¶ 75).

Defendants contend that NEC suggested to CBC that new crates, ones lighter than those provided by ARS, be constructed for transporting the cartons containing the lamp shades and chandeliers to and from the venues in Japan. (Defs.' 56.1 Stmt. ¶ 78). Apparently, NEC believed that the lighter crates would make the Tiffany pieces easier to handle. (Defs.' 56.1 Stmt. ¶ 78). Before these crates were constructed, however, NEC and CBC consulted with Femenella. (Defs.' 56.1 Stmt. ¶ 79). Plaintiff denies that lighter crates were ever used or constructed and states that according to Femenella some of the Tiffany pieces were transported without their exterior wooden crates in order to save space and facilitate the packing and unpacking process. (Pl.'s 56.1 Stmt. ¶¶ 78-9).

While the Tiffany pieces were being installed at the Electricity Museum Building an "5" hook dropped on and damaged the Bellis Floral Chandelier. (56.1 Stmts. ¶ 83). The Defendants and the Plaintiff dispute the extent of the damage, and Femenella's characterization of the damage once he examined the chandelier. (56.1 Stmts. ¶¶ 84-5). With the exception of the "5" hook incident, NEC never reported any damage as required by its internal policy. (56.1 Stmts. ¶¶ 81-2). When Bellis asked Femenella whether any damage had occurred to his pieces in transit between the Japanese venues, (56.1 Stmts. ¶ 87), Femenella told Bellis that except for the Floral Chandelier, no damage occurred to any of his pieces. (56.1 Stmts. ¶ 88). Plaintiff admits that while Femenella inspected the pieces, the inspection was too cursory, and could only identify major damage. (Pl.'s 56.1 Stmt. ¶ 88). In addition, Duncan who was present at each of the venues and personally examined every item at each of the venues, did not observe any damage to the Bellis pieces. (56.1 Stmts. ¶¶ 89, 90, 91). Plaintiff contends, however, that Duncan's inspections were also cursory and could not have revealed all of the damage to Plaintiff's pieces. (Pl.'s 56.1 Stmt. ¶ 91). Further, Duncan did not see the pieces after they were de-installed in Toyama and shipped to Kawasaki. (Pl.'s 56.1 Stmt. ¶ 91).

The parties dispute what damages, if any, Bellis was able to see during his time in Japan. The Defendants claim that Bellis did not see any new damage. (Defs.' 56.1 Stmt. ¶¶ 99, 103, 105, 107, 109). Bellis claims that although he was present in Japan at each of the venues for the installation and deinstallation of his pieces, (56.1 Stmts. ¶ 93), and was able to see and touch his pieces, he did not inspect them in a manner necessary to observe any new damage. (Pl.'s 56.1 Stmt. ¶ 94). Further, Bellis asserts that since he knew there was pre-existing damage to the pieces he was not concerned with what damage he may have noticed. (Pl.'s 56.1 Stmts. ¶¶ 97, 99, 103).

After the Japanese Exhibition the Tiffany objects, possibly with the exception of the Bellis Tiffany windows, were moved to a warehouse for inspection prior to their shipment back to the United States. (56.1 Stmts. ¶ 110). While the Tiffany pieces were at the warehouse, Femenella examined the pieces for "gross" damage. (56.1 Stmts. ¶¶ 111, 112). Defendants claim that with the exception of the damage caused by the "5" hook incident, Femenella did not notice any damage to the Tiffany pieces, gross or otherwise. (Defs.' 56.1 Stmt. ¶¶ 114-15). With respect to this examination, Plaintiff again asserts that the examinations done in Japan were simply too cursory to see any damage that might have existed. (Pl.'s 56.1 Stmt. ¶¶ 114-15). Further, Plaintiff points out that Femenella did not believe that all the Tiffany pieces were inspected at the warehouse. (Pl.'s 56.1 Stmt. ¶ 115).

According to Femenella, "gross damage" is that damage that can readily be seen in ambient light or with minor auxiliary light through a quick cursory examination. (56.1 Stmts. ¶ 113).

The Bellis Tiffany pieces were shipped to the United States in the same crates used to send them to Japan. (56.1 Stmts. ¶ 119). JAL, the airline used to transport the pieces, does not have any records indicating that damage occurred to the Bellis pieces during transit. (56.1 Stmts. ¶ 120). However, contrary to the standard practice and Femenella's recommendation, a courier did not accompany the items to the United States. (Pl.'s 56.1 Stmt. ¶ 120). Plaintiff contends that the courier's absence explains the lack of any record indicating damage occurred to the pieces during the flight.

In September 1991 Femenella picked up the crates containing the Tiffany pieces at the Kennedy Airport. (56.1 Stmts. ¶ 121). Although Plaintiff claims that Femenella's inspection of the crates was cursory and that damage did in fact exist, the parties agree that Femenella did not notice any damage to the wooden crates at the airport. (56.1 Stmts. ¶ 122). Femenella signed cargo receipts indicating that there were "no exceptions." (56.1 Stmts. ¶ 123). Femenella understood the phrase "no exceptions" to mean that no known damage had occurred during the shipment from Japan to New York. (56.1 Stmts. ¶ 124).

On September 30, 1991, at Bellis' instruction, Femenella delivered the crates containing the Bellis Tiffany to a residence Bellis owned in New Jersey, and placed the crates in the garage. (56.1 Stmts. ¶¶ 125, 128). While in the Bellis garage Femenella opened the crate containing the Peacock window and closed it quickly once he noticed "some cracks." (56.1 Stmts. ¶ 129). The parties dispute whether other crates were opened and whether Femenella had a specific recollection of the condition of the pieces that he saw in the garage. (56.1 Stmts. ¶ 132). However, according to Femenella, "it appeared to [him] as though there had been some damage [which] might have been extensive. . . (Pl.'s 56.1 Stmt. ¶ 132). Once Femenella saw the damage he decided that instead of continuing with the inspection, he would call CBC so that they could proceed in any way they saw fit. (56.1 Stmts. ¶ 133).

Further, after looking at the Bellis pieces Femenella was of the opinion that "the damage that . . . exists in the windows and lamps that belong to Mr. Bellis and were part of the recent Japan Masterworks Exhibition, [was] the result of the following: 1/Existing damage. . . . 2/Direct damage. . . . 3/ Indirect damage. This [indirect] damage occurred while the objects were in transit between venues and between Japan and the United States." (Femenella Ex. 97). In addition, Femenella has stated that he has "not seen a collection in more pristine condition nor found anyone as careful and dedicated to maintaining their objects in excellent condition as Mr. Bellis," and that in his opinion "the new damage now visible in the artworks described in Mr. Bellis' claim was caused by the inadvertent mishandling of the objects while in, and on the way home from, Japan." (Id.)

On October 10, 1991, Bellis, Femenella, and an insurance adjuster who represented Tokio Marine traveled to inspect the Bellis Japanese Exhibition pieces. (56.1 Stmts. ¶ 137). of the six hours the insurance adjuster spent at the Bellis residence (56.1 Stmts. ¶ 138), the actual inspection of the pieces and the packing material only lasted 2-3 hours, (Pl.'s 56.1 Stmt. ¶¶ 138, 140). During the inspection all the cracks the adjuster noticed were marked with white tape. (56.1 Stmts. ¶ 146). When Bellis complained to the adjuster and told him to conduct a more thorough inspection, Bellis was told to conduct his own inspection. (Pl.'s 56.1 Stmt. ¶¶ 141, 147).

The adjuster issued a report on October 21, 1991 that detailed the damage to 10 of the Bellis pieces that he observed during his inspection. (56.1 Stmts. ¶ 154). The parties dispute whether, pursuant to the adjuster's suggestion, Bellis conducted his own inspection around the time after the October 10, 1991 inspection. Defendants point out that Bellis did not employ any photographers or experts to document the damage or inspect his pieces. (56.1 Stmts. ¶¶ 157-60). Bellis claims to have inspected in fact his pieces in May, 1992. (Pl.'s 56.1 Stmt. ¶ 155). Bellis admits that he did not hire photographers or experts to inspect the damage, but states that he was under no obligation to do so. (Pl.'s 56.1 Stmt. ¶¶ 158, 160). Further, Bellis claims that one of his representatives tried to schedule a time for Tokio Marine to inspect the pieces but that they "balked at the suggestion." (Pl.'s 56.1 Stmt. ¶ 160). The parties also dispute who was obligated to obtain the condition reports prepared before the pieces were sent to Japan. Defendants suggest that Bellis was obligated to obtain the condition reports and to provide those reports to the adjuster. (56.1 Stmts. ¶¶ 156, 163-65). Bellis refutes this assertion and states that the condition reports that were prepared by Femenella, Defendants' agent, were given to another of Defendants' agents in Japan and thus any delay in obtaining the condition reports was occasioned by Defendants' own lack of effort. (Pl.'s 56.1 Stmt. ¶ 162)

In February 1992, Bellis contacted Joan Meyer, a Tiffany glass restorer, and asked that she inspect some of his pieces. (56.1 Stmts. ¶¶ 159, 183). Bellis also contacted William Chadwick, another restorer, and asked that he inspect and estimate the costs to repair certain pieces. (56.1 Stmts. ¶¶ 159, 181). On March 8, 1992 in a letter to Bellis, Meyer listed the cracks she found in eight of the Bellis pieces. (56.1 Stmts. ¶ 184). Shortly thereafter in April 1992, Bellis submitted an Insurance Claim in the amount of $9,776,390.50 as an effort to start the insurance claim process. (56.1 Stmts. ¶¶ 185, 188). Although Plaintiff wanted the figure for the total number of cracks submitted with his Insurance Claim to be as accurate as possible, he viewed the figures submitted with his claim as simply a "worksheet." (Pl.'s 56.1 Stmt. ¶ 188).

After the Insurance Claim was submitted and before May 1992, Bellis received the condition reports and conducted a new "critical inspection" of his pieces. (56.1 Stmts. ¶¶ 195-96). In his "critical inspection" Bellis found cracks that were not identified in the April 1992 Insurance Claim, including cracks in two Tiffany works not listed in that claim. (56.1 Stmts. ¶¶ 197-98). Apparently when the Defendants sent their expert, Judy Sloan, to examine the Plaintiff's Tiffany she did not produce an independent count, but rather verified the Plaintiff's count. (P1.'s 56.1 Stmt. ¶¶ 196, 214). Plaintiff even details one incident where a Tiffany specialist for the Defense, upon noticing additional damage, was instructed by an employee from Tokio Marine not to say anything since the damage was "for [Plaintiff] to find out." (Pl.'s 56.1 Stmt. ¶ 196).

Bellis used the word "critical" in describing his own examination to denote the necessity of the inspection. (Pl.'s 56.1 Stmt. ¶ 196). Further Bellis claims that he is not an expert in Tiffany and was thus unable to identify all the damage. (Id.)

Plaintiff submitted a Revised Insurance Claim ("Revised Claim") on August 3, 1992, where he included the damage he observed during his critical inspection. (56.1 Stmts. ¶ 210). However, Plaintiff contends that this critical inspection was not thorough and was still just a starting point in the claims process. (56.1 Stmts. ¶ 210). After Bellis submitted his Revised Claim he again asked specialists to examine the 10 Tiffany pieces where he had identified damage. (56.1 Stmts. ¶¶ 211, 214-219, 228). The subsequent counts yielded new crack totals. (56.1 Stmts. ¶¶ 220, 221, 229). According to the Plaintiff there was not an increase in the number of cracks each piece contained but only an increase in the number of cracks observed. (56.1 Stmts. ¶¶ 220, 221). After the submission of the Revised Claim, Defendants also hired experts to examine the Bellis Tiffany pieces claimed to be damaged and the packing material used to ship those items. (56.1 Stmts. ¶¶ 230-32, 240).

On September 15, 1993 counsel for Tokio Marine advised the Plaintiff that, based upon the information provided by Tokio Marine experts, the Bellis insurance claim had been denied. (56.1 Stmts. ¶ 242). Plaintiff then commenced the instant action on September 20, 1993. (56.1 Stmts. ¶ 243). Since the filing of this action the number of cracks communicated to or observed by the Defendants have increased. (56.1 Stmts. ¶¶ 257, 258, 282-85, 290-91, 294, 296). However, as Plaintiff points out, one of the Defendants' own experts does not believe that the increase in the crack total is attributable to recent handling. (See Sloan Ex. 2). Rather, "[t]he increase in the number of marked pieces between 1993 and 1996 is largely due . . . to the increased amount of time and effort that has been spent examining the objects." (Id.) The Plaintiff's experts opine that the damage to the Bellis Tiffany took place during the Insurance Period and not as the result of post-Exhibition handling. (56.1 Stmts. ¶¶ 275, 307, 326, 343, 377). Nevertheless, according to Defendants, the Plaintiff's lack of any "specific evidence as to the time, date and place where each object was damaged" makes his claim too conclusory to withstand Defendants' Motion for Summary Judgment.

The Court's reference to any person as an "expert" in this Opinion is not meant to indicate any legal finding that said person is in fact qualified as an expert under Federal Rule of Evidence 703.

To be sure, the Defendants' expert was also of the opinion that "all of the damage marked by Mr. Bellis, with the exception of that noted to the Floral Trellis shade as having happened in Japan, predates the Japan exhibition venues." (Sloan Ex. 2).

II. DISCUSSION

Defendants Tokio Marine and CBC argue that summary judgment should be granted in this case since "the record is devoid of any evidence that any damage now claimed by Bellis occurred during the one year period that the insurance policy at issue was in effect." (Defs.' Mem. Law at 1, (emphasis added)). The real problem the Defendants have with the Plaintiff's Complaint, however, is not that Plaintiff wishes to recover for damage that allegedly occurred during the Insurance Period, but that the expert reports upon which Plaintiff relies are the product of various examinations that took place, in some cases, several years after Plaintiff's Tiffany objects returned from Japan. (Id. at 2). In support of their argument that no damage to Plaintiff's Tiffany occurred in Japan, Defendants cite to the various inspections that took place of the pieces in Japan. (Id. at 4-5). Further, Defendants rely heavily upon the Plaintiff's statement in interrogatories that he had no "specific evidence as to the time, date and place where each object was damaged" (Defs.' Ex. G response 21(a)). The Court notes, however, that Plaintiff's response upon which Defendants rely excludes the "substantial damage . . . to the Peacock and Cockatoo windows [that occurred] some time after they were finally packed in Japan and prior to their return to Mr. Bellis." (Defs.' Ex. G response 21(a)).

A. Summary Judgment

The Court's role on a motion for summary judgment is not to resolve disputed issues of fact, but to determine whether there are any genuine issues for trial. Summary judgment may be granted only when there is no genuine issue of material fact remaining for trial, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (stating that when granting a motion for summary judgment, "the requirement is that there be no genuine issue of material fact"); Corselli v. Coughlin, 842 F.2d 23, 25 (2d Cir. 1988) (holding that summary judgment was inappropriate when there were "obvious factual conflicts in the record").

In assessing whether summary judgment should be granted, the Court must "resolv[e] ambiguities and draw reasonable inferences against the moving party." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986). "Viewing the evidence produced in the light most favorable to the nonmovant, if a rational trier could not find for the nonmovant, then there is no genuine issue of material fact and entry of summary judgment is appropriate." Binder v. Long Island Lighting Co., 933 F.2d 187, 191 (2d Cir. 1991)

If the nonmovant's evidence "is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted). A party may not rely upon "mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Knight, 804 F.2d at 12; see also Podell v. Citicorp Diners Club, Inc., 112 F.3d 98 (2d Cir. 1997) ("The litigant opposing summary judgment may not rest upon mere conclusory allegations or denials, but must bring forward some affirmative indication that his version of relevant events is not fanciful.") (internal quotations omitted).

1. Defendants' Motion for Summary Judgment

a. Plaintiff's Breach of Contract Claim

Plaintiff claims than he entered into an oral contract with CBC in New York. (Pl.'s Compl. ¶ 5). Under the terms of the contract, Plaintiff allegedly agreed to loan 16 of his Tiffany pieces to CBC for the CBC-sponsored Tiffany Exhibition to take place in Japan. (Id.) Bellis further alleges in his Complaint that CBC for its part, agreed to pay Bellis an exhibitor's fee, to return his Tiffany in the same condition as it was delivered to CBC, and to provide Bellis insurance to protect against damage to his Tiffany while the pieces traveled to and from and in Japan. (Id.) Despite Defendants' admission in its Second Amended Answer that "CBC, through third parties including, inter alia, J. Alastair Duncan and J. Alastair Duncan, Ltd. entered into an arrangement for the inclusion of a number of lamps, windows and other objects created by Louis Comfort Tiffany and owned by David Bellis . . . in an exhibition entitled 'Masterworks of Louis Comfort Tiffany,'" (Defs.' Second Amended Answer ¶ 4) (emphasis added), CBC now contends that no contract existed between CBC and Bellis and argues that Bellis has not alleged any terms and conditions of his purported contract.

CBC also admitted that it purchased an insurance policy from Tokio Marine in connection with the CBC Exhibition. (Id.).

To state a claim in federal court for breach of contract under New York law, a complaint need only allege (1) the existence of an agreement, (2) adequate performance of the contract by the plaintiff, (3) breach of contract by the defendant, and (4) damages. Tagare v. NYNEX Network Sys. Co., 921 F. Supp. 1146, 1149 (S.D.N.Y. 1996); see also 5 Charles A. Wright Arthur R. Miller, Federal Practice and Procedure § 1235 (2d ed. 1990). Under New York law, a contract need not be in writing in order to be enforceable. See IBS Ketel, Ltd. v. Korea Telecom America, Inc., No. 98 Civ. 4856, 2000 WL 821013, at *3 (S.D.N.Y. June 22, 2000) (citingShaftel v. Dadras, 39 F. Supp. 2 d 217, 225 (E.D.N.Y. 1999)). Oral agreements are binding unless the parties have explicitly indicated their intention to be bound only by an executed written agreement. Id. (citingDiMario v. Coppola, 10 F. Supp.2d 213, 220 (E.D.N.Y. 1998)).

Here, the parties do not dispute the nature of the agreement, they dispute its existence. Defendants' admission that CBC entered into an "arrangement" to have the Bellis Tiffany displayed in Japan is alone enough to create a material issue of fact for trial on this claim. Additionally, when Bellis sought to have the Insurance Policy value on his Tiffany pieces increased, he met with representatives from CBC and after several hours of "discussion . . . [these representatives] agreed to modified increases." (56.1 Stmts. ¶ 60). The use of the word "arrangement" instead of contract or agreement, and the use of "discussion" instead of "negotiation" does not extinguish the agreement that appears to have existed between the parties. The actual existence of the agreement, of course, is a question of fact for the jury. To the extent that what is really at issue is the terms of the agreement between Bellis and CBC, this is also a disputed material fact that requires a jury determination. Therefore, Defendants' Summary Judgment Motion on Plaintiff's breach of contract claim is DENIED.

The existence of the alleged agreement is also evidenced by the Duncan deposition testimony in which he represents that Bellis conditioned the release of his Tiffany pieces upon the upward revision the insurance values. (Duncan Dep. at 413).

b. Plaintiff's Bailment Claim

CBC argues that Plaintiff's breach of bailment claim must fail as a matter of law since Plaintiff cannot show that the damage to the bailed property — the Plaintiff's Tiffany pieces — was caused by a lack of reasonable care in handling the property. (Defs.' Mem. Law at 7). In its reply CBC also raises the argument that Plaintiff cannot demonstrate CBC served as a bailee; this argument, however, will not be considered here. See Carbonell v. Acrish, 154 F. Supp.2d 552, 561 (S.D.N.Y. 2001) (stating that a court need not consider arguments raised for the first time in the reply brief) (citing Playboy Enter. Inc. v. Dumas, 960 F. Supp. 710, 720 n. 7 (S.D.N.Y. 1997)) (collecting cases).

Bailment is defined as a delivery of personalty for some particular purpose, or on mere deposit, upon a contract express or implied, that after the purpose has been fulfilled it shall be redelivered to the person who delivered it, or otherwise dealt with according to his directions, or kept until he reclaims it, as the case may be. Herrington v. Verrilli, 151 F. Supp.2d 449, 457 (S.D.N.Y. 2001); Chilewich Partners v. M.V. Alligator Fortune, 853 F. Supp. 744, 756 (S.D.N.Y. 1994) (citing 8 C.J.S. Bailment § 2); see also Ellish v. Airport Parking Co. of America, Inc., 345 N.Y.S.2d 650, 653 (N.Y.App.Div. 1973) ("A bailment is . . . merely a special kind of contract; it describes a result which in many instances does not flow from the conscious promises of the parties made in a bargaining process but from what the law regards as a fair approximation of their expectations." (citation omitted)). The elements of a bailment are the intent to create a bailment, delivery of possession of the bailed items, and acceptance of the items by the bailee. Chilewich Partners, 853 F. Supp. at 756 (citing 8 C.J.S. § 19). Once the contractual relationship is established, a bailor makes out a prima facie case for negligence for breach of bailment by establishing that the goods were delivered in a good condition and returned in damaged condition. Zurich Ins. Group. v. Grandurismo, Inc., No. 00 Civ. 980, 2000 WL 1677941, at *3 (S.D.N.Y. Nov. 8, 2000) (citing Leather's Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 812 (2d Cir. 1971). Once the plaintiff has satisfied the prima facie requirements, the burden of production shifts to the bailee to demonstrate that "the cause of the loss was not due to his negligence." Id.

Defendants argue that Plaintiff has not established the existence of aprima facie case. According to Defendants, Plaintiff cannot establish that the damage in fact occurred during the course of the bailment. Defendants' construction of the Plaintiff's burden at this stage in the litigation is too high. Plaintiff need not prove at this time that the damage of which he complains occurred during the Insurance Period, rather he must demonstrate that a material fact exists with respect to when the damage occurred. The record indicates that condition reports were issued prior to the shipment of the goods to Japan and that some damage occurred while the Plaintiff's pieces were exhibited. Further, Plaintiff has had specialists examine his Tiffany pieces, and these specialists have concluded that the pieces were damaged during the Insurance Period. It is clear to this Court that Plaintiff's claim is based upon more than just conclusory allegations. Since it cannot be said that no reasonable juror could find for the Plaintiff on this cause of action, Defendants' Summary Judgment Motion is DENIED on Plaintiff's bailment claim.

c. Plaintiff's Negligence Claim

Plaintiff also alleges that CBC was negligent in failing to use due care in handling the Bellis Tiffany Objects and thereby substantially damaged ten of the Bellis pieces. (Compl. ¶ 12). With respect to Plaintiff's negligence claim, CBC argues that Plaintiff is unable to establish damages, or proximate cause. The crux of CBC's argument on the Plaintiff's negligence claim is that from April 1992, when Plaintiff submitted his Insurance Claim, to January 1997, when Plaintiff's final expert examined the Tiffany objects, an ever increasing number of cracks and imperfections were noticed, and that during this entire time the Plaintiff's Tiffany objects were in Plaintiff's, rather than CBC's, control. (Defs.' Mem. Law. at 8).

"Under New York law . . . a plaintiff must establish three elements to prevail on a negligence claim: '(1) the existence of a duty on defendant's part as to [sic] plaintiff; (2) a breach of this duty; and (3) injury to the plaintiff as a result the thereof.'" Alfaro v. Wal-Mart Stores, Inc. 210 F.3d 111, 114 (2d Cir. 2000) (quoting Akins v. Glens Falls City Sch. Dist., 53 N.Y.2d 325, 333 (1981)). It is well settled that a simple breach of contract is not considered a tort unless a legal duty independent of the contact itself has been violated. Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 389 (1987). This legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract. Id. A legal duty independent of contractual relations may be imposed by law as incident to the parties' relationship. Sommer v. Federal Signal Corp., 583 N.Y.S.2d 957, 961 (1992). "A duty extraneous to the contract often exists where the contract accompanies some relation between the parties out of which arises a duty of affirmative care, as in cases involving a bailor and bailee, public carrier and passenger, innkeeper and guest, lawyer and client, or principal and agent." A.B. Realty Corp. v. Metropolitan Life Ins. Co., No. 3:98Cv01592, 2001 WL 1134612, at *6 (D. Conn. Sept. 7, 2001) (citing Broadway National Bank v. Barton-Russell Corp., 585 N.Y.S.2d 933, 943 (1992).

Under the Federal Rules of Civil Procedure parties are permitted to plead alternative theories of recovery. Fed.R.Civ.P. 8(e)(2). Since the parties dispute the terms of the oral contract Plaintiff alleges existed, a jury could find that, in fact, the alleged contract did not exist, or that the agreement did not include all the terms Plaintiff alleges. These possibilities make it imprudent to dismiss the negligence claim even though it alleges a breach of a contractual element. Further, the existence of the bailor/bailee relationship means that even without the contractual element that Plaintiff alleges to exist, specifically, the agreement that CBC would return Bellis' Tiffany to him in the same condition it was received by CBC, CBC, as an alleged bailee, may still be held liable under a negligence theory for failing to keep the Plaintiff's Tiffany pieces in the same condition as they were when provided to CBC. Having found that the Plaintiff has pled properly both his negligence claim and his breach of contract claim, the Court for the reasons already stated, is unpersuaded by the Defendants' argument that there is no material fact with respect to the damages sustained by the Bellis Tiffany.

The Court finds Defendants' proximate cause theory similarly unpersuasive. Proximate or legal cause is defined as that which in a natural sequence, unbroken by any new cause, produces that event, i.e., the damage to the Bellis Tiffany, and without which that event would not have occurred. See Rider v. Syracuse Rapid Transit Ry. Co., 171 N.Y. 139, 147 (1902) (quoted in Caraballo v. United States, 830 F.2d 19, 22 (2d Cir. 1987)). Plaintiff's damage is proximately caused by an act, or a failure to act, whenever it appears from the evidence in the case that the act or omission played a substantial part in bringing about or actually causing the damage, and that the damage was either a direct result or a reasonably probable consequence of the act or omission. Jund v. Town of Hempstead, 941 F.2d 1271, 1286 (2d Cir. 1991) (citing E. Devitt, C. Blackinar M. Wolff, Federal Jury Practice and Instructions: Civil § 80.18, at 170 (4th ed. 1987)). In discharging the burden to provide "specific facts" demonstrating "that there is a genuine issue for trial," Fed.R.Civ.P. 56(e), and even during trial, "[t]he plaintiff is not required to produce direct evidence in order to prove proximate cause to 'a mathematical certainty.'" Olejniczak v. E.I. Du Pont De Nemours Co., 998 F. Supp. 274, 278 (W.D.N.Y. 1998) (quoting Hurley v. Marriot Corp., No. 93 Civ. 1544, No. 94 Civ. 117, 1995 WL 694614, at *4 (N.D.N.Y. Nov. 21, 1995). The causal sequence rather may be inferred from circumstantial evidence or common knowledge. Id. Proximate cause is usually a question of fact for the jury to decide. See Packer v. Skid Roe, Inc., 938 F. Supp. 193, 196 (S.D.N.Y. 1996) ("Issues of proximate cause are normally questions of fact for the jury to decide, unless the court concludes that a reasonable jury could reach only one conclusion."); see also Joblon v. Solow, 23 F. Supp.2d 411, 413 (S.D.N.Y. 1998) ("Generally, issues of proximate cause are questions of fact appropriate for a jury to decide.").

This Court finds that Plaintiff has met its burden at this time with respect to proximate cause, and the Defendants cite no cases in support of their contention that proximate cause is absent here. Plaintiff has set forth specific facts to permit a finder of fact to infer the existence of proximate case. The parties agree that NEC approached CBC and suggested that lighter crates be used to transport some of the Bellis pieces in Japan. (56.1 Stmts. ¶ 78). The parties also agree that CBC and NEC consulted with Femenella on this issue. However, the parties dispute whether the lighter crates were ever used. (Pl.'s 56.1 Stmt. ¶¶ 78-9). Plaintiff claims that during the transportation of the Tiffany in Japan the outer protective wooden crates were actually abandoned. (Femenella Dep. Ex. 97). Femenella makes clear in his deposition that he objected to the abandonment of the wooden crates but that he was told "[using the wooden crates] was really a problem because of the time and the budget, [and their use would require having] to get many more employees to be able to open things and close things." (Femenella Dep. at 1208-09). According to Femenella he stated his preference for the wooden crates and added "[i]f you want to move to this that is your decision." (Id.) These facts raise the inference that CBC participated in the decision not to use the wooden crates in order to cut costs. A fact finder could use these facts to infer CBC acted negligently with respect to the transportation of the Bellis Tiffany and thereby proximately caused the damage Plaintiff alleges to have suffered. Accordingly, Defendants' Summary Judgment Motion on Plaintiff's negligence claim is DENIED.

Defendants claim that Plaintiff has improperly brought suit against CBC alone, and that it is improper to hold CBC responsible for all the damage sustained by the Bellis Tiffany. If Defendants believed that other parties contributed to the damage to Plaintiff's property, Defendants could have brought a contribution claim against these parties, pursuant to N.Y. Civ. Prac. L. R. § 1401.

d. Plaintiff's Claim for Reimbursement from Insurer

In support of its Summary Judgment Motion on Plaintiff's claim for reimbursement under the Insurance Policy, Tokio Marine makes two arguments. Tokio Marine asserts that (1) Plaintiff is unable to establish that the damage to the Bellis Tiffany objects occurred during the Insurance Period and (2) that the doctrine of uberrimae fidei requires that the Insurance Policy be declared void. For the reasons already set forth above, the issue of whether the Bellis Tiffany was in fact damaged during the Insurance Period is a material fact that a jury must decide. Further, and as discussed in greater detail infra, the Defendants have not demonstrated the factual predicate necessary for the doctrine ofuberrimae fidei to apply. Accordingly, Tokio Marine's Motion for Summary Judgment on this claim is DENIED.

Defendants, without providing any support, argue that the Insurance Contract at issue in this case is a marine insurance contract, and that as such the doctrine of uberrimae fidei applies. Under the doctrine of uberrimae fidei the parties to a marine insurance policy must accord each other the highest degree of good faith. In re Balfour MacLaine int'l Ltd., 85 F.3d 68, 81 (2d Cir. 1996); Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 13 (2d Cir. 1986). This obligation requires that the party seeking insurance "disclose all circumstances known to him which materially affect the risk." Puritan Ins. Co. v. Eagle S.S. Co. S.A., 779 F.2d 866, 870 (2d Cir. 1985). A fact is not material unless it is something which would have controlled the underwriter's decision to extend a policy to the applicant. Id. at 871 (citing Btesh v. Royal Ins. Co., Ltd., of Liverpool, 49 F.2d 720, 721 (2d Cir. 1931)).

New York Insurance Law § 1113 (20) in relevant part states that:

"Marine and inland marine insurance," means insurance against any and all kinds of loss or damage to:

(A) Vessels, hulls, craft, aircraft, cars, automobiles, trailers and vehicles of every kind, and all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builder's risks and all personal property floater risks . . .

In this chapter "inland marine" insurance shall not include insurance of vessels, crafts, their cargoes, marine builders' risks, or other similar risks, commonly insured only under ocean marine insurance policies.

The Court notes that in their 56.1 Statements the parties disputed whether or not English law governs the instant Insurance Policy. (56.1 Stmts. 91 49). However, despite this dispute both the Defendants CBC and Tokio Marine as well as the Plaintiff have cited this Court to exclusively Second Circuit and New York case law rather than to English law. Where parties have agreed to the application of the forum law, their consent concludes the choice of law inquiry. Texaco A/S (Denmark) v. Commercial Ins. Co. of Newark, NJ, 160 F.3d 124, 128 (2d Cir. 1998); see also David J. Gold, P.C. v. Berkin, No. 00 Civ. 7940, 2001 WL 121940, at *2 (S.D.N.Y. Feb. 13, 2001) (stating that where parties rely solely on New York law in support of their position, the parties, by implication, agree that there is no dispute on the choice-of-law question).

Defendants' Motion is based upon the Plaintiff's decision to replace the Lava Vase he intended to include in the Japanese Exhibit, Lava Vase #1, with the Lava Vase that was damaged in the Smithsonian Exhibition and valued at no more than $5,000, Lava Vase #2. The Lava Vase included under the Insurance Policy was valued at $185,000. In support of its Motion to void the Insurance Policy Tokio Marine submits an affidavit from Tadashi Kuninori, the Deputy General Manager of the Tokio Marine Underwriting Department, in which he states that had Tokio Marine known all the facts surrounding the Lava Vase valuation, it would have either "declined to issue insurance for any of Bellis' Tiffany glass objects or, at the very least, would have adjusted downward each of the values given to it for Bellis' objects." (Kuninori Aff. ¶ 8). Plaintiff contends that he notified Duncan of his decision to replace Lava Vase #1 with Lava Vase #2. (Pl.'s 56.1 Stmt. ¶ 66).

Tokio Marine's attempt to invoke the uberrimae fidei doctrine fails. Material issues of fact exist as to whether Plaintiff made the required disclosure and the Kuninori affidavit states that the valuation of the Lava Lamp would not have "controlled" the decision to insure the objects and that even without the disclosure Tokio Marine might have still decided to accept the risk of insurance. (Kuninori Aff. ¶ 8). Accordingly, Defendants' Motion to void the Insurance Policy under the doctrine of uberrimae fidei is DENIED.

e. Spoliation

Defendants also argue that the doctrine of spoliation requires the dismissal of the Plaintiff's claims. (Defs.' Mem. Law at 13-14). Defendants' Motion is based on Plaintiff's handling of his Tiffany pieces once they were returned to him after the Japanese Exhibition. Defendants argue that the increase in the number of the cracks observed in the Bellis Tiffany, coupled with the inability to date when the cracks occurred, makes it impossible for "anyone, let alone a trier of fact, to determine which cracks occurred when and therefore, to determine the damage that purportedly occurred during the Insurance Period." (Defs.' Mem. Law at 14). The Defendants have underestimated the ability of jurors to determine material facts at issue. Defendants' Motion to Dismiss on spoliation grounds is DENIED.

Defendants cannot have it both ways, however: on the one hand they fault the Plaintiff for not having expert appraisals and examinations done soon enough and on the other hand for handling the objects too much. (See Opinion, supra at 17-18.)

Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation. See West v. Goodyear Tire Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999). Spoliation requires a finding that the party has destroyed evidence that it was under an obligation to preserve. Fujitsu Ltd. v. Federal Express Corp., 247 F.3d 423, 436 (2d Cir. 2001).

The determination of an appropriate sanction for spoliation, if any, is confined to the sound discretion of the court. Fujitsu Ltd., 247 F.3d at 436. The appropriate sanction should be designed to (1) deter the parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party. See West, 167 F.3d at 779. Dismissal is only appropriate if there is a showing of wilfulness, bad faith, or fault on the part of the sanctioned party. Id.

In this case, no sanction for spoliation is appropriate. The Defendants have not made the requisite showing that Plaintiff destroyed evidence he was under an obligation to preserve. Although Defendants point to the numerous times that Plaintiff, or one of his representatives, either moved or handled the Tiffany that is the subject of the instant suit, the record does not demonstrate sufficiently that the Bellis Tiffany evidence was destroyed. Additionally, the record reflects that the Defendants had an opportunity to inspect the Bellis Tiffany almost immediately after the pieces were returned to Plaintiff in New Jersey. This opportunity weighs against any spoliation sanction in this case, especially dismissal. See, e.g., Indemnity Ins. Co. of N. Am. v. Liebert Corp., No. 96 Civ. 6675, 1998 WL 363834 (S.D.N.Y. June 29, 1998) (denying spoliation sanction where the defendant had an opportunity to inspect evidence prior to its destruction); Thiele v. Oddy's Auto and Marine, Inc., 906 F. Supp. 158, 160 (W.D.N.Y. 1995) (same).

2. Femenella and ARS's Motion to Dismiss the Plaintiff's Complaint and Cross-claims Asserted by Duncan/JAD

Femenella and ARS join the Defendants' Motion for Summary Judgment and move to dismiss the cross-claims asserted by Duncan and JAD, pursuant to Rule 56, Rule 12 and Rule 13 of the Federal Rules of Civil Procedure. For the reasons already stated herein, the Femenella and ARS Motion to Dismiss the Plaintiff's Complaint is DENIED.

Despite the separate bases cited in support of Femenella/ARS Motion, the Court treats the Femenella/ARS Motion as a Summary Judgment Motion pursuant to Rule 56. The Motion is titled as such and is accompanied by a Notice of Motion setting forth the facts upon which Femenella/ARS rely. Further, Femenella/ARS along with Tokio Marine and CBC submitted a Joint 56.1 Statement in support of their Motions for Summary Judgment. Curiously, "Duncan/JAD does not dispute the facts relevant to this Motion as they are set forth in the pleadings and the moving affidavits." (Duncan/JAD Mem. Law at 2). Duncan/JAD however, submits that the Femenella/ARS Motion is based solely upon the pleadings and that facts outside the pleadings are irrelevant. For the reasons previously stated, this Court does not agree and shall rely as needed upon the facts included in the Affidavit attached to the Femenella/ARS Notice of Motion. Since Duncan/JAD do not dispute the facts contained therein, Duncan/JAD suffer no prejudice from this Court's reliance upon those facts.

a. Insufficiency of Service of Process

Femenella argues that the Court lacks the personal jurisdiction necessary to adjudicate the claims against him in this action, specifically the Duncan/JAD cross-claims. However, Femenella has not provided the Court with the particular provision of the Federal Rules of Civil Procedure upon which he seeks to ground his Motion. While the assertion that the court lacks "personal jurisdiction" appears to invoke Rule 12(b)(2), the moving papers and the accompanying affidavit indicate that the actual basis for the Motion is Femenella's claim that he was never served with process pursuant to Rule 4(e) of the Federal Rules of Civil Procedure or the applicable New York state provisions. (See Femenella Ex. 71). In particular, Femenella complains that the Third-party Complaint and the Duncan/JAD cross-claims were not delivered to a person of suitable age and discretion at [his] place of business." (Id.) The Court shall consider Femenella's Motion according to its substance. 5A Charles A. Wright Arthur R. Miller, Federal Practice and Procedure, § 1351 (2d ed. 1990). The Motion is properly characterized as one brought pursuant to Rule 12(b)(5). Rule 12(b)(5) is the proper provision to challenge "the mode of delivery or the lack of delivery of the summons and complaint." See id. § 1353.

Pursuant to the Federal Rules of Civil Procedure, the only document required to be served upon Femenella in a manner consistent with Rule 4 in this case was the Tokio Marine and CBC Third-party Complaint. This is the pleading that made Femenella a party to this action. Bellis, of course, had no obligation to serve Femenella pursuant to Rule 4 since he chose only to bring suit against Tokio Marine and CBC. Femenella, however, has chosen not to move against Tokio Marine and CBC pursuant to 12(b)(5). Instead, he directs his 12(b)(5) Motion against Duncan and JAD. Since Femenella has decided not to contest the service of the Tokio Marine and CBC Third-party Complaint through filing the appropriate motion against Tokio Marine and CBC, any objection that Femenella may have possibly been able to raise regarding the insufficiency of service of that pleading is deemed waived. See Burton v. Northen Dutchess Hosp., 106 F.R.D. 477, 481 (S.D.N.Y. 1985) (raising the defense of insufficient service of process in an answer does "not preserve the defense in perpetuity"); see also Pennsylvania Lumbermens Mut. Ins. Co. v. Forman's of Orchard Street, Inc., No. 96 Civ. 0508, 1998 WL 241963, *2 (S.D.N.Y. May 14, 1998) ("[C]ourts in this circuit have held that a delay in challenging insufficiency of service of process by motion to dismiss results in waiver of the defense, even where the defense is asserted in a timely answer." (collecting cases)).

Femenella/ARS were brought into this action pursuant Rule 14 by the filing of the Tokio Marine and CBC Third-party Complaint. Rule 14 requires that a third-party defendant be served with the summons and the third-party complaint. Fed.R.Civ.P. 14.

With respect to the Duncan/JAD cross-claims, Femenella complains that they were not "delivered to a person of suitable age and discretion at [his] place of business." (See Femenella Ex. 71). Duncan and JAD do not contest Femenella's claim that service of process was insufficient in this case. Instead, Duncan and JAD argue that Femenella has consented to the jurisdiction of this Court through asserting a third-party claim against NEC, and argue in the alternative that Femenella has waived any objection that he may have once had to insufficient service of process.

This Court finds Femenella's insufficiency of process argument unavailing for reasons not raised by the parties. Once a party to an action, service of responsive pleadings that contain cross-claims, such as the pleading filed by Duncan/JAD in this case, need not be served pursuant to Rule 4. See American Tel. and Tel. Co. v. Merry, 592 F.2d 118, 120 (2d Cir. 1979) (stating that service of cross claim is governed by Fed.R.Civ.P. 5). Under Fed.R.Civ.P. 5(a) "every pleading subsequent to the original complaint . . . shall be served upon each of the parties." Further, paragraph (b) provides that "[w]henever under these rules service is required or permitted to be made upon a party represented by an attorney the service shall be made upon the attorney unless service upon the party is ordered by the court. Service upon the attorney or upon a party shall be made by . . . mailing [a copy] to the attorney or party at the attorney's or party's last known address . . . ." Fed.R.Civ.P. 5(b). Rule 4 is only operative after service of a complaint where a party asserts new or additional claims against a party in default. Fed.R.Civ.P. 5(a); see also Merry, 592 F.2d 118, 120.

Here, the Duncan/JAD responsive pleading that contains the cross-claim against Femenella and ARS is not a complaint that requires service pursuant to Rule 4(e) of the Federal Rules of Civil Procedure. The responsive pleading filed by Duncan/JAD that contains the cross-claim has attached to it a certificate of service indicating that the document was mailed to the attorney representing Femenella and ARS. The requirements of the Federal Rules of Civil Procedure having been satisfied, Femenella/ARS's Motion to Dismiss the cross-claim for insufficient service and lack of personal jurisdiction is DENIED.

b. The Duncan/JAD cross-claim for Indemnification and Contribution

Duncan/JAD concedes they would not be entitled to complete indemnification from either Femenella, ARS or NEC. (See Duncan/JAD Mem. Law at 1 n. 2.)

In its Third-party Complaint against Duncan/JAD, Tokio Marine and CBC allege fraudulent misrepresentation, negligent misrepresentation, and breach of fiduciary duty claims against Duncan/JAD and a breach of contract claim against JAD alone. The claims are all based upon the allegedly "substantially inflated" values for the Bellis Tiffany that Duncan/JAD provided to Tokio Marine and CBC which "exposed Tokio Marine and CBC to unnecessary expense and unwarranted financial exposure in this lawsuit." (See Tokio Marine/CBC Sec. Am. Ans. ¶¶ 134, 136, 139, 140, 143, 144, 147, 148). These claims alleged against Duncan/JAD by CBC and Tokio Marine serve as the basis for the Duncan/JAD cross-claims. Specifically, Duncan/JAD allege that if they are found liable to CBC and Tokio Marine, then "said damages were sustained by reason of the sole active or primary carelessness, recklessness, negligence, fraudulent acts, affirmative acts of omissions or commission, or breach of contract by [other parties and that] JAD and Duncan are entitled to complete indemnification and/or on the basis of an apportionment of responsibility [sic] from any judgment over and against Arthur Femenella, The Association of Restoration Specialists, Inc., and Nippon Co., Ltd., for all or part of any verdict or judgment that the third-party plaintiffs may recover against JAD and Duncan . . . ." (See Duncan/JAD 3d Am. Ans. ¶¶ 60-61.)

CPLR § 1401, the New York statute that governs claims for contribution, provides 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." N.Y. Civ. Prac. L. R. § 1401. Under New York law, "the existence of some form of tort liability is a prerequisite to application of the statute." See Bd. of Educ. of Hudson City Sch. Dist. v. Sargent, Webster, Crenshaw Folley, 71 N.Y.2d 21, 28 (1987). In finding a duty upon which to ground a contribution claim, "[m]erely charging a breach of a 'duty of due care', employing language familiar to tort law, does not, without more, transform a simple breach of contract into a tort claim.Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 390 (1987).

In order to state a claim for contribution under § 1401 the party against whom contribution is sought must have contributed to the "same injury" suffered by the complaining party, in this case CBC and Tokio Marine. McCoy v. Goldberg, 883 F. Supp. 927, 933 (S.D.N.Y. 1995); see also Delta Holdings, Inc. v. National Distillers and Chemical Corp., No. 85 Civ. 3439, 1986 WL 9790, at *5 (S.D.N.Y. Sept. 4, 1986); Gonzalez v. Jacoby Meyers, 685 N.Y.S.2d 461, 462 (N.Y.App.Div. 1999). Duncan and JAD must "plead facts" that demonstrate Femenella and ARS contributed to the "same injury" Tokio Marine and CBC allege to have suffered. McCoy, 883 F. Supp. at 933.

Further, where a party pleads the right to contribution under § 1401 the action will not lie unless "all of the essential elements of a cause of action against the proposed contributor can be made out."McCoy, 883 F. Supp. at 933 (S.D.N.Y. 1995). Thus, Duncan/JAD must plead facts establishing the existence of a duty between Femenella/ARS on the one hand and Tokio Marine/CBC or Duncan/JAD on the other, that the duty was breached, and that the breach contributed to the loss allegedly suffered by Tokio Marine and CBC. See Interpetrol Bermuda, Ltd. v. Rosenwasser, No. 86 Civ. 5631, 1988 WL 83406 (S.D.N.Y. July 28, 1988);see also Toto v. McMahan, Brafinan, Morgan Co., No. 93 Civ. 5894, 1997 WL 458764, at *6 (S.D.N.Y. Aug. 11, 1997). "[T]he breach of duty by the contributing party must have had a part in causing or augmenting the injury for which contribution is sought." McCoy, 883 F. Supp. at 933 (internal quotations omitted) (quoting Nassau Roofing Sheet Metal Co., Inc. v. Facilities Development Corp., 528 N.Y.S.2d 516, 518 (1988)).

As stated earlier, the facts are not in dispute. On December 20, 1989 Duncan provided CBC a list of 100 Tiffany objects and insurance values for each of the Tiffany objects. (Femenella/ARS Notice of Motion ¶ 22). These values were produced by Duncan with no assistance from Femenella or ARS. (Id.) Further, neither Femenella nor ARS had any involvement in transmitting insurance numbers to Tokio Marine. (Id.) Before the items were sent to Japan for the Exhibition the insurance values were revised a number of times. The last revision occurred in December as a result of a meeting between McCaffery, Bellis, Kudo, and Oishi in which CBC representatives agreed to increase the insurance values so that the Bellis Objects could be sent to Japan for the Exhibition. (Id. ¶ 31).

In this case, there is no evidence that Femenella/ARS contributed to the "same injury" suffered by CBC and Tokio Marine — the unnecessary expense and unwarranted financial exposure each may suffer as a result of the allegedly inflated insurance values provided to them by Duncan and JAD. It is clear from the undisputed facts that Femenella/ARS played no role in the formulation or transmission of the allegedly inflated numbers to CBC or Tokio Marine. The Court has considered the Duncan/JAD argument characterizing the "financial loss" Tokio Marine and CBC may suffer as a result of the alleged torts committed by Duncan and JAD as the "same injury" that Tokio Marine and CBC may suffer as a result of the actions of Femenella and ARS. The Court finds this argument unpersuasive. Characterizing the injury in such a broad fashion would vitiate the "same injury" requirement. McCoy, the case that Duncan and JAD cite for their "financial loss" argument is not to the contrary. In that case the injury was not defined as simply "financial loss" but rather the "financial loss [plaintiff] sustained because she invested in the partnerships." McCoy, 883 F. Supp. at 934. Here, accurately stated, the financial loss is that which Tokio Marine and CBC sustained as a result of the allegedly inflated insurance values. Seen in this light, it is clear given the undisputed facts before the Court in this Motion, that Femenella and ARS contributed in no way to the injury suffered by the Third-party Plaintiffs in this civil action. Accordingly, the Femenella/ARS Motion for Summary Judgment on the Duncan/JAD cross-claim is GRANTED.

3. NEC's Motion to Dismiss the Femenella/ARS Third Party Complaint and the Duncan/JAD Cross-Claims

NEC moves pursuant to Rule 12(b)(6) to dismiss the Femenella and ARS Third-party Complaint and the Duncan and JAD cross-claims. In a Rule 12 (b)(6) motion to dismiss, it is generally accepted that a claim should not be dismissed unless it is entirely clear that the plaintiff is unable to prove any set of facts that would support the claim and thereby grant him relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The complaint must be read "generously, accepting as true the factual allegations in the complaint and drawing all inferences in favor of the pleader." BRS Associates, L.P. v. Dansker, 246 B.R. 755, 764 (S.D.N.Y. 2000) (citingBolt Elec., Inc. v. City of New York, 53 F.3d 465, 469 (2d Cir. 1995);see also Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993)). A court should grant the motion to dismiss only "if, after viewing plaintiff's allegations in this favorable light, 'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Walker v. City of New York, 974 F.2d 293, 298 (2d Cir. 1992) (quoting Ricciuti v. New York City Transit Auth., 941 F.2d 119 (2d Cir. 1991)). In deciding a motion to dismiss brought pursuant to Rule 12(b)(6), the Court "is not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). Although bald assertions and conclusions of law are insufficient, the pleading standard is nonetheless a liberal one. See Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996).

a. Indemnification and Contribution Claims Asserted by Duncan/JAD

As already discussed, supra at note 21, Duncan and JAD have withdrawn their indemnification claim against NEC. In addition, this Court finds that the Duncan and JAD contribution claim against NEC fails to state a claim. The Duncan/JAD cross-claim against NEC is entirely conclusory. (See Duncan/JAD 3d Am. Ans. ¶ 60 (stating that if it is liable to Tokio Marine and CBC "said damages were sustained by reason of the sole active or primary carelessness, recklessness, negligence, fraudulent acts, affirmative acts of omissions or commissions, or breach of contract by . . . Nippon Express Co., Ltd.") The Duncan/JAD claim against NEC lacks a sufficient factual basis. There are no facts alleged that demonstrate NEC committed any tort for which contribution may be sought.See McCoy v. Goldberg, 883 F. Supp. at 933 (stating that where a party pleads the right to contribution under § 1401 the action will not lie unless "all of the essential elements of a cause of action against the proposed contributor can be made out"). Accordingly, NEC's Motion to Dismiss the Duncan/JAD cross-claims is GRANTED.

b. Indemnification and Contribution Claims Asserted by Femenella/ARS

The Court notes that Femenella and ARS did not respond to the NEC Motion to Dismiss the indemnification claim, and have thereby abandoned that claim.

The Femenella/ARS Complaint alleges indemnification, contribution, and breach of contract claims against NEC. The Femenella/ARS indemnity and contribution claims are based upon allegations of NEC negligence.

In their Complaint, Third-party Plaintiffs Femenella and ARS allege that Bellis and CBC entered into an oral contract where Bellis agreed to loan 16 of his Tiffany pieces to CBC for their inclusion in an exhibit sponsored by CBC, (Femenella/ARS Compl. ¶ 12), and that prior to September 1991, CBC also entered into a contract with NEC (the "NEC/CBC Contract") (Femenella/ARS Compl. ¶ 13). Under the terms of the NEC/CBC Contract, NEC agreed to handle the shipment, packing, unpacking, mounting, dismounting, installation, de-installation and transportation of the Bellis Tiffany in Japan, (Femenella/ARS Compl. ¶ 14). NEC allegedly held itself out to be knowledgeable, experienced and/or experts in carrying out its duties under the aforementioned NEC/CBC Contract. (Femenella/ARS Compl. ¶ 16). NEC also expressly and impliedly warranted its services to be suitable and safe and further represented that it would comport with the industry's recognized standards of skill and care as well as applicable codes, rules, regulations and standards. (Femenella/ARS Compl. ¶ 26).

Femenella and ARS allege that the Bellis pieces were damaged as alleged in the Bellis Complaint and in the Tokio Marine/CBC Third-party Complaint and that if the damage was not caused solely by the Plaintiff or Third-party Plaintiffs, it resulted from the negligence of NEC. (Femenella/ARS Compl. ¶ 17). Specifically, Femenella and ARS allege,inter alia, that NEC failed to (1) hire competent personnel, (2) adequately and properly train and supervise its personnel, (3) adequately and properly pack/unpack and prepare the Bellis Tiffany for shipping, (4) adequately and properly mount and dismount and install/deinstall the Bellis Tiffany in Japan, (5) adequately and properly transport the Bellis Tiffany, (6) properly advise and consult with ARS, (7) utilize proper, safe prudent methods, (8) conduct itself in a manner consistent with the standards and skill customary to the industry, (9) adequately and properly handle and prepare the Bellis Tiffany. (Femenella/ARS Compl. ¶ 17).

Femenella/ARS argue that their claim for contribution is grounded upon NEC's negligent performance of the NEC/CBC Contract. Specifically, Femenella/ARS argue that NEC was under an independent duty to perform the NEC/CBC contract with reasonable care and skill, and that NEC's breach of this duty thereby damaged Femenella/ARS.

However, where two parties have each entered into separate contracts with a third-party, there exists no right of contribution between them if the liability for which contribution is sought arises solely from a breach of contract with the third-party. See Bd. of Educ. of Hudson City Sch. Dist. v. Sargent, Webster, Crenshaw Folley, 71 N.Y.2d 21, 28 (1987); see also Rothberg v. Reichelt, 705 N.Y.S.2d 115, 117 (N.Y.App. Div. 2000) (stating that a party may not seek contribution from another party where the alleged tort is essentially a breach of contract claim). In Sargent, an architectural firm and a construction company both contracted with the school district to work on a project. The architectural firm was required under the terms of its contract to, among other things, plan and supervise the construction of the project. Under its contract, the construction company was required to do the actual construction. Upon the completion of the contract, a leak developed in the roof and the school district brought breach of contract claims against both the architectural firm and the construction company. The architectural firm sought contribution against the construction company. The construction company moved to dismiss the contribution claim.

The New York Court of Appeals held that since "purely economic loss resulting from a breach of contract does not constitute 'injury to property' within the meaning of [the] statute," Sargent, 71 N.Y.2d at 26, § 1401 does not "permit contribution between two contracting parties whose only potential liability to the [third-party] is for the contractual benefit of the bargain. Id. at 28. The court reasoned that to allow contribution in actions were liability is premised solely on a breach of contract would "do violence to settled principles of contract law . . . ." Id. at 28. The court also found that alleging a party breached its duty of care in performing the terms of a contract does not create the requisite tort liability necessary for a contribution claim.Id. at 29; see also Clark-Fitzpatrick, 70 N.Y.2d 382, 389 ("[A] simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated." (citations omitted)); see generally Megaris Furs, Inc v. Gimble Bros., Inc., 568 N.Y.S.2d 581, 583 (N.Y.App.Div. 1991) (no cause of action for negligent breach of contract exists under New York law); see also Wecker v. Quaderer, 655 N.Y.S.2d 93, 94 (N.Y.App.Div. 1997) (finding that "[e]ven though the plaintiff couched the complaint in terms of negligent performance, it [was] essentially a breach of contract claim" and as such contribution could not be sought).

In this case, Femenella/ARS are not entitled to contribution from NEC. The liability of each of these parties to CBC must be governed solely by their contracts with CBC. The Femenella/ARS attempt to recast a breach of contract claim that CBC could have brought against NEC into a tort claim alleging negligent performance does not create the independent duty necessary for Femenella/ARS to bring a contribution claim against NEC under New York law. Accordingly the Femenella/ARS contribution claim against NEC is DISMISSED.

c. The Femenella/ARS Third-party Beneficiary Claim Against NEC

Femenella and ARS further baldly allege in their Complaint that they were intended beneficiaries of the NEC/CBC Contract, (Femenella/ARS Compl. ¶¶ 24-5), that NEC breached its expressed and implied warranties, and that the damage described in the Plaintiff's Complaint was proximately cased by NEC's breach of the its contract with CBC. (Femenella/ARS Compl. ¶¶ 27-8.)

Femenella/ARS claim that as third-party beneficiaries to the NEC/CBC Contract, they may bring a breach of contract action against NEC. NEC argues that there is no basis for the Femenella/ARS contention that Femenella and/or ARS are third-party beneficiaries of the admittedly valid NEC/CBC oral contract. (See NEC Reply Br. at 7; NEC Answer to Femenella/ARS Compl. at 3, 5.)

For cases in which the claimant is not a party to the contract but claims third-party rights therefrom, New York has adopted the standard set forth in the Restatement (Second) of Contracts. LaSalle National Bank v. Ernst Young LLP, 729 N.Y.S.2d 671, 676 (N.Y.App.Div. 2001). Under this approach:

[A] beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either (a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.

Restatement (Second) of Contracts § 302. Further, an incidental beneficiary is not an intended beneficiary. Id. To plead properly this claim Femenella and ARS must allege facts demonstrating that they wereintended beneficiaries of the CBC/NEC contract, i.e., that CBC entered into the contract with the purpose of providing some benefit to Femenella/ARS. See generally United States v. Weisz, 914 F. Supp. 1050, 1053 (S.D.N.Y. 1996) (stating that a court "need not accept as admitted mere legal conclusions or characterizations contained in the nonmovant's pleadings").

See, e.g., Restatement (Second) of Contracts § 302, Illustration 10 ("A, the operator of a chicken processing and fertilizer plant, contracts with B, a municipality, to use B's sewage system. With the purpose of preventing harm to landowners downstream from its system, B obtains from A a promise to remove specified types of waste from its deposits into the system. C, a downstream landowner, is an intended beneficiary under subsection (1)(b).")

Femenella/ARS argue that since its contract with CBC called for CBC to select a firm to "mount, dismount, and transport . . . the objects between the different venues in Japan" Femenella/ARS are the intended beneficiaries of that NEC/CBC Contract. (See CBC-ARS Agreement as Andoh Ex. 7). The NEC/CBC Contract, however, must be examined in light of the circumstances in which it was entered. First, CBC contracted with ARS so that ARS could provide, with the assistance of Femenella, its expertise in overseeing certain aspects of the Japanese Tiffany Exhibition. Although CBC hired NEC to mount, dismount and transport the pieces while in Japan, this fact, even when considered with the existence of the CBC-ARS Agreement, does not create any third party rights in Femenella or ARS. Under the circumstances, i.e., where CBC is promoting an Exhibition of Tiffany pieces in Japan, if anyone is the intended beneficiary to the NEC/CBC Contract, it is the Plaintiff and the other owners of the Tiffany pieces included in the Exhibition, not Femenella or ARS. The facts simply do not support the Femenella/ARS contention that CBC and NEC intended to benefit ARS and Femenella through the NEC/CBC contract. The difficulty in making a third-party beneficiary claim on the facts of this case is clear not only from the conclusory facts pled in the Femenella/ARS Complaint against NEC, but also in the conclusory argument Femenella/ARS advance in their brief submitted in opposition to the NEC Motion to Dismiss. (See Femenella/ARS Compl. ¶¶ 23-25; Femenella/ARS Opp'n to NEC Motion to Dismiss at 11.) Accordingly, the Femenella/ARS third-party beneficiary claim is

DISMISSED.

Ordinarily, where a claim is dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, leave to replead shall be "freely given when justice so requires." Fed.R.Civ.P. 15(a). However, despite this flexible standard, it is proper to deny leave to replead where there is no merit in the proposed amendment or the amendment would be futile.See Hunt v. Alliance North Am. Government Income Trust, Inc., 159 F.3d 723, 728 (2d Cir. 1998); Health-Chem Corp. v. Baker, 915 F.2d 805, 810 (2d Cir. 1990). Furthermore, where a case has progressed to the summary judgment stage, leave to amend is deemed futile "unless the (complaining party has] offered evidence in support of each element of [the dismissed claim]." See Caputo v. Pfizer, Inc., 267 F.3d 181, 191 (2d Cir. 2001).

Here, justice does not require that leave to amend be granted in this case. Femenella and ARS have made no application for leave to amend, and discovery in this case is closed. The fact that NEC has moved against the Femenella/ARS Third-Party Complaint pursuant to Rule 12(b)(6) does not change the fact that this case is at the summary judgment stage. Accordingly, given the posture of this case, and the Court's finding that any effort to replead would be futile, the claims alleged in the Femenella/ARS Complaint against NEC are dismissed with prejudice.

III. CONCLUSION

For the foregoing reasons the Defendants' Summary Judgment Motion against Plaintiff is DENIED. The Femenella/ARS Summary Judgment Motion against the Duncan/JAD cross-claims is GRANTED. NEC's Motion to Dismiss the Duncan/JAD and Femenella/ARS claims alleged against it is GRANTED.

SO ORDERED.

Bellis v. the Tokio Marine and Fire Insurance Company

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Bellis v. the Tokio Marine and Fire Insurance Company

Bellis v. the Tokio Marine and Fire Insurance Company

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Bellis v. the Tokio Marine and Fire Insurance Company

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I. BACKGROUND

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Bellis v. the Tokio Marine and Fire Insurance Company

Bellis v. the Tokio Marine and Fire Insurance Company

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