Opinion
Index No. 035596/2016 Motion Seq. No. 3
04-08-2019
AARON MORSE and FLOYD MORSE, Plaintiffs, v. CARL CIPOLLONE, LARRY JANESKY, TOTAL BASEMENT FINISHING, a Division of Basement Systems, Inc., CHRIS KERVATT, SPARTAN MANAGEMENT and ASSOCIATES, THE CENTER FOR HOME DESIGN, LLC, R & S CONSTRUCTION CONTRACTING, INC. and "John Does 1-5", Defendants.
Unpublished Opinion
Motion Date: Jan. 23, 2019
To commence the statutory time period for appeals as of right (CPLR 5513 [a]), you are advised to serve a copy of this order, with notice of entry, upon all parties.
DECISION AND ORDER
Paul I. Marx, Judge
The following papers numbered 1 to 6 were read on Defendants Carl Cipollone, Chris Kervatt, Spartan Management and Associates and The Center for Home Design's ("Defendants") motion for summary judgment dismissing the Plaintiffs' complaint:
Notice of Motion/Affirmation of Peter A. Hurwitz, Esq. /Affidavit of Carl Cipollone/Exhibits A-H....................................................................................................1-3
Defendants' Memorandum of Law......................................................................................4
Affirmation of Mark W. Blanchard, Esq. in Opposition/Exhibits 1-2................................5
Affirmation of Peter A. Hurwitz, Esq. in Reply..................................................................6
Upon reading the foregoing papers, it is ORDERED that Defendants' motion is granted for the reasons set forth below.
BACKGROUND:
On or around June 27, 2014, Plaintiff Floyd Morse ("Floyd M.") and his wife, Victoria Morse, entered into an agreement with Defendants Spartan Management and Associates ("Spartan Management") and The Center for Home Design, LLC ("Home Design") (collectively, the "Company Defendants"), pursuant to which the Company Defendants agreed to convert the basement of Plaintiff Aaron Morse's ("Aaron M.") residence located at 82 Division Avenue, Spring Valley, New York, into an apartment (the "Agreement").
The first page of the Agreement, a proposal dated April 29, 2014, indicates at the top of the proposal that the Agreement was entered into with "Total Basement Finishing By The Center For Home Design". The second page of the Agreement, a proposal dated June 28, 2014, indicates at the top of the proposal that the Agreement was entered into with "Total Basement Finishing by Spartan Management & Associates, The Center for Home Design, LLC".
On or around June 22, 2015, Floyd M. filed a complaint with the Rockland County Department of Consumer Protection ("DCP") against Tri-State Total Basement Finishing ("Tri-State") regarding the Agreement (the "DCP complaint"). Although the DCP complaint named Tri-State as the defendant, the matter appears to have been prosecuted only against the owners of the company, Defendants Carl Cipollone ("Cipollone") and Chris Kervatt ("Kervatt") (collectively, the "Individual Defendants"). In his DCP complaint, Floyd M. stated that: "Work was not performed consistent with contract. Please see attached report of construction deficiencies: Exhibits 'A' - 'BY' Floyd M. sought "[reimbursement for all monetary damage/investment so that project can be completed/repaired" (Defendants' Exhibit E). The matter, People of the State of New York v Cipollone, et al, was referred to the Hon. Alan M. Simon at the Justice Court of the Village of Spring Valley. The matter was settled by a Stipulation of Settlement made on the record on April 28, 2016, with the DCP appearing as the plaintiff and the Individual Defendants appearing pro se. The Individual Defendants agreed to pay $8,000.00 in restitution to Floyd M, and to release him from the remaining balance due on the Agreement of $8,991.00. There is no dispute that Floyd M. accepted the settlement amount and release from the remaining balance due on the Agreement.
In response to an inquiry by the DCP as to which entity Floyd M. was filing his complaint against, Floyd M.'s counsel stated that Tri-State, Spartan Management and Home Design all worked on the construction project in dispute and that all three entities appeared to be the same or were interchangeable. (Defendants' Exhibit E, pg. 6). Plaintiffs alleged in their complaint in the instant action that Cipollone conducted business under Tri-State (Compl. ¶ 3). Plaintiffs also alleged that Kervatt is a co-owner of Tri-State (Compl. ¶ 6). Defendants have not explained what relationship Tri-State has to the Company Defendants.
Cipollone is the President of Spartan Management and Home Design, LLC.
On December 20, 2016, Plaintiffs commenced this action by filing a summons and complaint, alleging three causes of action arising out of the Agreement. Under the first cause of action, which sounds in unjust enrichment, Plaintiffs seek damages for the Defendants' "failure to satisfactorily correct, repair and remedy the faulty construction" pursuant to the terms of the Agreement (Compl. ¶ 21-22). Under the second cause of action, Plaintiffs seek damages for Defendants' "'negligence and failure to satisfactorily complete the construction at Plaintiffs' Premise in a manner which was satisfactory under the terms of the [A]greement" (Compl. ¶ 28). Under the third cause of action, Plaintiffs seek punitive damages for Defendants' "wanton and reckless actions" (Compl. ¶ 30).
On January 13, 2017, Cipollone filed an answer pro se, "rejecting" the allegations in Plaintiffs complaint. On September 6, 2017, Defendants filed an answer with four affirmative defenses, by counsel.
On November 1, 2018, Defendants filed the instant motion.
DISCUSSION:
Plaintiffs' First Cause of Action - Unjust Enrichment:
Defendants argue that the first cause of action, which seeks damages for unjust enrichment, is barred by the existence of the Agreement. Defendants also argue that an unjust enrichment cause of action is not available where it simply duplicates a breach of contract cause of action.
Plaintiffs do not dispute that their unjust enrichment cause of action is barred by the existence of the Agreement.
"The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter. A 'quasi contract' only applies in the absence of an express agreement, and is not really a contract at all, but rather a legal obligation imposed in order to prevent a party's unjust enrichment. ... a quasi-contractual obligation is one imposed by law where there has been no agreement or expression of assent, by word or act, on the part of either party involved. The law creates it, regardless of the intent of the parties, to assure a just and equitable result.'" Clark-Fitzpatrick, Inc. v Long Island Rail Road Company, 70 N.Y.2d 382 [1987]. "[T]he theory of unjust enrichment lies as a quasi-contract claim". Georgia Malone & Co., Inc. v Rieder, 19 N.Y.3d 511, 516 [2012].
Here, it is undisputed that Plaintiffs' unjust enrichment cause of action arises out of the parties' Agreement and any alleged breaches thereof. Plaintiffs allege in their complaint that: "It would be grossly unjust and inequitable for the Defendants to receive the value of Plaintiffs' money without satisfactorily correcting, repairing and remedy [sic] the faulty construction pursuant to the terms of the Agreement causing the Premises to be left in a condition of disrepair" (Compl. ¶ 21). Plaintiffs seek damages for Defendants' "failure to satisfactorily correct, repair and remedy the faulty construction" pursuant to the terms of the Agreement (Compl. ¶ 22). This is essentially, a breach of contract cause of action. As such, Plaintiffs' unjust enrichment cause of action must be dismissed.
Accordingly, Defendants' motion for summary judgment dismissing Plaintiffs' first cause of action is granted, Plaintiffs' Second Cause of Action - Negligence:
Defendants argue that the second cause of action, which seeks damages for negligence in performing the contract, is also barred by the Agreement. Defendants argue that this cause of action should be dismissed, because no legal duty independent of the contract has been violated. Defendants argue that Plaintiffs are merely "seeking enforcement of the bargain on a routine private contract with no public interest and no potential catastrophic consequences" (Defendants' Memorandum of Law, pg, 6).
Plaintiffs argue that there is an issue of fact as to whether Defendants had a separate legal duty independent of the contract. Plaintiffs argue that Defendants had a duty "as set forth in applicable construction law, UCC language and statutory requirements that are independent of the Contract, which includes fiduciary obligations" (Affirmation of Mark W. Blanchard, Esq., ¶ 22). Plaintiffs assert that the waterproofing work was not performed or incorrectly performed and that a handicap accessible ramp was not properly installed. Plaintiffs assert that the work was not completed pursuant to applicable building codes and statutes, or in compliance with the Americans with Disabilities Act ("ADA"). Plaintiffs argue that they are seeking recovery on the "clear mis-management and unlawful acts committed by Defendants" (Affirmation of Mark W. Blanchard, Esq., ¶ 25). Plaintiffs further argue that Defendants' negligent acts resulted in catastrophic consequences, such as causing the renovation to be unusable and dangerous.
Presumably, the Uniform Commercial Code.
In reply, Defendants argue that Plaintiffs have not raised an issue of fact. Defendants assert that the Agreement excluded waterproofing work. Defendants also assert that the deposition transcript of Aaron M., submitted with Plaintiffs opposition, establishes that a Certificate of Occupancy was issued for the ramp in front of his house and that there were no violations. Defendants argue that Plaintiffs did not identify any catastrophic consequence during their depositions. Defendants also argue that Plaintiffs never provided any engineer report in support of the instant action and are thus prohibited from using any engineer report at trial since discovery is closed.
"[A] simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated. This legal duty must spring from circumstances extraneous to, and not constituting the elements of, the contract, although it may be connected with and dependent upon the contract". Clark-Fitzpatrick, 70 N.Y.2d 382 at 289. "Put another way, where the damages alleged 'were clearly within the contemplation of the written agreement. .. [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'." Dormitory Auth of the State of New York v Samson Construction Co., 30 N.Y.3d 704, 711 [2018].
"We have also recognized that '[a] legal duty independent of contractual obligations may be imposed by law as an incident to the parties' relationship' and that several types of defendants- including professionals-can be held liable in tort 'for failure to exercise reasonable care, irrespective of their contractual duties'. In certain circumstances, this independent duty has been imposed based on the nature of the services performed and the defendant's relationship with its customer-specifically, where the defendant 'perform[s] a service affected with a significant public interest [and where the] failure to perform the service carefully and competently can have catastrophic consequences'. To determine whether a tort claim lies, we have also evaluated the nature of the injury, how the injury occurred and the harm it caused. However, we have made clear that 'where plaintiff is essentially seeking enforcement of the bargain, the action should proceed under a contract theory'." Dormitory Auth. of the State of New York, 30 N.Y.3d 704 at 711.
The negligence cause of action alleged in Plaintiffs' complaint is essentially a breach of contract cause of action, except that it is framed in terms of Defendants' failure to comply with professional standards of care. Plaintiffs allege that they seek damages for Defendants' "negligence and failure to satisfactorily complete the construction at Plaintiffs' Premise in a manner which was satisfactory under the terms of the [A]greement" (Compl. ¶ 28). Plaintiffs simply seek damages for Defendants' failure to comply with the Agreement. Plaintiffs do not allege an injury that a negligence cause of action would address that would not be encompassed by a breach of contract cause of action. Plaintiffs are seeking the benefit of their contractual bargain, not recovery of damages for an abrupt, cataclysmic occurrence, such as a fire that spread out of control.
Plaintiffs allege in their complaint that Defendants are responsible for the diminishment in value of Plaintiffs' property caused by "Defendants' negligence and failure to satisfactorily complete the construction at Plaintiffs' Premises in a manner which was satisfactory under the terms of the agreement" (Compl. ¶ 28). Presumably, Plaintiffs seek the difference between the value of the defective property and that of the property if construction had been properly completed. This "difference in value" rule in construction contracts are applied only when the alleged defects are not remediable. Bellizzi v Huntley Estates, 3 N.Y.2d 112 [1957], Plaintiffs have not alleged that such is the case here.
Moreover, Plaintiffs have not alleged or demonstrated that Defendants owe them a legal duty independent of the Agreement so as to salvage their negligence cause of action. See Sommer v Federal Signal Corporation, 79 N.Y.2d 540 [1992] (holding that the nature of the services provided by Holmes Protection, Inc., a fire alarm company, and its relationship with its customers gave rise to a duty of reasonable care that is independent of Holmes' contractual obligations, because Holmes performed a service affected with a significant public interest and failure to perform the service carefully and competently could have catastrophic consequences); see also Clark-Fitzpatrick, supra (holding that the negligence causes of action were properly dismissed because no legal duty independent of the contract had been violated). Plaintiffs' bald and conclusory arguments, made only via counsel's affirmation, that the construction was not performed in compliance with applicable construction law, the UCC, applicable building codes and statutes, or in compliance with the ADA, do not raise an issue of fact as to whether Defendants owe a legal duty independent of the Agreement. Plaintiffs do not even specify which codes or laws were allegedly violated or how they were violated.
Likewise, Plaintiffs' bald and conclusory argument that Defendants' negligent acts resulted in catastrophic consequences because they rendered the premises unusable and dangerous, without more, does not raise an issue of fact warranting denial of Defendants' motion. Plaintiffs' arguments that the waterproofing work was not completed or incorrectly performed or that the handicap accessible ramp was not properly installed and not up to ADA code are all issues that are encompassed by the parties' Agreement.
Accordingly, Defendants' motion for summary judgment dismissing Plaintiffs' second cause of action is granted.
Plaintiffs' Third Cause of Action - Punitive Damages:
Defendants argue that the third cause of action, which seeks punitive damages, must be dismissed because a cause of action for punitive damages does not constitute an independent cause of action. Defendants also argue that a private breach of contract action does not support a claim for punitive damages. Defendants further argue that allegations of willful misconduct do not render a breach of contract claim a separate and independent tort.
Plaintiffs do not contest dismissal of the punitive damages. Indeed, New York does not recognize an independent cause of action for punitive damages. Gershman v Ahmad, 156 A.D.3d 868 [2nd Dept 2017].
Accordingly, Defendants' motion for summary judgment dismissing the Plaintiffs' third cause of action is granted.
SUMMARY:
Defendants' motion for summary judgment dismissing the Plaintiffs' complaint in its entirety is granted.
In light of the foregoing, the Court need not address Defendants' remaining arguments.
The foregoing constitutes the Decision and Order of this Court.