Opinion
12361-05.
Decided July 31, 2007.
Bleakley, Platt Schmidt, LLP, One North Lexington Avenue, White Plains, New York, COUNSEL FOR PLAINTIFF.
Clausen Miller, P.C., One Chase Manhattan Plaza, New York, New York, COUNSEL FOR DEFENDANT.
Defendant moves for reargument of its motion to dismiss the complaint on the grounds of a defense founded upon documentary evidence and failure to state a cause of action.
BACKGROUND
This is an action for breach of a professional services contract. Defendant Cashin Associates, P.C. ("Cashin") performed certain soil and air testing for Valley Stream School District No. 30 ("School District") pursuant to an environmental consulting contract. The purpose of the testing was to assess the environmental impact of a gasoline spill which had occurred at a Mobil station near the Clearstream School in the District. Plaintiff, The Tyree Organization, Ltd. ("Tyree"), is the environmental contractor which performed the initial remediation for the service station. The School District sued Tyree, Exxon Mobil, the service station and certain other parties to recover the cost of the environmental testing, as well as the costs associated with relocating kindergarten classrooms which were to be constructed at Clearstream School.
The School District's action was settled and, as part of the settlement agreement, the School District promised to assign its claims against Cashin to the settling Defendants. Tyree and Exxon Mobil were the only Defendants which made a financial contribution to the settlement.
Tyree then commenced this action against Cashin for breach of contract. Tyree alleges that Cashin breached its environmental consulting contract with the School District in three respects; to wit: (1) the methods of air sampling conducted at Clearstream were inappropriate; (2) the air testing was excessive because it was performed on a monthly basis, as opposed to a quarterly basis as recommended by the Nassau County Department of Health; and (3) Cashin provided improper advice to the School District as to whether to undertake expansion at Clearstream School. In this regard, Tyree claims that Cashin exaggerated the health risk of gasoline vapor contamination at the school because its air testing did not allow for the presence of gasoline-powered vehicles which were kept at the site. Thus, Tyree's breach of contract action is based upon the theory of failure to exercise due care in the performance of contract services, as opposed to a theory of breach of particular provisions in the contract. Sears, Roebuck Co. v. Enco Assoc., 43 NY2d 389, 393 (1977).
Tyree seeks to recover the damages caused to the School District by these various breaches of the contract. These damages include the charges for the improper and unnecessary testing, as well as the costs associated with relocating the kindergarten classes.
In its order of January 22, 2007, this Court ruled that Tyree, as an equitable assignee of the School District, should be granted standing to pursue the action. The Court further determined that because the parties had submitted statements of material fact, the motion to dismiss should be treated as one for summary judgment. However, because Cashin had not made a prima facie showing that it was entitled to judgment as a matter of law, summary judgment dismissing the complaint should be denied.
In moving for reargument, Cashin maintains that it did make a prima facie showing that it did not breach its contract with the School District or cause the School District to relocate the classrooms which were to be constructed at Clearstream. Cashin asserts that its indoor air sampling was conducted in compliance with government protocols and controlled for the presence of gas-powered equipment, at least after November, 1999.
In support of its motion to dismiss, Cashin submitted correspondence from Gregory Greene, its director of environmental programs, to Lawrence McGoldrick, the superintendent of the School District. In his letter of October 22, 1999, Greene stated that "the highest level of MTBE detected [in the air samples] was in a storage room where gasoline-powered equipment is stored. . . ." In a subsequent letter dated December 20, 1999, Greene indicated that the gasoline-powered equipment had been removed from the storage room prior to that month's testing.
Greene's letters indicated that there were no detectable levels of MTBE in the soil vapor samples. While the air samples showed detectable levels of MTBE, the levels appeared to be "comparable" to the "trace background levels" observed during prior testing. Greene concluded that "there appears to be no evidence that the upgradient spill is affecting the school at this time." However, Greene continued to recommend monthly monitoring "to ensure that any changes in site conditions are detected" while the state-supervised remediation program was in effect.
Cashin further asserts that the School District did not rely upon its advice in deciding to relocate the kindergarten classrooms and to conduct monthly monitoring. The School District received advice not only from Cashin but also from the District's architect and attorney. Cashin argues that the School District's decision not to build the additional classrooms at Clearstream School was based on the mere presence of the gasoline plume and the concern that contaminants would be released if the soil were disturbed during construction.
Cashin suggests that the School District's decision to conduct monthly testing was based upon a desire to promote public confidence that it was doing everything possible to insure the safety of students and faculty. In response, Tyree claims that, despite the written reports indicating that there was no environmental impact, the School District did, in fact, rely upon Cashin's recommendation against constructing additional classrooms at Clearstream School.
Cashin argues that because its testing methods were approved by the Environmental Laboratory Approval Program ("ELAP"), as a matter of law, it complied with its contractual obligation.Compliance with relevant industry standards, be they derived from customary business practice or government regulation, is some evidence that the defendant exercised due care. Trimarco v. Klein, 56 NY2d 98, 105-06 (1982). However, as the Court noted in its earlier decision, compliance with regulations or other standards does not in and of itself establish that a defendant exercised due care. Id. Thus, the Court concluded that compliance with ELAP did not establish a prima facie case that Cashin exercised due care in testing the indoor air samples or that Cashin performed as required by the contract.
On the other hand, failure to comply with industry standards or regulations does not establish as a matter of law that a defendant did not exercise due care. Id. Thus, monthly testing is not necessarily inappropriate or "excessive" merely because an agency with environmental expertise is of the opinion that less frequent testing would be sufficient. However, Cashin has offered no evidence that monthly air testing was the appropriate frequency in the exercise of due care. Instead, it has merely offered speculation as to the School District's motivation in agreeing to this service.
On a motion for summary judgment, it is the proponent's burden to make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. JMD Holding Corp. v. Congress Financial Corp., 4 NY3d 373, 384 (2005). Failure to make such a prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers. Id. Cashin has failed to establish a prima facie case of due care as to the proper method and frequency of air sampling. Moreover, even if Cashin had made such a showing, the affidavit of Plaintiff's expert witness, Marilyn Hoyt, establishes a triable issue of fact as to whether Cashin complied with that standard. Cashin's motion for summary judgment was correctly denied as to Plaintiff's contract claims for improper and excessive air sampling.
General damages for breach of contract are those which are the natural and probable consequences of the breach. American List Corp. v. U.S. News and World Report, 75 NY2d 38, 42-43 (1989). Special, or consequential, damages are extraordinary in that they do not so directly flow from the breach. Id. These extraordinary damages are recoverable only upon a showing that they were forseeable and within the contemplation of the parties at the time the contract was made. Id. In an action for breach of a professional services contract, consequential damages are recoverable, except perhaps as to lost profits. Sears, Roebuck Co. v. Enco Assoc., supra at 397.
Cashin argues that because the School District relied upon advice from its attorney and architect in deciding to relocate the kindergarten classrooms, the cost of relocation is not attributable to any act or omission on the part of Cashin. The written reports from Greene, while guarded, were reasonably reassuring that the gasoline spill did not pose a health hazard. However, Greene's deposition testimony makes clear that his recommendation, along with that of the District's architect and its counsel, was that "expansion of that school was not prudent at that time." Thus, Cashin has not established a prima facie case that the District's decision to relocate the kindergarten classrooms did not flow, at least in part, from faulty advice provided by Cashin. Nor has Cashin established that relocation of the classrooms was not foreseeable or within the contemplation of the parties at the time that the environmental consulting agreement was entered into. Moreover, where an action for breach of a professional services contract is based on an implied promise to exercise due care, the issue of reliance, as opposed to causation, is not an element of plaintiff's case. See, Ackerman v. Price Waterhouse, 252 AD2d 179, 196-97 (1st Dept. 1998).
Since Cashin did not establish a prima facie right to judgment as a matter of law in regard to plaintiff's relocation damage claim, summary judgment was properly denied. See, Winegrad v. New York University Medical Center, 64 NY2d 851 (1985); and Widmaier v. Master Products, Mfg., 9 AD3d 362 (2nd Dept., 2004); and Ron v. New York City Housing Auth., 262 AD2d 76 (1st Dept., 1999).
Since the court did not overlook any relevant fact and did not misapprehend or misapply any applicable law, reargument must be denied. See, Carrillo v. PM Realty Group, 16 AD3d 611 (2nd Dept. 2005); Hoey-Kennedy v. Kennedy, 294 AD2d 573 (2nd Dept. 2003); and Foley v. Roche, 68 AD2d 558 (1st Dept. 1979).
Accordingly, it is,
ORDERED, that Defendant's motion to reargue is denied; and it is further,
ORDERED, that counsel shall appear for a status conference in September 12, 2007 at 9:30 a.m.
This constitutes the decision and order of this Court.