MINEOLA Millet v Kamen  2018 NY Slip Op 28181  Decided on May 31, 2018  Supreme Court, Nassau County Marber, J. is a case that discusses the balance in obligation and remedy between Professionals and others.  Sometimes professionals, such as defendant-architect do business with non-professionals, but do not render professional services.  In this case Defendant sold a renovated home to non-professionals, but had not been retained by them to provide professional services.  The house displays certain problems.  How might the non-professionals recover damages?

“”It is a well-established principle that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated” (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389 [1987]). “[M]erely alleging that the breach of a contract duty arose from a lack of due care will not transform a simple breach of contract into a tort.” (Sommer v. Federal Signal Corp., 79 NY2d 540, 551 [1992]). Professionals may be held liable in tort for failure to exercise reasonable care, irrespective of their contractual duties (Id.). In such circumstances, “it is policy, not the parties’ contract, that gives rise to a duty of care.” (Id. at 552).

In determining whether a legal duty independent of a contractual obligation should be imposed, courts look to the nature of the services performed and the parties’ relationship — “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.’ ” (Dormitory Authority of the State of New York v. Samson Construction Co., 30 NY3d 704, 711 [2018], citing Sommer, 79 NY2d at 553). In addition to considering the relationship between the parties, courts also evaluate the nature of the injury, how the injury occurred and the harm it caused (Dormitory Authority, 30 NY3d at 711). The Court of Appeals has made clear that “where plaintiff is essentially seeking enforcement of the bargain, the action should proceed under a contract theory” (Dormitory Authority, 30 NY3d at 711, citing Sommer, 79 NY2d at 552)

One of the legal issues addressed by the New York Court of Appeals in Dormitory Authority is precisely the issue presented here — whether the plaintiff’s negligence claim asserted against the defendant architect was duplicative of the breach of contract claim. Dormitory Authority was decided by the Court of Appeals on February 15, 2018, one day after the instant motion was fully briefed and submitted. As the parties did not have the opportunity to reference this recent opinion in their papers, pertinent portions are noted and relied upon herein.

Dormitory Authority involved a construction project to build a lab for use by the Office of the Chief Medical Examiner in New York City adjacent to Bellevue Hospital. Pursuant to a contract with the City, the plaintiff was responsible for financing and managing the design and [*6]construction of the lab. Pursuant to a contract between Dormitory Authority and Perkins (defendant architect), Perkins was to provide design, architectural, and engineering services for the project and supervise its construction. Ultimately, the failure to properly install an excavation support system led to substantial damage and delays, including causing an adjacent building to “settle” by eight inches and damage to sidewalks, sewers and water mains, requiring emergency repairs. (Dormitory Authority, 30 NY3d at 707-708). The Plaintiff’s breach of contract claim alleged that Perkins failed to provide adequate designs; failed to properly supervise subcontractors it retained; failed to monitor the progress of their work to ensure it was being completed properly and in substantial compliance with design recommendations; failed to ascertain the actual field conditions and the foundation beneath the adjacent building; and failed to advise Dormitory Authority of the risks posed by the installation of the excavation support system and taking precautions against such risks. (Dormitory Authority, 30 NY3d at 708-709). The Court of Appeals described the allegations set forth in plaintiff’s negligence claim as “virtually identical in every respect, but with an introductory phrase that references Perkins’ failure to ‘comply with professional standards of care’ instead of breach of contract. The damages for both claims were described as the “significant additional expenses” necessary to complete the project. However, the damages sought pursuant to plaintiff’s professional malpractice claim was $4 million higher than for its breach of contract.

In dismissing the negligence claim as duplicative of the breach of contract claim, the Court of Appeals found, as it did in Clark-Fitzpatrick, that the negligence allegations were “merely a restatement, albeit in slightly different language, of the ‘implied’ contractual obligations asserted in the cause of action for breach of contract” (Id. at 711-712). The Court noted that there was no distinction in the allegations between the damages applicable to either claim. The Court also found significant that the contract itself contemplated the defendant architect’s responsibility for additional costs or expenses due to the architect’s design errors or omissions, and addressed it in the contract terms.

In the instant matter, dismissal of the Plaintiffs’ negligence claims is warranted. Affording the Plaintiffs every reasonable inference, as required on a pre-answer motion, the Court finds that the negligence allegations are all based upon acts or omissions pursuant to the explicit terms of the Limited Warranty in the parties’ Contract. In the First Cause of Action, labeled breach of Limited Warranty as against Architect, the Plaintiffs allege latent defects resulting from defective installation of the plumbing, HVAC and electrical systems resulting in major water leaks, damaged floors, failure to maintain a temperature and risk to health and safety. Other than employing language that Defendants “[failed] to exercise reasonable care in fulfilling [their] duty to Plaintiffs”, the negligence claims merely include a more detailed description of the defects resulting from the Defendants’ alleged “negligent and/or substandard workmanship or craftmanship in violation of industry standard and/or the applicable building codes”.

As to the relationship between Kamen and the Plaintiffs, nothing in the Contract, amended complaint, or submissions herein suggest that Kamen was retained to provide architectural services or to design a home specifically for the Plaintiffs herein. Rather, while the Defendants were involved in constructing the Premises, the nature of the parties’ relationship is in contract.”