Court Opinion

ID: 9821943
Source: CourtListenerOpinion
Date Created: 2023-09-01 08:35:55.875655+00
Date Added: 2024-06-11T07:38:59.043139
License: Public Domain

Order, Supreme Court, New York County (Eileen Bransten, J.), entered March 1, 2013, which, to the extent appealed from as limited by the briefs, granted the part of defendant Perkins Eastman Architects, P.C.’s (Perkins) motion for summary judgment seeking dismissal of the fifth cause of action, for breach of contract, and denied the part of the motion seeking dismissal of the sixth cause of action, for negligence, modified, on the law, to deny the motion as to the fifth cause of action, and otherwise affirmed, without costs.
In or about 2000, plaintiff City decided to build a state-of-the-art forensic biology laboratory for the Office of the Chief Medical Examiner. The project was designed to be a 15-story structure with a two-level basement, and was to be located on a parcel of city-owned land at the intersection of First Avenue and East 26th Street in Manhattan. The project site was part of the Bellevue Hospital Campus.
The City turned over the project to plaintiff Dormitory Authority of the State of New York (DASNY), a public authority that provides professional services and expertise for the financing and construction of public projects. The City and DASNY then entered into an agreement pursuant to which *434DASNY was to manage and finance the planning, design, and construction of the project. DASNY was authorized to contract with consultants, contractors, and a construction manager. It retained Perkins as the architect. Defendant Samson Construction Co. (not a party to this appeal) was hired as the foundation contractor. Samson was responsible for site excavation and the foundation’s construction.
In or about May 2002, when Samson began driving piles as part of the foundation work, the adjacent Bellevue building, known as the C&D building, began to settle. The settling of the building continued while the foundation work continued. By March 2004, the C&D Building had settled eight inches in some areas, leading to a delay of the project by more than 18 months. Other structures adjacent to the project site, including sidewalks, roadbeds, sewers, and water systems, also sustained damage due to the settlement during the foundation work. The cost of fixing the damage to the project site and the adjacent properties was approximately $37 million. Perkins ultimately completed its work on the project in February 2007.
The motion court erred in dismissing the breach of contract claim against Perkins. Although Perkins made a prima facie showing that the City is not a third-party beneficiary of the contract because it is not named in the contract, the City raised an issue of fact whether it is an intended third-party beneficiary of the contract (see MK W. St. Co. v Meridien Hotels, 184 AD2d 312 [1st Dept 1992]). The contract expressly states that a city agency will operate the DNA laboratory, and the City retained control over various aspects of the project, including participation in and approval of the design of the building, the budget for the project, the selection of contractors, including Perkins, and the construction of the building.
The motion court, however, correctly determined that DASNY may proceed with its negligence claim. Perkins, as architect, may be subject to tort liability based on a failure to exercise due care in the performance of its duties. In making this determination, the court is to look at the nature of the injury and whether the plaintiff is merely seeking the benefit of its agreement. Where the plaintiff is merely seeking the benefit of its agreement, it is limited to a contract claim (Sommer v Federal Signal Corp., 79 NY2d 540, 551-552 [1992]).
Where, however, “[t]he particular project . . . is so affected with the public interest that the failure to perform competently can have catastrophic consequences,” a professional may be subject to tort liability as well (Trustees of Columbia Univ. in City of N.Y. v Gwathmey Siegel & Assoc. Architects, 192 AD2d *435151, 154 [1st Dept 1993]). Indeed, “[t]his is one of the most significant elements in determining whether the nature of the type of services rendered gives rise to a duty of reasonable care independent of the contract itself” (id., citing Sommer v Federal Signal Corp., 79 NY2d 540, 553 [1992]). As the Court explained in Sommer, “ [I] t is policy, not the parties’ contract, that gives rise to a duty of . . . care” (79 NY2d at 552). The “nature of the injury, the manner in which the injury occurred and the resulting harm” are also considered (id., citing Bellevue S. Assoc. v HRH Constr. Corp., 78 NY2d 282, 293-295 [1991] [Court rejected plaintiff’s attempt to ground in tort a claim that defendants supplied defective floor tiles, noting that the injury (delamination of tiles) was not personal injury or property damage, there was no abrupt, cataclysmic occurrence, and the injury was simply replacement cost of the product]).
Here, there is a factual question whether Perkins assumed an independent legal duty as an architect to perform its work in a manner consistent with the generally accepted standard of professional care in its industry. DASNY alleges that Perkins’s failure to adhere to professional standards of care by not conducting an adequate site investigation and/or providing an adequate foundation design appropriate to the existing site conditions violated the relevant standard of professional care, resulting in increased costs for the project and additional costs of $37 million to remediate the damage caused by the failure to comply with those professional standards. The damage included damage to the sidewalks, roadbeds, sewers, and water systems located near a major medical center in Manhattan. There are issues of fact whether the project was so affected with the public interest that Perkins’s failure to comply with the relevant professional standards could result in catastrophic consequences (Trustees of Columbia Univ., 192 AD2d at 154).
The dissent opposes this position on the basis that the damages were not “catastrophic” since the “settling of the building took place gradually over a couple of years and never posed a serious threat to the public’s safety.” However, the suddenness of the injury is only one factor for the court to consider, and, in any event, a catastrophe does not necessarily have to be a sudden event {see Oxford Online Dictionaries, catastrophe [“(A)n event causing great and often sudden damage or suffering; a disaster” (emphasis added)]).* The destruction of road beds, sidewalks, sewers and water pipes in a crowded city is a catastrophe and has the potential to lead to catastrophic *436consequences (see Sommer, 79 NY2d at 552; see also Duane Reade v SL Green Operating Partnership, LP, 30 AD3d 189, 189-190 [1st Dept 2006] [tort claim properly made out where it was alleged that “defendant reduced the heat in the building and . . . freezing temperatures caused a sprinkler pipe to burst, resulting in $500,000 in damages to plaintiffs property”]).
Perkins’s reliance on the “economic loss” rule is also unavailing. The “economic loss” doctrine does not apply to negligence claims arising out of a violation of a professional duty (Assured Guar. [UK] Ltd. v J.P. Morgan Inv. Mgt. Inc., 80 AD3d 293, 306 [1st Dept 2010], affd 18 NY3d 341 [2011]).
We have considered Perkins’s remaining contentions and find them unavailing.
Concur—Acosta, Richter and Kapnick, JJ.

 Oxford Online Dictionaries, catastrophe (http://www.oxforddictionaries . com/us/definition/american_english/catastr ophe)