Court Opinion

ID: 5850314
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:58:52.155709+00
Date Added: 2024-06-11T08:44:03.964161
License: Public Domain

Sandler, J. (dissenting in part).
I disagree with that aspect of the court’s decision that declines to apply here the principle set forth in Sears, Roebuck & Co. v Eneo Assoc. (43 NY2d 389) that the six-year contract Statute of Limitations (CPLR 213, subd 2) governs an action for damages to property or pecuniary interest where the obligations alleged to have been violated by the defendant (p 396) “whether verbalized as in tort for professional malpractice or as in contract for nonperformance of particular provisions of the contract, arose out of the contractual relationship of the parties”.
Apart from the general importance of the issue, it is of more than academic interest in this case. For in Sears, Roebuck, the Court of Appeals reinstated, in addition to the contract cause of action, a separate tort action for professional malpractice that had not been commenced within three years, limiting both causes of action, however, to damages recoverable for contract liability. Moreover, the limited ground on which this court’s decision has reinstated the contract cause of action severely, a'nd erroneously, circumscribes the basis on which plaintiff may recover for a contractual violation.
Analysis of the issue presented appropriately starts with consideration of Matter of Paver & Wildfoerster (Catholic High School Assn.) (38 NY2d 669), in which the Court of Appeals reviewed carefully the evolution of the pertinent then controlling rules in the context of a demand for arbitration that was opposed on the ground that the claim sought to be arbitrated would have been barred by the Statute of Limitations had it been asserted in a court of the State. (See CPLR 7502, subd [b].) The claim was that architects, who had agreed with the owner to supply professional services in the construction of a high school, were in part responsible for leakages first observed after the *458owner took occupancy because “of defects in design and faulty supervision”.
The Court of Appeals stated preliminarily (38 NY2d, at p 672): “In determining whether a claim for property damage is barred by the Statute of Limitations, however, the court should not be constrained by the special rules developed largely in personal injury actions and which depart from the general principle that time limitations depend upon, and are confined to, the form of the remedy.”
The court then went on (supra, pp 675-676) to examine those authorities which had applied the negligence or malpractice limitations where the wrong complained of, although arising from a breach of a contractual obligation, essentially consisted of a failure to use due care in the performance of that obligation:
“Significantly, many of these cases were decided in the context of causes of action to recover damages for direct or underlying personal injury (e.g., Webber v Herkimer & Mohawk St. R.R. Co., 109 NY 311, 313) * * * In personal injury cases, it has been said with verbal plausibility that since the ‘gravamen’ of the action is the misconduct of the defendant, the action sounds ‘essentially’ in tort. On the other hand, however, when the action is one for damages to property or pecuniary interests only, where there is a contractual agreement between the parties, the general tendency has been to allow the plaintiff to elect to sue in contract or tort, as he sees fit * * * Indeed, even in personal injury actions, the rule of the Webber case has been somewhat eroded * * *
“In any event, whatever its validity today and whatever its relation to larger general principles, the rule of the Webber case and those in its wake should not be blanketed to cover arbitration”.
In Sears, Roebuck (43 NY2d 389, supra), the Court of Appeals addressed the same issue in an action at law. The complaint, also against architects, set forth three causes of action: the first for negligence in the preparation of design and plans, the second for breach of implied warranty of fitness for the purposes intended, and the third for breach of contract. It was alleged in this cause of action (p 394) *459that “the architects contracted to provide design, normal structural, mechanical and electrical engineering services and that they breached the contract by neglect or lack of professional care and in improperly designing the ramps”.
In holding that the action was governed by the six-year contract Statute of Limitations, the Court of Appeals reaffirmed and amplified the analysis previously set forth in Paver (supra). The court repeated (43 NY2d, at pp 394-395) that “the choice of applicable Statute of Limitations is properly related to the remedy rather than to the theory of liability”; noted as an apparent exception to this principle those cases that had turned on what was called the “ ‘reality’ ” or the “ ‘essence’ ” of the particular theory of liability; quoted the Paver observation that “‘many of these cases were decided in the context of causes of action to recover damages for direct or underlying personal injury’”; and again stated that “different policy considerations were involved * * * in actions for damages to property or pecuniary interest only”.
Concluding that the contract Statute of Limitations applied, the court noted (supra, p 395) that it did so “[w]ithout intending to disturb the holdings in the line of cases that deal with claims for personal injuries for malpractice on the part of members of one of the professions and acknowledging the Legislature’s general address to malpractice claims (CPLR 214, subd 6)”.
The controlling rule of law was set forth in terms whose applicability to the instant case seem to me free from any possible doubt (supra, p 396):
“All obligations of the architects here, whether verbalized as in tort for professional malpractice or as in contract for nonperformance of particular provisions of the contract, arose out of the contractual relationship of the parties — i.e., absent the contract between them, no services would have been performed and thus there would have been no claims. It should make no difference then how the asserted liability is classified or described, or whether it is said that, although not expressed, an agreement to exercise due care in the performance of the agreed services is to be implied; it suffices that all liability alleged in this complaint had its *460genesis in the contractual relationship of the parties. (Cf. Brick v Cohn-Hall-Marx Co., 276 NY 259, 263-264; see Prosser, Torts [4th ed], § 92, p 613.)
“As a consequence, the range of proof to be adduced to establish liability will be correspondingly broad. That is to say, not only will evidence be admissible, as in the normal contracts case, which might tend to establish breach of a particular term of the contract between the parties; it will also be open to plaintiff owner to introduce evidence, including expert testimony, which might demonstrate that the architects failed to use due and reasonable care in the performance of their obligations under the contract or that their performance fell short of the applicable professional standards — in effect the same scope of admissibility as in the instance of what has in the past been referred to as a claim for professional malpractice.”
Finally, the court considered the problem of damages that would confront the trial court in a case in which, as in this case, the tort claims were barred by the three-year Statute of Limitations (43 NY2d, at p 396): “In principle, because this action was not commenced within three years after accrual of the owner’s claims, proof on the issue of damages should be limited to that admissible under the law of damages for contract liability.”
I am unable to discern any basis for not applying here the controlling rules set forth with meticulous care in Sears, Roebuck (supra).
This is an action to recover for damage to pecuniary interest only in which the obligations of the defendant “whether verbalized as in tort for professional malpractice or as in contract for nonperformance of particular provisions of the contract, arose out of the contractual relationship of the parties — i.e., absent the contract between them, no services would have been performed and thus there would have been no claims” (supra, p 396). Accordingly, the six-year contract Statute of Limitations applies no matter “how the asserted liability is classified or described, or whether it is said that, although not expressed, an agreement to exercise due care in the performance of the agreed services is to be implied; it suffices that all *461liability alleged in this complaint had its genesis in the contractual relationship of the parties.” (Sears, Roebuck & Co. v Eneo Assoc., 43 NY2d 389, 396, supra.)
In finding the Sears, Roebuck principles inapplicable in this case, the court’s opinion suggests that the Court of Appeals did not mean in Sears, Roebuck what the opinion said, that the Court of Appeals most likely did not intend so sweeping a limitation on the previously understood scope of the malpractice limitation sections. This speculation seems to me insupportable. The Sears, Roebuck opinion discloses that the malpractice sections were carefully considered.
The action in Sears, Roebuck (supra) was classically a professional malpractice action. Indeed one of the causes of action reinstated by the Court of Appeals was specifically so described in the opinion. Throughout the opinion the words “negligence” and “malpractice” were used interchangeably. The explicit statement in the opinion (p 395) that it was not intended “to disturb the holdings in the line of cases that deal with claims for personal injuries for malpractice on the part of members of one of the professions” strongly implies a different intent with regard to claims for other than personal injuries. And in a footnote that seems to me dispositive (43 NY2d, at p 395, n 1) the opinion meticulously detailed proposals to amend CPLR 214 (subd 6) to include within its ambit claims for malpractice arising out of contract, and noted that such proposals had never been adopted.
In the light of the foregoing, I see no warrant whatever for not applying the Sears, Roebuck rule in accordance with the usual and accepted meaning of the words used in the opinion. Nor should it be overlooked that the rule formulated quite precisely interprets the statutory language in the relevant sections, which prohibit “an action to recover damages for malpractice” commenced after three years (CPLR 214, subd 6), but allow six years to commence an action “upon a contractual obligation or liability express or implied” (CPLR 213, subd 2). If the practical consequences of applying these sections as quite accurately interpreted by the Court of Appeals are undesirable, the *462problem presented would be appropriate for corrective legislative action.
In Adler & Topol v Exclusive Envelope Corp. (84 AD2d 365), the Second Department concluded (pp 367, 368) that the decision in Sears, Roebuck turned on the circumstance that there was “a detailed written agreement which provided for specific and sophisticated services,” and that the ruling in that case “should not be expanded” to cover an “informal underlying oral agreement”. But the Court of Appeals did not say in Sears, Roebuck that the six-year contract Statute of Limitations was to govern an action for damage to pecuniary interest where the obligations arose out of “a detailed written agreement”. The equivalent words used in the formulation of the rule by the Court of Appeals, and indeed twice repeated, were “contractual relationship”. It is not lightly to be assumed that the Court of Appeals did not intend this phrase to be interpreted according to its normal and accepted meaning. Nor is there any basis in the contract Statute of Limitations, which the Court of Appeals was interpreting, for a distinction between “detailed written agreement” and “an informal, underlying oral agreement”, the statutory language being “an action upon a contractual obligation or liability express or implied”. (See CPLR 213, subd 2.)
Accordingly, the order of the Supreme Court, New York County (Tyler, J.), entered February 27, 1980 granting the motion of defendant Flatto to dismiss the amended complaint on the ground that it was barred by the Statute of Limitations, should be reversed, on the law, the motion to dismiss should be denied, and the complaint should be reinstated.
Ross, Markewich and Fein, JJ., concur with Birns, J. P.; Sandler, J., dissents in part in an opinion.
Order, Supreme Court, New York County, entered on February 27, 1980, modified, on the law, the motion to dismiss the amended complaint pursuant to CPLR 3211 (subd [a], par 5) denied with respect to the contract cause of action, which is reinstated, and the order otherwise affirmed, without costs and without disbursements.