Court Opinion

ID: 4084036
Source: CourtListenerOpinion
Date Created: 2016-10-07 23:50:49.027897+00
Date Added: 2024-06-11T14:34:58.879370
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

1044
CA 13-00090
PRESENT: SCUDDER, P.J., CENTRA, CARNI, LINDLEY, AND SCONIERS, JJ.

NIAGARA FOODS, INC., BENLEY REALTY CO. AND
THE CHARTER OAK FIRE INSURANCE COMPANY,
PLAINTIFFS-APPELLANTS-RESPONDENTS,

                    V                             MEMORANDUM AND ORDER

FERGUSON ELECTRIC SERVICE COMPANY, INC.,
DEFENDANT-RESPONDENT-APPELLANT,
AND TEGG CORPORATION, DEFENDANT-RESPONDENT.
(APPEAL NO. 1.)

LAW OFFICES OF ROBERT A. STUTMAN, P.C., NEW YORK CITY AND BRANDT,
ROBERSON & BRANDT, P.C., LOCKPORT (CAROL R. FINOCCHIO OF COUNSEL), FOR
PLAINTIFFS-APPELLANTS-RESPONDENTS.

RUPP, BAASE, PFALZGRAF, CUNNINGHAM & COPPOLA LLC, BUFFALO (R. ANTHONY
RUPP, III, OF COUNSEL), FOR DEFENDANT-RESPONDENT-APPELLANT.

WALSH, ROBERTS & GRACE, BUFFALO (JOSEPH H. EMMINGER, JR., OF COUNSEL),
FOR DEFENDANT-RESPONDENT.

     Appeal and cross appeal from an order of the Supreme Court,
Niagara County (Ralph A. Boniello, III, J.), entered October 16, 2012.
The order granted the motion of defendant Tegg Corporation for summary
judgment dismissing the first amended complaint against it, granted
those parts of the motion of defendant Ferguson Electric Service
Company, Inc., for summary judgment dismissing the causes of action
for negligence and strict products liability and otherwise denied the
motion of defendant Ferguson Electric Service Company, Inc.

     It is hereby ORDERED that said cross appeal is unanimously
dismissed and the order is affirmed without costs.

     Memorandum: This action arises out of a fire that caused
significant property damage to a four-story industrial building in the
Village of Middleport in Niagara County. During the relevant time
period, plaintiffs Niagara Foods, Inc. (Niagara) and Benley Realty Co.
(Benley) both occupied the building, and Benley was the owner.
Plaintiff The Charter Oak Fire Insurance Company (Charter Oak) seeks
subrogation for the payments it made as a result of the subject fire.
In appeal No. 1, plaintiffs appeal and defendant Ferguson Electric
Service Company, Inc. (Ferguson) cross-appeals from an order that
granted the motion of defendant Tegg Corporation (Tegg) for summary
judgment dismissing the first amended complaint in its entirety
                                 -2-                          1044
                                                         CA 13-00090

against Tegg and that granted in part Ferguson’s motion for summary
judgment dismissing, as relevant on appeal, the negligence cause of
action against it. In appeal No. 2, Ferguson appeals from an order
that, upon reargument, denied its motion to the extent that it sought
summary judgment dismissing the remaining cause of action, for breach
of contract, against it. We note at the outset that Ferguson’s cross
appeal from the order in appeal No. 1 must be dismissed because the
order in appeal No. 2 superseded the original order insofar as it
granted leave to reargue the prior motion with respect to the cause of
action for breach of contract and, upon reargument, adhered to the
prior decision concerning that cause of action (see Loafin’ Tree Rest.
v Pardi [appeal No. 1], 162 AD2d 985, 985).

     In appeal No. 1, we reject plaintiffs’ contention that Supreme
Court erred in granting those parts of defendants’ respective motions
for summary judgment dismissing the negligence cause of action. “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 . . . This legal duty must spring
from circumstances extraneous to, and not constituting elements of,
the contract, although it may be connected with and dependent upon the
contract” (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382,
389; see Bristol-Myers Squibb, Indus. Div. v Delta Star, 206 AD2d 177,
179-180). Plaintiffs cannot maintain their tort cause of action
because Ferguson, which had a contract with Niagara, owed no legal
duty that is independent of the contract (see generally Bristol-Myers
Squibb, 206 AD2d at 179-180). Moreover, “a contractual obligation,
standing alone, will generally not give rise to tort liability in
favor of a third party,” such as Benley (Espinal v Melville Snow
Contrs., 98 NY2d 136, 138).

     In addition, even assuming, arguendo, that the negligence cause
of action is viable with respect to Ferguson, we conclude that it was
properly dismissed against Tegg. That cause of action as against Tegg
was premised solely upon its status as a franchisor of Ferguson,
inasmuch as Tegg had neither a contract nor a direct relationship with
any of the plaintiffs. “The mere existence of a franchise agreement
is insufficient to impose vicarious liability on the franchisor for
the acts of its franchisee; there must be a showing that the
franchisor exercised control over the day-to-day operations of its
franchisee” (Martinez v Higher Powered Pizza, Inc., 43 AD3d 670, 671).
Here, the record establishes that Tegg did not exercise “control over
the day-to-day operations of” Ferguson (id.).

     In appeal No. 2, we agree with Ferguson that the court erred,
upon reargument, in denying its motion for summary judgment dismissing
the remaining cause of action against it, for breach of contract,
which at this stage of the litigation is asserted only by Niagara and,
by way of subrogation, Charter Oak. We therefore reverse the order
insofar as appealed from. It is well settled that the elements of a
breach of contract cause of action are “the existence of a contract,
the plaintiff’s performance under the contract, the defendant’s breach
of that contract, and resulting damages” (JP Morgan Chase v J.H. Elec.
of N.Y., Inc., 69 AD3d 802, 803; see Clearmont Prop., LLC v Eisner, 58
                                 -3-                          1044
                                                         CA 13-00090

AD3d 1052, 1055). Ferguson contracted to provide a “3-year Electrical
Preventive Maintenance Program” (EPMP) for a fee of $2,108 per year,
and the contract specified the services to be provided pursuant
thereto. It is undisputed that there was a written contract between
Ferguson and Niagara and that Niagara met its obligations under the
contract, which in this context was payment for the services rendered.
While plaintiffs allege that Ferguson breached that contract, they do
not identify what service or services were either not performed at all
or were inadequately performed. Plaintiffs thus effectively concede
that Ferguson performed the services it promised to perform pursuant
to the contract, and they instead attempt to prove based on matters
outside the agreement that Ferguson failed to perform additional
services or to meet certain industry standards for an EPMP.

     “[I]nasmuch as [Niagara] seeks to create triable issues of fact
solely through the use of parol evidence, resolution of the propriety
of [the c]ourt’s [denial] of summary judgment against [it] turns upon
whether parol evidence is admissible in this instance” (State Univ.
Constr. Fund v Aetna Cas. & Sur. Co., 189 AD2d 929, 931-932). It is
well established that “a written agreement that is complete, clear and
unambiguous on its face must be enforced according to the plain
meaning of its terms” (Greenfield v Philles Records, 98 NY2d 562,
569). Moreover, “[p]arol evidence—evidence outside the four corners
of the document—is admissible only if a court finds an ambiguity in
the contract” (Schron v Troutman Sanders LLP, 20 NY3d 430, 436).
Here, parole evidence is not admissible because there is no ambiguity
in the contract between Niagara and Ferguson (see Polyfusion Elecs.,
Inc. v Promark Elecs., Inc., 108 AD3d 1186, 1187). “What [plaintiffs]
misapprehend[] is that evidence of current industry practice is only
‘admissible to explain the meaning of terms used in any particular
trade, when their meaning is material to construe the contract’ ”
(News Am. Mktg., Inc. v Lepage Bakeries, Inc., 16 AD3d 146, 148).
Ferguson met its initial burden by establishing through proof in
admissible form that it performed the services it had promised to
perform in the contract and, in opposition, plaintiffs failed to
present evidence that Ferguson breached the contract (see generally
Alvarez v Prospect Hosp., 68 NY2d 320, 324). As a result, Ferguson is
entitled to summary judgment dismissing the cause of action for breach
of contract against it. In light of our determination, we need not
address Ferguson’s separate contention relating solely to Charter
Oak’s right of subrogation.

Entered:   November 15, 2013                    Frances E. Cafarell
                                                Clerk of the Court