ROSS v. Consolidated Edison Company of New York, Inc., Defendant–Respondent. (2024)

Order, Supreme Court, New York County (Lucy Billings, J.), entered March 27, 2023, which granted defendant Consolidated Edison Company of New York, Inc.’s (Con Edison's) motion to dismiss the second cause of action against it, unanimously modified, on the law, without costs, to deny the motion to the extent that it is based upon a contract between Con Edison and the City, and otherwise affirmed, without costs.

In this putative class action, plaintiff Graham Ross and other similarly situated construction flaggers brought a breach of contract claim premised on a contract between Con Edison and the City. In support of this claim, plaintiffs alleged that Con Edison failed to ensure payment of prevailing wages by codefendant No Parking Today, Inc. (No Parking) as required by the permits issued by the City Department of Transportation (DOT), in that it breached agreements required to be made, pursuant to Administrative Code of City of N.Y. § 19–142, prior to obtaining such permits.  Administrative Code § 19–142 required Con Edison “to agree that ․ the prevailing scale of union wages shall be the prevailing wage for similar titles as established by the fiscal officer pursuant to section [220] of the labor law, paid to those so employed,” and provides that “[n]o permit shall be issued until such agreement shall have been entered into with the” DOT. As required by the Administrative Code, the DOT permits issued to Con Edison stated that the permittee was required, “before such permit may be issued, to agree ․ that the prevailing scale of union wages shall be the prevailing wage for similar titles” established pursuant to Labor Law § 220 (see Lewis v. Hallen Constr. Co., Inc., 193 A.D.3d 511, 141 N.Y.S.3d 857 [1st Dept. 2021]).

We find that plaintiffs sufficiently alleged a breach of contract claim based on an agreement between Con Edison and the City, and the court erred in dismissing this portion of their claim.

Further, the fact that the breach of contract cause of action in the complaint does not specifically identify the relevant contract but instead refers to “the promises required to be made pursuant to New York City Administrative Code § 19–142 prior to obtaining such permits,” does not require dismissal.  Despite the non-specificity, the complaint “give[s] sufficient notice of the nature of the claim” by referencing Administrative Code § 19–142 and the DOT permits (Tokhtaman v. Human Care, LLC, 149 A.D.3d 476, 478, 52 N.Y.S.3d 89 [1st Dept. 2017], lv dismissed 30 N.Y.3d 1010, 66 N.Y.S.3d 230, 88 N.E.3d 391 [2017] [finding that although the contracts allegedly breached were not specifically identified in the complaint, the citation to the applicable statute indicated that the contracts referenced are those which companies are required to obtain pursuant to that statute]).

However, the court properly dismissed the portion of plaintiffs’ breach of contract claim based solely on the DOT permit.  Contrary to plaintiffs’ argument, the type of permit at issue here is not a contract giving rise to third-party beneficiary rights (see Matter of Union Indem. Ins. Co. of N.Y., 200 A.D.2d 99, 108, 611 N.Y.S.2d 506 [1st Dept. 1994] [“the essential foundation of any right of action a third-party beneficiary may have is a valid and binding contract”]).¹  Tellingly, none of the cases cited by plaintiffs hold that a permit constitutes a contract.²  Plaintiffs’ argument that “the permit, even if not a formal contract, serves as a memorialization of ConEd's enforceable agreement ․” is also unpersuasive.

We have considered the remaining contentions and find them unavailing.

FOOTNOTES

1.   Moveover, early New York decisions also concluded that a permit is not a contract (see e.g. People ex rel. Lodes v. Department of Health of City of N.Y., 189 N.Y. 187, 191, 82 N.E. 187 [1907];  Metropolitan Bd. of Excise v. Barrie, 34 N.Y. 657 [1866]).  A considerably more recent Court of Appeals case, (Brothers v. New York State Elec. & Gas Corp., 11 N.Y.3d 251, 259–260, 869 N.Y.S.2d 356, 898 N.E.2d 539 [2008]), found that the work permit at issue in that case was “not a typical ‘bargained-for exchange’ ” but declined to decide whether the permit was a contract.

2.   Most of the cases cited by plaintiffs involve actual contracts, leases, or scaffolding law liability and are thus inapposite (see e.g. Lewis v. Hallen Constr. Co., Inc., 193 A.D.3d 511, 141 N.Y.S.3d 857 [1st Dept. 2021];  Bart v. Universal Pictures, 277 A.D.2d 4, 715 N.Y.S.2d 240 [1st Dept. 2000];  Larkin v. Consolidated Tel. & Elec. Subway Co., 193 Misc. 1001, 85 N.Y.S.2d 631 [Sup. Ct., N.Y. County 1949]).