HENICK LANE INC v. HUDSON MERIDIAN CONSTRUCTION GROUP LLC 86 LLC LLC (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the defendant/counterclaim plaintiff Red Apple 86 Fleet Place Development, LLC, appeals, and the plaintiff/counterclaim defendant cross-appeals, from an order of the Supreme Court, Kings County (Larry D. Martin, J.), dated December 3, 2024.  The order, insofar as appealed from, granted that branch of the motion of the plaintiff/counterclaim defendant and the counterclaim defendant which was for summary judgment dismissing so much of the counterclaims as sought to recover purely economic losses.  The order, insofar as cross-appealed from, granted that branch of the defendants/counterclaim plaintiffs' motion which was for summary judgment on so much of their counterclaims as sought to recover for property damages, including, inter alia, the cost of security and lost equipment.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting those branches of the defendants/counterclaim plaintiffs' motion which were for summary judgment on so much of their counterclaims as sought to recover for the costs of security and lost equipment, and substituting therefor a provision denying those branches of the motion;  as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

The plaintiff/counterclaim defendant, Henick–Lane, Inc. (hereinafter Henick–Lane), commenced this action, inter alia, to recover damages for breach of contract against, among others, the defendant/counterclaim plaintiff Red Apple 86 Fleet Place Development, LLC (hereinafter Red Apple), and the defendant Hudson Meridian Construction Group, LLC (hereinafter Hudson), based upon their failure to pay Henick–Lane its final payment for the installation of an HVAC system in a mixed-use building owned by Red Apple.  Red Apple and its insurer, the defendant/counterclaim plaintiff Hartford Fire Insurance Company (hereinafter Hartford), interposed an answer and asserted counterclaims against Henick–Lane and the counterclaim defendant, Vivid Mechanical, LLC (hereinafter Vivid).  The counterclaims alleged that the work of Henick–Lane and Vivid was defective and caused four major water leak incidents, requiring repairs to the property and resulting in lost rental income.

Henick–Lane and Vivid moved, inter alia, for summary judgment dismissing so much of the counterclaims as sought to recover lost rental income, arguing, among other things, that a trade agreement between Henick–Lane and Red Apple specifically excluded the recovery of such economic losses.  Red Apple and Hartford moved, inter alia, for summary judgment on so much of their counterclaims as sought to recover damages incurred due to the property damage caused by Henick–Lane and Vivid's allegedly defective work.  In support of their motion, Red Apple and Hartford argued that these damages totaled $291,180.71, which included, among other things, the cost of security hired during the repairs and the loss of certain equipment known as “gas trains” that Red Apple had to replace.  In an order dated December 3, 2024, the Supreme Court, inter alia, granted that branch of the motion of Henick–Lane and Vivid which was for summary judgment dismissing so much of the counterclaims as sought to recover purely economic losses, and granted that branch of the motion of Red Apple and Hartford which was for summary judgment on so much of the counterclaims as sought to recover property damages caused by Henick–Lane and Vivid's allegedly defective work in the sum of $291,180.71, which included, among other things, the cost of security and lost equipment.  Red Apple appeals, and Henick–Lane cross-appeals.

“A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion” (Goodale v. Central Suffolk Hosp., 210 AD3d 956, 957;  see Greenfield v. Philles Records, 98 N.Y.2d 562, 569).  The test for ambiguity is whether the provision is “susceptible of two reasonable interpretations” (State of New York v. Home Indem.  Co., 66 N.Y.2d 669, 671;  see Concordia Gen. Contr.  Co., Inc. v Preferred Mut. Ins. Co., 146 AD3d 932, 934).  “The mere assertion by one [party] that contract language means something different to him or her, where it is otherwise clear, unequivocal, and understandable when read in connection with the whole contract, is not in and of itself enough to raise a triable issue of fact” (Regency Condominium v. Dongbu Ins. Co., Ltd., 188 AD3d 742, 743;  see Cohen & Slamowitz, LLP v. Zurich Am. Ins. Co., 168 AD3d 905, 906).  “When a party is under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed” (Hooper Assoc. v. AGS Computers, 74 N.Y.2d 487, 491;  see Cano v. Mid–Valley Oil Co., Inc., 151 AD3d 685, 690).

Henick–Lane and Vivid established their prima facie entitlement to judgment as a matter of law dismissing so much of the counterclaims as sought to recover purely economic losses.  Henick–Lane and Vivid submitted, among other things, a copy of the trade agreement between Henick–Lane and Red Apple.  Section 20.1 of the agreement, entitled “Indemnity,” unambiguously required Henick–Lane to indemnify Red Apple for all damages and liability “of any nature whatsoever which arise out of or are connected with or are claimed to arise out of or be connected with personal injury, wrongful death or property damages” in the performance of Henick–Lane's work.  The agreement, which contained red-line edits, demonstrated that Henick–Lane and Red Apple specifically removed the phrase “any other economic loss” from the indemnification provision.  In opposition, Red Apple failed to raise a triable issue of fact.  Accordingly, the Supreme Court properly granted that branch of the motion of Henick–Lane and Vivid which was for summary judgment dismissing so much of the counterclaims as sought to recover purely economic losses.

The Supreme Court should have denied those branches of the motion of Red Apple and Hartford which were for summary judgment on so much of their counterclaims as sought to recover for the costs of security and lost equipment.  Red Apple and Hartford demonstrated, prima facie, that Red Apple paid for security to monitor the repairs to the building.  However, in opposition, Henick–Lane raised a triable issue of fact as to whether the security detail was a consequential damage reasonably contemplated by the parties (see Ashland Mgt. v. Janien, 82 N.Y.2d 395, 403;  Island Ordnance Sys., LLC v. Amerimex, Inc., 224 AD3d 821, 823).  Additionally, Red Apple and Hartford failed to eliminate triable issues of fact as to whether Henick–Lane was responsible for the loss of the gas trains.

The parties' remaining contentions either need not be reached in light of our determination or are without merit.

CONNOLLY, J.P., CHRISTOPHER, WAN and QUIRK, JJ., concur.