REGATTA CONDOMINIUM ASSOCIATION v. Mandel Organization, Inc., Appellant.

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Supreme Court, Appellate Division, Second Department, New York.

REGATTA CONDOMINIUM ASSOCIATION, Respondent, v. VILLAGE OF MAMARONECK, et al., Defendants, Mandel Organization, Inc., Appellant.

Decided: March 31, 2003

DAVID S. RITTER, J.P., FRED T. SANTUCCI, SANDRA J. FEUERSTEIN and ROBERT W. SCHMIDT, JJ. Stein Riso Mantel, LLP, New York, N.Y. (Gerard A. Riso of counsel), for appellant. Cuddy & Feder & Worby LLP, White Plains, N.Y. (Joshua J. Grauer of counsel), for respondent.

In an action, inter alia, to recover damages for negligent construction and design of a condominium complex, the defendant Mandel Organization, Inc., appeals from an order of the Supreme Court, Westchester County (Barone, J.), entered March 5, 2002, which denied its motion to dismiss the complaint insofar as asserted against it.

ORDERED that the order is reversed, on the law, with costs, the motion is granted, the complaint is dismissed insofar as against the Mandel Organization, Inc., and the action against the remaining defendants is severed.

The plaintiff condominium association commenced this action, inter alia, seeking damages arising from the alleged negligent design and construction of a condominium complex.   The defendant Mandel Organization, Inc. (hereinafter Mandel) contracted with the owner/sponsor of the condominium to act as the “Owner's Representative” on the project.   The plaintiff alleged that Mandel's breach of that contract proximately caused “all of the serious and substantial construction and construction-related defects” claimed.   The plaintiff sought recovery against Mandel as a third-party beneficiary of the contract and in tort.   The Supreme Court denied Mandel's motion to dismiss the complaint insofar as asserted against it.   We reverse.

 Mandel's contract with the owner/sponsor did not expressly state an intention to benefit any third-party, and the plaintiff did not otherwise plead any facts or circumstances that would support a finding that it was more than a mere incidental beneficiary of the contract (see Port Chester Elec. Constr. Corp. v. Atlas, 40 N.Y.2d 652, 656, 389 N.Y.S.2d 327, 357 N.E.2d 983;  see also Perron v. Hendrickson/Scalamandre/Posillico (TV), 283 A.D.2d 627, 628, 725 N.Y.S.2d 662;  Cahill v. Lazarski, 226 A.D.2d 572, 573, 641 N.Y.S.2d 124;  World Trade Knitting Mills v. Lido Knitting Mills, 154 A.D.2d 99, 551 N.Y.S.2d 930;  cf., Board of Mgrs. of Alfred Condominium v. Carol Mgt., 214 A.D.2d 380, 382-383, 624 N.Y.S.2d 598;  Board of Mgrs. of Astor Terrace Condominium v. Schuman, Lichtenstein, Claman & Efron, 183 A.D.2d 488, 583 N.Y.S.2d 398).   Thus, the plaintiff failed to state a cause of action as a third-party beneficiary of Mandel's contract with the owner/sponsor.

 Further, the complaint does not state a cause of action against Mandel sounding in tort arising from the alleged breach of the contract.   Ordinarily, the breach of a contractual obligation is not sufficient in and of itself to impose tort liability upon the promisor to noncontracting parties (see Church v. Callanan Indus., 99 N.Y.2d 104, 111, 752 N.Y.S.2d 254, 782 N.E.2d 50;  Espinal v. Melville Snow Contrs., 98 N.Y.2d 136, 138-139, 746 N.Y.S.2d 120, 773 N.E.2d 485;  Eaves Brooks Costume Co. v. Y.B.H. Realty Corp., 76 N.Y.2d 220, 557 N.Y.S.2d 286, 556 N.E.2d 1093).   The case law has identified three sets of circumstances as exceptions to this general rule.   The first is when the promisor, while engaged affirmatively in discharging a contractual obligation, creates an unreasonable risk of harm to others, or increases that risk, sometimes described as conduct that has “ launch[ed] a force or instrument of harm” (H.R. Moch Co. v. Rensselaer Water Co., 247 N.Y. 160, 168, 159 N.E. 896;  see Church v. Callanan Indus., supra at 111, 752 N.Y.S.2d 254, 782 N.E.2d 50;  Espinal v. Melville Snow Contrs., supra at 141-142, 746 N.Y.S.2d 120, 773 N.E.2d 485).   The second is when the plaintiff has suffered an injury as a result of reasonable reliance upon the defendant's continuing performance of a contractual obligation (see Church v. Callanan Ind. supra at 111-112, 752 N.Y.S.2d 254, 782 N.E.2d 50;  Espinal v. Melville Snow Contrs., supra at 140, 746 N.Y.S.2d 120, 773 N.E.2d 485).   The third is where the contracting party “has entirely displaced the other party's duty to maintain the premises safely” (Espinal v. Melville Snow Contrs., supra at 140, 746 N.Y.S.2d 120, 773 N.E.2d 485;  see Church v. Callanan Indus, supra at 112, 752 N.Y.S.2d 254, 782 N.E.2d 50;  Palka v. Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579, 611 N.Y.S.2d 817, 634 N.E.2d 189).   Here, the plaintiff failed to plead facts or circumstances that would give rise to any of these three exceptions.   Indeed, scrutiny of the contract between Mandel and the owner/sponsor, which limited Mandel's presence at the job site to two days a week, reveals that the tasks undertaken by Mandel were, in the main, administrative and organizational in nature.   Finally, no relationship akin to privity between Mandel and the plaintiff was established (see Ossining Union Free School Dist. v. Anderson, LaRocca, Anderson, 73 N.Y.2d 417, 541 N.Y.S.2d 335, 539 N.E.2d 91;  Melnick v. Parlato, 296 A.D.2d 443, 745 N.Y.S.2d 68).

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