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Castle Village Owners Corp. v. Greater New York Mutual Insurance Co.

December 2, 2008

CASTLE VILLAGE OWNERS CORP., PLAINTIFF,
v.
GREATER NEW YORK MUTUAL INSURANCE COMPANY, ET AL., DEFENDANTS. [AND A THIRD-PARTY ACTION]
LANGAN ENGINEERING AND ENVIRONMENTAL SERVICES, INC., ET AL., SECOND THIRD-PARTY PLAINTIFFS-RESPONDENTS,
MUESER RUTLEDGE CONSULTING ENGINEERS, SECOND THIRD-PARTY DEFENDANT-APPELLANT.



Second third-party defendant Mueser Rutledge Consulting Engineers appeals from an order of the Supreme Court, New York County (Helen E. Freedman, J.), entered February 15, 2008, which, insofar as appealed from, denied its motion to dismiss the second third-party complaint in its entirety.

The opinion of the court was delivered by: Lippman, P.J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Jonathan Lippman, P.J., Richard T. Andrias, David B. Saxe, John W. Sweeny, Jr., Leland G. DeGrasse, JJ.

604415/05, 590264/07, 590302/07

On May 12, 2005, a 250-foot section of the retaining wall bordering the Castle Village co-op complex collapsed onto the Henry Hudson Parkway, causing a major artery providing access into and out of Manhattan to be shut down and inconveniencing thousands. Remarkably, although there was damage to parked vehicles, no one was injured or killed.

Plaintiff Castle Village commenced this action against, among others, Langan Engineering and Environmental Services, Inc. and Langan Engineering and Environmental Services, P.C. Langan had been providing engineering services for Castle Village, including monitoring and maintaining the retaining wall, from approximately 2002 until the collapse. Langan, in turn, brought this third-party action for contribution against Mueser Rutledge Consulting Engineers (MRCE), the engineers who had designed and implemented certain corrective measures for the stability of the retaining wall in 1985 when Castle Village was in the process of converting from a rental building to a co-op. The primary issue presented for review is whether the motion court properly denied MRCE's motion to dismiss under CPLR 3211(h).

In 1985, WLS Associates, the owner of Castle Village and the sponsor of the conversion, submitted an offering plan to the New York State Department of Law. In connection with the proposed conversion, the tenants retained an engineer, John J. Flynn, P.E., to inspect the site. Flynn issued a report raising certain concerns about the condition of the property, including the structural integrity of the retaining wall. The report noted that there were signs of movement and instability in the wall and recommended that a separate structural analysis be conducted to determine the type of repairs that would be necessary.

Langan alleges that the Department of Law delayed the conversion because of the concerns raised by Flynn's report. The Department of Law then retained MRCE to study the condition of the retaining wall and to design and inspect the repairs. The sponsor agreed that it would accept MRCE's recommendations and fund the ensuing repair work. Langan asserts that the sponsor pressured MRCE to generate a report quickly to allow the conversion process to move forward. MRCE inspected the site and issued a report recommending several repairs, including patching cracks with mortar and placing rock bolts into the wall, but opined that the wall was "in good condition" in light of its age and showed "no signs of instability." This report ultimately was included in the Castle Village offering plan.

MRCE subsequently provided the sponsor with drawings depicting proposed repairs to certain sections of the wall, including the section that later collapsed. One of the proposed measures was to insert eight rock anchors at least four feet into the bedrock behind the wall. The remediation, undertaken by a contractor subject to MRCE's supervision and inspection, began in June 1986. The co-op conversion took place in December 1986, while repairs were ongoing. MRCE monitored the progress of the work and completed its final inspection of the remediation in February 1987.

Langan asserts that, although MRCE supervised the remediation, none of its representatives actually observed the installation of the rock anchors or tested them once they were in place. Approximately 19 months after repairs were completed, MRCE provided Castle Village with a letter stating that it had inspected and accepted the remedial work. Shortly thereafter, MRCE also sent an amended inspection report to the New York City Department of Buildings certifying that it had inspected the work and that the work "conform[ed] to Code requirements." Langan alleges, however, that the rock anchors were too short for their intended purpose and did not penetrate into the bedrock behind the wall.

Castle Village retained Langan in 2002 to perform engineering services with respect to the wall and other portions of the property. Langan monitored the wall through a series of surveys and determined that some movement was occurring. In April of 2005, Castle Village again requested that Langan visit the property. At that time, Langan conducted additional surveys and concluded that the wall was moving more rapidly. In addition, there were visible cracks and sinkholes in the land above the retaining wall, which caused Langan to recommend immediate remedial action. Langan designed an emergency bracing system, but the wall collapsed before the system could be implemented.

Castle Village brought suit against Langan, among others, asserting claims for breach of contract and professional negligence. Langan commenced this third-party action against MRCE seeking contribution. As is here relevant, MRCE moved to dismiss the third-party complaint pursuant to CPLR 3211(h), which relief was denied on the ground that the complaint's allegations were sufficient to establish "a substantial basis in law" for Langan's claim. Supreme Court also found that MRCE owed a duty of care to Castle Village, since there was a relationship between them approaching privity, and that Langan's contribution claim was not barred by the economic loss doctrine.

As noted, MRCE's motion to dismiss was made under CPLR 3211(h) a provision that imposes a heightened standard of review. CPLR 3211(h) applies to claims against a licensed architect, engineer, land surveyor or landscape architect for personal injury, wrongful death or property damage, when the professional's conduct occurs more than 10 years prior to the date of the claim. Under CPLR 3211(h), the movant must demonstrate that the action is against a statutorily enumerated design professional and that it requires service of a notice of claim pursuant to CPLR 214-d(1)*fn1. To maintain the action, the party responding to the motion must then show that "a substantial basis in law exists to believe that the performance, conduct or omission complained of . . ...


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