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Emmelyn Logan-Baldwin and Leroy A. Baldwin, Plaintiffs-Appellants v. L.S.M. General Contractors

April 20, 2012

EMMELYN LOGAN-BALDWIN AND LEROY A. BALDWIN, PLAINTIFFS-APPELLANTS,
v.
L.S.M. GENERAL CONTRACTORS, INC., BART NOTO, INDIVIDUALLY AND AS PRESIDENT OF L.S.M. GENERAL CONTRACTORS, INC.,
HENRY ISAACS HOME REMODELING AND REPAIR, HENRY ISAACS, INDIVIDUALLY AND AS PRESIDENT OF HENRY ISAACS HOME
REMODELING AND REPAIR, DEFENDANTS-RESPONDENTS, ET AL., DEFENDANTS.



Appeal from an order of the Supreme Court, Monroe County (Kenneth R. Fisher, J.), dated January 6, 2011.

LoganBbaldwin v L.S.M. Gen. Contrs., Inc.

Decided on April 20, 2012

Appellate Division, Fourth Department

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.

PRESENT: SCUDDER, P.J., CENTRA, LINDLEY, AND SCONIERS, JJ.

The order, among other things, granted the motion of defendants Henry Isaacs Home Remodeling and Repair and Henry Isaacs, individually and as president of Henry Isaacs Home Remodeling and Repair, for summary judgment.

Now, upon the stipulation of discontinuance of appeal signed by the attorneys for plaintiffs and defendants L.S.M. General Contractors, Inc. and Bart Noto, individually and as president of L.S.M. General Contractors, Inc., on November 23, 2011,

It is hereby ORDERED that the appeal from said order insofar as it concerns defendants L.S.M. General Contractors, Inc. and Bart Noto, individually and as president of L.S.M. General Contractors, Inc., is unanimously dismissed upon stipulation and the order is modified on the law by denying in part the motion of defendants Henry Isaacs Home Remodeling and Repair and Henry Isaacs, individually and as president of Henry Isaacs Home Remodeling and Repair, and reinstating the breach of contract cause of action against those defendants and as modified the order is affirmed without costs.

Memorandum: Plaintiffs, the owners of an historic residence, contracted with defendant L.S.M. General Contractors, Inc. (LSM), through its president, to be the general contractor for a rehabilitation project on that residence. Defendant Bart Noto, sued individually and as the president of LSM, subcontracted with defendants Henry Isaacs Home Remodeling and Repair and Henry Isaacs, individually and as president of Henry Isaacs Home Remodeling and Repair (collectively, Isaacs defendants), to perform the roofing work on the project. The Isaacs defendants in turn subcontracted with defendant Hal Brewster, sued individually and as the president of defendant Hal Brewster Home Improvements, Inc. (collectively, Brewster defendants), to perform the roofing work.

The Isaacs defendants do not dispute that, when Hal Brewster performed the work on the roof, he "botched" the job, causing extensive leaking inside the house. LSM and the Isaacs defendants initially attempted to correct the problems, but they subsequently abandoned the project, leaving plaintiffs to hire others to complete the work.

Plaintiffs commenced this action, asserting breach of contract and fraud causes of action against all defendants. Plaintiffs have since obtained a default judgment against the Brewster defendants, and in a prior appeal we affirmed an order granting the cross motion of Noto for summary judgment dismissing the complaint against him in his individual capacity and for summary judgment dismissing the fraud causes of action against LSM (Logan-Baldwin v L.S.M. Gen. Contrs., Inc., 48 AD3d 1220). The Isaacs defendants thereafter moved for summary judgment dismissing the complaint against them, contending that there was a lack of privity between them and plaintiffs with respect to the breach of contract cause of action and that there was a lack of evidence of fraud with respect to the remaining causes of action, as required by CPLR 3016 (b). Plaintiffs cross-moved for, inter alia, partial summary judgment on liability against the Isaacs defendants. Supreme Court, inter alia, granted the motion of the Isaacs defendants (Logan-Baldwin v L.S.M. Gen. Contrs., Inc., 31 Misc 3d 174). On this appeal, plaintiffs challenge only those parts of the order that granted the motion of the Isaacs defendants and denied that part of their motion seeking partial summary judgment on liability on the breach of contract cause of action against those defendants. We therefore deem abandoned any contention by plaintiffs with respect to the order insofar as it granted that part of the Isaacs defendants' motion for summary judgment dismissing the fraud causes of action against them (see Ciesinski v Town of Aurora, 202 AD2d 984, 984). We agree with plaintiffs that the court erred in granting that part of the motion of the Isaacs defendants with respect to the breach of contract cause of action, but we conclude that the court properly denied plaintiffs' cross motion. We therefore modify the order accordingly.

With respect to the breach of contract cause of action against the Isaacs defendants, we note that, "[a]s a general rule, privity or its equivalent remains a predicate for imposing liability for nonperformance of contractual obligations . . . An obligation rooted in contract may [nevertheless] engender a duty owed to those not in privity when the contracting party knows that the subject matter of a contract is intended for the benefit of others . . . An intention to benefit a third party must be gleaned from the contract as a whole" (Van Vleet v Rhulen Agency, 180 AD2d 846, 848-849; see Drake v Drake, 89 AD2d 207, 209). Thus, contrary to the contention of the Isaacs defendants, privity is not always required. Parties such as the plaintiffs herein who are "asserting third-party beneficiary rights under a contract must establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for [their] benefit and (3) that the benefit to [them] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [them] if the benefit is lost' " (Mendel v Henry Phipps Plaza W., Inc., 6 NY3d 783, 786, quoting Burns Jackson Miller Summit & Spitzer v Lindner, 59 NY2d 314, 336; see DeLine v CitiCapital Commercial Corp., 24 AD3d 1309, 1311).

The focus is on the intent of the promisee, inasmuch as "the promisee procured the promise by furnishing the consideration therefor" (Drake, 89 AD2d at 209; see Key Intl. Mfg. v Morse/Diesel, Inc., 142 AD2d 448, 455), and "[a] beneficiary will be considered an intended beneficiary, rather than merely an incidental beneficiary, when the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance" (DeLine, 24 AD3d at 1311 [internal quotation marks omitted]; see Chavis v Klock, 45 AD3d 1353, 1354). "Where[, as here,] performance is rendered directly to the third party, it is presumed that the contract was for his [or her] benefit" (Drake, 89 AD2d at 209 [emphasis added]; see Tarrant Apparel Group v Camuto Consulting Group, Inc., 40 AD3d 556, 557; Internationale Nederlanden [U.S.] Capital Corp. v Bankers Trust Co., 261 AD2d 117, 123; Finch, Pruyn & Co. v Wilson Control Servs., 239 AD2d 814, 816). Indeed, "[i]t is almost inconceivable that those . . . who render their services in connection with a major construction project would not contemplate that the performance of their contractual obligations would ultimately benefit the owner . . . [I]t is obviously inferable that ...


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