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Genesee/Wyoming Ymca v. Bovis Lend Lease Lmb

September 28, 2012

GENESEE/WYOMING YMCA,
PLAINTIFF,
v.
BOVIS LEND LEASE LMB, INC., DEFENDANT.
BOVIS LEND LEASE LMB, INC.,
THIRD-PARTY PLAINTIFF-RESPONDENT,
WHITNEY EAST, INC.,
THIRD-PARTY DEFENDANT, AND THOMAS ASSOCIATES ARCHITECTS & ENGINEERS, P.C., THIRD-PARTY DEFENDANT-APPELLANT. (APPEAL NO. 1.)



Appeal from an order of the Supreme Court, Erie County (John A. Michalek, J.), entered November 17, 2011.

Genesee/Wyoming YMCA v Bovis Lend Lease LMB, Inc.

Decided on September 28, 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., SMITH, CENTRA, FAHEY, AND PERADOTTO, JJ.

The order, insofar as appealed from, denied that part of the motion of third-party defendant Thomas Associates Architects & Engineers, P.C. seeking to dismiss the fourth cause of action of third-party plaintiff's complaint.

It is hereby ORDERED that the order insofar as appealed from is unanimously reversed on the law without costs, that part of the motion of third-party defendant Thomas Associates Architects & Engineers, P.C. to dismiss the fourth cause of action in the third-party complaint is granted and the third-party complaint is dismissed in its entirety against it.

Memorandum: Plaintiff, Genesee/Wyoming YMCA (YMCA), commenced an action seeking damages for breach of contract and unjust enrichment against defendant-third-party plaintiff, Bovis Lend Lease LMB, Inc. (Bovis). Bovis in turn commenced a third-party action seeking contribution and common-law indemnification from third-party defendants, Thomas Associates Architects & Engineers, P.C. (Thomas) and Whitney East, Inc. (Whitney). In appeal No. 1, Thomas appeals from an order insofar as it denied that part of Thomas's motion seeking dismissal of the indemnification cause of action against it in the third-party complaint. In appeal No. 2, Bovis appeals from an order denying its motion for summary judgment dismissing the complaint in the main action.

In 1999 the YMCA decided to construct a wellness facility, which included an indoor swimming pool, at its Wyoming County location (project). The YMCA entered into an agreement with Bovis calling for Bovis to oversee the project (hereafter, Agreement). The YMCA also hired Thomas as the architect and Whitney as the general contractor for the project. As relevant, Thomas designed a "standing seam roof" with a "flat (or near flat) pitch" and a "taped insulation system" using "fiberglass batt insulation" above the swimming pool (collectively, proposed design). In the spring of 2001, before construction commenced, Whitney questioned the proposed design. Bovis allegedly reviewed the proposed design and Thomas's selection of materials for the construction thereof and recommended that the YMCA move forward with the project as designed and with the materials selected. The project was completed during 2002. In January 2003, it was discovered that the roof and insulation system were defectively designed and that the materials used were improper or of inferior quality.

After expending significant funds to repair and eventually replace the roof and insulation system, the YMCA commenced an action against Bovis,alleging that, pursuant to the Agreement, Bovis "agreed to review and approve design, constructability and materials used to construct the roof and insulation systems." The YMCA further alleged that Bovis breached its contractual obligations to the YMCA by "approving" the defective proposed design and the inferior or improper materials for the construction thereof. The YMCA also alleged that Bovis was unjustly enriched inasmuch as the YMCA compensated Bovis in accordance with the Agreement even though Bovis did not "fully and effectively provide all of the services" set forth therein. Bovis then commenced a third-party action against Whitney and Thomas. As relevant, Bovis's fourth cause of action sought common-law indemnification from Thomas, alleging that, if Bovis is held liable to the YMCA in the main action, Thomas is in turn liable to Bovis based on Thomas's "affirmative action and primary negligence . . . without any active or primary negligence or active participation" by Bovis.

By the order in appeal No. 1, the court denied that part of Thomas's motion seeking dismissal of the fourth cause of action in the third-party complaint and otherwise granted Thomas's motion. Preliminarily, we note that Thomas's motion to dismiss was based solely on CPLR 3211 (a) (7), and we therefore must "accept the facts as alleged in the [third-party] complaint as true, accord [Bovis] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory . . . [T]he criterion is whether [Bovis] has a cause of action, not whether [it] has stated one' " (Leon v Martinez, 84 NY2d 83, 87-88; see Burton v Matteliano, 81 AD3d 1272, 1274, lv denied 17 NY3d 703). Applying that standard of review, we conclude that the court should have granted Thomas's motion in its entirety.

Indemnification is "[t]he right of one party to shift the entire loss to another" and "may be based upon an express contract or an implied obligation" (Bellevue S. Assoc. v HRH Constr. Corp., 78 NY2d 282, 296, rearg denied 78 NY2d 1008). "The principle of common-law, or implied indemnification, permits one who has been compelled to pay for the wrong of another to recover from the wrongdoer the damages it paid to the injured party" (17 Vista Fee Assoc. v Teachers Ins. & Annuity Assn. of Am., 259 AD2d 75, 80; see D'Ambrosio v City of New York, 55 NY2d 454, 460-461; McDermott v City of New York, 50 NY2d 211, 217, rearg denied 50 NY2d 1059). " Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee, it follows that a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine' " (Great Am. Ins. Co. v Canandaigua Natl. Bank & Trust Co., 23 AD3d 1025, 1028, lv dismissed 7 NY3d 741).

Here, the liability of Bovis in the main action if any, is not vicarious or secondary, i.e., based solely on Thomas's breach of its obligations to the YMCA, but it is based on Bovis's alleged "failure to perform its own contractual obligations" pursuant to the Agreement (Board of Educ. of Hudson City School Dist. v Sargent, Webster, Crenshaw & Folley, 146 AD2d 190, 199, lv denied 75 NY2d 702). Thus, even viewing the allegations of the third-party complaint as true, we conclude that Bovis failed to state a cause of action for common-law indemnification against Thomas (see Westbank Contr., Inc. v Rondout Val. Cent. School Dist., 46 AD3d 1187, ...


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