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Rothberg v. Phil's Main Roofing, LLC

United States District Court, S.D. New York

March 24, 2017

DEBRA ROTHBERG, Plaintiff,
v.
PHIL'S MAIN ROOFING, LLC, Defendant, PHIL'S MAIN ROOFING, LLC, Third-Party Plaintiff,
v.
DHI CONSTRUCTION SERVICES, INC., MANUEL H. PEREZ D/B/A ENP HOME IMPROVEMENT, ENP HOME IMPROVEMENT, LLC, MITCHELL WILK ARCHITECTURE, P.C., and DOUGLAS WILK, Third-Party Defendants.

          OPINION & ORDER

          NELSON S. ROMAN, UNITED STATES DISTRICT JUDGE.

         Plaintiff Debra Rothberg commenced the instant action against Defendant Phil's Main Roofing, LLC ("Phil's" or "Defendant") alleging claims for breach of contract and, in the alternative, unjust enrichment. (See generally Complaint, ECF No. 1.) Defendant filed a third-party complaint against DHI Construction Services, Inc. ("DHI"), Manuel H. Perez, d/b/a ENP Home Improvement, LLC, [1] Mitchell Wilk Architecture, P.C., and Douglas Wilk. (Def s. Third-Party Compl. ("Def. Compl."), ECF No. 16.) Presently before the Court is Defendant Phil's motion to dismiss Plaintiff's Complaint, as well as a motion to dismiss Defendant Phil's Third-Party Complaint, filed by Defendants Mitchell Wilk Architecture, P.C. and Douglas Wilk (collectively, "MWA"). The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332. For the reasons stated below, Defendant Phil's motion is GRANTED in part and DENIED in part, and MWA's motion is GRANTED.

         FACTUAL BACKGROUND

         Unless otherwise indicated, the facts are drawn from Plaintiffs Complaint ("PI. Compl."), (ECF No. 1), and Defendant's Third-Party Complaint ("Def. Compl."), (ECF No. 16.). Plaintiff contracted with DHI in connection with the construction of her new home. (Pi's. Mem. in Opp'n. to Def s. Mot. to Dismiss ("PI. Opp."), ECF No. 82 at 1.) DHI, in turn, entered into a subcontract agreement (the "Subcontract") with Defendant wherein Defendant was to "supply labor, materials, and equipment necessary to properly perform" the roofing work on Plaintiffs home. (PI. Compl. ¶ 9.) The Subcontract was made expressly subject to a hold harmless agreement (the "Hold Harmless") executed by Defendant. (Id. ¶ 10.) Defendant acknowledged receipt of payment by DHI in the amount of $88, 000, by Partial Waiver of Lein dated December 1, 2013. (Id. ¶ 11.) The Hold Harmless provides for the recovery of attorneys' fees, costs, expenses, and disbursements incurred in the "defense of the underlying claim, " in the enforcement of the Subcontract, "and the prosecution of any claim for indemnification by Plaintiff." (Id. ¶ 13.) Pursuant to a Confidential Settlement Assignment and Assumption Agreement between Plaintiff and DHI (the "DHI Assignment Agreement"), dated August 12, 2014, DHI assigned all of its rights and obligations under the Subcontract, including the Hold Harmless, to Plaintiff. (Id. ¶ 12.)

         Defendant completed work on Plaintiffs roof on or about November or December 2011. (Ttf.¶ 15.) In April 2012, Plaintiff began to observe issues with the new roof, including "cupping" of the shingles, staining on the trim boards, and misalignment of roof panels. (Id. ¶ 16.) In May 2012, a Professional Engineer conducted an initial Inspection of the roof and identified certain defects therein. (Id. ¶ 17.) In June and July 2012, Plaintiff communicated the inspection results to Defendant. (Id. ¶ 18.) In August and September 2012, Plaintiff permitted Defendant to conduct inspections on the "Roof Systems." (Id. ¶ 19.) After conducting its own inspection. Defendant admitted to Plaintiff that the "wood cedar roof and standing seam metal roof was defectively installed, " and "further conceded" that there may have been other issues with the roofing work as well. (Id. ¶ 20.) Defendant subsequently represented to Plaintiff that it would correct the errors and omissions in the wood cedar roof and replace the standing seam mental roof at its own expense, but failed to do so. (Id. ¶¶ 21, 22.) Plaintiff was also deprived of any available product warranties of the roofing system as a result of Defendant's failure to register the products. (Id. ¶ 23.)

         In June 2013, Plaintiff retained an independent roof-consulting firm, which identified various defects with the roof, and revealed Defendant's failure "to comply with applicable codes, regulations, manufacturer requirements and standards applicable to the residential construction industry." (Id. ¶¶ 24, 25.) The firm recommended removal and replacement of the "defective roofing systems." (Id. ¶ 26.) Later, in December 2013, Plaintiff engaged a qualified roofing contractor to remove and replace the defective roofing system, and incurred various costs, in excess of $75, 000, in connection with the removal, and related repairs arising from the same. (Id. ¶ 27-29.)

         Relevant to Defendant's Third-Party claim, in November 2010, Plaintiff engaged MWA to perform "professional architectural and construction administration services" in connection with the construction of Plaintiffs property. (Def. Compl. ¶ 14.) MWA served as "Architect of Record" on this project. (Id.15.)

         STANDARD OF REVIEW

         Under the Federal Rules of Civil Procedure, "[a]fter the pleadings are closed - but early enough not to delay trial - a party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). When deciding motions under Rule 12(c), courts "employ[ ] the same... standard applicable to dismissals pursuant to [Rule] 12(b)(6)." L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 429 (2d Cir. 2011) (quoting Johnson v. Rowley, 569 F.3d 40, 43 (2d Cir. 2009)) (internal quotation marks omitted).

         Under Rule 12(b)(6), on a motion to dismiss for "failure to state a claim upon which relief can be granted, " dismissal is proper unless the complaint "contain[s] sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Ad. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). To survive a motion to dismiss, a complaint must supply "factual allegations sufficient 'to raise a right to relief above the speculative level.'" ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Twombly, 550 U.S. at 555). "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 679. The Court must take all material factual allegations as true and draw reasonable inferences in the non-moving party's favor, but the Court is '"not bound to accept as true a legal conclusion couched as a factual allegation, '" or to credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). In determining whether a complaint states a plausible claim for relief, a district court must consider the context and "draw on its judicial experience and common sense." Id. at 662. A claim is facially plausible when the factual content pleaded allows a court "to draw a reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678.

         DISCUSSION [2]

I. Plaintiffs Breach of Contract Claim

         "An assignment is a contractual transfer of a right, interest, or claim from one person to another." Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry Co., 966 F.Supp.2d 270, 279-80 (S.D.N.Y. 2013), aff'd, 762 F.3d 165 (2d Cir. 2014). In this sense, the assignee assumes all rights of the assignor, "no greater and no less." In re New Haven Projects Ltd. Liab. Co., 225 F.3d 283, 290 n.4 (2d Cir. 2000). In this role, the assignee is permitted to "stand in the shoes" of assignor, in order to enforce the contract it has assumed the rights to. Sompo Japan Ins. Co. of Am., 966 F.Supp. at 279-80. In her capacity as assignee, Plaintiff brings a breach of contract claim against Defendant.

         Under New York law, to state a claim for breach of contract a party must allege: (1) the existence of a contract; (2) performance of the contract by one party; (3) breach of the contract by the other party; and (4) damages as a result of the breach. First Inv 'rs Corp. v. Liberty Mut. Ins. Co.,152 F.3d 162, 168 (2d Cir. 1998). Defendant challenges Plaintiffs ability to plausibly allege the fourth factor. Specifically, Defendant argues that because DHI suffered no damages as a result of any alleged breach by Defendant, Plaintiff, standing in the shoes of DHI, cannot assert a breach of contract claim for the costs she incurred in connection with the defects associated with the roofing work performed (Plaintiffs "roofing claims"). (See Def. Mem. in Support of Mot. to Dismiss ("Def. Mem."), at 13, ECF No. 80.) In support of this argument, Defendant asserts that DHI has sustained no damages attributable to Defendant because the Confidential Settlement Assignment and Assumption Agreement specifically excluded payment for any and all roofing claims;[3] thus, Defendant argues, none of the settlement monies paid by DHI to Plaintiff were intended to compensate Plaintiff for Defendant's alleged breach of contract, nor did DHI pay any additional monies or suffer any damages pursuant to the alleged breach. (See Id. 13-14.) Defendant further contends that the damages and costs incurred by Plaintiff were incurred by her individually, and not by DHL[4] (Id. at 14-15.) In sum, Defendant argues that because the damages asserted were not sustained or paid for by DHI, they are personal damages incurred by ...


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