CJUF III 20 Henry Properties LLC v. Edison Coatings, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

CJUF III 20 HENRY PROPERTY LLC,

Individually, and as Assignee of B&A MEMORANDUM & ORDER

RESTORATION CONSULTING, INC.,

19-CV-1954 (NGG) (PK)

Plaintiff,

-against-

EDISON COATINGS, INC.,

Defendant.

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff CJUF III 20 Henry Property LLC (“CJUF”) brings this

action against Defendant Edison Coatings, Inc. (“Edison”), for

breach of contract, indemnification, and contribution, relating

to allegedly defective stucco that Defendant supplied for the

renovation of a building located at 20 Henry Street, formerly

known as 73-79 Middagh Street, in Brooklyn, New York (the

“Middagh Building”). (Am. Compl. (Dkt. 18) ¶ 1.) Defendant

moves pursuant to Federal Rule of Civil Procedure 12(b)(6) to

dismiss the complaint with prejudice. (Mot. to Dismiss (“Mot.”)

(Dkt. 21) at 1.) For the reasons stated below, the motion is

GRANTED.

BACKGROUND

A. Facts

The following factual summary is drawn from the facts alleged

in the complaint, which the court generally accepts as true. See

N.Y. Pet Welfare Ass’n v. City of New York, 850 F.3d 79, 86 (2d

Cir. 2017).

CJUF has owned the Middagh Building since 2010. (Am. Compl.

¶ 9.) In 2011, B&A Restoration Consulting, Inc. (“B&A”), the fa-

çade contractor for the Middagh Building, hired Edison as its

subcontractor to supply stucco for the façade in connection with

an ongoing rehabilitation project. (Id. ¶¶ 18, 20.) B&A entered

into a contract to purchase stucco from Edison in October 2011

(the “Stucco Contract”). (Id. ¶ 20; see also Stucco Contract (Dkt.

22-1).) Construction of the façade was completed in 2013. (Am.

Compl. ¶ 23.)

In March 2016, a large chunk of stucco broke off the north façade

of the Middagh Building. (Id. ¶ 23.) The Board of Managers of

the 20 Henry Street properties (which includes the Middagh

Building) (the “Board”) further noted that pervasive “spider

cracks” in the north façade were causing “water infiltration, se-

vere spalling, and detachments of sections of hard coating.” (Id.

¶ 24.) In April 2016, the Board filed a complaint against CJUF in

Kings County Supreme Court alleging claims of breach of con-

tract, breach of the implied covenant of good faith and fair

dealing, breach of fiduciary duty, and violations of N.Y. G.B.L

§§ 349-350 relating to, inter alia, the defective stucco (the “Un-

derlying Action”). (Id. ¶ 25; see also Am. Compl., Bd. Of Mgrs. of

20 Henry St. Condo. v. CJUF III 20 Henry Properties, LLC, Ind. No.

500289/2016 (Kings Cty. Sup. Ct. June 29, 2016), NYSCEF Dkt.

No. 13 (“Underlying Complaint”).) CJUF impleaded B&A as a

third-party defendant. (Am. Compl. ¶ 26.) B&A did not implead

Edison. (Id.)

The entire façade was eventually replaced. (Id. ¶ 27.) In January

2018, CJUF, B&A, and Merritt Engineering Consulting, P.C.

(which CJUF impleaded as a third-party defendant in the Under-

lying Action) settled all claims relating to the north façade stucco

for $270,000, to which CJUF and B&A each contributed $90,000.

(Id. ¶ 28.) Later that month, B&A assigned its rights under the

Stucco Contract to CJUF. (Id. ¶ 29.)

B. Procedural History

CJUF filed its original complaint in on April 4, 2019. (Compl.

(Dkt. 1).) CJUF filed its amended complaint on September 6,

2019. (Am. Compl.) Currently pending before the court is De-

fendant’s motion to dismiss for failure to state a claim. (See Mot.;

Pl.’s Opp. to Mot. to Dismiss (“Opp.”) (Dkt. 23); Reply in Supp.

of Mot. to Dismiss (“Reply”) (Dkt. 24).)

LEGAL STANDARD

The purpose of a motion to dismiss for failure to state a claim

under Rule 12(b)(6) is to test the legal sufficiency of a plaintiff’s

claims for relief. Patane v. Clark, 508 F.3d 106, 111-12 (2d Cir.

2007) (per curiam). A complaint will survive a motion to dismiss

if it contains “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 Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007)). “Threadbare recitals of the elements

of a cause of action, supported by mere conclusory statements,

do not suffice.” Id.

In evaluating a motion to dismiss, a court may consider docu-

ments central to a plaintiff’s claim, documents sufficiently

referred to so as to be deemed “integral” to the complaint, and

documents over which a court may take judicial notice. See King

v. City of New York, No. 12-CV-2344 (NGG), 2014 WL 4954621,

at *7-8 (E.D.N.Y. Sept. 30, 2014) (citing Global Network Comms.,

Inc. v. City of New York, 458 F.3d 150, 156 (2d Cir. 2006)); see

also Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.

2002) (holding that courts may consider an extrinsic document

when the complaint “relies heavily upon its terms and effect”).

The purpose of this rule is to “prevent[] plaintiffs from generat-

ing complaints invulnerable to Rule 12(b)(6) simply by clever

drafting.” King, 2014 WL 4954621, at *8 (quoting Global Net-

work, 458 F.3d at 157).

DISCUSSION

CJUF seeks damages incurred by Defendant’s act of supplying de-

fective stucco through three claims: breach of contract, common-

law indemnification, and contribution. As discussed below, how-

ever, CJUF’s breach of contract claim is time-barred. Moreover,

CJUF’s common-law indemnification claim fails because the lia-

bility for which it is seeking indemnification—breach of its own

contracts with the Board—does not give rise to a claim for com-

mon-law indemnification. Finally, CJUF’s contribution claim fails

because CJUF has not alleged that Defendant engaged in any tor-

tious conduct. As such, CJUF’s claims fail as a matter of law and

the court accordingly grants Defendant’s motion to dismiss with

prejudice.1

1 Because there are independently sufficient grounds to dismiss the claims,

the court declines to address Defendant’s invocation of the doctrine of

laches.

The court notes, however, that CJUF’s arguments concerning the failure to

implead Defendant in the Underlying Action are untenable. CJUF simulta-

neously asserts that it is entitled to recover directly from Defendant in this

action and that it had no grounds to implead Defendant in the Underlying

Action because it lacked contractual privity with Defendant at that time—

and did not come into such privity until it was assigned B&A’s rights under

the Stucco Contract. However, the Stucco Contract lacks any indemnifica-

tion provision (except the provision in which B&A agreed to indemnify

Defendant (see Stucco Contract ¶ 7)), and CJUF is not seeking contractual

indemnification, having amended its complaint to remove that claim.

Thus, to the extent that CJUF now has a cause of action for common-law

indemnification against Defendant (which, as discussed herein, it does

not), it would have had the same claim at the time of the Underlying Ac-

tion. Putting that issue to the side, assuming that whatever right CJUF now

has to pursue a claim for damages against Defendant exists only by virtue

of its status as assignee of B&A, CJUF cannot escape the consequence of

B&A’s failure to implead Defendant in the Underlying Action by arguing

that it had not yet been assigned the rights it now possesses. The court

need hardly explain why, as a matter of law and policy, a valid affirmative

defense against a claim cannot be extinguished by mere assignment.

A. Breach of Contract

CJUF’s first claim is a breach of contract claim against Defendant

for supplying defective stucco. (Am. Compl. ¶¶ 31-37.) This claim

is time-barred.

The Stucco Contract contains a Connecticut choice of law clause.

(Stucco Contract ¶ 8.) However, for matters regarding accrual

and statutes of limitations, New York courts “look only to the

place where the claim accrued in deciding which statute of limi-

tations to apply.” Migdal Ins. Co. v. Ins. Co. of Pa., 14-CV-700

(JPO), 2014 WL 5149128, at *5 (S.D.N.Y. Oct. 14, 2014); see

also Glob. Fin. Corp. v. Triarc Corp., 93 N.Y.2d 525, 528 (1999);

C.P.L.R. § 202. Thus, this court looks to New York law to deter-

mine the applicable statute of limitations.

Under New York law, the statute of limitations for claims

founded upon a contract for the sale of goods is four years. N.Y.

U.C.C. § 2-725(1). The Stucco Contract falls within this provision

because goods are defined under the U.C.C. as (with some ex-

ceptions not applicable here) “all things … which are movable at

the time of identification to the contract for sale,” N.Y. U.C.C. §

2-105(1), and stucco is evidently a movable object.

The statute of limitations begins to run after the delivery of the

goods is tendered. Heller v. U.S. Suzuki Motor Corp., 64 N.Y.2d

407, 410 (1985); see also N.Y. U.C.C. § 2-725 (2). It does not

matter whether a defect is defect latent, because “in the absence

of a warranty explicitly extending to future performance, a

breach occurs when tender of delivery is made.” Id. The Stucco

Contract is dated October 11, 2011. (Stucco Contract.) CJUF did

not serve Defendant until April 2019. (Am. Compl. ¶ 30.) Thus,

CJUF’s breach claim is time-barred.

B. Common-Law Indemnification

CJUF next claims that Defendant is obligated to indemnify CJUF

and B&A for damages incurred from Defendant’s “sole culpable

conduct” of supplying defective stucco. (Am. Compl. ¶¶ 38-41.)

CJUF’s common-law indemnification claim fails because the

amended complaint contains no allegations that Defendant

breached a legal duty independent of the contract, as required to

sustain a claim for common-law indemnification.

Under New York law, common-law indemnification allows a

party who has been compelled to pay damages for the wrongdo-

ing of another party to recover from the wrongdoer. Arrendal v.

Trizechahn Corp., 98 A.D.3d 699, 700 (2d Dep’t 2012). However,

common-law indemnification is available only where one party

“ha[s] been held vicariously liable for the party that actually

caused the negligence that injured the plaintiff.” Chatham Tow-

ers, Inc. v. Castle Restoration & Constr., Inc., 151 A.D.3d 419, 420

(1st Dep’t 2017). The claims settled in the Underlying Action,

however, relate entirely to the alleged wrongdoing of CJUF in

breaching its own contracts with and duties to the Board, and not

any negligent conduct by Defendant. See generally Underlying

Complaint). It is well-established that “in New York, a party can-

not obtain common-law indemnification to recover damages

resulting from its own breach of contract.” Milnot Holding Corp.

v. Thruway Produce, Inc., No. 08-cv-6140, 2014 WL 993743, at

*4 (W.D.N.Y. Mar 13, 2014) (collecting cases); see also Chatham

Towers, 151 A.D.3d at 420 (“[T]here is no common-law indem-

nification claim because Chatham sought recovery from Castle

because of the latter’s alleged wrongdoing—breach of contract—

and not vicariously because of any negligence on the part of Zim-

merman.”). As such, CJUF’s indemnification claim must be

dismissed.

C. Contribution

CJUF’s claim for contribution similarly fails because the

amended complaint does not allege the breach of a legal duty

that would sustain a contribution claim. New York’s contribu-

tion statute provides that “two or more persons who are subject

to liability for damages for the same personal injury, injury to

property or wrongful death, may claim contribution among

them whether or not an action has been brought or a judgment

has been rendered against the person from whom contribution

is sought.” C.P.L.R. § 1401. This provision, however, “may not

be invoked to apportion liability arising solely from breach of

contract.” City of Kingston Water Dep’t v. Charles A. Manganaro

Consulting, No. 01-cv-1317 (LEK), 2003 WL 355763, at *2

(N.D.N.Y. Feb. 13, 2003) (citing Bd. of Educ. of Hudson City Sch.

Dist. v. Sargent, Webster, Crenshaw & Folley, 71 N.Y.2d 21, 28

(1987)). It is well settled that “the existence of some form of

tort liability is a prerequisite to application of the [contribution]

statute.” Sargent, 71 N.Y.2d at 28; see also PPI Enters. (U.S.),

Inc., v. Del Monte Foods Co., No. 99-cv-3794 (BSJ), 2003 WL

22118977, at *31 (S.D.N.Y. Sept. 11, 2003).

In this case, however, there is no allegation that Defendant

breached any duty independent from its obligations under the

contract and, as such, no basis to imply any liability in tort.

While CJUF describes Defendant’s culpable conduct as provid-

ing defective stucco that caused “property damage and life-

safety issues,” (Am. Compl. ¶ 44), “the mere potential for seri-

ous physical injury or property damage is not enough to create

a duty independent of the contract thereby authorizing recovery

in tort.” Trump Vill. Section 3 v. N.Y.S. Hous. Fin. Agency, 307

A.D.2d 891, 897 (1st Dep’t 2003) (citation omitted). Thus,

CJUF “may not seek contribution from [Defendant] where the

alleged ‘tort’ is essentially a breach of contract claim.” Id. Ac-

cordingly, CJUF’s contribution claim fails as a matter of law.

CONCLUSION

For the reasons stated above, Defendant’s (Dkt. 21) Motion to

Dismiss is GRANTED. Further, because any amendment of the

complaint would be futile, the dismissal is with prejudice. See

generally Ruffolo v. Oppenheimer & Co., 987 F.2d 129 (2d Cir.

1993). The Clerk of Court is respectfully DIRECTED to enter

judgment in favor of Defendant and close this case.

SO ORDERED.

Dated: Brooklyn, New York

July 28, 2020

_/s/ Nicholas G. Garaufis_

NICHOLAS G. GARAUFIS

United States District Judge