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Nature of a “Turn-Key” or “Design-Build” Contract Explained—Three-Year Statute of Limitations for Malpractice Applied to Defendant Architects Who Were Engaged Solely to Design, Not Build, the Renovations

In a lawsuit stemming from the failure of a building facade, the Third Department determined that the contract between plaintiff property-owner and defendant architects was not a “turn-key” or “design-build” contract, which encompassed the entire construction project, but rather was a professional services contract for the design of building renovations.  Therefore the three-year statute of limitations for professional malpractice applied. The Third Department affirmed the dismissal of the complaint, explaining the nature of a “design-build” contract:

In “turnkey” or “design-build” construction projects, “an owner contracts with one entity to both design and build the project [and t]he turnkey builder is responsible for every phase of the construction from final design through subcontracting, construction, finishing and testing” … . The design-builder generally cannot shift liability and is the “single point [of] responsibility” under a design-build contract, because it is “the [d]esign-[b]uilder [who] has the responsibility of the preliminary and construction design, the responsibility of submitting a fixed sum for the construction of the project and the responsibility for holding the contracts with its trade contractors” … . As plaintiff asserts, it follows that nearly every design-build project involves the existence of two or more contracts — at least one among the members of the design-build team and one between the design-builder and the owner. Here, however, it was not defendant, the purported design-builder, who held the separate contract with the general contractor, but plaintiff as the owner. * * *

…[W]e conclude that plaintiff’s … causes of action — alleging that defendant was negligent and breached the parties’ contract by failing to use reasonable care in rendering its professional services — essentially allege professional malpractice … . Such claims “‘come[] within the purview of CPLR 214 (6),'” which sets forth a three-year statute of limitations for nonmedical malpractice, “‘regardless of whether the theory is based in tort or breach of contract'”… . We note that “‘a claim for professional malpractice against an engineer or architect accrues upon the completion of performance under the contract and the consequent termination of the parties’ professional relationship'” … . 797 Broadway Group LLC v Stracher Roth Gilmore Architects, 2014 NY Slip Op 08689, 3rd Dept 12-11-14

 

Reference to Statute Cured Any Omissions from the Description of the Elements of the Offense Charged in a Superior Court Information

The Third Department noted that a Superior Court Information (SCI) charging aggravated unlicensed operation was sufficient even though it did not state the road upon which defendant was driving was a public highway because the SCI specifically referenced Vehicle and Traffic Law 511 (3) (a) and therefore incorporated all the elements of the crime:

…[D]efendant argues that the SCI failed to allege all material elements of aggravated unlicensed operation of a motor vehicle in the first degree because the People did not state that the crime occurred on a public highway (see Vehicle and Traffic Law § 511 [3] [a]). While this claim survives defendant’s guilty plea and appeal waiver …, no defect exists when the SCI incorporates elements by specific reference to the crime’s relevant statutory authority, because such incorporation “constitute[s] allegations of all the elements of the crime” …, while also giving the defendant “fair notice of the charges made against him [or her]” … . Here, although the SCI failed to state that the road on which defendant was driving was a public highway, it specifically referenced Vehicle and Traffic Law § 511 (3) (a) and, as such, sufficiently incorporated all of the specific elements of the crime. People v Brothers, 2014 NY Slip Op 08682, 3rd Dept 12-11-14

 

Repeated Invitations to Review 60 to 80 Banker’s Boxes of Documents In Response to a Discovery Demand Constituted Willful and Contumacious Behavior Justifying the Striking of the Complaint

The Third Department determined Supreme Court properly struck the pleadings based upon plaintiffs’ failure to comply with discovery demands.  Plaintiffs sued defendants for profits allegedly lost when plaintiffs failed to procure a printing and copying contract with the state.  The defendants sought discovery of documents related to the lost profits (alleged to be $1,500,000). Although plaintiffs supplied some relevant information, the discovery demands were repeatedly met with an invitation to review 60 to 80 banker’s boxes of documents in a warehouse:

We recognize that plaintiffs provided certain documents and that [plaintiff’s principal] appeared at a deposition. This limited cooperation does not necessarily preclude a finding of willful and contumacious behavior… . Plaintiffs had the burden to prove damages and defendants were entitled to review documents supporting the damages claim prior to trial. Notably, plaintiffs were able to create and provide annual sales summaries, but never provided the documents that were used to calculate the sales figures. The record confirms that despite Supreme Court’s frequent intervention and direction to produce the documents in a more organized fashion, plaintiffs continued to insist that their offer to have defendants sift through 60 to 80 boxes of miscellaneous business records was adequate. Indeed, plaintiffs refused to respond otherwise even after defendants narrowed their document request following [a] deposition. * * *

In our view, the record demonstrates “[a] pattern of noncompliance” sufficient to support Supreme Court’s finding that plaintiffs’ conduct was willful … . Under the circumstances, we thus conclude that the court did not abuse its discretion in granting defendants’ motion and striking plaintiffs’ complaint. BDS Copy Inks Inc, v International Paper, 2014 NY Slip Op 08692, 3rd Dept 12-11-14

 

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Indian Point Nuclear Power Plants Exempt from a Consistency Review Under New York’s Coastal Management Program—No State Environmental Impact Statements Required—Federal Environmental Impact Statements Prepared in the 1970’s Deemed Sufficient to Trigger the Exemption Under the Plain Meaning of the Statutory and Regulatory Language

The Third Department, in a full-fledged opinion by Justice Clark, determined that the petitioners, owners and operators of Indian Point nuclear power plants seeking renewal of operating licenses, were exempt from New York’s Coastal Management Program (CMP).  The court explained that the plain language of the relevant statutes and regulations did not require the preparation of environmental impact statements pursuant to New York’s State Environmental Quality Review Act (SEQRA), as the Department of State and the lower court had ruled. The fact that environmental impact statements had been prepared in the 1970’s under the federal National Environmental Policy Act (NEPA) was deemed sufficient to trigger the exemption:

Petitioners particularly focus upon the second exemption in the CMP, which exempts from consistency review “those projects for which a final [e]nvironmental [i]mpact [s]tatement has been prepared prior to the effective date of the Department of State [p]art 600 regulations … .” 19 NYCRR part 600 took effect in 1982. Indian Point 2 and Indian Point 3 went into operation prior to the State Environmental Quality Review Act (see ECL art 8 [hereinafter SEQRA]) taking effect in 1976 and, as such, environmental impact statements were not prepared under SEQRA. Final environmental impact statements were prepared pursuant to the National Environmental Policy Act of 1969 (42 USC § 4321 et seq. [hereinafter NEPA]), however, and statements were completed for Indian Point 2 and Indian Point 3 in 1972 and 1975, respectively. Accordingly, applying the plain meaning of the language in the CMP, Indian Point 2 and Indian Point 3 are exempt from consistency review.

The Department nevertheless held that the exemption did not apply to Indian Point 2 and Indian Point 3 because their final environmental impact statements had not been prepared pursuant to SEQRA. There is simply no basis in law for injecting such a requirement. The Department noted that 19 NYCRR 600.3 (d) is cited in the exemption and refers to final environmental impact statements prepared under the SEQRA regulatory regime, but that regime permits the use of final environmental impact statements prepared under NEPA (see 6 NYCRR 617.2 [n]; 617.15 [a]; Philip Weinberg, Practice Commentaries, McKinney’s Cons Laws of NY, Book 17½, ECL 8-0111). Indeed, SEQRA is modeled upon NEPA, and there is no indication that the final environmental impact statements prepared for Indian Point 2 and Indian Point 3 would not have complied with SEQRA … . Matter of Entergy Nuclear Operation Inc v New York State Dept of State, 2014 NY Slip Op 08702, 3rd Dept 12-11-14

 

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Teacher Who Was Encouraged by the Superintendent to Resign Her Tenured Teaching Position to Take A Library-Position Which Was Subsequently Eliminated Did Not Thereby Voluntarily Waive Her Seniority Rights—She Was Entitled to Reinstatement In Her Tenured Teaching Position With Back Pay

The Third Department determined that a teacher (petitioner) who, at the request of the school superintendent resigned her teaching position to take a library media specialist (LMS) position, did not waive her seniority rights.  After the LMS position was eliminated and petitioner was terminated, petitioner brought an Article 78 proceeding to reinstate her as a tenured teacher. Supreme Court granted the petition and the Third Department affirmed:

Respondents maintain that Supreme Court erred in finding that the termination of petitioner’s employment was arbitrary and capricious and irrational, inasmuch as petitioner freely waived her seniority rights when she resigned from her position as an English teacher. Although an employee may waive his or her seniority rights by resigning or retiring, “such a relinquishment must be knowing and voluntary” … . An effective waiver of such rights must be free from any indicia of duress or coercion … .

The record demonstrates that, when petitioner was encouraged by the interim Superintendent to take the LMS position, she expressed her reluctance to leave her position as an English teacher and asked if she could take a leave of absence rather than resign. The interim Superintendent indicated that a leave of absence would not suffice and that petitioner’s resignation was required. After tendering her letter of resignation, which the Board accepted a month after appointing her to the LMS position, petitioner received a longevity pay increase, continued to accrue sick and personal leave time that had carried over from her English teaching position and also received a severance payment from the District that would not have been made if petitioner had voluntarily severed her employment. Notably, when petitioner moved into the LMS position, she assumed such position without any interruption in service … . Where, as here, an employee does not take the necessary “affirmative steps to terminate all aspects of his or her employment by a school district,” no waiver of seniority and tenure rights will be found … . Accordingly, as the Commissioner’s dismissal of petitioner’s appeal was arbitrary and capricious and lacking a rational basis, Supreme Court’s judgment annulling that determination shall remain undisturbed … . Matter of Kwasnik v King, 2014 NY Slip Op 08697, 3rd Dept 12-11-14

 

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Criteria for a Legal Malpractice Action Re: the Attorney’s Performance In a Criminal Trial Explained—Here Plaintiff’s Conviction Was Reversed and Plaintiff Made a Colorable Claim of Innocence

The Third Department determined a legal malpractice action brought by a client represented by the defendant-attorney in a criminal trial properly survived summary judgment.  The defendant's conviction had been overturned by the Third Department and he was not reprosecuted.  Deficiencies in defendant's representation were noted in the reversal-decision:

In a legal malpractice claim, proximate cause is established by demonstrating that “but for the attorney's negligence, [the plaintiff] would have prevailed in the underlying matter or would not have sustained any ascertainable damages”… . Stated differently, “[t]he test is whether a proper defense would have altered the result of the prior action” … which, in the context of a criminal action, requires proof that the criminal defendant would not have been convicted … . Further, “[f]or malpractice actions arising from allegations of negligent representation in a criminal matter, the plaintiff must have at least a colorable claim of actual innocence” … . We find that a colorable claim has been demonstrated here based upon plaintiff's expressed assertions of innocence, together with our reversal of the judgment of conviction, as well as the District Attorney's decision not to reprosecute plaintiff and the consequent dismissal of the indictment … . * * *

Contrary to defendant's argument, plaintiff has sufficiently alleged pecuniary damages …, i.e., damages that “compensate the victim for the economic consequences of the injury” … . Arnold v Devane, 2014 NY Slip Op 08534, 3rd Dept 12-4-14

 

Psychiatrist Deemed an Employee of a Counseling Center

The Third Department determined a psychiatrist was an employee of the New York Psychotherapy and Counseling Center (NYPCC) and was therefore entitled to unemployment insurance benefits:

“Whether there exists an employee-employer relationship is a factual question to be resolved by the Board and we will not disturb its determination when it is supported by substantial evidence in the record” … . Further, “[w]here, as here, medical professionals are involved, the pertinent inquiry is whether the purported employer exercised overall control over the work performed” … .

Here, evidence was presented that NYPCC referred the patients to claimant and scheduled their initial appointments. NYPCC paid claimant an hourly wage for the time he treated the patients and NYPCC would bill the patients. Claimant was paid whether or not NYPCC was reimbursed by the patients or their health plans. Claimant worked in an office provided by NYPCC on NYPCC's premises — for which he only paid a nominal weekly fee of $9.87 — and would generate a treatment record that is accessed by NYPCC's doctors and staff. Matter of Lustgarten…, 2014 NY Slip Op 08538, 3rd Dept 12-4-14

 

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“Expert” Affidavit Did Not Address the Affiant’s Qualifications for Rendering an Opinion Re: the Safety of a Curb and Sidewalk—Affidavit Should Not Have Been Relied Upon by the Motion Court

In finding that defendant's motion for summary judgment in a slip and fall case should have been denied, the Third Department noted that the expert affidavit should not have been relied upon by the motion court because it failed to include sufficient information to qualify the affiant as an expert:

Defendant … submitted the affidavit of an alleged expert engineer who opined that the sidewalk and curb complied with all state and local building and fire codes and the sidewalk was in a good state of repair. A precondition to the admissibility of expert testimony is that the proposed expert is “possessed of the requisite skill, training, education, knowledge or experience from which it can be assumed that the information imparted or the opinion rendered is reliable” … . Defendant's proffered expert affidavit does not include the information necessary to permit a court to reach such a determination. In his affidavit, defendant's proffered expert listed the initials “P.E.” after his name, stated that he is a principal in a specific engineering firm, and stated his opinion based on his inspection, review of codes and his “experience as an engineer.” While the “P.E.” would indicate that he is licensed as a professional engineer (see Education Law § 7202), the expert did not explicitly state whether he is licensed in any particular state. He also did not mention anything about his education, what type of engineer he is (e.g., mechanical, chemical, electrical), or any experience he may have that would be relevant to the design and maintenance of curbs and sidewalks. Nor did he attach a curriculum vitae that presumably would have included some or all of that information … .

Even assuming from the “P.E.” designation that this person is licensed as a professional engineer somewhere, merely stating that a person is a licensed engineer is insufficient to qualify that person as an expert in a particular case, absent any proof that he or she had any specialized training, personal knowledge or practical experience related to the subject at issue … . Flanger v 2461 Elm Realty Corp, 2014 NY Slip Op 08532, 3rd Dept 12-4-14

 

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No Appeal Lies from an Ex Parte, Sua Sponte, Judgment/Order

In affirming the dismissal of an inmate's action seeking to challenge the computation of his sentence (dismissal was based upon the inmate's failure to comply with the service requirements in an order to show cause), the Third Department noted that no appeal lies from an ex parte order, including an order entered sua sponte.  Apparently the remedy is a motion to vacate pursuant to CPLR 5015:

…[T]here is “no right of appeal from an ex parte [judgment/order], including [one] entered sua sponte,” such as Supreme Court's dismissal of the petition here … . Under the circumstances presented here, we decline to treat the notice of appeal from that judgment as an application for leave to appeal (see CPLR 5701 [c]…). Petitioner sought renewal pursuant to CPLR 2221 and, while perhaps more properly viewed as one to vacate pursuant to CPLR 5015, the judgment denying that motion presents the salient issues for review. Matter of Martin v Annucci, 2014 NY Slip Op 08539, 3rd Dept 12-4-14

 

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Court’s Limited Arbitration-Review Powers Described—Collateral Estoppel Precluded the District from Raising the “Faithless Servant Doctrine” in a Related Lawsuit Because the Arbitrator Concluded the Doctrine Did Not Apply

The Third Department affirmed the arbitrator's decision that the school district employee, who had attempted to retire after allegations that she stole school district property surfaced, was entitled to health benefits.  The court determined, given that the faithless servant doctrine was litigated fully during the arbitration and deemed inapplicable, and given the arbitrator's conclusion the employee was entitled to her contractual health benefits, the school district was collaterally estopped from amending its complaint in the related court proceedings to include the faithless servant doctrine:

…Vacatur of the arbitration award is not warranted. “It is well established that an arbitrator's award is largely unreviewable” … . Vacatur of an arbitration award is only appropriate where “it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power” … . “Outside of these narrowly circumscribed exceptions, courts lack authority to review arbitral decisions, even where 'an arbitrator has made an error of law or fact'” … . Union-Endicott Cent Sch Dist v Peters, 2014 NY Slip Op 08533, 3rd Dept 12-4-14

 

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