Americon Construction, Inc. v. Cirocco & Ozzimo, Inc., Supreme Court, Appellate Division, First Department, New York, 205 A.D.3d 568 (1st Dept. 2021)

Third-party claims for common-law contribution not cognizable where underlying claim seeks to hold defendant liable for economic losses based on improper performance under contract.

The general contractor for the construction of a building brought a breach of contract action against a subcontractor arising from the building’s steel superstructure dropping during construction and allegedly setting off a chain reaction of damage through the building, which was allegedly caused by the subcontractor’s installed work. The subcontractor brought third-party claims of negligence and common-law contribution against a structural engineering consultant on the project. The trial court denied the engineer’s motion to dismiss, and the First Department reversed. Since the general contractor’s claim against the subcontractor was for purely economic loss allegedly caused by the subcontractor’s performance under the subcontract, there could be no claim for contribution. Though the complaint alluded to property damage, the only damages the contractor sought to recover from the subcontractor were the cost of repairs and delays resulting from the subcontractor’s allegedly contractually noncompliant work. The First Department also dismissed the claim for negligence as there can be no recovery for purely economic losses arising out of negligent construction in the absence of contractual privity.

 

Case Law Alerts, 3rd Quarter, July 2022 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2022 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.