Claims Arising out of Marina Construction Project Dismissed on Summary Judgment for Noncompliance with Contract’s Notice of Claim Provision: Village of Greenpoint v Manning Plumbing and Heating Corp.

In a May 9, 2012 decision by Justice Emerson, the court granted the defendant ARA Plumbing’s (ARA) motion for summary judgment dismissing the complaint and certain of the cross claims against it, and further granted the cross-motion for summary judgment of ARA’s insurance carrier, the defendant QBE Insurance Corporation (QBE). The case arose out of the allegedly negligent design and construction of a marina in the Village of Greenport. ARA entered into a contract with the Village to complete the fire suppression system on the two piers being built at the marina. The Village asserted causes of action for breach of contract, negligence, and quantum meruit after piping and connections in the system ruptured during use and the system subsequently failed tests administered by ARA.

The court granted ARA’s motion for summary judgment based on the contract’s notice of claim provision. The provision required either party to give written notice of any claim arising out of the contract within 21 days after it recognized the condition giving rise to the claim. The court held that the provision was a condition precedent to recovery and that the Village failed to comply with it. The Village relied on a letter informing of the failure, sent by ARA to the Village two days after the failure, as proof that ARA had actual notice of its Claim. The court found that while the letter “clearly evice[d] that ARA had notice of the condition giving rise to th[e] litigation, it d[id] not constitute a Claim” within the meaning of the contract because it was not initiated by the Village and did not advise that the Village was making a demand against ARA for relief under the contract.

The court also dismissed the cross claims for contribution, and contract and common-law indemnification brought against ARA by entities that provided architectural and construction management services on the project. With respect to the contribution claim, the court held that where, as in this case, “the plaintiff seeks damages for purely economic loss, the contribution claims is properly dismissed.” The cross claims for contractual indemnification were dismissed because the terms of the contract excluded indemnity based on damages, losses or expenses attributable to the work itself, which was the sole basis of injury alleged by the Village. The cross claim for common law indemnity was dismissed because the Village did not seek to hold the entities vicariously liable for ARA’s negligence, but rather liable for their own alleged wrongdoing. Finally, because all of the claims against ARA were dismissed, the court granted QBE’s motion for summary judgment dismissing ARA’s cross claim for a judgment declaring that QBE had a duty to defend and indemnify ARA.

Village of Greenport v. Manning Plumbing and Heating Corp., Sup Ct, Suffolk County, May 9, 2012, Emerson, J, Index No. 26981-09.