Divided New York Court of Appeals Holds That a Third Party Cannot Sue for Breach of Contract Absent Express Language Naming Them as an Intended Beneficiary and That Claims for Breach of Contract and Professional Negligence Against an Architect Cannot Both Be Maintained When the Allegations Supporting Both Claims Are Nearly Identical

Dormitory Auth. of the State of NY v. Samson Constr. Co., 2018 N.Y. Lexis 218 (February 15, 2018)

The Dormitory Authority of the State of New York (“DASNY”) undertook, as project manager, to construct a facility for the Office of the Chief Medical Examiner of the City of New York (the “City”) as a forensic biology laboratory (the “Project”).  DASNY retained Perkins Eastman Architects, P.C. (“Perkins”) as architect for the Project, and Samson Construction Co. (“Samson”) as the foundation contractor.

Complications during the construction of the foundation resulted in 18 months of delays due to the adjacent building settling eight inches, damages to the adjacent sidewalks, utilities and emergency repairs.  DASNY and the City filed suit against Samson, and later joined Perkins, asserting claims against Perkins for breach of contract and negligence.

Perkins moved for summary judgment to dismiss the City’s claims, and to dismiss DASNY’s negligence claim as duplicative of its breach of contract claim.  The trial court dismissed the City’s breach of contract claim; holding that the City was not an intended third-party beneficiary of the contract between DASNY and Perkins (the “Contract”), and allowed both DASNY’s breach of contract and negligence claims to proceed, holding that the claims were not duplicative of each another. Continue reading “Divided New York Court of Appeals Holds That a Third Party Cannot Sue for Breach of Contract Absent Express Language Naming Them as an Intended Beneficiary and That Claims for Breach of Contract and Professional Negligence Against an Architect Cannot Both Be Maintained When the Allegations Supporting Both Claims Are Nearly Identical”

Federal Court in Georgia Holds Specific Contractual Intent to Benefit Required for Tenant to Be Third-Party Beneficiary of Construction Contract

J.C. Penney Props. v. Hiram LL, LLC, 2016 U.S. Dist. LEXIS 8027 (N.D. Ga. Jan. 25, 2016)

In January 2008, Hiram LL, LLC (“Hiram”) leased property to J.C. Penney Properties, Inc. (“J.C. Penney”) for the construction and operation of a J.C. Penney retail store.  Pursuant to the lease, Hiram was required “to design and construct certain improvements on the property” to prepare the site on which J.C. Penney planned to build its store.  Based on plans and specifications prepared by an architect, Hiram entered into a contract (the “Contract”) with Benning Construction Company (“Benning”) to construct the site.  The Contract was based on two AIA forms:  the A101 standard agreement and the A201 general conditions.  Benning completed its construction work and J.C. Penney eventually opened the store for business. Continue reading “Federal Court in Georgia Holds Specific Contractual Intent to Benefit Required for Tenant to Be Third-Party Beneficiary of Construction Contract”

Federal Court in Indiana Permits City to Sue Design Subconsultant Despite Lack Of Privity

City of Whiting, Indiana v. Whitney, Bailey, Cox, & Magnani, LLC, 2015 U.S. Dist. LEXIS 150229 (N.D. Ind. Nov. 5, 2015)

The City of Whiting, Indiana (the “City”) contracted with American Structurepoint, Inc. (“Engineer”) to design a lakefront park that would protect its shoreline from erosion (the “Project”).  Engineer subcontracted with Whitney, Bailey, Cox, & Magnani, LLC (“Subconsultant”) to serve as the marine engineer for the Project (the “Subcontract”).  Pursuant to the Subcontract, Subconsultant designed a revetment to protect the Project shoreline.  The revetment failed, damaging the City’s property and necessitating remediation. Continue reading “Federal Court in Indiana Permits City to Sue Design Subconsultant Despite Lack Of Privity”