On January 29, 2024, Justice Masley of the New York County Commercial Division issued a decision in One PPW Owner, LLC v. IBI Group, 2024 NY Slip Op. 30330(U), dismissing a contribution claim because the underlying claim sought economic damages, explaining:
In sustaining the contribution claim, this court relied on Tower Bldg. Restoration, Inc. v 20 E. 9th St. Apt. Corp., 295 AD2d 229 [1st Dept 2002] and held that:
Although contribution under CPLR 1401 is not available where the damages sought by the plaintiff are exclusively for breach of contract, here there is also a professional malpractice claim alleged against IBI in the main action, and professionals may be subject to tort liability for failure to exercise reasonable care, irrespective of their contractual duties. Thus, as the tort claim against IBI is still pending, the necessary predicate tort liability for a contribution action remains in the case.
Third-party defendants argue that the Appellate Division, First Department in Children’s Corner Learning Ctr. v A. Miranda Contr. Corp., 64 AD3d 318 [1st Dept 2009]) clarified and distinguished the factual circumstances in Tower Building Restoration. They further argue that Children’s Corner Learning Center is analogous to the present matter and warrants dismissal of the contribution claim because in the underlying action against IBI, plaintiff seeks purely economic loss damages.
Reargument is warranted. In Children’s Corner Learning Center, the Appellate Division, First Department held that the common-law contribution claim against third-party defendants should have been dismissed because although the underlying complaint alleged breach of contract and professional malpractice, the damages sought were purely economic. The court also reaffirmed that the touchstone for purposes of whether one can seek contribution is not the nature of the claim in the underlying complaint but the measure of damages sought therein. Children’s Corner Learning Center rejected third-party plaintiff’s reliance on Tower Building Restoration because:
Although the decision in Tower Bldg. Restoration did not specify the nature of the damages sought against the fourth-party plaintiff architect, a review of the briefs does. They reveal that the third-party plaintiff there, a cooperative apartment corporation, sought traditional tort damages from the architect in connection with the architect’s alleged damaging of the floor and roof of one of the apartments in the building. In this case, plaintiff does not claim any damages that seek traditional tort remediation.
Based on the foregoing, the pendency of the professional malpractice claim in the main action is an insufficient predicate for IBl’s contribution claim. The pivotal question is whether the damages sought in the main action are for injury to property or rather for purely economic loss. Upon reargument, the contribution claim against moving third-party defendants is dismissed. The underlying complaint contains no allegations indicating that plaintiff’s property was injured and does not seek damages for any such injury. Instead, plaintiff seeks to recover purely economic loss flowing from IBl’s breach of an agreement for architectural services, breach of the standard of care in performing such architectural services, and unjust enrichment. Indeed, the damages sought in the professional malpractice claims resulted from alleged delays caused by IBl’s repeated breaches of duty and malpractice, defective plans and designs and the resulting need to perform additional work to correct the effects of such defects and breaches. The mere fact that the breach of contract and professional malpractice claims seek different amounts of damages ($7.7 million and $6.5 million, respectively) is insufficient to indicate that the professional malpractice claim seeks to recover for injury to property.
(Internal quotations and citations omitted).