FILED: NEW YORK COUNTY CLERK 11/17/ :42 PM INDEX NO /2016 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 11/17/2016

Transcription

1 FILED: NEW YORK COUNTY CLERK 11/17/ :42 PM INDEX NO /2016 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 11/17/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK W 108 DEVELOPMENT LLC, Index No /2016 -against- Plaintiff, DOMINICK R. PILLA, ARCHITECTURE- ENGINEERING P.C. d/b/a DOMINICK R. PILLA ASSOCIATES, P.C., DOMINICK R. PILLA and XYZ CORP., Defendants. MEMORANDUM OF LAW BYRNE & O NEILL, LLP Attorneys for Defendants, Dominick R. Pilla, Architecture-Engineering P.C. d/b/a Dominick R. Pilla Associates, and Dominick R. Pilla Navid Ansari 11 Broadway, Suite 910 New York, New York (212) na@bonlaw.com 1 of 19

2 TABLE OF CONTENTS Table of Authorities ii Preliminary Statement 1 Statement of Facts 2 Argument 4 Standard on a Motion to Dismiss 4 I. In the Absence of Contractual Privity the Plaintiff May Not Maintain Causes of Action for Breach of Contract, Breach of an Implied Duty of Good Faith and Fair Dealing, or for Professional Malpractice Against Pilla 6 II. Plaintiff s Professional Malpractice Claim Should be Dismissed As Duplicative of the Breach of Contract Claim 7 III. Plaintiff s Fraud Cause of Action Should be Dismissed as Duplicative Of the Breach of Contract Cause of Action 9 IV. Plaintiff s Cause of Action for Breach of an Implied Duty of Good Faith and Fair Dealing Should be Dismissed as Duplicative of Plaintiff s Breach of Contract Claim 11 V. The Complaint Fails to Plead Fraud Against Pilla With Sufficient Particularity 12 VI. The Fifth Cause of Action for Attorneys Fees, Costs, and Expenses Is not Cognizable 13 i 2 of 19

3 TABLE OF AUTHORITIES STATE CASE LAW AG Capital Funding Partners, L.P. v. State Street Bank and Trust Co., 5 N.Y.3d 582, 595, 808 N.Y.S.2d 573 (2005) 5 Basis Yield Alpha Fund v. Goldman Sachs Group, Inc., 115 A.D.3d 128, 135, 980 N.Y.S.2d 21 (1 st Dept. 2014) 5 Bd. of Mgrs. of the Chelsea 19 Condominium v. Chelsea 19 Assoc., 73 A.D.3d 581, 905 N.Y.S.2d 8 (1 st Dept. 2010) 10 Bd. of Mgrs. of Riverview v. Schorr Brothers Dev. Corp., 182 A.D.2d 664, 665, 582 N.Y.S.2d 258 (2 nd Dept. 1992) 6 Bd. of Mgrs. of Soho North v. NW 124, LLC, 116 A.D.3d 506, 507 (1 st Dept. 2014) 11 Bostany v. Trump Org. LLC, 73 A.D.3d 479, 481, 901 N.Y.S.2d 207 (1 st Dept. 2010) 11 Briar Contr. Corp. v. City of New York, 156 A.D.2d 628, , 550 N.Y.S.2d 717 (1 st Dept. 1989) 9 Canstar v. Jones Constr. Co., 212 A.D.2d 452, 453, 622 N.Y.S.2d 730 (1 st Dept. 1995) 11 Chapel v. Mitchell, 84 N.Y.2d 345, 349, 618 N.Y.S.2d 626 (1994) 13 Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d 382, 389, 521 N.Y.S.2d 653 (1987) 8, 9 Doukas v. Ballard, 135 A.D.3d 896, 897, 24 N.Y.S.3d 174 (2 nd Dept. 2016) 10 Encore Lake Grove Homeowners Ass n, Inc. v. Cashin Assoc. P.C., 111 A.D.3d 881, 883, 976 N.Y.S.2d 143(2 nd Dept. 2013) 8 Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147 (2009) 12 Financial Structures Ltd. v. UBS AG, 77 A.D.3d 417, 419, 909 N.Y.S.2d 45, 47 (1 st Dept. 2010) 10, 11 ii 3 of 19

4 Gertler v. Goodgold, 107 A.D.2d 481, 485, 487 N.Y.S.2d 565 (1 st Dept. 1985) 5 Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182 (1977) 5 Leonard v. Gateway II, LLC, 68 A.D.3d 408, 890 N.Y.S.2d 33 (1 st Dept. 2009) 6 Levine v. Yokell, 258 A.D.2d 296-7, 685 N.Y.S.2d 296 (1 st Dept. 1999) 6 Maas v. Cornell University, 94 N.Y.2d 87, 91, 699 N.Y.S.2d 716 (1999) 5 Manda Intl. Corp. v. Yager, 139 A.D.3d 594, 32 N.Y.S.3d 145 (1 st Dept. 2016) 12 Melnick v. Parlato, 296 A.D.2d 443, 745 N.Y.S.2d 68 (2 nd Dept. 2002) 7 Mighty Midgets v. Centennial Ins. Co., 47 N.Y.2d 12, 21-2, 416 N.Y.S.2d 559 (1979) 13 Nicosia v. Bd. of Mgrs. of the Weber House Condominium, 77 A.D.3d 455, 456, 909 N.Y.S.2d 412 (1 st Dept. 2010) 12 Ossining Union Free Sch. Dist. v. Anderson La Rocca Anderson, 73 N.Y.2d 417, 424, 541 N.Y.S.2d 335 (1989) 7 Palace Elec. Constr., Inc. v. William Floyd Union, 60 A.D.3d 921, 921-2, 876 N.Y.S.2d 109 (2 nd Dept. 2009) 7 Peter F. Gaito Architecture, LLC, v. Simone Dev. Corp., 46 A.D.3d 530, 846 N.Y.S.2d 368 (2 nd Dept. 2007) 5 Res. Bd. of Mgrs. of Zeckendorf Towers v. Union Square, 190 A.D.2d 636, 637, 594 N.Y.S.2d 161 (1 st Dept. 1993) 6 Rockefeller Univ. v. Tishman Constr. Corp. of N.Y., 240 A.D.2d 341, 342, 659 N.Y.S.2d 460 (1997) 10 Salomon v. Citigroup Inc., 123 A.D.3d 517, 518, 999 N.Y.S.2d 21 (1 st Dept. 2014) 12 iii 4 of 19

5 Sebastian Holdings, Inc., v. Deutsche Bank, AG., 78 A.D.3d 446, 447, 912 N.Y.S.2d 13 (1 st Dept. 2010) 9 Sebastian Holdings, Inc., v. Deutsche Bank, AG., 35 Misc.3d 1227(A), 953 N.Y.S.2d 553 (NY Cnty 2009) 9 Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 414, 729 N.Y.S.2d 425 (2001) 5 Southern Wine & Spirits of Am., Inc., Impact Env. Engineering, 104 A.D.3d 613, 614, 962 N.Y.S.2d 118 (1 st Dept. 2013) 6, 7 Sutton Apts. Corp., v. Bradhurst 100 Dev. LLC, 107 A.D.3d 646, 648-9, 968 N.Y.S.2d 483 (1 st Dept. 2013) 7 Wildenstein v. 5H & Co., Inc., 97 A.D.3d 488, 491, 950 N.Y.S.2d 3 (1 st Dept. 2012) 8 FEDERAL CASE LAW Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 125 (2 nd Cir. 2013) 11 Travelers Cas. and Sur. Co. v. DASNY, 734 F.Supp.2d 368, 388 (S.D.N.Y. 2010) 7 TVT Records v. Island Def Jam Music Group, 244 F.Supp.2d 263, 277 (S.D.N.Y. 2003) 6 RULES CPLR 3106(b) 12, 13 CPLR 3211(a)(7) 4-5 iv 5 of 19

6 PRELIMINARY STATEMENT The Defendants, Dominick R. Pilla, Architecture-Engineering P.C. d/b/a Domincik R. Pilla Associates ( DRPA ), and Dominick R. Pilla ( Pilla ), respectfully request the dismissal of the Complaint s Second, Third, Fourth, and Fifth causes of action, as against DRPA; and the dismissal of the Complaint, in its entirety, as against Pilla. Following DRPA s filing of a Notice of Mechanic s Lien ( Lien ) against property owned by the Plaintiff, the Plaintiff served its Verified Complaint ( Complaint ) in this action and asserted five causes of action against DRPA and the individual defendant, Pilla, without drawing a distinction between DRPA and Pilla. The factual allegations underlying each of these causes of action stem from professional architectural services performed by DRPA, under contract, and in connection with the Plaintiff s desire to convert and enlarge a premises located at West 108 th Street, New York New York. This is the same premises against which DRPA filed the Lien. The Complaint alleges that DRPA breached the professional services agreement by incorrectly interpreting certain codes and regulations, as well as by providing design services which failed to meet the requirements of these same codes and regulations. These allegations of breach of contract against DRPA are, however, later duplicated several times and recast as redundant causes of action which are stated, ostensibly, in terms of professional malpractice, fraud, and breach of an implied duty of good faith and fair dealing. These duplicative causes of action, which lack any factual basis distinct from the Plaintiff s breach of contract cause of action and which seek to recover the same contractual benefit of the bargain as a matter of law, should be dismissed. Additionally, and specifically pertinent to the individual defendant, Pilla: the documentary exhibits which the Plaintiff has attached to its Complaint establish that Pilla was not party to the 1 6 of 19

7 professional services agreement. Nor is there any allegation in the Complaint which identifies any specific act or representation made by Pilla which could serve as the basis of a cause of action for fraud. Consequently, in the absence of privity of contract, and any specific allegations of fraud, the Complaint, in its entirety, should be dismissed as against Pilla. Finally, the Complaint includes a separate cause of action which seeks without a contractual or statutory basis to recover attorneys fees and legal expenses in connection with the Plaintiff s prosecution of this action. Such a desired recovery is, however, in direct contradiction to the well-established rule that each party is responsible for its own legal fees. What follows herein is a detailed explication as to the allegations and the law, which require the dismissal of the Complaint s Second, Third, Fourth, and Fifth causes of action as against DRPA, and the Complaint, in its entirety, as against Pilla. STATEMENT OF FACTS 1 Plaintiff, W 108 Development LLC, is the owner of the property and buildings located at West 108 th Street, New York, New York ( Premises ). (Ansari Aff., Ex.C, 6,9). On or about February 25, 2015 the Plaintiff alleges that, by way of a series of exchanged s, it and not the individual, Orly Gilat engaged DRPA 2 to perform architectural services in 1 Please note that for the purposes of this motion, which challenges the pleadings, the facts stated here are drawn from the allegations of the Plaintiff s Verified Complaint and the exhibits thereto ( Complaint ). The movants accept the allegations of the Complaint as true only for the purposes of this motion, and only to the extent that those allegations are not contradicted by the documents which the Plaintiff has attached and incorporated into the Complaint. Furthermore, the defendants reserve the right to dispute any or all of the Complaint s allegations, at a later time, in a pleading responsive to the Complaint, should one become necessary. A copy of the Complaint is attached to the Affirmation of Navid Ansari ( Ansari Aff. ) as Exhibit C. The documentary exhibits to the Complaint are attached to the Ansari Aff., respectively, as Exhibits C1, C2, and C3. 2 Please note that while in this regard the Complaint s allegations fail to draw a distinction between DRPA and Pilla [see Ansari Aff.,Ex.C, 11], the documentary exhibits attached to the Complaint establish that to the extent an agreement existed between the Plaintiff and any party, that agreement was between the Plaintiff and DRPA, and not with Pilla, individually. (See Ansari Aff.,Ex.C1-3). 2 7 of 19

8 connection with the Plaintiff s desire to convert and enlarge the Premises ( Project ). (See Ansari Aff., Ex.C, 11). These services initially envisioned a scope of work which was to consist of five phases: (1) pre-design, (2) schematic design, (3) design development, (4) construction document, and (5) construction administration. (See Ansari Aff. Ex.C1, p.1/6). The initial estimate of the total fee for these services was $248,000. (See Id. 3 ). At that time, the Plaintiff had pre-selected a contractor, and thereby obviated the need for DRPA to provide architectural services in connection with a bidding and negotiation phase. (See Id. at p.2/6). By December 2015, however, circumstances had changed. During this period, DRPA began providing the Plaintiff with architectural services in connection with the bidding and negotiating of the construction contract for the Project. (See Ansari Aff. Ex.C3 4 ). In addition to the expansion of DRPA s scope to include bidding and negotiation phase services, certain previously unanticipated obstacles required DRPA to expend additional time and resources so as to gain the full approval for various aspects of the Project from the New York City Department of Buildings ( DOB ), the New York City Landmarks Preservation Commission ( LPC ), and the New York City Mayor s Office for People with Disabilities ( MOPD ). (See Ansari Aff., Ex.C ). The Plaintiff maintains that the architectural services required to obtain these approvals which were performed by DRPA were eventuated by DRPA s failure to properly interpret: (a) Section of the Zoning Resolution of the City of New York, i.e. the Sliver Law 5 ; (b) 3 Please also see Ansari Aff. Ex.C, In particular, please see the following invoices which are attached as part of Exhibit C3: Invoice No /11 dated December 23, 2015; Invoice No /12 dated January 31, 2016; Invoice No /13 dated February 29, 2016; Invoice No /15 dated April 26, See Ansari Aff., Ex.C. 17, of 19

9 Article 1, Chapter 3 of the Zoning Resolutions of the City of New York 6 ; (c) Section of the New York City Building Code 7 ( Building Code ); and (d) Title 27, Subchapter 6 of the Building Code 8. Plaintiff further alleges that as a result of DRPA s alleged failures to properly interpret these laws and codes, the Plaintiff issued a stop work order to DRPA in May of (See Ansari Aff., Ex.C. 65). By May of 2016, however, the Plaintiff was already significantly in arrears on its payments to DRPA. (See Ansari Aff., Ex.C3, Itemized Statement Pursuant to Lien Law 38 ). In fact, the Plaintiff had made no payments against any of DRPA s invoices dating back to November of 2015, and had only made partial payments against invoices dated October 27, 2015 and June 15, (See Id.). In total, the Plaintiff s nonpayment left $193, in unpaid invoices. (See Id.). Based on these unpaid invoices, in October 2016, DRPA filed a Notice Under Mechanic s Lien Law against the Premises in the amount of $193, (See Ansari Aff. Ex.C2 9 ). Plaintiff, thereafter, filed its Complaint in this action asserting causes of action against DRPA and Pilla which are stated in terms of breach of contract, professional malpractice, fraud, breach of an implied covenant of good faith and fair dealing, and a separate cause of action for attorneys fees, and the costs and expenses related to this litigation. DRPA and Pilla now move for dismissal. ARGUMENT STANDARD ON A MOTION TO DISMISS On a motion to dismiss made pursuant to CPLR 3211(a)(7), courts accept as true the facts as they are alleged in the complaint, provide the plaintiff the benefit of every possible favorable 6 See Ansari Aff., Ex.C See Ansari Aff., Ex.C See Ansari Aff., Ex.C See also Ansari Aff., Ex.C., of 19

10 inference, and determine only whether the facts, as alleged, fit within any cognizable legal theory. Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 414, 729 N.Y.S.2d 425 (2001). Bare legal conclusions, as well as factual claims which are flatly contradicted by documentary evidence are not, however, entitled to favorable inferences. See Maas v. Cornell University, 94 N.Y.2d 87, 91, 699 N.Y.S.2d 716 (1999) quoting Gertler v. Goodgold, 107 A.D.2d 481, 485, 487 N.Y.S.2d 565 (1 st Dept. 1985) aff d 66 N.Y.2d 946 (1985). If after providing the plaintiff the benefit of every possible favorable inference, the complaint fails to state a cause of action, the court may properly dismiss the complaint pursuant to CPLR 3211(a)(7). See e.g. AG Capital Funding Partners, L.P. v. State Street Bank and Trust Co., 5 N.Y.3d 582, 595, 808 N.Y.S.2d 573 (2005)(Complaint failed to state causes of action for legal malpractice and negligent misrepresentation). Where evidentiary material is considered on a motion to dismiss pursuant to CPLR 3211(a)(7) the inquiry alters from whether the proponent of the pleading has stated a cause of action to whether the proponent of the pleading has a cause of action. Basis Yield Alpha Fund v. Goldman Sachs Group, Inc., 115 A.D.3d 128, 135, 980 N.Y.S.2d 21 (1 st Dept. 2014); Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182 (1977). If documentary proof disproves an essential allegation of the complaint, dismissal pursuant to CPLR 3211(a)(7) is warranted even if the allegations, standing alone, are capable of withstanding a motion to dismiss for failure to state a claim. See Basis Yield Alpha Fund v. Goldman Sachs Group, Inc., 115 A.D.3d at 134; see also Peter F. Gaito Architecture, LLC, v. Simone Dev. Corp., 46 A.D.3d 530, 846 N.Y.S.2d 368 (2 nd Dept. 2007) of 19

11 I. IN THE ABSENCE OF CONTRACTUAL PRIVITY THE PLAINTIFF MAY NOT MAINTAIN CAUSES OF ACTION FOR BREACH OF CONTRACT, BREACH OF AN IMPLIED DUTY OF GOOD FAITH AND FAIR DEALING, OR FOR PROFESSIONAL MALPRACTICE AGAINST PILLA As the documentary attachments to the Complaint make clear, Dominick R. Pilla ( Pilla ) the individual defendant was not party to DRPA s agreement for the Project. (See Ansari Aff., Ex.C1). Consequently, in the absence of contractual privity, the Plaintiff s causes of action for breach of contract, professional malpractice, and the breach of an implied duty of good faith and fair dealing are not cognizable as against Pilla and should be dismissed. See e.g. Southern Wine & Spirits of Am., Inc., Impact Env. Engineering, 104 A.D.3d 613, 614, 962 N.Y.S.2d 118 (1 st Dept. 2013)(Absent privity of contract plaintiff could not recover against engineering firm based on allegations of breach of contract or professional malpractice); see also Res. Bd. of Mgrs. of Zeckendorf Towers v. Union Square, 190 A.D.2d 636, 637, 594 N.Y.S.2d 161 (1 st Dept. 1993). It is legally evident that in the absence of contractual privity, a party may not maintain a cause of action for breach of contract. See e.g. Leonard v. Gateway II, LLC, 68 A.D.3d 408, 890 N.Y.S.2d 33 (1 st Dept. 2009); Bd. of Mgrs. of Riverview v. Schorr Brothers Dev. Corp., 182 A.D.2d 664, 665, 582 N.Y.S.2d 258 (2 nd Dept. 1992). Similarly, since an implied duty of good faith and fair dealing may only exist where there is an underlying contract, the absence of an underlying contract negates the legal predicate for such a duty. TVT Records v. Island Def Jam Music Group, 244 F.Supp.2d 263, 277 (S.D.N.Y. 2003)(An implied duty of good faith and fair dealing does not exist in the absence of an underlying contract); see also Levine v. Yokell, 258 A.D.2d 296-7, 685 N.Y.S.2d 296 (1 st Dept. 1999)(Cause of action alleging breach of implied duty was dismissed where there was no underlying contract). The result being that in the absence of privity of contract between Pilla and the Plaintiff the causes of action 6 11 of 19

12 which allege breach of contract and breach of an implied duty of good faith and fair dealing are not cognizable and should be dismissed. Further, where pecuniary losses are at issue, the privity requirement works to bar causes of action for professional malpractice which are made by a nonprivy party. See e.g. Southern Wine & Spirits of Am., Inc., Impact Env. Engineering, 104 A.D.3d at 614 (Absent privity of contract there is no right to recover for professional negligence) 10 ; Sutton Apts. Corp., v. Bradhurst 100 Dev. LLC, 107 A.D.3d 646, 648-9, 968 N.Y.S.2d 483 (1 st Dept. 2013)(Tort claims against architect failed for lack of contractual privity) 11. Here, because there is no contractual privity between Pilla and the Plaintiff the cause of action for professional malpractice is not cognizable and should also be dismissed. II. PLAINTIFF S PROFESSIONAL MALPRACTICE CLAIM SHOULD BE DISMISSED AS DUPLICATIVE OF THE BREACH OF CONTRACT CLAIM The Plaintiff s Second cause of action, which alleges professional malpractice, is based on the same underlying allegations concerning DRPA s performance of its contractual obligations. It is, in short, a mere duplication of the Plaintiff s First cause of action which alleges breach of contract. As a result, it is redundant and should be dismissed. 10 The First Department s decision in Southern Wine also references the limited exception to this rule, which applies in cases where allegations of negligent misrepresentation are made. See 104 A.D.3d at 614. That exception provides that: recovery may be had for pecuniary loss arising from negligent representations where there is actual privity of contract between the parties or a relationship so close as to approach that of privity. Ossining Union Free Sch. Dist. v. Anderson La Rocca Anderson, 73 N.Y.2d 417, 424, 541 N.Y.S.2d 335 (1989). This exception does not apply to the present matter as, by its own terms, the exception s application is limited to claims of negligent misrepresentation. See Id.; see also Travelers Cas. and Sur. Co. v. DASNY, 734 F.Supp.2d 368, 388 (S.D.N.Y. 2010). Regardless of the inapplicability of this exception, the Complaint fails to allege facts sufficient to meet the three-part test for the applicability of this exception, specifically that: (1) the defendant was aware that his or her reports were to be used for a particular purpose; (2) reliance by a known party in furtherance of that purpose; and (3) some conduct by the defendant linking them to the party or parties and evincing defendant s understanding of their reliance. Ossining Union Free Sch. Dist. v. Anderson La Rocca Anderson, 73 N.Y.2d at Please also see accord from the Second Department: Melnick v. Parlato, 296 A.D.2d 443, 745 N.Y.S.2d 68 (2 nd Dept. 2002)(In absence of privity plaintiff could not maintain architectural malpractice claim); Palace Elec. Constr., Inc. v. William Floyd Union, 60 A.D.3d 921, 921-2, 876 N.Y.S.2d 109 (2 nd Dept. 2009)(Plaintiff could not maintain tort claim against engineer in the absence of privity) of 19

13 It has long been the rule in New York that an alleged breach of contract is not to be considered a tort unless a legal duty, independent of the contract, has been violated. Clark- Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d 382, 389, 521 N.Y.S.2d 653 (1987). This independent legal duty must grow out of circumstances extraneous to, and not constituting, elements of the contract. Id. Merely alleging the breach of a duty of care, without more, is insufficient to transform a breach of contract into a distinct, viable tort claim. Id. at 390. The application of this rule requires that where a Plaintiff s allegations of negligence offer the same factual bases as a concurrent breach of contract claim, the negligence allegations are duplicative and should be dismissed. See Wildenstein v. 5H & Co., Inc., 97 A.D.3d 488, 491, 950 N.Y.S.2d 3 (1 st Dept. 2012)(Negligence claim should have been dismissed where it duplicated breach of contract allegations); Encore Lake Grove Homeowners Ass n, Inc. v. Cashin Assoc. P.C., 111 A.D.3d 881, 883, 976 N.Y.S.2d 143(2 nd Dept. 2013)(Architectural malpractice claim was properly dismissed where it was not based on obligations distinct from those required by contract). Here, as detailed below, the Plaintiff s cause of action for professional malpractice is derived from the same contractual obligations which are alleged to have been breached, as well as the same allegations concerning the manner by which the alleged breaches occurred. To illustrate, first, these causes of action both allege that they arise out of DRPA s contractual obligations which concern the Project. (Compare Ansari Aff., Ex.C, 82 with 97). Second, in its attempts to articulate both breach of contract and malpractice, the Complaint duplicates the same factual allegations. In particular, these duplicative allegations are that DRPA: (a) provided plans, specifications, and construction related documents which were inconsistent with industry standards 12 ; (b) provided an incorrect analysis of the Sliver Law 13 ; (c) failed to 12 Compare Ansari Aff., Ex.C, 86 with Compare Ansari Aff., Ex.C, 87 with of 19

14 recognize that the Premises is located in a Manhattan Core parking district 14 ; (d) failed to design an ADA-complaint entrance or obtain a waiver of compliance 15 ; (e) failed to design a Building Code compliant means of egress 16 ; (f) failed to communicate with the Plaintiff concerning critical Project-related issues 17 ; and (g) misrepresented critical facts concerning the Project which affected the Project s viability 18. Other than these duplicated allegations, the only additional charge made by the professional malpractice cause of action is a generalized contention that DRPA breached a duty of care. (See Ansari Aff., Ex.C, 96,107). As detailed above, merely charging a breach of a duty of care is insufficient to transform what is a breach of contract claim into a tort claim. Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d at 390; see also Briar Contr. Corp. v. City of New York, 156 A.D.2d 628, , 550 N.Y.S.2d 717 (1 st Dept. 1989). Lacking distinction, the Complaint s Second cause of action should be dismissed. III. PLAINTIFF S FRAUD CAUSE OF ACTION SHOULD BE DISMISSED AS DUPLICATIVE OF THE BREACH OF CONTRACT CAUSE OF ACTION The Complaint s allegations of fraud, like its malpractice allegations, are duplicative of the breach of contract allegations. This redundancy requires the dismissal of the Third cause of action which alleges fraud. See e.g. Sebastian Holdings, Inc., v. Deutsche Bank, AG., 78 A.D.3d 446, 447, 912 N.Y.S.2d 13 (1 st Dept. 2010)(Fraud claim was properly dismissed where it was duplicative of breach of contract claim) Compare Ansari Aff., Ex.C, 88 with Compare Ansari Aff., Ex.C, 89 with Compare Ansari Aff., Ex.C, 90 with Compare Ansari Aff., Ex.C, 91 with Compare Ansari Aff., Ex.C, 92 with For more concerning the underlying facts please see the Supreme Court s decision at Sebastian Holdings, Inc., v. Deutsche Bank, AG., 35 Misc.3d 1227(A), 953 N.Y.S.2d 553 (NY Cnty 2009) of 19

15 It is a rule that where an alleged fraud is based on the same facts and seeks the same damages as a cause of action alleging breach of contract, the alleged fraud should be dismissed as duplicative of the alleged breach of contract. See Financial Structures Ltd. v. UBS AG, 77 A.D.3d 417, 419, 909 N.Y.S.2d 45, 47 (1 st Dept. 2010); Bd. of Mgrs. of the Chelsea 19 Condominium v. Chelsea 19 Assoc., 73 A.D.3d 581, 905 N.Y.S.2d 8 (1 st Dept. 2010) 20. Such is the case here. As a basis for its fraud cause of action the Plaintiff offers the following factual allegations: (a) that DRPA improperly advised the Plaintiff about the requirements of the Sliver Law 21 ; and (b) that DRPA falsely represented the facts concerning the design and approval of a Building Code compliant means of egress 22. These allegations are merely restatements of some of the Complaint s breach of contract allegations albeit seasoned in terms of an alleged intentional tort. To be clear, the breach of contract cause of action is derived, in part, of the same factual allegations, specifically, that DRPA: (a) provided an incorrect analysis of the Sliver Law and also failed to manage the related Zoning Resolution Determination ( ZRD ) challenge 23 ; and (b) failed to design a Building Code compliant means of egress 24. Additionally and probative on the point that the Plaintiff seeks contractual damages in connection with its fraud claim is that both causes of action seek the same damages. (Compare Ansari Aff., Ex.C, 93 with 119); see also Rockefeller Univ. v. Tishman Constr. Corp. of N.Y., 240 A.D.2d 341, 342, 659 N.Y.S.2d 460 (1997) lv. denied 91 N.Y.2d 803 (1997)(Fraudulent misrepresentation claim was duplicative of breach of contract where it sought the identical contractual benefit of the bargain in recovery). 20 See accord from the Second Department: Doukas v. Ballard, 135 A.D.3d 896, 897, 24 N.Y.S.3d 174 (2 nd Dept. 2016). 21 See Ansari Aff., Ex.C, See Ansari Aff., Ex.C, See Ansari Aff., Ex.C, 87; for more factual allegations concerning the Sliver Law and the ZRD challenge please see Ansari Aff., Ex.C, See Aff., Ex.C, of 19

16 In sum, the Third cause of action is based on the same factual allegations and seeks the same measure of damages as the breach of contract cause of action it is duplicative and should be dismissed. See Financial Structures Ltd. v. UBS AG, 77 A.D.3d at 419. IV. PLAINTIFF S CAUSE OF ACTION FOR BREACH OF AN IMPLIED DUTY OF GOOD FAITH AND FAIR DEALING SHOULD BE DISMISSED AS DUPLICATIVE OF PLAINTIFF S BREACH OF CONTRACT CLAIM The Plaintiff s Fourth cause of action, which alleges the breach of an implied duty of good faith and fair dealing, is derived of an alleged breach of DRPA s agreement for the Project 25 a correlation which intrinsically ties the damages sought by the Fourth cause of action to the alleged breach of contract. This intrinsic link is made further apparent by the Complaint s allegation which expressly ties the damages sought by the Fourth cause of action with the underlying contract. Specifically, the Complaint alleges: As a result of Defendants breach of the Agreement, Plaintiff has incurred damages [ ]. (See Ansari Aff., Ex.C, 129)(Emphasis added). Under these circumstances where the alleged breach of the implied duty is intrinsically tied to the damages which are alleged to have resulted from a breach of contract a cause of action for breach of an implied duty is redundant and may not be maintained. See e.g. Bostany v. Trump Org. LLC, 73 A.D.3d 479, 481, 901 N.Y.S.2d 207 (1 st Dept. 2010); Canstar v. Jones Constr. Co., 212 A.D.2d 452, 453, 622 N.Y.S.2d 730 (1 st Dept. 1995) 26. Moreover, while New York law implies a duty which requires the parties to every express contract to act in good faith, an alleged breach of that duty is merely a breach of the underlying contract and not a separate cognizable cause of action. Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 125 (2 nd Cir. 2013). Consequently, where a complaint, based on the same alleged facts, asserts causes of action for breach of contract and also for breach of an implied duty of good faith and fair 25 See Ansari Aff., Ex.C, Please also see Bd. of Mgrs. of Soho North v. NW 124, LLC, 116 A.D.3d 506, 507 (1 st Dept. 2014) of 19

17 dealing, the latter should be dismissed. See Id.; see e.g. Salomon v. Citigroup Inc., 123 A.D.3d 517, 518, 999 N.Y.S.2d 21 (1 st Dept. 2014). Here, as detailed above, the Fourth cause of action is redundant of the breach of contract cause of action and should be dismissed. V. THE COMPLAINT FAILS TO PLEAD FRAUD AGAINST PILLA WITH SUFFICIENT PARTICULARITY The Complaint s failure to allege any specific fraudulent act or representation made by Pilla an individual defendant requires the dismissal of the fraud cause of action, to the extent it is asserted against Pilla. See e.g. Nicosia v. Bd. of Mgrs. of the Weber House Condominium, 77 A.D.3d 455, 456, 909 N.Y.S.2d 412 (1 st Dept. 2010). The law requires any claim which is rooted in fraud to be pleaded with the particularity required by CPLR 3106(b) 27. Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147 (2009). In order to meet this requirement a Plaintiff must plead facts which are sufficient to permit a reasonable inference of the alleged misconduct. Id. Where the pleaded facts are, however, insufficient for such a reasonable inference to be drawn as to any one of the elements of fraud 28 the cause of action should be dismissed. See e.g. Manda Intl. Corp. v. Yager, 139 A.D.3d 594, 32 N.Y.S.3d 145 (1 st Dept. 2016)(Pleadings which failed to include the name of the employee who conveyed information, or when or where information was conveyed failed to meet the heightened pleading standard of CPLR 3016(b); see also Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d at 560 (A reasonable inference of fraud could not be drawn from allegations that a law firm, despite allegedly having knowledge that its client had exceeded a 27 CPLR 3016(b) requires that: Where a cause of action or defense is based upon misrepresentation, fraud, mistake, willful default, breach of trust, or undue influence, the circumstances constituting the wrong shall be stated in detail. 28 The elements of fraud are a material misrepresentation of fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages [internal citations omitted]. Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d at of 19

18 published investment cap, intentionally included mention of the cap in subsequent offering memoranda with the purpose of defrauding investors). Here, the Complaint offers no specific allegations as to any fraudulent act or representation which was made by Pilla with the intent to perpetrate a fraud against the Plaintiff. Rather, the Complaint simply offers no basis upon which a reasonable inference may be drawn that Pilla participated in the alleged misconduct. Consequently, the Complaint fails to meet the pleading requirements of CPLR 3016(b) and should be dismissed as against Pilla. VI. THE FIFTH CAUSE OF ACTION FOR ATTORNEYS FEES, COSTS AND EXPENSES IS NOT COGNIZABLE The Complaint s Fifth cause of action seeks to recover attorneys fees and expenses incurred as a result of the Plaintiff s prosecution of this action. (See Ansari Aff., Ex.C, 130-4). Well-settled New York law holds, however, that absent a contractual or statutory basis, a successful litigant may not recover legal fees from another party. Chapel v. Mitchell, 84 N.Y.2d 345, 349, 618 N.Y.S.2d 626 (1994); Mighty Midgets v. Centennial Ins. Co., 47 N.Y.2d 12, 21-2, 416 N.Y.S.2d 559 (1979). Since the Complaint does not premise its attempt to recover legal fees on any contractual or statutory provision, the Fifth cause of action is not cognizable under wellestablished New York law. It should be dismissed of 19

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