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Bits & Pieces

(Masterpiece International Ltd v. Elite Systematic Arts & Ace Crating

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MASTERPIECE INTERNATIONAL LIMITED INC., Plaintiff,

v.

ELITE SYSTEMATIC ARTS & ACE CRATING INC., Defendants.

March 18, 2008.

JACK M. BATTAGLIA, J.

The Verified Complaint of Masterpiece International Limited Inc. against Elite Systematic Arts and Ace Crating Inc. alleges two causes of action. In the first, Masterpiece alleges that it “did retain the defendant, Ace Crating, to pick up certain furniture … and said furniture was to be boxed, crated and transported pursuant to direction”; that “Ace Crating Inc. did merge its business with the entity known as Elite Systematic Arts Inc.”; and that “defendants did pick up said objects … and … in attempting to box, crate and transport said items did beach (sic ) its (sic ) agreement with [Masterpiece] by damaging said objects.”(Verified Complaint, ¶¶ 2-4.) In the second cause of action, Masterpiece repeats those allegations, and alleges that “defendant in its attempt to perform services as agreed to with the plaintiff did perform said services in a negligent manner causing damages to said furniture in the sum of $37, 000.00.”(Id., ¶¶ 5, 6.) Plaintiff seeks judgment for $37, 000, 00, with interest from May 7, 2004.

With this motion, Defendants seek dismissal of the Verified Complaint, contending pursuant to CPLR 3211(a)(5) that the action is barred by the applicable statute of limitations, found in CPLR 214(4); and pursuant to CPLR 3211(a)(1) “on the grounds documentary evidence indicates Elite is an improper party.”(Notice of Motion to Dismiss.)

To the extent the motion is based upon “a defense … founded upon documentary evidence” (seeCPLR 3211[a]) that defendant Elite Systematic Arts is “an improper party,” it is easily disposed of. The motion is supported only by an affidavit by Oscar Romero, the President of both Elite and defendant Ace Crating, Inc.; a letter dated May 12, 2004 from Plaintiff to Ace Crating, complaining about damage to the goods; and a Memorandum of Law. The affidavit asserts that the allegation of a merger between Defendants “is completely false and without basis in fact or law as these are two separate corporations and no such merger has occurred.”(Affidavit in Support of Defendants’ Motion to Dismiss, ¶ 21.) The attached letter does not speak to the contention, and the Memorandum of Law is silent on it.

Defendants have failed to make a prima facie showing pursuant to CPLR 3211(a)(1) that Elite is “an improper party.” The affidavit is not “documentary evidence” for purposes of CPLR 3211(a)(1) (see Berger v Temple Beth-El of Great Neck, 303 A.D.2d 346, 347 [2d Dept 2003] ); and although the copy of Plaintiff’s letter may qualify (see Brown v. Solomon and Solomon, P.C., 181 Misc.2d 461, 463 [Albany City Ct 1999] ), it does not “resolve[ ] all factual issues as a matter of law, and conclusively dispose[ ] of the plaintiff’s claim” against either Elite or Ace Crating (see Matovick v. Times Beacon Record Newspapers, 46 AD3d 636, 638 [2d Dept 2007].)

Defendants’ primary contention is that “[s]ince the events causing the damage alleged in the complaint occurred on May 7, 2004, and since no action was commenced until the Plaintiff filed and served the summons and complaint herein in November of 2007, Plaintiff may not maintain the action because it has not been timely commenced within three years after the property damage allegedly occurred; and is thus barred by the three-year negligence statute of limitations.”(Affidavit in Support of Defendants’ Motion to Dismiss, ¶ 19.) CPLR 214(4) establishes a three-year statute of limitations for “an action to recover damages for an injury to property except as provided in section 214-c.”Since Plaintiff does not allege “injury to property caused by the latent effects of exposure to any substance or combination of substances … upon or within property” (seeCPLR 214-c ), there is no applicable exception to CPLR 214(4.)

It should be noted that the Verified Complaint does not allege that the property damage occurred on May 7, 2004, although it seeks interest on the judgment from that date. Also, the damage clearly occurred before May 12, 2004, the date of the complaint letter, and the Verified Complaint was filed on November 9, 2007. To the extent, therefore, that the three-year statute of limitations is applicable to the alleged causes of action, the Verified Complaint must be dismissed.

The second cause of action alleges that “defendant in its attempt to perform services as agreed to with the plaintiff did perform said services in a negligent manner causing damage to said furniture in the sum of $37,000.00.”(Verified Complaint, ¶ 6.) As to the first cause of action, Defendants contend that it “is, in essence, a claim in negligence resulting in damage” to property, and “[s]ince the damage alleged … in both the first cause of action and the second cause of action for negligence arise from the same allegations regarding Defendants’ alleged negligent actions while performing the agreed services … the relevant three year statute of limitations for negligence actions must be complied with.”(Affidavit in Support of Defendants’ Motion to Dismiss, ¶¶ 8, 16.)

But nowhere in the first cause of action does the word “negligence” or a variant appear, and there is no allegation of lack of reasonable care or prudence. The allegations are of an agreement that certain furniture “was to be boxed, crated and transported pursuant to direction,” and that Defendants “did beach (sic ) its (sic ) agreement with the plaintiff by damaging said objects.”(Verified Complaint, ¶ 2, 4.) The general statute of limitations for breach of contract is six years. (SeeCPLR 213.)

Defendants do not dispute the contract alleged in the first cause of action, nor do they purport to prove its terms, oral or written, so as to show that Plaintiff may succeed on its claim only if it proves negligence. Defendants may succeed on this motion, therefore, only if they show that any claim seeking compensation for unintentional physical damage to personal property is, as a matter of law, governed by the three-year “negligence” statute of limitations, whatever may be the legal theory alleged to sustain the claim.

This is not “an action to recover damages for malpractice” for which the statute provides a three-year limitations period “regardless of whether the underlying theory is based in contract or tort.”(SeeCPLR 214.) Even a claim against a professional, however, would be governed by the six-year statute for breach of contract where it is alleged that the professional “guarantee[d] a particular result or agree[d] to perform a service above or beyond that which it might be expected to accomplish using due care even in the absence of the specific term in the agreement.”(See Matter of R.M. Kliment & Frances Halsbrand, Architects [McKinsey & Co., Inc.], 3 NY3d 538, 543 [2004].)

Defendants rely on a line of decisions beginning with Webber v. Herkimer and Mohawk R.R. Co.(109 N.Y. 311 [1888].) In Webber, the Court of Appeals held that a three-year statute of limitations applicable to tort actions, rather that a six-year statute applicable to breach of contract, barred an action by a passenger against a common carrier to recover damages for personal injuries. (See id., at 315.)As Defendants argue, the tort statute of limitations has been applied as well to bar actions alleging physical damage to personal property arising out of a contract of carriage or other bailment. (See Klein v. Parke-Bernet Galleries, Inc., 21 A.D.2d 772, 772 [1st Dept 1964]; Federal Ins. Co. v. United Port Serv. Co., 23 Misc.2d 142, 143 [Sup Ct, N.Y. County 1960], aff’d12 A.D.2d 905 [1st Dept 1961]; Hillel v. Motor Haulage Co., Inc., 102 N.Y.S.2d 578, 580 [Sup Ct, Kings County 1950]; Schiavone-Bonomo Corp. v. Buffalo Barge Towing Corp., 132 F.2d 766, 768-69 [2d Dept 1942].)

It is worth noting in the first instance that the decisions relied upon by Defendants suggest exceptions and qualifications to the applicability of the three-year statute. (See Webber v. Herkimer and Mohawk R.R. Co., 109 N.Y. at 315-16;Klein v. Parke-Bernet Gallaries, Inc., 21 A.D.2d at 772-73;Federal Ins. Co. v. United Port Serv. Co., 23 Misc.2d at 143;Hillel v. Motor Haulage Co., Inc., 102 N.Y.S.2d at 580.) And in the several decades since those decisions, the law has developed on the issue, including as it applies to bailments. (See Rodriguez v. Central Parking Sys. of NY, 10 Misc.3d 435, 436-41 [Civ Ct, N.Y. County 2005], aff’d17 Misc.3d 108 [App Term, 1st Dept 2007].)

The primary development of the law in this area is marked by movement away from an “essence of the action” rule (see Baratta v. Kozlowski, 94 A.D.2d 454, 461 [2d Dept 1983] ) to consideration of the nature of the interests being asserted and the remedy being sought. (See Sears, Roebuck & Co. v. Enco Associates, Inc., 43 N.Y.2d 389, 394-97 [1977];Matter of Paver & Wildfoerster (Catholic High School Assc.), 38 N.Y.2d 669, 674-75 [1976];Baratta v. Kozlowski, 94 A.D.2d at 460-63.) And so, “an action for failure to exercise due care in the performance of a contract insofar as it seeks recovery for damages to property or pecuniary interests recoverable in a contract action is governed by the six-year contract Statute of Limitations.”(Video Corp. of Amer. v. Flatto Assoc., 58 N.Y.2d 1026, 1028 [1983].)

The upshot seems to be that where, as here, “[t]he liability alleged in the complaint has its genesis in the contractual relationship between the parties, and the plaintiff seeks to recover … for damage to property …, the six-year contract Statute of Limitations is applicable.”(See King Kullen Grocery Co., Inc. v. Long Island R.R., 112 A.D.2d 194, 194 [2d Dept 1985].) Whether the $37,000.00 Plaintiff seeks for “damages to [the] furniture” (Verified Complaint, ¶ 6) is cognizable as contract damages is an issue that need not be determined on this motion. (See Sears, Roebuck & Co. v. Enco Associates, Inc. 43 N.Y.2d at 396-97;Baratta v. Kozlowski, 94 A.D.2d at 463.) The second cause of action survives to the extent it seeks contract damages, notwithstanding the allegation of negligence.

Moreover, “[u]nder New York common law, a common carrier is an insurer against damage to property received by it for transportation; the only exceptions are losses arising from an act of God or from acts of the public enemy.”(ABN AMRO Verzckeringer BV v. Geologistics Americas, Inc., 253 F Supp 2d 757, 765 [SDNY 2003], aff’d485 F3d 85 [2d Cir2007]; see also Calvin Klein Ltd. v. Trylon Trucking Corp., 829 F.2d 191, 195 [2d Cir1989].) “Where the loss is not due to the excepted causes,” including “the inherent nature or qualities of the goods, or the act or fault of the owner or shipper,”“it is immaterial whether the carrier was negligent or not.”(American Mach. & Foundry Co. v. Santini Bros., Inc., 54 Misc.2d 866, 889 [Sup Ct, N.Y. County 1967] [quoting 13 C.J.S., Carriers, § 71, p. 132], aff’d46 A.D.2d 844 [1974].) Defendants make no showing that they are not common carriers, and, therefore, they are allegedly liable as insurers for damage to Plaintiff’s furniture, whether or not there was negligence.

In sum, absent any evidence of an agreement between the parties that would limit or qualify Defendants’ alleged liability to Plaintiff for damage to its furniture while in Defendants’ possession pursuant to contract, Plaintiff may seek contract damages on both causes of action. Depending upon the status of Defendants as common carriers or not, and the terms of any express contract, those damages could include compensation for physical damage to property pursuant to the first cause of action, and might or might not include compensation for such damage pursuant to the second. Tort damages are unavailable because the action was commenced more than three years after the property was allegedly damaged.

Defendants’ motion to dismiss is denied. Defendants shall serve their answer to the Verified Complaint within twenty (20) days after service upon them of a copy of this order with notice of entry.

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