City Was Not Third-Party Beneficiary, Couldn't Sue Architect For Negligence

Friday, April 27, 2018 6:21 am
May 2018 - Volume 40 Number 5

Contract Breach --- Negligence

Dormitory Auth. of the State of N.Y. v. Samson Construction Co., 2018 N.Y. Lexis 218 (Feb. 15, 2018)

A project owner and project manager sought to recover damages of $37 million from the project architect for failure to provide adequate designs on a project that ended up behind schedule and over budget. The Court of Appeals of New York ultimately dismissed both of their claims---one for breach of contract, one for negligence.

The project was to build a forensic biology laboratory in Manhattan, adjacent to Bellevue Hospital. The City of New York (the City) entered into a project management agreement with the Dormitory Authority of the State of N.Y. (DASNY) under which DASNY would “finance and manage the design and construction of the laboratory.” DASNY then entered into a contract with Perkins Eastman, Architects, P.C. (Perkins) under which the designer agreed to provide architectural and engineering services, as well as to supervise construction. Separately, DASNY also entered into a contract with contractor Samson Construction Co. (Samson) to perform excavation and foundation work.

The trouble began in 2002 with the foundation work. According to the record, the excavation support system was improperly installed, causing adjacent buildings to “settle” as much as eight inches, and leading to “substantial” damage and a project delay of more than 18 months. Other structures, including sidewalks, sewers, and water mains, also sustained damage.

Either contract breach or negligence, not both

In 2007, both DASNY and the City sued Perkins for breach of contract and negligence. (DASNY also sued Samson, but the contractor was not a party to the appeal.) Perkins moved to dismiss the cla[..]