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Smart Summary

Factual and Procedural Background

Plaintiff, New York Central Mutual Fire Insurance Company, as subrogee of Richard and Barbara Frear, initiated this action on June 17, 2008 to recover payments made for property damage caused by a liquid propane (LP) gas explosion. The Frears contracted Stewart Brockett, doing business as Another Construction Company, to construct a home with an LP gas system, and separately contracted Glider Oil Company, Inc. (Glider) to install an LP gas tank and supply system and provide future LP gas. Brockett completed construction in September 2001; Glider installed the LP gas system in October 2001 and last serviced and supplied LP gas in late 2006. The home was destroyed by an LP gas explosion on March 20, 2007.

Plaintiff alleged four causes of action against defendants: negligence, breach of warranty, breach of contract, and strict products liability. Each defendant cross-claimed against the other for contribution. Both Brockett and Glider moved for summary judgment dismissing the complaint against them. The Supreme Court granted Brockett’s motion in full and granted parts of Glider’s motion dismissing the negligence, breach of warranty, and strict products liability claims against Glider.

Legal Issues Presented

  1. Whether Brockett’s breach of contract claim was time-barred under the six-year statute of limitations.
  2. Whether Glider’s breach of warranty claim was time-barred under the four-year statute of limitations.
  3. Whether Glider owed a legal duty independent of its contractual obligations that would sustain negligence and strict products liability claims.
  4. Whether the court erred in granting summary judgment dismissing the cross claim against Brockett.
  5. Whether Glider’s breach of contract claim was time-barred considering its recurring contractual obligations.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
State of New York v. Lundin, 60 N.Y.2d 987 Accrual of breach of contract claim upon substantial completion of construction. Determined Brockett’s breach of contract claim accrued in September 2001 when the home was substantially completed, making the claim time-barred.
Phillips Constr. Co. v. City of New York, 61 N.Y.2d 949 Definition of substantial completion of construction for accrual purposes. Supported the court’s conclusion that Brockett’s minor subsequent work did not delay accrual of the breach of contract claim.
Caleb v. Sevenson Envtl. Servs., Inc., 19 A.D.3d 1090 Accrual of breach of contract claim at substantial completion. Reinforced the application of the six-year statute of limitations to Brockett’s claim.
Town of Poughkeepsie v. Espie, 41 A.D.3d 701 When a contract is substantially completed for purposes of statute of limitations. Further supported the dismissal of Brockett’s breach of contract claim as time-barred.
Zuckerman v. City of New York, 49 N.Y.2d 557 Standard for raising triable issues of fact on summary judgment. Rejected plaintiff’s evidence as insufficient to create a triable issue on substantial completion date.
UCC 2-725(1) and (2) Four-year statute of limitations for breach of warranty claims and accrual at tender of delivery. Found Glider’s breach of warranty claim time-barred as the LP gas system was installed over four years before commencement.
Rissew v. Yamaha Motor Co., 129 A.D.2d 94 Accrual of breach of warranty claim at delivery of product. Supported dismissal of Glider’s breach of warranty claim as untimely.
Heller v. U.S. Suzuki Motor Corp., 64 N.Y.2d 407 Definition of accrual for breach of warranty claims. Confirmed timing for accrual of warranty claims relevant to Glider’s motion.
Sommer v. Federal Signal Corp., 79 N.Y.2d 540 Distinction between breach of contract and tort claims; requirement of independent legal duty for tort liability. Guided the court’s analysis in finding Glider owed a legal duty independent of contract, precluding summary judgment on negligence and strict products liability claims.
Clark–Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382 Legal duty independent of contract must arise from extraneous circumstances. Supported the court’s conclusion that Glider’s duty arose from its services, not just contract terms.
Gallup v. Summerset Homes, LLC, 82 A.D.3d 1658 Merely alleging lack of due care does not convert breach of contract into tort. Applied to determine that Glider’s tort claims were viable due to independent duty and nature of injury.
Schmeer v. Gaslight Co. of Syracuse, 147 N.Y. 529 Gas company’s duty to exercise reasonable care to prevent escape or explosion of gas. Established Glider’s independent tort duty based on the dangerous nature of gas.
Jackson v. Gas Co., 2 A.D.3d 1104 Gas company’s duty of reasonable care in handling and distribution of gas. Supported the court’s finding of Glider’s independent legal duty.
Lockwood v. Berardi, 135 A.D.2d 881 Gas company’s duty to prevent gas escape and explosion. Reinforced the independent duty owed by Glider beyond contractual obligations.
Syracuse Cablesystems v. Niagara Mohawk Power Corp., 173 A.D.2d 138 Characterization of abrupt, catastrophic occurrences as tort injuries. Supported the court’s finding that the explosion was typical of tort claims.
Bellevue S. Assoc. v. HRH Constr. Corp., 78 N.Y.2d 282 Definition of catastrophic injury relevant to tort claims. Supported the nature of injury analysis favoring tort claims.
Village of Palmyra v. Hub Langie Paving, Inc., 81 A.D.3d 1352 Distinction between economic damages and damages supporting tort claims. Supported the court’s conclusion that plaintiff sought damages beyond economic loss.
Franklin Credit Mgt. Corp. v. Wik, 75 A.D.3d 1145 Relief not granted if not requested in motion papers. Found error in granting Brockett summary judgment dismissing cross claim not requested in his motion.
Berle v. Buckley, 57 A.D.3d 1276 Same as above, regarding relief not requested in motion. Supported the modification of the order reinstating the cross claim against Brockett.
Lyon v. Lyon, 259 A.D.2d 525 Same principle as above. Further supported correction of the order regarding cross claims.
Stalis v. Sugar Cr. Stores, 295 A.D.2d 939 Six-year statute of limitations accrues when contract breached or performance omitted. Applied to Glider’s recurring obligations to determine accrual of breach of contract claims.
Bulova Watch Co. v. Celotex Corp., 46 N.Y.2d 606 For recurring obligations, claim accrues at each breach. Supported finding that Glider’s breaches in 2006 were timely for breach of contract claim.
Sirico v. F.G.G. Prods., Inc., 71 A.D.3d 429 Same as above regarding recurring contract breaches. Confirmed the accrual analysis for Glider’s breach of contract claim.
Airco Alloys Div. v. Niagara Mohawk Power Corp., 76 A.D.2d 68 Same principle on recurring breaches and accrual. Further supported the court’s ruling on Glider’s breach of contract claim timing.

Court's Reasoning and Analysis

The court analyzed the statute of limitations applicable to each cause of action. For Brockett, the six-year limitation for breach of contract began upon substantial completion of the home in September 2001, rendering the claim time-barred when the action was commenced in 2008. Minor subsequent work by Brockett was deemed incidental and insufficient to delay accrual.

For Glider, the four-year statute of limitations for breach of warranty began at tender of delivery of the LP gas system in October 2001, making that claim untimely. However, the court found that Glider owed a legal duty independent of the contract for negligence and strict products liability because of the inherently dangerous nature of LP gas and the duty to prevent its escape or explosion. This independent duty precluded summary dismissal of these tort claims.

The court further held that the nature of the injury—a sudden, catastrophic gas explosion causing damage beyond economic loss—was typical of tort claims, supporting the viability of negligence and strict products liability causes of action.

Regarding the cross claim against Brockett, the court found error in granting summary judgment dismissing it because Brockett did not seek such relief in his motion. Lastly, the court recognized that Glider’s contract involved recurring obligations, such as ongoing gas supply and maintenance, with each breach triggering a new statute of limitations period. As Glider last serviced and supplied gas in late 2006, the breach of contract claim was timely.

Holding and Implications

The court MODIFIED the order by:

  • Denying Glider’s motion for summary judgment dismissing the negligence and strict products liability causes of action, thereby reinstating those claims;
  • Denying Brockett summary judgment dismissing the cross claim against him and reinstating that cross claim.
As modified, the order was affirmed without costs.

The direct effect is to allow the negligence and strict products liability claims against Glider and the cross claim against Brockett to proceed. No new precedent was established; the court applied existing legal principles regarding statutes of limitations, independent tort duties, and recurring contractual breaches.

NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY, as Subrogee of Richard Frear and Barbara Frear, Plaintiff–Appellant–Respondent, v. GLIDER OIL COMPANY, INC., Defendant–Respondent–Appellant,andStewart Brockett, Doing Business as Another Construction Company, Defendant–Respondent.

PRESENT: SCUDDER

Mitchell Goris Stokes & O'Sullivan, LLC, Cazenovia (Patrick J. O'Sullivan of Counsel), for Plaintiff–Appellant–Respondent. Costello, Cooney & Fearon, PLLC, Syracuse (Gabrielle M. Hope of Counsel), for Defendant–Respondent–Appellant. Petrone & Petrone, P.C., Utica (James H. Cosgriff, III, of Counsel), for Defendant–Respondent. PRESENT: SCUDDER, P.J., CENTRA, FAHEY, CARNI, and SCONIERS, JJ.

MEMORANDUM:

Plaintiff, as subrogee of the owners of the property in question, Richard Frear and Barbara Frear, commenced this action on June 17, 2008 seeking to recover sums that it paid to the Frears for property damage sustained as a result of a liquid propane (LP) gas explosion. The Frears entered into a contract with defendant Stewart Brockett, doing business as Another Construction Company, for the construction of a home that was to include an LP gas system. The Frears entered into a separate contract with defendant Glider Oil Company, Inc. (Glider) for the installation of an LP gas tank and supply system and for the provision of all future LP gas required. Brockett completed construction of the home in September 2001, and Glider installed and connected the LP gas tank and supply system in October 2001. Glider returned to the home on October 31, 2006 to service the LP gas tank, and it last supplied LP gas to the home on November 6, 2006. The home was destroyed by an LP gas explosion on March 20, 2007.

Plaintiff alleged four causes of action against defendants for negligence, breach of warranty, breach of contract and strict products liability, and each defendant cross-claimed against the other for contribution. Brockett moved for summary judgment dismissing the complaint against him, and Glider also moved for summary judgment dismissing the complaint against it. Supreme Court granted Brockett's motion in its entirety and granted those parts of the motion of Glider with respect to the first cause of action, for negligence, the second cause of action, for breach of warranty, and the fourth cause of action, for strict products liability.

We reject the contention of plaintiff on its appeal that the court erred in granting that part of Brockett's motion for summary judgment dismissing the breach of contract cause of action against him as time-barred. The statute of limitations for a breach of contract cause of action is six years ( see CPLR 213[2] ). In an action “against a general contractor and architect for defective construction and design, the cause of action generally accrues upon the completion of construction, meaning completion of the actual physical work” ( State of New York v. Lundin, 60 N.Y.2d 987, 989, 471 N.Y.S.2d 261, 459 N.E.2d 486; see Phillips Constr. Co. v. City of New York, 61 N.Y.2d 949, 951, 475 N.Y.S.2d 244, 463 N.E.2d 585, rearg. denied 62 N.Y.2d 646, 476 N.Y.S.2d 1028, 464 N.E.2d 990; Caleb v. Sevenson Envtl. Servs., Inc., 19 A.D.3d 1090, 1091, 796 N.Y.S.2d 806), i.e., “when the contract in question was substantially completed” ( Town of Poughkeepsie v. Espie, 41 A.D.3d 701, 706, 840 N.Y.S.2d 600, lv. dismissed 9 N.Y.3d 1003, 849 N.Y.S.2d 30, 879 N.E.2d 170, lv. denied 15 N.Y.3d 715, 915 N.Y.S.2d 216, 940 N.E.2d 922). Brockett established his entitlement to judgment as a matter of law with respect to the breach of contract cause of action inasmuch as he established that the home was substantially completed in September 2001, more than six years before commencement of this action ( see Lundin, 60 N.Y.2d at 989, 471 N.Y.S.2d 261, 459 N.E.2d 486; see generally Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718). Although there is evidence in the record that Brockett returned to the home in either the fall of 2001 or 2002 to complete work, that evidence is insufficient to raise a triable issue of fact concerning the date when the home was substantially completed ( see generally Zuckerman, 49 N.Y.2d at 562, 427 N.Y.S.2d 595, 404 N.E.2d 718). Indeed, the work in question was described as incidental and cosmetic, and it was performed in a few hours on one day ( see Lundin, 60 N.Y.2d at 989–990, 471 N.Y.S.2d 261, 459 N.E.2d 486; Tom L. LaMere & Assoc., Inc. v. City of Syracuse Bd. of Educ., 48 A.D.3d 1050, 1051–1052, 851 N.Y.S.2d 752). “[C]onstruction may be complete even though incidental matters relating to the project remain open” ( Lundin, 60 N.Y.2d at 989, 471 N.Y.S.2d 261, 459 N.E.2d 486; see Phillips Constr. Co., 61 N.Y.2d at 951, 475 N.Y.S.2d 244, 463 N.E.2d 585; Tom L. LaMere & Assoc., Inc., 48 A.D.3d at 1052, 851 N.Y.S.2d 752). We note that plaintiff failed to raise any issues in its brief with respect to those parts of the order granting Brockett's motion for summary judgment dismissing the first, second and fourth causes of action against him, and we therefore deem any such issues abandoned ( see Ciesinski v. Town of Aurora, 202 A.D.2d 984, 609 N.Y.S.2d 745).

We reject plaintiff's further contention that the court erred in granting that part of Glider's motion for summary judgment dismissing the breach of warranty cause of action against it as time-barred. The statute of limitations for a breach of warranty cause of action is four years ( see UCC 2–725[1] ), and such a cause of action “against a manufacturer or distributor ‘accrues on the date the party charged tenders delivery of the product’ ” ( Rissew v. Yamaha Motor Co., 129 A.D.2d 94, 99, 515 N.Y.S.2d 352, quoting Heller v. U.S. Suzuki Motor Corp., 64 N.Y.2d 407, 411, 488 N.Y.S.2d 132, 477 N.E.2d 434; see UCC 2–725[2] ). It is undisputed that Glider installed and connected the LP gas tank and supply system on or about October 22, 2001, and this action was commenced more than four years after that cause of action accrued ( see UCC 2–725[2]; Heller, 64 N.Y.2d at 411, 488 N.Y.S.2d 132, 477 N.E.2d 434).

We agree with plaintiff, however, that the court erred in granting those parts of Glider's motion for summary judgment dismissing the negligence and strict products liability causes of action against it, and we therefore modify the order accordingly. This case “falls in the borderland between tort and contract, an area [that] has long perplexed courts” ( Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 550, 583 N.Y.S.2d 957, 593 N.E.2d 1365). “[A] simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated ... [That] legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract” ( Clark–Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 389, 521 N.Y.S.2d 653, 516 N.E.2d 190; see Sommer, 79 N.Y.2d at 551–552, 583 N.Y.S.2d 957, 593 N.E.2d 1365; Gallup v. Summerset Homes, LLC, 82 A.D.3d 1658, 1660, 920 N.Y.S.2d 504). “ ‘[M]erely alleging that the breach of a contract duty arose from a lack of due care will not transform a simple breach of contract into a tort’ ” ( Gallup, 82 A.D.3d at 1660, 920 N.Y.S.2d 504, quoting Sommer, 79 N.Y.2d at 551, 583 N.Y.S.2d 957, 593 N.E.2d 1365). “In considering whether plaintiff[has] viable tort causes of action, we must also consider ‘the nature of the injury, the manner in which the injury occurred and the resulting harm’ ” ( id., quoting Sommer, 79 N.Y.2d at 552, 583 N.Y.S.2d 957, 593 N.E.2d 1365).

Here, plaintiff demonstrated that Glider owed a legal duty independent of its contractual obligations, thus precluding summary judgment dismissing the negligence and strict products liability causes of action ( see Sommer, 79 N.Y.2d at 551–553, 583 N.Y.S.2d 957, 593 N.E.2d 1365; cf. Clark–Fitzpatrick, Inc., 70 N.Y.2d at 389–390, 521 N.Y.S.2d 653, 516 N.E.2d 190; Gallup, 82 A.D.3d at 1660, 920 N.Y.S.2d 504). “A legal duty independent of contractual obligations may be imposed by law as an incident to the parties' relationship. [For example, p]rofessionals [and] common carriers ... may be subject to tort liability for failure to exercise reasonable care, irrespective of their contractual duties” ( Sommer, 79 N.Y.2d at 551, 583 N.Y.S.2d 957, 593 N.E.2d 1365). “A gas company is required to use reasonable care in the handling and distribution of gas. In view of the dangerous and explosive character of gas and its tendency to escape, a gas company has the duty to use that degree of caution which is reasonably necessary to prevent the escape or explosion of gas from its pipes and equipment” (PJI 2:185; see generally Schmeer v. Gaslight Co. of Syracuse, 147 N.Y. 529, 538, 42 N.E. 202; Jackson v. Gas Co., 2 A.D.3d 1104, 1105, 769 N.Y.S.2d 638; Lockwood v. Berardi, 135 A.D.2d 881, 882, 522 N.Y.S.2d 279). Thus, Glider's duty to act with reasonable care is not only a function of its contract with the Frears “but also stems from the nature of its services” (Sommer, 79 N.Y.2d at 552, 583 N.Y.S.2d 957, 593 N.E.2d 1365).

In addition, “the manner in which the injury arose ... and the resulting harm [are] both typical of tort claims” ( id. at 553, 583 N.Y.S.2d 957, 593 N.E.2d 1365). The gas explosion was an “ ‘abrupt, cataclysmic occurrence’ ” ( id.; see Syracuse Cablesystems v. Niagara Mohawk Power Corp., 173 A.D.2d 138, 140–142, 578 N.Y.S.2d 770; cf. Bellevue S. Assoc. v. HRH Constr. Corp., 78 N.Y.2d 282, 293–294, 574 N.Y.S.2d 165, 579 N.E.2d 195, rearg. denied 78 N.Y.2d 1008, 575 N.Y.S.2d 459, 580 N.E.2d 1062). Further, plaintiff “is not seeking the benefit of [the] contractual bargain,” inasmuch as the Frears suffered more than economic damages ( Sommer, 79 N.Y.2d at 553, 583 N.Y.S.2d 957, 593 N.E.2d 1365; see Village of Palmyra v. Hub Langie Paving, Inc., 81 A.D.3d 1352, 1353–1354, 917 N.Y.S.2d 454; Syracuse Cablesystems, 173 A.D.2d at 142, 578 N.Y.S.2d 770).

We agree with Glider on its cross appeal that the court erred in granting Brockett summary judgment dismissing the cross claim against him inasmuch as Brockett did not request that relief in his motion papers ( see Franklin Credit Mgt. Corp. v. Wik, 75 A.D.3d 1145, 1146, 905 N.Y.S.2d 809; Berle v. Buckley, 57 A.D.3d 1276, 1277, 869 N.Y.S.2d 679; Lyon v. Lyon, 259 A.D.2d 525, 686 N.Y.S.2d 476). We therefore further modify the order accordingly. We reject the further contention of Glider on its cross appeal, however, that the court erred in denying that part of its motion for summary judgment dismissing the breach of contract cause of action against it as time-barred. Glider had recurring obligations under its contract with the Frears, i.e., to supply all LP gas required by the Frears and to maintain the LP gas supply system. “ ‘The general rule applicable to contract actions is that a six-year [s]tatute of [l]imitations begins to run when a contract is breached or when one party omits the performance of a contractual obligation’ ” ( Stalis v. Sugar Cr. Stores, 295 A.D.2d 939, 940, 744 N.Y.S.2d 586). Where, as here, a contract provides for a recurring obligation, a claim for damages accrues each time the contract is allegedly breached ( see Bulova Watch Co. v. Celotex Corp., 46 N.Y.2d 606, 611, 415 N.Y.S.2d 817, 389 N.E.2d 130; Sirico v. F.G.G. Prods., Inc., 71 A.D.3d 429, 435, 896 N.Y.S.2d 61; Airco Alloys Div. v. Niagara Mohawk Power Corp., 76 A.D.2d 68, 80–81, 430 N.Y.S.2d 179). Plaintiff alleged that Glider breached the contract by defectively servicing and supplying the LP gas system, and the record establishes that Glider last serviced the LP gas system in October 2006 and last supplied LP gas in November 2006.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying those parts of the motion of defendant Glider Oil Company, Inc. for summary judgment dismissing the first and fourth causes of action against it and reinstating those causes of action against that defendant and by denying defendant Stewart Brockett, doing business as Another Construction Company, summary judgment dismissing the cross claim against him and reinstating that cross claim, and as modified the order is affirmed without costs.

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New York Cent. Mut. Fire Ins. Co. v. Glider Oil Co.
(Dec 30, 2011)