MAHONEY, Circuit Judge:
Third-party defendants-appellants Blakeslee Prestress, Inc. ("Blakeslee"), St. Lawrence Cement Co. ("St. Lawrence") and A.J. McNulty & Co., Inc. ("McNulty") appeal from an interlocutory order of the United States District Court for the Southern District of New York, Shirley Wohl Kram, Judge, denying their motions to dismiss the third-party claims of third-party plaintiff-appellee Trinity Industries, Inc. ("Trinity"), and the claims and cross-claims of plaintiff and third-party defendant-appellee Helena Erectors, Inc. ("Helena"), for failure to state a claim upon which relief can be granted.
In two diversity actions, Morse/Diesel, Inc. v. Trinity Industries, Inc. ("Morse/Diesel") and Helena Erectors, Incorporated v. Trinity Industries, Inc. ("Helena Erectors"), Trinity and Helena assert claims for negligent performance of contractual duties or negligent misrepresentation against Blakeslee, St. Lawrence and McNulty. Trinity sought direct damages, indemnity and contribution from Blakeslee, St. Lawrence and McNulty. Helena sought direct damages from Blakeslee, and contribution from Blakeslee, St. Lawrence and McNulty. Despite the absence of contractual privity between the adverse parties, the district court held that the complaints alleged sufficiently close working relationships among the parties, who were subcontractors with various roles in the same construction project, to allow recovery for economic loss under New York law.
Pursuant to 28 U.S.C. § 1292(b) (1982 and Supp. IV 1986), the district court certified to this court, and a panel of this court permitted appeal of, "that portion of [the district court's] order which ruled that Blakeslee, McNulty and St. Lawrence could be held liable to Trinity and Helena for economic loss in the absence of privity of contract." Morse/Diesel, Inc. v. Trinity Indus., Inc., 664 F.Supp. 91, 95 (S.D.N.Y.1987). We reverse and remand for dismissal of all claims by Trinity and Helena against Blakeslee, St. Lawrence and McNulty.
Morse/Diesel and Helena Erectors arise out of various alleged construction defects, delays, and other problems relating to a project for the construction of a hotel, the Times Square Hotel (now the Marriott Marquis), located on Broadway between West
Finally, Trinity entered into a subcontract with Helena to hoist, erect and install the structural steel, metal decking and precast concrete planks, and receive and hoist the steel stairs.
In the two main actions for breach of contract, both commenced in August, 1984, Morse is suing Trinity in Morse/Diesel for "failing to complete its work in a timely manner, completing other work in a defective manner, and failing to pay for work performed by others;" and Helena is suing Trinity in Helena Erectors for "inter alia, failing to deliver structural steel in a timely manner, delivering nonconforming structural steel, failing to coordinate Helena's work with that of other subcontractors, and failing to provide Helena with accurate drawings and specifications." Morse/Diesel, Inc. v. Trinity Indus., Inc., 655 F.Supp. 346, 351 (S.D.N.Y.1987).
Trinity filed various counterclaims against Morse in Morse/Diesel and Helena in Helena Erectors. In both actions, Trinity also filed third-party claims against a number of parties. Trinity's third-party claims against Blakeslee, St. Lawrence and McNulty are before us on this appeal. With respect to each of these third-party defendants, Trinity sought damages for negligence in connection with the performance of their subcontracts with Morse, and indemnity
Trinity also filed a third-party claim against Helena in Morse/Diesel, thus making Helena a third-party defendant in that action. Helena then filed, inter alia, cross-claims against third-party defendants Blakeslee, St. Lawrence and McNulty which are before us on this appeal. In each instance, Helena alleged negligence by the subcontractor in the performance of its subcontract with Morse, and sought contribution with respect to any ultimate liability on Helena's part to "Trinity or others." A direct claim for damages resulting from negligence, however, was pleaded only against Blakeslee.
In Helena Erectors, after Trinity filed third-party claims against Blakeslee, St. Lawrence and McNulty, Helena filed claims against these third-party defendants which paralleled Helena's cross-claims against these parties in Morse/Diesel.
The gist of Trinity's and Helena's claims for negligence against Blakeslee is that Blakeslee delivered concrete planks — which Trinity and Helena had contractual duties to erect and install — in an untimely manner, in improper sequence, and in defective condition. As a result of Blakeslee's alleged negligence, Trinity and Helena claim
Trinity's and Helena's negligence claims against St. Lawrence allege that St. Lawrence failed to provide the plans, drawings and specifications for steel connector clips — which were to be fabricated by Trinity — in a timely manner. As a result, they claim that Trinity had to install the clips at the construction site instead of at its manufacturing facility, thus causing additional expense and substantial delays in Trinity's performance and possible liability of Trinity and Helena to third parties.
Finally, Trinity's and Helena's claims against McNulty are essentially for negligent misrepresentation. It is alleged that prior to commencing attachment of the precast concrete panels to the steel structure of the hotel, McNulty surveyed the steel structure and advised Morse that the placement of the steel connector clips was improper, and that McNulty was therefore unable to install the precast concrete panels. They allege that McNulty's survey was erroneous, and that as a result of McNulty's negligent misrepresentations to Morse, Trinity was required by Morse to retain another firm to survey the steel structure and the placement of connector clips. They further allege that McNulty's negligent misrepresentations caused substantial delay of the project, thereby exposing Trinity and Helena to liability to third parties.
Neither Trinity nor Helena is in direct privity of contract with either Blakeslee, St. Lawrence or McNulty. Rather, Trinity, Blakeslee, St. Lawrence and McNulty are all subcontractors of Morse, and Helena is a subcontractor of Trinity. In an effort to overcome the conceded lack of contractual privity, however, Trinity and Helena point to the following provisions of the subcontracts between Morse and Blakeslee, St. Lawrence and McNulty:
Trinity and Helena also bring to our attention the following provision of the "general conditions" applicable to all Morse subcontracts for this project:
Blakeslee, St. Lawrence and McNulty stress with equal vigor the following provision
Blakeslee, St. Lawrence and McNulty, as well as Portman and Weidlinger, against whom Trinity and Helena asserted similar claims, moved to dismiss the claims against them pursuant to Fed.R.Civ.P. 12(b)(6). In a memorandum opinion and order dated March 7, 1987, Judge Kram denied all motions to dismiss negligence claims, with one exception. Morse/Diesel, Inc. v. Trinity Indus., Inc., 655 F.Supp. 346, 353-59 (S.D.N.Y.1987).
The third-party defendants, including Portman and Weidlinger, moved for reargument in the district court. Relying upon this court's intervening opinion in Widett v. U.S. Fidelity and Guar. Co., 815 F.2d 885 (2d Cir.1987), the third-party defendants argued that the district court erred in holding that the architect (Portman), structural engineer (Weidlinger) and other construction subcontractors (Blakeslee, St. Lawrence, and McNulty) could be liable in negligence for purely economic loss, absent privity of contract.
In a June 26, 1987 memorandum opinion and order, the district court held that Widett, which concerned the liability of an architect to a third party, required dismissal of the negligence claims against Portman and Weidlinger. Morse/Diesel, Inc. v. Trinity Indus., Inc., 664 F.Supp. 91, 94 (S.D.N.Y.1987). The court, however, concluded that Widett's strict application of New York's privity requirement "involves the provision of professional services." Id. The court therefore adhered to its earlier decision that dismissal was not required with respect to Blakeslee, St. Lawrence and McNulty, as to whom the complaints alleged a sufficiently "close relationship ... which gives rise to the duty of care." Id.
The district court nevertheless acknowledged that there was "substantial ground for difference of opinion as to its ruling," id. at 95, and therefore, explicitly finding that the conditions of 28 U.S.C. § 1292(b) (1982 and Supp. IV 1986) were met, certified "that portion of its [prior] order ... which ruled that Blakeslee, McNulty and St. Lawrence could be held liable to Trinity and Helena for economic loss in the absence of privity of contract" for interlocutory appellate review. Id. The court also stayed all proceedings against those third-party defendants pending resolution of the appeal. On August 11, 1987, a panel of this court granted permission to appeal pursuant to 28 U.S.C. § 1292(b) (1982 and Supp. IV 1986).
For the reasons hereinafter stated, we reverse and remand with instructions to
A. Direct Liability.
All parties agree that New York law applies in this diversity case. See Widett v. U.S. Fidelity and Guar. Co., 815 F.2d 885, 886 (2d Cir.1987).
We deal first with the claims of Trinity and Helena for damages resulting directly to them from the negligence of Blakeslee, St. Lawrence and McNulty. Trinity states such claims against all three third-party defendants; Helena does so only against Blakeslee.
In Widett, we recently addressed the liability of an architect to a subcontractor under New York law where both were engaged in the same project but there was no privity between them. Widett proceeded from the general premise that "in New York, ... professionals are not liable either in tort or contract absent privity." Widett, 815 F.2d at 886 (citing Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931)).
Widett is not dispositive, however, with respect to the issues that we must now decide, in view of its carefully crafted limitation to the issue of architect liability. Indeed, one of the cases cited in Widett precluded liability of an architect to a subcontractor, but nonetheless ruled that the subcontractor had stated claims for fraud and negligence against another subcontractor that had been designated "project manager." See James McKinney & Son, Inc. v. Lake Placid 1980 Olympic Games, Inc., 92 A.D.2d 991, 461 N.Y.S.2d 483 (3d Dep't 1983), modified on other grounds, 61 N.Y.2d 836, 473 N.Y.S.2d 960, 462 N.E.2d 137 (1984). In so ruling, the court stated with respect to the negligence claim:
92 A.D.2d at 993, 461 N.Y.S.2d at 486.
A similar ruling was made more recently in Northrup Contracting, Inc. v. Village of Bergen, 139 Misc.2d 435, 527 N.Y.S.2d 670
Under the circumstances, the court concluded that there was" `an unmistakable relationship with the reliant plaintiff.'" Id. at 437, 527 N.Y.S.2d at 671 (quoting Credit Alliance Corp. v. Arthur Andersen & Co., 65 N.Y.2d 536, 554, 483 N.E.2d 110, 120, 493 N.Y.S.2d 435, 445 (1985)). The court compared the defendant subcontractor's role to the active supervision of the project manager in McKinney, and quoted McKinney to the effect that "[t]hese duties can reasonably be said to inure to the benefit of subcontractors as well as the owner. Id. at 438, 527 N.Y.S.2d at 672 (quoting McKinney, 92 A.D.2d at 993, 461 N.Y.S.2d at 486).
Accepting as true Trinity's and Helena's allegations, however, we find nothing in this case approaching the relationship between the parties in McKinney and Northrup. All three third-party defendants here were subcontractors with discrete, circumscribed roles in the overall construction project. Blakeslee had no duties on the construction site at all, certainly no supervisory duties; its role was confined to manufacturing precast concrete planks and shipping them to the site. St. Lawrence also had no supervisory duties. Its only obligation, in addition to manufacturing the precast concrete panels, was to design steel connector clips and provide plans, drawings and specifications for their use. These were essentially architectural or design duties generally not inuring to the benefit of third parties under New York law. Widett, 815 F.2d at 887; Edward B. Fitzpatrick, Jr. Constr. Corp. v. County of Suffolk, 138 A.D.2d 446, 448, 525 N.Y.S.2d 863, 865 (2d Dep't 1988) (citing Widett); Ossining Union Free School Dist. v. Anderson LaRocca Anderson, 135 A.D.2d 518, 521, 521 N.Y.S.2d 747, 750 (2d Dep't 1987) (citing Widett).
The case is a little closer with regard to McNulty. Like Blakeslee and St. Lawrence, McNulty had no general supervisory duties akin to those found in McKinney and Northrup; rather, its obligation was limited to the installation of precast concrete panels. In fulfilling this duty, however, McNulty notified Morse/Diesel of alleged problems with the steel clip placement that rendered McNulty unable to install the concrete panels. This did place McNulty, to a very limited degree, in the position of one subcontractor reviewing the work of another. It is clear, nevertheless, that review of Trinity's clip placement was by no means "`the end and aim of the transaction,'" Northrup, 139 Misc.2d at 437, 527 N.Y.S.2d at 671 (quoting Glanzer v. Shepard, 233 N.Y. 236, 238-39, 135 N.E. 275, 277 (1922)), but was merely an incident to installation of the panels. Cf. William v. Iselin & Co., Inc. v. Landau, 71 N.Y.2d 420, 426 & n. 2, 527 N.Y.S.2d 176, 179 & n. 2, 522 N.E.2d 21, 23-24 & n. 2 (1988) (no liability to third party from incidental or collateral purpose of accounting engagement).
Finally, the provisions of the subcontracts between the third-party defendants and Morse/Diesel argue strongly against liability to third parties. Although, as Trinity and Helena properly contend, various
We conclude that the direct claims of Trinity against Blakeslee, St. Lawrence and McNulty, and of Helena against Blakeslee, should have been dismissed.
A question arises whether the issue of contribution is presented to this court pursuant to 28 U.S.C. § 1292(b) (1982 and Supp. IV 1986). Judge Kram certified "that portion of [the district court's] order in Morse/Diesel I [, 655 F.Supp. 346 (S.D.N.Y.1987),] which ruled that Blakeslee, McNulty and St. Lawrence could be held liable to Trinity and Helena for economic loss in the absence of privity of contract." Morse/Diesel, Inc. v. Trinity Indus. Inc., 664 F.Supp. 91, 95 (S.D.N.Y.1987) (emphasis added). This formulation appears addressed only to questions of direct liability between the named parties, rather than to contribution with respect to liability to third parties.
Our powers on an appeal under § 1292(b), however, "are not so narrowly circumscribed as to preclude consideration and resolution of questions other than those specifically regarded as controlling by the district court at the time of its certification order." Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 994 (2d Cir.), cert. denied, 423 U.S. 1018, 96 S.Ct. 453, 46 L.Ed.2d 389 (1975). We are "not ... required to answer the precise question certified by the district court since the certification statute does not require it; the certificate to the appellate court is that there is a controlling question of law, but the interlocutory appeal is from the order made below." Slade v. Shearson, Hammill & Co., 517 F.2d 398, 400 (2d Cir.1974).
Since the district court's decision, the New York Court of Appeals has construed New York's contribution statute, N.Y.Civ.Prac.L. & R. 1401 (McKinney 1976), as not permitting "contribution between two parties whose potential liability to a third party is for economic loss resulting only from a breach of contract." Board of Educ. v. Sargent, Webster, Crenshaw & Folley, 71 N.Y.2d 21, 24, 523 N.Y.S.2d 475, 476, 517 N.E.2d 1360, 1361 (1987). The Court of Appeals made it clear that section 1401 creates a right of contribution only among joint tortfeasors.
The only obligations of the third-party defendants whose alleged breach gives rise to claims for contribution were contractual in nature, resulting from their respective subcontracts with Morse. Sargent, Webster accordingly precludes those claims. Trinity and Helena contend, however, that the third-party defendants were negligent in failing to perform these obligations with
Sargent, Webster, 71 N.Y.2d at 29, 523 N.Y.S.2d at 479, 517 N.E.2d at 1365.
Any obligations which the third-party defendants failed to perform here were essentially contractual in nature. Such failure does not provide a basis to impose liability for contribution under New York law.
The order of the district court is reversed and the case is remanded for dismissal of Trinity's claims for direct liability and contribution against Blakeslee, St. Lawrence and McNulty, and Helena's claims for direct liability against Blakeslee and contribution against Blakeslee, St. Lawrence and McNulty.