Blackhawk Development, LLC v. Krusinski Construction Company

Filing 176

OPINION & ORDER re: 162 SECOND MOTION to Dismiss the Amended Third Party Complaint. filed by CBRE, Inc., 124 FIRST MOTION to Dismiss Amended Third-Party Complaint of Krusinski Construction. filed by McKesson Corporati on., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., CBRE, Inc., McKesson Corporation, McKesson Corporation, McKesson Corporation, McKesson Corporation, McKesson Co rporation, McKesson Corporation, McKesson Corporation, McKesson Corporation, McKesson Corporation, McKesson Corporation, CBRE, Inc. and CBRE, Inc. terminated. For the foregoing reasons, the Court GRANTS Defendants' motions to dismiss and dismis ses all of Krusinski's claims. Since the Court has already granted Krusinski leave to amend its Third-Party Complaint after a conference during which the precise issues raised in CBRE and McKesson's motions were raised (Minute Entry date d February 13, 2020), and the Court believes that further amendment would be futile, the claims against CBRE and McKesson are dismissed with prejudice. The Clerk of the Court is respectfully directed to terminate the motions at ECF Nos. 124 and 162 and terminate CBRE and McKesson as parties in this case. SO ORDERED (Signed by Judge Nelson Stephen Roman on 3/31/2021) (rj)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
BLACKHAWK DEVELOPMENT, LLC,
Plaintiff,
v.
KRUSINSKI CONSTRUCTION CO.,
Defendant.
KRUSINSKI CONSTRUCTION CO.,
3d Party Plaintiff,
v.
COMPANY, INC., CBRE INC., MCKESSON
CORPORATION, SOLOCITO & SON
CONTRACTING CORP., GREENWORLD
LANDSCPE & IRRIGATION INC.
RECLAMATION, LLC, THOMAS J. KEMPTON,
JR. INC., and LOIODICE EXCAVATING, INC,
3d Party Defendants,

3/31/2021
19 CV 5590 (NSR)
OPINION & ORDER

NELSON S. ROMÁN, United States District Judge:
Plaintiff Blackhawk Development, LLC (“Blackhawk”) brought this action against
Krusinski Construction Company (“Krusinski” or “KCC”) alleging breach of contract, breach of
warranty and negligence in its construction, as general contractor, of a Distribution Center in
Orange County, New York. (ECF No. 1.) Krusinski filed a Third-Party Complaint against various
parties, including CBRE, Inc. (“CBRE”) and McKesson Corporation (“McKesson”) (ECF No. 14),
which it amended (ECF No. 75). Currently before the Court are Third-Party Defendants McKesson
and CBRE’s motions to dismiss the Amended Third-Party Complaint. (ECF Nos. 124 and 162.)
For the following reasons, the motions are GRANTED.
BACKGROUND
The facts herein are drawn from the Amended Third-Party Complaint (“ATPC” (ECF No.
75)), and Blackhawk’s underlying complaint (“Complaint” (ECF No. 1)) and are presumed true
for purposes of this motion.

I.

Blackhawk’s Allegations Against Krusinski
Blackhawk hired Krusinski for construction services at its Distribution Center in Orange

County, New York (“Distribution Center,” “the Project,” or “the Property”). (ATPC ¶ 36.)
Blackhawk alleges that its contract with Krusinski required Krusinski to
a) install all Work in conformity with approved Drawings and Specifications using
its best knowledge as to the interpretation or application of applicable codes; b)
notify Plaintiff of any error or inconsistency; c) take field measurements and verify
field conditions and carefully compare such field measurements and conditions and
other information known to KCC with the Contract Documents before commencing
activities; and d) perform the Work in accordance with the Contract Documents
and approved submittals.
(Compl. ¶ 17 (citations omitted).) Krusinski alleges that it “relied exclusively upon [Blackhawk],
its agent(s) or its parent company for the design, planning and testing of groundwork and soil
compaction relative to excavating and backfilling at the property.” (ATPC ¶ 39.) Krusinski
retained subcontractors to perform certain aspects of work for Blackhawk. (ATPC ¶ 37.)
Beginning on or about June 17, 2016, Blackhawk suffered damage to its Distribution
Center located in Orange County, New York. (ATPC ¶ 35.) Specifically, “on or about June 17,
2016, a water pipe connection that had been installed by KCC and/or its subcontractor(s) near a
break room in the Distribution Center leaked water into the Distribution Center for several hours.”
(ATPC ¶ (quoting from Compl. ¶ 8).) “‘[A]s a result of the water leak and/or the work of KCC
and/or the work of its subcontractors, the Distribution Center . . . parking lot . . . . [and] Northeast
corner’ sustained property damage.” (ATPC ¶ 43 (quoting Compl. ¶¶ 9-11).)
Blackhawk sued Krusinski for “costs to date to repair the defects.” (ECF No. 1.)
Blackhawk’s Complaint alleges that:
KCC breached its duties under the . . . Contract by its omissions and/or acts,
including, but not limited to the following: a) failing to adhere to requirements
and/or specifications for composition and type of fill on-site; b) failing to adhere to
prohibitions on certain contents of fill; c) failing to adhere to requirements and/or
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specifications as to compaction of soil; c) failing to adhere requirements and/or
specifications as to building support and/or dimensions of lifts or other supports
under the building to be constructed at the Project; d) failing to adhere to
requirements and/or specifications regarding moisture penetration and/or
protection from moisture; e) failure to adhere to requirements and/or specifications
regarding contaminants in soil at the site; and f) failure to properly install fittings,
couplings, pipes, and/or equipment and/or failure to install proper fittings,
couplings, pipes, and/or equipment.
(Compl. ¶ 18.) Blackhawk further alleges that Krusinski “and/or its subcontractor(s)” were
responsible for the work related to the leaking water pipe. (ATPC ¶ 45 (quoting Compl. ¶¶ 8-11)),
and that negligent installation of the water pipe connection caused various forms of property
damage (ATPC¶ 44).
II.

Krusinski’s Allegations Against McKesson
McKesson is the parent company of Blackhawk. (ATPC ¶ 40.) Prior to and including June

17, 2016, McKesson “performed construction management and/or oversight and approval of work
in relation to the construction of [Blackhawk’s] Distribution Center.” (ATPC ¶ 66.) During the
Project, McKesson was “aware of the content of the reports and correspondences from KCC to
CBRE, INC., concerning the excavation and backfilling relative to the Project.” (ATPC ¶ 67.)
Blackhawk, on behalf of McKesson, “directly retained” geotechnical engineering firms, structural
engineering firms, and architectural firms in relation to the Project. (ATPC ¶¶ 68-73.) “As early
as June 2, 2015, KCC recommended that MCKESSON CORPORATION consult with
ADVANCE TESTING COMPANY, INC. for guidance and/or oversight including soil
compaction testing relative to excavation work at the Project.” (ATPC ¶ 74.) “As early as June 2,
2015, MCKESSON CORPORATION, through its agents and/or employees, was on notice that the
property was subject to at least one inch of settlement within a year.” (ATPC ¶ 75.)
“During the course of the Project, KCC delegated exclusive responsibility to MCKESSON
CORPORATION for one or more duties within KCC’s agreement with Plaintiff.” (ATPC ¶ 76.)
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III.

Krusinski’s Allegations Against CBRE
CBRE acted as Blackhawk’s agent during the construction of the Distribution Center.

(ATPC ¶¶ 41, 58.) Prior to and including June 17, 2016, CBRE “performed certain construction
management and/or oversight and approval of certain work in relation to the construction” of
Blackhawk’s Distribution Center. (ATPC ¶ 57.) CBRE employees used e-mail addresses with the
suffix “@mckesson.com” during the course of the construction of the Distribution Center. (ATPC
¶ 59.) CBRE “directly retained” geotechnical engineering, structural engineering, and architectural
firms in relation to the Project. (ATPC ¶¶ 60-62.)
“As early as June 2, 2015, KCC requested that CBRE, INC. consult with the Plaintiff’s
subcontractor, ADVANCE TESTING COMPANY, INC. for guidance and/or oversight including
soil compaction testing.” (ATPC ¶ 63.) “As early as June 2, 2015, CBRE., INC., through its agents
and/or employees, was on notice that the property was subject to at least one inch of settlement
within a year.” (ATPC ¶ 65.)
Krusinski further alleges that during the course of the Project, Krusinski “delegated
exclusive responsibility to CBRE, INC. for one or more duties within KCC’s agreement with
Blackhawk.” (ATPC ¶ 65.)
IV.

Procedural History
Blackhawk filed this action against Krusinski in June 2019. (ECF No. 1.) Krusinski

answered on October 15, 2019 (ECF No. 13) and filed a Third-Party Complaint against CBRE,
McKesson, and others (ECF No. 14). The Court granted Krusinski leave to amend the Third-Party
Complaint and granted McKesson and CBRE leave to file separate motions to dismiss. (Minute
Entry Dated Feb. 13, 2020.) Krusinski’s Amended Third-Party Complaint states claims for
common law indemnification (ATPC ¶¶ 181-86), contribution (ATPC ¶¶ 187-90), and negligence

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(ATPC ¶¶ 191-97) as against McKesson, and common law indemnification (ATPC ¶¶ 159-64),
contribution (ATPC ¶¶ 165-68), breach of implied warranty (ATPC ¶¶ 169-73), and negligence
(ATPC ¶¶ 174-80) as against CBRE. McKesson and CBRE’s motions to dismiss are now before
the Court. (ECF Nos. 124 and 162.)
LEGAL STANDARD
Under Rule12(b)(6), a court must determine whether the complaint “contain[s] sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
The Court must take all material factual allegations as true and draw reasonable inferences in the
non-moving party’s favor, but the Court is “not bound to accept as true a legal conclusion couched
as a factual allegation,” or to credit “mere conclusory statements” or “[t]hreadbare recitals of the
elements of a cause of action.” Id. (quoting Twombly, 550 U.S. at 555). A claim is facially plausible
when the factual content pleaded allows a court “to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. at 678.
Generally, “[i]n adjudicating a Rule 12(b)(6) motion, a district court must confine its
consideration to facts stated on the face of the complaint, in documents appended to the complaint
or incorporated in the complaint by reference, and to matters of which judicial notice may be
taken.” Leonard F. v. Isr. Disc. Bank of N.Y., 199 F.3d 99, 107 (2d Cir. 1999) (internal quotation
marks and citation omitted).
DISCUSSION
I.

Common Law Indemnification
CBRE avers that since Blackhawk seeks to hold Krusinski liable for its own breaches of

contract rather than for the actions of CBRE, Krusinski’s indemnification claim against CBRE

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must fail. (CBRE Mem. (ECF No. 164) at 7-9.) McKesson avers that because Krusinski has not
alleged that McKesson acted as Krusinski’s subcontractor, Krusinski’s indemnification claim
against McKesson must fail. (McKesson Mem. (ECF No. 124-4) at 4-5.)
The basic principles of common law indemnity “permit one who is held vicariously liable
solely on account of the negligence of another to shift the entire burden of the loss to the actual
wrongdoer.” Trustees of Columbia Univ. v. Mitchell/Giurgola Assocs., 109 A.D.2d 449, 453 (1st
Dep’t 1985). In New York, a party seeking common law indemnity “must show that it may not be
held responsible to any degree.” Rosado v. Proctor & Schwartz, Inc., 66 N.Y.2d 21, 25 (1985);
see also Monaghan v. SZS 33 Assocs., L.P., 73 F.3d 1276, 1284 (2d Cir. 1996) (“common-law
indemnity is barred altogether where the party seeking indemnification was itself at fault, and both
tortfeasors violated the same duty to the plaintiff”). In other words, “a party who has itself actually
participated to some degree in the wrongdoing cannot receive the benefit of the doctrine.”
Dormitory Auth. of the N.Y. v. Caudill Rowlett Scott, 160 A.D.2d 179, 181 (1st Dep’t 1990)
(quoting Trustees of Columbia Univ., 492 N.Y.S.2d at 375)). To state a claim for indemnification,
a party must allege that it “delegated exclusive responsibility for the duties giving ain rise to the
loss to the party from whom indemnification is sought, and must not have committed actual
wrongdoing itself.” Bd. of Managers of Olive Park Condo. v. Maspeth Properties, LLC, 95
N.Y.S.3d 344, 346 (2d Dep’t 2019) (internal quotation mark omitted); accord 17 Vista Fee Assocs.
v. Tchrs. Ins. & Annuity Ass’n of Am., 259 A.D.2d 75, 80 (1st Dep’t 1999). A party cannot obtain
common-law indemnification unless it has been held to be vicariously liable without proof of any
negligence or actual supervision on its own part. See McCarthy v. Turner Const., Inc., 17 N.Y.3d
369, 377-78 (2011).

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The Amended Third-Party Complaint plainly does not state a plausible indemnification
claim against either CBRE or McKesson. Krusinski’s cursory allegations that it “delegated
exclusive responsibility” for “one or more duties” to CBRE and McKesson, without specifying
which duties is insufficient. To state a claim for common law indemnity, a plaintiff must allege
that it delegated “exclusive responsibility for the duties giving rise to the loss,” Bd. of Managers
of Olive Park Condo., 95 N.Y.S.3d at 346, or that “it may not be held responsible to any degree,”
Rosado, 66 N.Y.2d at 25; see e.g., Morris v. Home Depot USA, 59 N.Y.S.3d 92, 96 (2d Dep’t
2017) (affirming dismissal of common law indemnification claim where Home Depot failed to
establish, that it was not negligent, i.e. that Home Depot did not create the dangerous condition
that allegedly caused the injured plaintiff’s accident); Edge Mgt. Consulting, Inc. v. Blank, 807
N.Y.S.2d 353, 366-67 (1st Dep’t 2006) (affirming dismissal of a common law indemnification
claim in a case involving mold in a condominium unit leased by the plaintiff where it was possible
that defendant/third-party plaintiff landlord could be found liable in the main action). Krusinski’s
cursory allegations regarding the duties delegated to CBRE and McKesson are plainly inadequate.
Accordingly, the Court must dismiss the common law indemnification claims against both CBRE
and McKesson for failure to assert a plausible claim.
II.

Negligence
To prevail on a negligence claim under New York law, a plaintiff must establish : (1) the

defendant owed a duty of care; (2) the defendant breached that duty; (3) the breach was the
proximate cause of the plaintiff's injuries; and (4) the existence of damages. Vega v. Fox, 457 F.
Supp. 2d 172, 183 (S.D.N.Y. 2006). In other words, to sustain a cause of action in negligence, the
claimant must prove that a legal duty was owed to him, that this duty was not performed or was
improperly performed, and that the injury resulted as a consequence of the defendant's failure to

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properly perform that duty. Johnson v. Jamaica Hosp., 62 N.Y.2d 523 (1984). “In any negligence
action, the threshold issue before the court is whether the defendant owed a legally recognized
duty to the plaintiff.” Gilson v. Metro. Opera, 5 N.Y.3d 574, 576 (2005).
To establish a duty, claimant must allege a “specific duty” running to that claimant and
“not merely a general duty to society.” Hamilton v. Berretta Corp., 96 N.Y.2d 222, 232, 750
(2001). Further, negligence is actionable only where there is a breach of duty owed to one who
seeks to rely on that duty. See Daily v. Tops Mkts., LLC, 134 A.D.3d 1332, 1333 (3d Dept. 2015)
(holding that grocery store owed no affirmative duty to aid a person who died from intoxication
and hypothermia after being left in a vehicle in the store’s parking lot, even when store employees
were advised that the person needed assistance because the person’s presence in the parking lot
was unrelated to any store business). A simple breach of contract is not to be considered a tort
unless a legal duty independent of the contract itself has been violated. Clark-Fitzpatrick, Inc. v.
Long Island R. Co., 70 N.Y.2d 382, 383 (1987). There is no cause of action for negligent
performance of a contract. Johnson City Cent. Sch. Dist. v. Fid. & Deposit Co. of Maryland, 641
N.Y.S.2d 426 (3d Dep’t 1996).
Further, “[a] parent company will not be held liable for the torts of its subsidiary unless it
can be shown that the parent exercises complete dominion and control over the subsidiary.” Montes
Serrano v. New York Times Co., 19 A.D.3d 577, 578 (2d Dep’t 2005) (Billy v. Consol. Mach. Tool
Corp., 51 N.Y.2d 152 (1980) (holding that fact that employer of plaintiff’s fatally injured decedent
was a wholly–owned subsidiary was insufficient in itself to support imposition of liability upon
parent corporation for acts of subsidiary; liability required allegation that parent exercised
necessary control over subsidiary)).

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Assuming without deciding that Krusinski’s negligence claims are timely, they nonetheless
fail. Krusinski’s cursory allegations that that McKesson and CBRE “had a duty to KCC” as
Blackhawk’s parent company and agent, respectively, “to manage and oversee the work of
Plaintiff’s subcontractors, agents and engineers,” (ATPC ¶¶ 175, 192) are insufficient to allege
any duty beyond a contractual obligation, which “standing alone, will generally not give rise to
tort liability in favor of a third party,” Espinal v Melville Snow Contrs., 746 N.Y.S.2d 120, 122
(2002). Courts have dismissed claims almost identical to Krusinski’s under very similar
circumstances. E.g., City of New York v. Aetna v. Ascot v. Park Avenue Contracting, Inc., 1997
WL 379704 (SDNY 1997) (dismissing a negligence claim against a construction manager where
the duty of due care allegedly arose from the construction manager’s managing duties, as opposed
to its work-product related design duties). Additionally, McKesson cannot be held liable for
negligence merely because the contracts with some of the contractors were signed by McKesson
or it was “aware” of some reports; rather, to state a claim against McKesson for Blackhawk’s
negligence, Krusinski would need to allege “complete dominion and control over the subsidiary.”
Montes Serrano, 19 A.D.3d at 578. Krusinski has not done so.
Accordingly, the Court must dismiss Krusinski’s negligence claims against both CBRE
and McKesson for failure to assert a plausible claim.
III.

Contribution
CPLR 1401 provides in pertinent part that “two or more persons who are subject to liability

for damages for the same personal injury, injury to property or wrongful death, may claim
contribution among them whether or not an action has been brought or a judgment has been
rendered against the person from whom contribution is sought.” CPLR 1401. When determining
whether a party can seek contribution under CPRL 1401, the “touchstone is not the nature of the

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claim in the underlying complaint but the measure of damages sought therein.” Children’s Corner
Learning Ctr. v. A. Miranda Constr., 64 A.D.3d 318 (1st Dep’t 2009). Contribution is unavailable
when a plaintiff seeks recovery solely for economic loss. Rockefeller Univ. v. Tishman Constr.
Corp., 240 A.D.2d 341,659 N.Y.S.2d 460 (1st Dep’t 1997); see Board of Educ. of the J Constr.
City Sch. District v. Sargent, Webster, Crenshaw & Folley, 71 N. Y.2d 21, 26 (1987) (holding that
damages solely economic in nature preclude claims for contribution). Further, “attempts at
casting” a claim in tort when they are based on breach of contract will not lead to damages under
CPLR 1401. Structure Tone Inc. v. Universal Svs. Grp. Ltd., 87 A.D.3d 909, 911 (lst. Dep’t 2011)
(finding that economic loss in the form of water damage resulting from the breach of contract
between general contractor and subcontractor without any allegation of personal injury does not
constitute an “injury to property” under CPLR 1401).
Krusinski’s contribution claims fail for three reasons. First, the alleged duty of care arose
in connection with contractual obligations. Second, the damages sought by Blackhawk for all three
claims—breach of contract, breach of warranty, and negligence—are identical: “costs to date to
repair the defects,” which is how courts define “the appropriate measure of damages for defective
construction” under a construction contract. Marino v. Lewis, 17 A.D.3d 325, 326 (2d Dep’t 2005);
Brushton-Moira Cent. Sch. Dist. v. Fred H. Thomas Assocs., P.C., 91 N.Y.2d 256, 261-62 (1998)
(holding that “the appropriate measure of damages [for breach of a construction contract] is the
cost to repair the defects or, if the defects are not remediable, the difference in value between a
properly constructed structure and that which was in fact built”). Third, Krusinski is mistaken that
the inclusion of a negligence claim in either the Complaint or the Amended Third-Party Complaint
converts the nature of the damages because “merely charging a breach of a ‘duty of due care’. . .
does not, without more, transform a simple breach of contract into a tort claim” Bd. of Educ. of

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Hudson City Sch. Dist. v. Sargent, Webster, Crenshaw & Folley, 71 N.Y.2d 21, 29 (1987).
Accordingly, Krusinski has failed to plausibly assert a contribution claim against either McKesson
or CBRE.
IV.

Breach of Implied Warranty
Since “there is no cause of action for breach of warranty where the defendant has only

provided a service,” Gutarts v. Fox, 104 A.D.3d 457, 459 (1st Dep’t 2013), and the Amended
Third-Party Complaint clearly alleges that CBRE provided services, not goods, in connection with
the Project, the Court must dismiss the claims against CBRE for breach of implied warranty. See
Gutarts, 104 A.D.3d at 459-50 (dismissing breach of implied warranty claim against party hired
to file documents); see also Perlmutter v. Beth David Hosp., 308 N.Y. 100, 105 (1954) (“It has
long been recognized that, when service predominates, and transfer of personal property is but an
incidental feature of the transaction, the transaction is not deemed a sale within the Sales Act,”
and, therefore, “[t]he essence of the contractual relationship between hospital and patient is . . .
human skill and physical materiel of medical science . . . . [c]oncepts of purchase and sale cannot
separately be attached to the healing materials -- such as medicines, drugs or, indeed, blood -supplied by the hospital for a price as part of the medical services it offers. That the property or
title to certain items of medical material may be transferred, so to speak, from the hospital to the
patient during the course of medical treatment does not serve to make each such transaction a
sale.”).
CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ motions to dismiss and
dismisses all of Krusinski’s claims. Since the Court has already granted Krusinski leave to amend
its Third-Party Complaint after a conference during which the precise issues raised in CBRE and

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McKesson’s motions were raised (Minute Entry dated February 13, 2020), and the Court believes
that further amendment would be futile, the claims against CBRE and McKesson are dismissed
with prejudice.
The Clerk of the Court is respectfully directed to terminate the motions at ECF Nos. 124
and 162 and terminate CBRE and McKesson as parties in this case.
Dated: March 31, 2021
White Plains, New York

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