Wax NJ-2, LLC v. JFB Constr. & Dev., 13-cv-4537, 2015 U.S. Dist. LEXIS 74508 (S.D.N.Y. June 9, 2015)

Wax NJ-2, LLC (“Wax”) hired the architectural firm GF55 Partners (“GF55”) to design and then inspect construction of a store that Wax planned to open in New York City.  The building which Wax was preparing to lease for the store had been leased as two separate commercial spaces.  Wax had the option of moving a partition wall between the two spaces and thus increasing or decreasing the amount of square footage leased for its store.  In designing the layout of Wax’s store, GF55 reported to Wax that the footprint called for 1235 square feet.  Wax then entered into a lease agreement with the owner for 1235 square feet of the building at $125 per square foot.  Construction commenced, and GF55’s remaining obligations under its contract with Wax included inspection of the contractor’s work to ensure compliance with the building code.

Ultimately, GF55’s work proved deficient in several respects.  First, GF55 incorrectly measured the square footage, and Wax had thus entered into a lease agreement for more square footage than it actually needed under its design.  Second, GF55 did not uncover several ways in which the contractor’s work failed to comply with the building code and with the design documents, requiring Wax to remediate the space and bring it into compliance.  Wax sued GF55 for architectural malpractice, alleging that GF55 negligently measured the square footage and negligently inspected the contractor’s work.

The court held a non-jury trial and entered a defense verdict on the negligent measurement theory, but found in favor of Wax on a portion of its negligent inspection theory.  With respect to both theories, the court explained that to establish a duty, New York law generally requires proof that the plaintiff contracted for the negligently-performed service or that it had a relationship with the defendant that neared contractual privity for the service.

The court found that GF55 did not owe a duty to accurately measure the square footage with such precision that would enable Wax to negotiate an appropriate lease with the owner.  Wax did not request GF55 to measure the space for that purpose, and it failed to show that GF55 could reasonably have foreseen that Wax would use the measurement for that purpose.  Because the parties did not have a contractual or near contractual relationship for the provision of such a service, GF55 did not owe a duty to perform that service in accordance with the standard of care.  In contrast, GF55 did contract with Wax to inspect the contractor’s work for compliance with the building code.  GF55 thus owed a duty to perform its inspection for compliance with the building code with the “accepted standards of practice” in the architectural field.  GF55 did not contract to inspect the contractor’s work for compliance with the design documents, did not have a near contractual relationship with Wax for that service, and therefore did not owe a duty under that theory of negligent inspection.

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