Who Was Liable for Damage to Eighth Floor Unit?

High-rise commercial co-ops necessarily house utilities, pipes, and connections behind closed walls. As a recent case illustrates, where an enclosed pipe in one unit burst and damaged another unit, the Court may be required to navigate a web or relationships and agreements to determine who may be liable for the damage.

Metropolitan Productions, Inc. and Daylight Studio LLC sued Good Light Studio, Inc. and Good Light Studio 2, LLC and sought six million dollars for property damage and loss of income. The claim was the result of a frozen pipe that burst on February 1, 2015 and caused damages to a space occupied by Metro/Daylight on the 8th floor of 450 West 31st Street. Good Light moved for dismissal and/or summary judgment.

450 West 31st Street Owners Corp. is the commercial cooperative which collectively owns and operates the building in which the businesses of Metro/Daylight are located.

Metro/ Daylight are the proprietary lessee and occupant of units on the eighth and ninth floors of the building.

James Galloway is the proprietary lessee of unit 9C in the building. Good Light subleased unit 9C from Galloway. On February 1, 2015, the pipe burst in unit 9C causing damage to Metro/Daylight’s unit below.

The proprietary lease agreement between the co-op and Galloway provided that Galloway was not responsible for maintenance, repair, and replacement of water pipes within the walls, ceilings or floors.

Specifically, Article 18 of the lease provided that:

The Lessee shall keep the interior of the Unit (including interior walls, floors and ceilings but excluding windows, window panes, window frames, sashes, sills, entrance and terrace doors, frames and saddles) in good repair, shall do all the painting and decorating required for his Unit, including the interior of window frames, sashes and sills, and shall be solely responsible for the maintenance, repair, and replacement of plumbing, gas and heating fixtures and equipment and such immovable equipment and fixtures which may be in the unit. Plumbing, gas and heating fixtures as used herein shall include exposed gas, steam and water pipes attached to fixtures, appliances and equipment and the fixtures, appliance and equipment to which they are attached, and any special pipes or equipment which the Lessee may install within the wall or ceiling, or under the floor, but shall not include gas, steam, water or other pipes or conduits within the walls, ceilings or floors or air conditioning or heating equipment which is part of the standard building equipment.

The sublease between Galloway and Good Light was subordinate to the prime lease and incorporated by reference all of the provisions of the prime lease.

The pipe that burst was within the walls of Unit 9C and could only be accessed after the wall had been removed.

After the pipe burst, Metro/Daylight filed an action in Federal Court against their insurer, Fireman’s Fund Insurance Company. That action resulted in a settlement pursuant to which Fireman’s paid them $762,527.70, broken down as: $656,993.15 for tenant improvements; $20,534.55 for property damage; and $85,000.00 for business income loss and additional expenses. Fireman’s also assigned to Metro/Daylight all rights of subrogation and interest under the policy and any claims to recover the amounts paid in connection with the loss.

Good Light met the prima facie burden in establishing the right to judgment as a matter of law. The proprietary lease for Galloway and the sublease between Galloway and Good Light establish that Good Light had no responsibility to maintain or repair the water pipes that were inside the walls of the demised premises. The only admissible evidence was that the pipe was not installed by Good Light and that Good Light made no improvements or renovations to the area where the leak occurred. Good Light never serviced or repaired the pipe.

Metro/Daylight asserted two causes of action against Good Light: one for negligence and one based on the theory of respondeat superior.

To establish a claim for negligence, a plaintiff must show that: the defendant owed the plaintiff a duty; the defendant breached that duty; and the breach proximately caused harm to the plaintiff.

The existence and scope of a tortfeasor’s duty was a question of law to be determined by the Court. Foreseeability, alone, does not define duty, it merely determines the scope of the duty once it is determined to exist. To establish a duty giving rise to liability in tort, the injured party must show that a defendant owed not merely a general duty to society but a specific duty to him or her. Absent a duty running directly to the injured person there can be no liability in damages, however careless the conduct or foreseeable the harm.

There was ample authority establishing that lease provisions, such as those in this case, were unambiguous and a proper basis for summary determinations.

Even if they could have established a contractual duty pursuant to pursuant to the proprietary lease and the sublease, Metro/Daylight acknowledged that such an obligation alone would be insufficient to impose liability on Good Light. They conceded that contractual obligations were insufficient to impose tort liability on non-contracting third parties, unless: (1) the contracting party, in failing to exercise reasonable care in the performance of his duties, launches a force or instrument of harm; (2) the plaintiff detrimentally relies on the continued performance of the contracting party’s duties; or (3) the contracting party has entirely displaced the other party’s duty to maintain the premises safely. None of the three exceptions applied to Good Light.

Metro/Daylight argument that MDL § 78(1) imposed a duty of care on Good Light was unavailing. MDL § 78(1) provides “(e)very multiple dwelling … shall be kept in good repair. The owner shall be responsible for compliance with the provisions of this section; but the tenant also shall be liable if a violation is caused by his own wilful act, assistance or negligence or that of any member of his family or household or his guest.”

But it was undisputed that Good Light committed no willful acts and Metro/Daylight was unable to establish a claim of negligence as against Good Light. Nor was there a basis to find that Good Light had notice of any alleged defect in the pipes. The argument that Good Light was aware of a problem with the sink did not constitute notice of a defect to a pipe behind the walls.

Res ipsa loquitur may be applied where: (1) the event was of a kind which ordinarily does not occur in the absence of negligence; (2) was caused by an agency or instrumentality within the exclusive control of the defendant; and (3)was not due to any voluntary action or contribution on the part of the plaintiff.

While that doctrine had been applied against building owners in the case of ruptured pipes, Good Light was not the party charged contractually with maintenance of the pipes and did not have exclusive control of the pipes behind the walls of its premises.

In the cause of action that sounded in respondeat superior, Metro/Daylight claimed that Galloway and a third party were vicariously liable for the negligent acts and omissions of their authorized agent, Good Light. But a defendant cannot be both directly and vicariously liable for its own alleged negligence. So, the cause of action was based on a theory of negligence which could only be applied as against Galloway and could not be asserted against Good Light.