[*1]
| New York Child Resource Ctr., Inc. v Capital Bus Co. |
| 2004 NY Slip Op 51178(U) |
| Decided on August 6, 2004 |
| Supreme Court, New York County |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Supreme Court, New York County
NEW YORK CHILD RESOURCE CENTER, INC., Plaintiff,
against
CAPITAL BUS CO. & THE CITY OF NEW YORK, Defendants.
|
114054/03
Doris Ling-Cohan, J.
Plaintiff New York Child Resource Center, Inc. ("New York Child") is licensed by the New York State Department of Health to provide special needs education and therapy to young preschool children suffering developmental disabilities.
The defendant Capital Bus Company ("Capital" ) was awarded a public contract with the New York City Department of Transportation ("DOT"), after competitive bidding, to transport preschool special education children, including those children attending New York Child. There are approximately 90 children attending New York Child's program, under age three, who are provided bus service by Capital. The buses utilized are mini-buses and the routes range from the transportation of one to approximately nine children per bus. The busing requires curb to curb service and does not follow a prescribed route.
Procedural History
The within motion by plaintiff, made by order to show cause, seeks a preliminary injunction enjoining the defendant Capital from providing bus services to those preschool children attending New York Child's programs at its 350 East 146th Street, Bronx, New York location and compelling the defendant the City of New York ("City") to furnish alternative bus services.
The defendant City cross moves for an order dismissing the action for insufficiency and for lack of standing. In accordance with CPLR 3211 (c), the parties were notified by this court that the City's cross-motion to dismiss is being treated as a motion for summary judgment as to all defendants, and additional submissions were permitted.
A summons and complaint were served simultaneously with the order to show cause. The [*2]complaint alleges breach of contract and negligence and seeks both injunctive relief and money damages.
Factual Claims
New York Child argues that Capital is endangering the health and safety of the children as well as preventing the children from receiving crucial therapy sessions. New York Child also alleges that it is losing revenue since it is paid only when the child actually receives a therapy session and that its reputation is being damaged since the parents associate New York Child with the bus company's poor service.
New York Child submits an affidavit by Frederick Weinberg with the order to show cause alleging poor performance by Capital. Weinberg contends that the buses are filthy, lack operative air conditioning and two-way radios, fail to have a sufficient number of booster seats, that the children are kept on buses in excess of 60 minutes and were either not picked-up or the bus arrived extremely late.
Frederick Weinberg's affidavit specifically addresses two dates, April 28 and April 29, 2003, when there were respectively 57 and 44 children absent due to Capital's failure to transport these children. The above dates are when Capital first began busing children to New York Child's facility, and are approximately three months prior to New York Child seeking this preliminary injunction.
The City of New York's initial opposition included an affidavit of Sherwyn James-Gray, the Customer Liaison Director of DOT's Pre-K Student Transportation Unit, alleging that while there were some initial problems when Capital began performance of its busing contract, it has since made steady improvement in its service.
The order to show cause was adjourned one week so that the DOT Pre-K Student Transportation Inspectors ("DOT inspectors") could investigate the complaints made by New York Child concerning Capital's services. During the one week adjournment, the DOT assigned all five of its inspectors, over a course of three days, to monitor Capital. DOT determined that Capital was essentially in compliance with its contract with the DOT; the buses were clean, had working air conditioning, sufficient infant seats for every child weighing 40 pounds or less, and were considered generally on-time, assuming a 15 minute leeway as a result of normal New York City traffic problems. As to the two-way radios, there was admittedly a systematic failure and Capital had, in fact, since purchased cellular telephones for each of the bus drivers. At the court's direction, the DOT continued to assign one inspector to monitor Capital's performance, while the order to show cause was adjourned to provide the parties time to submit opposition and to either answer the complaint or move to dismiss.
After the hearing held before this Court, the DOT continued to monitor Capital's performance with respect to busing children to New York Child's facility by assigning at least one DOT inspector on a daily basis.
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Only the defendant City has cross moved to dismiss based upon insufficiency and lack of standing. The City of New York submits three affidavits from Shauna Tarshis Denkensohn, the Executive Director of Pre-K Student Transportation of DOT, dated October 21, November 7 and November 19, 2003. These affidavits attach the monitoring summaries of the DOT inspectors assigned to monitor Capital. Ms. Denkensohn states that DOT inspectors found no evidence of conditions of a chronic and recurring nature and that Capital was in substantial compliance with equipment specifications and performance requirements as set forth in Part III of its contract with the DOT.
Michele Weinberg, an administrator with New York Child, in her post-hearing affidavit of November 4, 2003, raised an issue concerning a collision between a Capital bus, in which no children were present, and a parked DOT inspector's car, which occurred on September 15, 2003. According to Ms. Denekensohn, the accident between the bus and parked DOT automobile resulted only in minor property damage and, while not contained in the DOT inspector's summary, was, in fact, reported to both the DOT and New York City Police Department.
Additionally, Ms. Weinberg complains of two other instances in which there was a complaint about a driver smoking on a bus and a complaint, by an unknown parent, alleging the smell of alcohol on a driver's breath. As to these two complaints, Ms. Denekensohn found that they were unsubstantiated. The DOT inspector on the scene found the complaint of alcohol on the driver's breath to be without a basis and there was no further complaint of smoking by any of the drivers.
Cross-Motion to Dismiss
There is no dispute that New York Child was not a signatory to the contract between Capital and DOT. However, New York Child asserts third-party beneficiary status alleging that it was an intended beneficiary of the underlying contract. Thus, the central issue before the court is whether the contract between Capital and DOT confers third-party beneficiary status to New York Child.
New York Child contends that there are several factors demonstrating that it is an intended beneficiary including: (1) New York Child's name and address appear in the subject contract and Capital is required to conform to preschool calendar and daily time schedules of the facilities where the children are bused; (2) Capital's performance of the contract is directed to New York Child; (3) there is no language in the contract negating enforcement by a third-party; and (4) New York Child's own contract with the Department of Mental Health imposes a duty upon the DOT to notify New York Child of anticipated disruptions in service.
Additionally, in the memorandum of law submitted on behalf of New York Child, raised for the first time is a claim that New York Child has standing to bring this action, pursuant to PHL §2559 (3)(a).
The City of New York disagrees and seeks dismissal, arguing that New York Child is merely an incidental beneficiary of the contract between the DOT and Capital and, therefore, lacks standing [*4]to maintain this action as a third-party beneficiary. As to New York Child's theory of standing based on an alleged violation of the PHL §2559 (3)(a), the City contends that such claim belongs instead to the disabled children entitled to bus services and their parents, and that, in any event, such remedy is administrative and not judicial in nature.
New York's Court of Appeals has adopted the approach of the Restatement 2d, Contracts, requiring the party asserting third-party beneficiary status to demonstrate that it was an intended beneficiary of the underlying contract. Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d 38 (1985). It is the intention of the promisee which is said to control the determination of the third-party beneficiary status. Id. at 44. "[T]he absence of any duty of the promisee to the beneficiary has been held to negate an intention to benefit in both governmental and private cases". Id. (citations omitted).
Fourth Ocean Putnam Corp. [supra], a case with analogous facts, dealt with a contract between a municipality and a demolition contractor to remove a structure that was a public nuisance. Plaintiff, the owner of the property, sued for breach of contract against the demolition contractor, alleging it breached the contract by failing to remove the foundation, and against the municipality for failure to supervise and insure that the contract was complied with. The court found that plaintiff was only an incidental beneficiary, not an intended beneficiary, of the contract since the demolition work was performed not as a means of benefitting plaintiff but to protect the general public against a public nuisance.
Similarly, in this case, the busing contract between the DOT and Capital was not performed as a means of benefitting New York Child, but rather to provide busing to special needs children attending therapy sessions, which the City of New York is required to do by statute. Clearly, it was never the intent of the City of New York, by entering into a contract with a bus company, to guarantee a revenue stream to a facility such as New York Child.
The fact that New York Child was named in the contract as one of the facilities to which Capital was to bus children, fails to demonstrate that New York Child was an intended beneficiary; rather, inclusion of such information was merely necessary to enable Capital to perform under the contract. Additionally, there is no provision in the contract implying an intent to permit third-party enforcement. In fact, the subject contract allows for enforcement only by the City of New York in the event Capital fails to comply with equipment specifications and performance requirements. [See Exh. A, Part III of the Contract].
New York Child's reliance upon Key International Manufacturing, Inc. v Morse/Diesel, Inc., 142 AD2d 448 (2d Dept 1988) is misplaced. In that case, the plaintiff, the owner of the development, sued an architect and an engineer contracted by plaintiff's wholly owned subsidiary for economic loss suffered in connection with a construction project involving the development on the basis that it was the third-party beneficiary of the contract. The language in Key International [supra, at 455], upon which New York Child relies, states:
"[w]here performance is to be made directly to a third party, that party is generally deemed an [*5]intended beneficiary of the contract and is entitled to enforce it . . ."
However, the court distinguished its case from Fourth Ocean Putnam Corp., where the performance, the demolition of the third-party's structure, was also made directly to the third-party, in that there was no indication in Fourth Ocean Putnam Corp., that either the promisor or the promisee intended to benefit the landowner, but rather intended to confer a benefit on the public by removing a dangerous structure. Similarly, even if this court considers that the performance of the busing contract to be made directly to New York Child, there is still no indication that the DOT or Capital ever intended to benefit the third-party, New York Child, as was the case in Key International; instead, the contract here was clearly intended to confer a benefit to the special needs children.
Further, New York Child's argument that there is an implied intent based upon language in New York Child's contract with the Department of Health, which it argues imposed a duty on the DOT to notify New York Child of anticipated disruptions, is an incorrect reading of the contract. [See Memo. in Opposition to Motion to Dismiss & in Support of Plaintiff's Motion for a Preliminary Injunction, Exh. B, Portion of Dept. of Mental Health Contract, §5.09(E)]. The "Department" referred to in the contract is not the DOT but rather the Department of Mental Health. The court notes that New York Child has neither sued for, nor does it claim that the City is in breach of its Mental Health contract.
As to New York Child's new claim, that it has standing pursuant to PHL §2559(a), such issue is not properly before this court as such claim is not asserted in plaintiff's complaint and plaintiff has not moved for leave to serve an amended complaint. In any event, as the City of New York has argued, such relief would be administrative in nature. See 10 N.Y.C.R.R. §69-4.17.
Nor may plaintiff prevail on its second cause of action as it is an attempt to plead a breach of contract action in negligence. A breach of contract does not give rise to a tort action in the absence of special and additional allegations of wrongdoing not present herein. See Burlew v American Mutual Ins. Co., 99 AD2d 11, 16, affd 63 NY2d 412 (1984).
Accordingly, the cross-motion by the City of New York dismissing this action for insufficiency and lack of standing is granted.
While co-defendant Capital did not move for dismissal, given the facts, New York Child's failure to state a viable claim against the City also warrants dismissal of this action as against Capital, since the court may search the record and grant judgment to a non-moving party. Abramovitz v Paragon Sporting Goods Co., 202 AD2d 206 (1st Dept 1994). As noted above, this court previously notified the parties that, in accordance with CPLR 3211 (c), the motion to dismiss by the City would be treated as a motion for summary judgment as to all defendants and permitted the submission of additional papers. In response thereto, plaintiffs failed to raise any factual issues to warrant that this case proceed as to either of the defendants.
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In addition, the court notes that it was recently informed by the City that, effective July 21, 2004, the City cancelled its contract with Capital and that the bus route to plaintiff's school will be serviced by GVC bus company.[FN1] [July 19, 2004 letter from Gary P. Rosenthal, Counsel for Defendant City].
Motion for Preliminary Injunction
In light of the above, New York Child's motion for a preliminary injunction is denied as moot. In any event, there is no basis for a preliminary injunction established in the submitted papers. A party seeking a preliminary injunction must demonstrate (1) irreparable harm, (2) likelihood of success on the merits and (3) a balancing of equities in its favor. W.T. Grant Co. v Srogi, 52 NY2d 496 (1981). New York Child has failed to demonstrate any of the necessary prongs. As plaintiff could have been compensated by money damages for its alleged loss of revenue, irreparable injury cannot be established. See James v. Gottlieb, 85 AD2d 572 (1st Dept 1981); cf. Klein, Wagner & Morris v. Klein, 186 AD2d 631, 633 (2nd Dept 1992). Additionally, as to a claim of damage to its reputation, it offered no evidence to support such claim.
ConclusionAccordingly, it is
ORDERED that the motion for a preliminary injunction is denied as moot and the cross-motion by the City of New York is granted and the action is dismissed in its entirety as against both the City of New York and co-defendant Capital; and it is further
ORDERED that, within 30 days of entry, counsel for defendant City of New York is directed to serve a copy of this order with notice of entry upon all parties and upon the Clerk of the Court who is directed to enter judgment of dismissal accordingly.
This constitutes the decision and order of the court.
Dated:
Doris Ling-Cohan, JSC
Check One: [ X ] FINAL DISPOSITION [ ] NON-FINAL DISPOSITION
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Footnotes
Footnote 1: The court further notes that it is undisputed that, since the beginning of this year, Capital no longer was the bus company transporting children to plaintiff's school; Capital sub-contracted with Apollo Bus Company for the subject route.