VILLENCY INC., Plaintiff, -against- INTER-COUNTY MECHANICAL
                          SERVICES, INC., Defendants.



               2010 NY Slip Op 33194U; 2010 N.Y. Misc. LEXIS 5594

                           October 15, 2010, Decided
                            November 4, 2010, Filed


JUDGES: PRESENT: Hon. Joan A. Madden, J.S.C.

OPINION BY: Joan A. Madden


   Joan A. Madden, J.:

   This is a case in which plaintiff subrogee, St. Paul Fire and Marine
Insurance Company (St. Paul), has asserted negligence and breach of contract
claims against, among others, 1 Inter-County, arising out of about $ 1,000,000
in damages incurred by St. Paul's subrogor, Maurice Villency Inc. (Villency),
when a sprinkler pipe allegedly froze and burst in Villency's furniture
showroom, supposedly as a result of cold air emanating from adjacent air ducts.
Inter-County now moves for an order granting it summary judgment. In the event
that its summary judgment  motion is denied, Inter-County seeks, pursuant to
CPLR 3001, the issuance of a declaratory judgment, under its contract's clause,
limiting damages to direct damages only, and excluding liability for
consequential damages, including loss of profits or other economic loss.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -1
Inter-County Mechanical Corp. (Inter-County) has advised that St. Paul
discontinued the action as to codefendants 200 Madison Associates LP, George
Comfort & Sons Inc., and Loeb Partners Realty and Development Corp.,
respectively the landowner, the building's landlord, and the management company
of the property where Villency was a tenant. Further, St. Paul's counsel advised
in his supplemental affirmation in opposition to the instant motion that
plaintiff has discontinued this action against codefendant R & S United Services
Inc. (R) & S). Thus, Inter-County is now the sole remaining defendant.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -


   Villency, at the time in issue, operated furniture showrooms in New Jersey,
Connecticut and New York, including one on Madison Avenue in Manhattan, for more
than 30 years. Villency installed, at that latter location, on some unspecified
date or dates, a cooling system, including air ducts, which drew in outside air
into the cooling units for its operation, and separate air ducts into which hot
air from its cooling units was discharged. On August 13, 2002, Villency entered
into Inter-County's "official standard" (Troesch ebt, at 23) air-conditioning
maintenance contract (the contract). A purpose of the preventive maintenance
program was directed toward achieving "peak system performance." Contract, at 2.
Robert Indovino (Indovino), Villency's Director of Operations, signed the
contract on behalf of it. Indovino worked out of Villency's Plainview, Long
Island offices. Under the contract, the yearly cost to Villency was about $

   As is relevant, the contract provided that Inter-County would provide four
custom maintenance inspections a year, including basic inspection, oiling and
adjusting procedures  recommended by the manufacturer. Labor for emergency
service and repairs was covered under the contract. The contract excluded, under
the inspection and labor program, most parts and materials, services or repairs
listed in Appendix "A", and any equipment not listed in an equipment inventory
which was to be provided on Villency's acceptance of Inter-County's contract.
The contract obligated Villency to provide Inter-County with safe and well
lighted access to Villency's equipment. Appendix "A" ( §§ 1, 2, 9) Indicated
that Inter-County would not be responsible for, among other things, the
"[m]aintenance, repair or replacement to ... ductwork, [or] insulation," changes
in ductwork, "or services beyond the covered equipment."

   Joseph Troesch (Troesch), who was then Inter-County's "sales engineer,"
signed the contract on behalf of Inter-County, but did not price it out (Troesch
ebt, at 23; but see id. at 13). He testified that the aforementioned equipment
inventory, the purpose of which was to let the customer know which equipment was
covered, was never provided to Villency, and that he did not know why it was not
provided. Troesch ebt, at 83-85. He asserted that such an inventory would list
only the "units," meaning the actual air-conditioning units. Id. at 80, 84.
Troesch further testified that Inter-County never obtained the equipment
manufacturers' brochures; did not know whether they were available from the
manufacturers; did not know whether he had taken steps to get them from the
manufacturers; did not request  the brochures from Villency; and failed to
advise Villency that Inter-County lacked the brochures. Id. at 81-83.

   In August 2003, Villency contacted Inter-County because water was leaking
from a part of its suspended ceiling above its first-floor showroom.
Inter-County sent one of its service technicians, Julio Cruz (Cruz), to look
into the problem. Cruz inspected the space above the wet ceiling tiles, and saw
two to three feet of rotting ductwork, which was allowing hot air, which was
being discharged from the cooling unit into the discharge duct, to escape into
the dropped ceiling space and condense, resulting in the moisture condition.
Cruz called Troesch, who obtained the services of a ductwork subcontractor to go
to Villency to Inspect. Troesch did not know whether Inter-County charged
villency for its inspection of the ductwork and did not believe that it charged
for its subcontractor's inspection. Troesch ebt, at 105. Troesch then sent
Villency a repair proposal to remove and replace two 64" x 24" discharge air
ducts, for a price in excess of $ 19,000.

   Thereafter, Villency obtained an estimate from former codefendant, R & S,
which proposed to remove and replace one piece of sheet metal from a discharge
duct, the rotted section, for $ 3,000. Villency opted to use R & S's more
limited and less expensive services, which it then performed in early September

   On December 2, 2003, Cruz and another Inter-County  technician, apparently
named Charlie, went to Villency's premises to close down the cooling system for
the winter. The system's water towers and pumps were drained, filters were
changed, and belts and motors were checked. Cruz testified that, in terms of
whether any other work had been done, he could only speak for himself, but that
his work did not require him to look into the suspended ceiling where the ducts
were located. When asked whether ductwork was inspected to ensure that the
system was maintained to achieve peak performance, Cruz replied, "we don't do
duct work." Cruz ebt, at 26. Cruz also testified that ductwork freezes, but that
he had never heard of pipes near ductwork freezing. Cruz further testified that
he had seen a fixed louver on the outside of Villency's premises, which led to
the ductwork that was for the system's water tower, and that his inspections for
Villency did not require him to inspect the louver. He was then asked whether
the individual performing the winterization process was required to inspect the
louver. Cruz replied that he did not know if Charlie had done so. When asked if
that were something Charlie might do, Cruz responded, "Maybe ... Maybe not."
Cruz ebt, at 75.

   Troesch, who initially testified that the ductwork was not part of the
cooling system, but eventually conceded that it was (Troesch ebt, at 38, 103),
asserted that winterization did not include inspecting the ductwork or checking
sources of cold air, because the ducts would just sit there for 10-30 years and
not  need anything (id. at 36-37). Troesch further indicated that it was not his
practice to tell customers to obtain separate contractors to inspect their
ductwork, because that was not an item that needed to be inspected or worried
about. However, Troesch later testified that he believed that the ductwork in
issue was about 30 years old. Id. at 114.

   He also testified that the ductwork and louvers that opened into the ducts
were not covered under the contract, that, as part of ordinary scheduled
maintenance, Inter-County would not inspect that ductwork to make sure that
there were no voids, and that he never heard of pipes freezing when the ductwork
was closed. Troesch asserted that ductwork was inspected only upon a customer's
request. When asked what inspections, if any, were called for by Inter-County's
technicians to lessen the risk of freezing to pipes near ductwork or air intake
louvers, Troesch responded, "I don't know. If we see something that looks bad to
us, we'll mention something, if it looks normal we don't even pay attention to
it." Troesch ebt, at 50. He also testified that there was no reason to have the
louvers closed. He further testified, when asked if he would ever recommend to
customers that their louvers be insulated for the winter, that it depended, and
that there were w a billion different cases." Id. at 56.

   On about January 11, 2004, the sprinkler pipe cracked, causing extensive
damage to Villency's showroom and inventory, thereby allegedly resulting in
business interruption losses. By  letter dated January 22, 2004, St. Paul's
counsel advised Inter-County of a likely subrogation action against it, as a
result of a frozen sprinkler pipe caused by Inter-County's alleged failure to
maintain Villency's HVAC and cold air infiltration system. St. Paul's counsel
advised that Villency needed to commence repairs to mitigate its damages, and
that if Inter-County, its attorney, or its insurance carrier desired to inspect
the damages and components, it should contact St. Paul's counsel within 72
hours, and that if no one contacted counsel, repairs would commence, and damaged
materials would be discarded. There is no indication that within 72 hours
Inter-County contacted St. Paul's counsel, but Troesch, evidently a day after
the pipe broke, went to the premises with another Inter-County sales
representative to inspect and take photographs. On January 24, 2004, non-party
Rheem Contracting Corp. (Rheem) repaired the pipe. Its invoice recites that the
pipe leaked due to freezing. Villency and R & S thereafter entered into a
service contract dated April 14, 2004 for the maintenance of specifically listed
air cooling equipment. That contract recited that R & S would not be responsible
for labor, parts or repair of ductwork.

   Thereafter, St. Paul commenced this action against Inter-County and the
aforementioned former codefendants. The complaint asserts negligence (first
cause of action) and breach of contract (third cause of action) claims against
Inter-County. The  complaint and bill of particulars allege, in addition to the
failure to maintain the ductwork and louvers, the negligent and grossly
negligent failures to protect the building from cold air infiltration; recommend
proper sealing and insulation to prevent cold air infiltration; warn of the
risks associated with not closing the louvers; properly Inspect and warn
Villency of the dangers which posed a risk of freezing to adjacent pipes; and to
do those things needed to protect Villency's property. Complaint, P 16; Bill of
Particulars, P 4.

   Inter-County moves for summary judgment dismissing the entire action as to it
on the grounds that it did not cause the freeze-up of the sprinkler pipe, which
caused the alleged damages, and did not have any duty with respect to the
ductwork, because it was specifically excluded from the contract. Alternatively,
Inter-County seeks a declaratory judgment limiting St. Paul's recovery in
accordance with the contract's "liquidated damages" clause. St. Paul opposes the
motion. After it submitted its reply affirmation, Inter-County sought to amend
its motion to add a new basis for dismissal of the action, namely, that Villency
spoliated evidence by discarding the broken sprinkler pipe.



   Inter-County seeks to amend its counsel's moving affirmation in support of
its summary judgment motion so as to adopt R & S's  request, made in its
subsequent summary judgment motion, to strike St. Paul's complaint on the ground
that Villency disposed of the broken sprinkler pipe at a time when it was aware
that it might be needed for litigation. Inter-County's application is denied.

   A party seeking the imposition of substantial and severe sanctions for
spoliation of evidence must demonstrate that the entity or individual sought to
be "sanctioned was responsible for the loss or destruction of evidence crucial
to the establishment of a claim or defense, at a time when [that individual or
entity] was on notice that such evidence might be needed for future litigation."
Haviv v Bellovin, 39 AD3d 708, 709 (2d Dept 2007); see also Tapia v Royal Tours
Service, Inc., 67 AD3d 894, 896 (2d Dept 2009) (plaintiffs must show that "they
are 'prejudicially bereft of the means of prosecuting'" the action [internal
citation omitted]); Dessources v Good Samaritan Hospital, 65 AD3d 1008, 1010 (2d
Dept 2009) (plaintiff's expert's speculative affidavit was inadequate to
establish that the loss of fetal monitoring tapes was crucial evidence); Utica
Mutual Insurance Co. v Berkoski Oil Co., 58 AD3d 717 (2d Dept 2009). Sanctions
can be ordered whether the spoliation was negligent or intentional. Baglio v St.
John's Queens Hospital, 303 AD2d 341 (2d Dept 2003); Squitieri v City of New
York, 248 AD2d 201 (1st Dept 1998).

    The court is given a broad degree of discretion in deciding which sanction
is appropriate, and since striking a party's pleading constitutes drastic
relief, the court is required to consider the prejudice to the other side. Utica
Mutual, 58 AD3d at 718; see also Minaya v Duane Reade International, Inc., 66
AD3d 402 (1st Dept 2009). "[A] less severe sanction or no sanction is
appropriate where the missing evidence does not deprive the moving party of the
ability to establish his or her case or defense." Denoyelles v Gallagher, 40
AD3d 1027, 1027 (2d Dept 2007). When a lesser sanction is imposed, it "is a
matter best left to the discretion of the trial court and should be made on the
basis of the record before it at the time." Quinn v City University of New York,
43 AD3d 679, 680 (1st Dept 2007); Kugel v City of New York, 60 AD3d 403 (1st
Dept 2009).

   In the instant case, while Inter-County seeks to make much of the fact that
Villency did not wait 72 hours after giving Inter-County notice before Villency
repaired the pipe, Inter-County has not indicated that within that 72-hour
period it sought to inspect the pipe. Significantly, Troesch and an Inter-County
salesman visited the site the morning after the event, and thus had the
opportunity to inspect the pipe if they so chose. Also, at his deposition,
Troesch did not appear to dispute that the pipe had frozen. Troesch ebt, at 64,
68, 72, 75-76, 100). Further, Inter-County has failed to demonstrate that
inspection  of the pipe is crucial to its defense. Hartford Fire Ins. Co. v
Regenerative Bldg. Constr. Inc., 271 AD2d 862, 864 (3d Dept 2000).

   Specifically, although Rheem's pipe repair invoice indicated that the leaking
pipe was due to a freeze-up of the sprinkler lines, there is no indication that
Inter-County ever attempted to depose Rheem, a disinterested witness, to
ascertain the basis for that conclusion. Additionally, Inter-County's expert
effectively opined that the pipe could not have frozen if the showroom was kept
heated above 32[degrees]. Thus, while Inter-County has shown, via St. Paul's
counsel's January 22, 2004 letter, that Villency was on notice that the pipe
might be needed for future litigation, Inter-County has not demonstrated that it
is bereft of the defense that the pipe did not burst due to a freeze-up of the
sprinkler line. Moreover, Inter-County does not claim that evidence of the
ducts' condition was spoliated. It therefore has evidence as to whether the
ducts' condition caused a freeze-up of the pipe.

   Next, Inter-County's motion, which seeks dismissal of the complaint, violates
my preliminary conference order, which provided that all dispositive motions had
to have been made within 60 days of the filing of the note of issue, which,
according to the court's case management system, occurred on November 6, 2009.
Inter-County's request to amend its affirmation in support of its summary
judgment motion was served  on March 12, 2010, evidently in response to R & S's
motion for summary judgment and to strike St. Paul's complaint. While the County
Clerk's file reveals that R & S sought, and was granted, an extension of time to
serve its summary judgment motion, because it and St. Paul were in the midst of
discussions as to whether St. Paul would voluntarily discontinue its action as
to R & S, no such extension was ever granted to Inter-County. Here, it is clear
from Inter-County's counsel's moving affirmation that it was aware that the pipe
was missing; yet, it did not seek dispositive relief on spoliation grounds until
after its time to do so expired.

   Thus, good cause has not been demonstrated to relieve it of its obligation to
timely move for dispositive relief on the ground of spoliation. Glasser v
Abramovitz, 37 AD3d 194 (1st Dept 2007). In light of the foregoing, its request
for summary judgment based on spoliation of the pipe is denied. Nonetheless,
this denial is without prejudice to a motion for a missing evidence charge at
trial. Barnes v Paulin, 52 AD3d 754, 755 (2d Dept 2008); Quinn v City of New
York, 43 AD3d at 680; Rodriguez v 551 Realty LLC, 35 AD 3d 221 (1st Dept 2006) ;
see e.g. PJI 1:77.

Summary Judgment

   The law is well settled that the movant on a summary judgment application
bears the initial burden of prima facie establishing its entitlement to the
requested relief, by  eliminating all material allegations raised by the
pleadings. Alvarez v Prospect Hospital, 68 NY2d 320 (1986); Winegrad v New York
University Medical Center, 64 NY2d 851 (1985); Kuri v Bhattacharya, 44 AD3d 718
(2d Dept 2007). The failure to meet one's burden mandates the denial of the
application, "regardless of the sufficiency of the opposing papers." Winegrad,
64 NY2d at 853. However, where the movant demonstrates its prima facie
entitlement to summary judgment, the burden shifts to the other side to raise a
material triable issue of fact warranting the motion's denial. Alvarez v
Prospect Hospital, 68 NY2d at 324. Also, "the remedy of summary judgment is a
drastic one, which should not be granted where there is any doubt as to the
existence of a triable issue or where the issue is even arguable, since it
serves to deprive a party of [its] day in court [internal citations omitted]."
Gibson v American Export Isbrandtsen Lines, Inc., 125 AD2d 65, 74 (1st Dept

   Before addressing the parties' substantive claims, there are two preliminary
issues. First, Inter-County requests in its reply affirmation that the court
preclude St. Paul from offering on this motion and at trial a statement
allegedly made by an unidentified Inter-County "mechanical representative" to
St. Paul's investigating engineer/expert, who was evidently on Villency's
premises on January 20, 2004. The basis for this request is that St. Paul failed
to provide that statement during  discovery, as required (CPLR 3101 [e]; Kaye v
M & J Associates, 46 AD2d 894 [2d Dept 1974]), thereby allegedly hampering and
prejudicing Inter-County's defense of this case (Sherman v Tamarack Lodge, 146
AD2d 767 [2d Dept 1989]). The alleged statement, as referred to in that
Investigator's affidavit, was to the effect that the employee performed the
yearly winterization and startup of Villency's air conditioning equipment, and
that such winterization included draining the system, and that the startup
included preparing the system for use.

   To the extent that Inter-County is seeking preclusion of the statement at
trial, as opposed to on this motion, that is an evidentiary issue for the trial.
As to Inter-County's request that the court preclude the statement on this
motion, it is readily apparent that such statement has not prejudiced or
hampered Inter-County in its defense of the action, Inter-County's bald and
conclusory assertion to the contrary notwithstanding, since the statement is
essentially a reiteration of the deposition testimony of Inter-County's
employees, Cruz and Troesch, as was noted by that investigator in his affidavit
(P 9).

   Nonetheless, while the court declines to preclude that statement based on a
failure to disclose it during discovery, it is clearly inadmissible on this
motion, since that individual's  identity has not been revealed (Griggs v
Children's Hosp. of Buffalo, Inc., 193 AD2d 1060 [4th Dept 1993]; Denn v Kaplan,
131 AD2d 535 [2d Dept 1987]), there is no indication that he was sent by
Inter-County to the premises for the purpose of being interviewed, and his
speaking authority has not been demonstrated. Loschiavo v Port Auth. of N.Y. &
N.J., 86 AD2d 624 (2d Dept 1982), affd 58 NY2d 1040 (1983); Sherman v Tamarack
Lodge, 146 AD2d at 768. Thus, the alleged statement constitutes hearsay, and
will not be considered on this motion.

   Second, to the extent that Inter-County seeks in its reply papers to preclude
St. Paul from using its expert's affidavit to oppose this summary judgment
motion on the ground that St. Paul failed to serve a CPLR 3101 (d) statement,
such request is, in the exercise of my discretion, denied since no prejudice has
been demonstrated. Howard v Kennedy, 60 AD3d 905 (2d Dept 2009); Hernandez-Vega
v Zwanger-Pesiri Radiology Group, 39 AD3d 710 (2d Dept 2007); Freeman v
Kirkland, 184 AD2d 331 (1st Dept 1992); but see Construction by Singletree, Inc.
v Lowe, 55 AD3d 861 (2d Dept 2008) (court did not abuse its discretion when it
barred a defendant from using its experts' affidavits to oppose a codefendant's
summary judgment motion to dismiss part of the defendant's cross claim, since
the note of issue and certificate of readiness had been filed without the
defendant having provided CPLR 3101 [d] statements). Specifically, St. Paul's
expert's  claims are essentially a rehashing of its pleadings, and certainly
could not have surprised Inter-County. Also, Inter-County did not formally move
for an order granting it preclusion when the plaintiff's CPLR 3101 (d) statement
was not forthcoming at the time it filed its note of issue or once Inter-County
received St. Paul's opposing papers which contained the expert's affidavit. See
Kozlowski v Alcan Aluminum Corp., 209 AD2d 930 (4th Dept 1994); see also Freeman
v Kirland, 184 AD2d at 332. Instead, Inter-County raised the preclusion issue in
its reply affirmation, so that St. Paul was not afforded an opportunity to
respond. Thus, the request to preclude the expert's affidavit is denied.

   Turning now to the substance of Inter-County's summary judgment application,
Inter-County, which did not submit an expert's affidavit with its initial moving
papers, argues that it is entitled to summary judgment since it did not cause
the freeze-up condition. The basis for this claim is the assertion of
Inter-County's counsel that there is no evidence in the record regarding
causation, i.e. what caused the pipe to burst, and, that since the pipe was
discarded, plaintiff will merely be speculating as to the cause of the accident.
While not entirely clear, Inter-County also seems to be asserting that, as
Villency chose R & S, rather than it, to repair the ductwork, Inter-County
cannot be responsible for problems with the sprinkler pipe.  Thus, Inter-County
maintains that it is entitled to summary judgment. This assertion is without

   A party does not meet its burden of establishing its entitlement to summary
judgment simply by pointing to gaps in a plaintiff's case. Bryan v 250 Church
Associates, LLC, 60 AD3d 578 (1st Dept 2009). Initially, it must be noted that
Inter-County has not established a particular problem with R & S's repair of the
discharge duct which caused the pipe to burst. In this regard, the court also
notes that Troesch's testimony (ebt, at 66) suggests that the broken pipe was in
the vicinity of an inlet duct. Therefore, it may have been an inlet duct, rather
than a discharge duct, which caused the pipe to burst. In view of the foregoing,
Inter-County has not prima facie established that the accident was unrelated to
the ductwork or the louvers, or that Inter-County should be exonerated because R
& S repaired a discharge duct. Thus, irrespective of the adequacy of the
opposing papers, Inter-County is not entitled to summary judgment on these

   This leaves the issue of whether Inter-County has prima facie established
that it had no contractual duty with respect to the ductwork and louvers.
Inter-County maintains that, since the contract excluded maintenance of the
ductwork and insulation, it is entitled to summary judgment. Inter-County's
counsel, who does not profess any expertise, claims that the contractual
exclusion of ductwork is common in the HVAC industry, as allegedly demonstrated
by Villency's contracts with it and R & S.

   St. Paul asserts that the contract provision' relied upon by Inter-County in
an attempt to exonerate itself simply meant that, if work were required on the
ductwork or louvers, there would be an additional charge, not that Inter-County
lacked a duty during its winterization process to inspect or warn of
deficiencies. In this regard, St. Paul relies on Indovino's deposition
transcript submitted by Inter-County. Indovino effectively testified that he was
of the belief that, looking at the contract as a whole, which mentioned
inspections and the system, that inspections of the ductwork were part of the
contract, and that the Appendix "A" exclusion meant that work on the ducts would
be excluded from the contract price. Indovino ebt, at 26-29, 45, 47-49. Indovino
testified that he expected that if there were a problem with the system,
Inter-County would bring it to his attention.

   St. Paul also relies on the affidavit of its expert engineer, Steven
Pietropaolo (Pietropaolo), who inspected the premises on January 20, 2004 and
February 6, 2004. Pietropaolo asserts that, while the contract does not provide
for replacement of ductwork, it is standard industry practice during
winterization of air conditioning systems to investigate all areas of potential
cold air ingress to prevent freezing damage  caused by air infiltration through
the air conditioning system. Pietropaolo then goes on to list various
deficiencies in the ductwork and louvers which permitted air to escape, such as
a missing access panel on a duct, the lack of insulation, particularly around
the louvers, gaps between the louvers an