Beck v. Studio Kenji, Ltd.
2100 WL 6090116 (1st Dep’t, Dec 8, 2011)

In this short and pithy decision, Beck, the owner of a condominium unit, sued Honigstock, his architect, on the grounds that her design for construction of his apartment did not comply with the building code.

Honigstock brought a third-party action against Vance, the architect for the condominium building, on the basis that he had reviewed and approved her plans.

Vance moved to dismiss the third-party complaint due to lack of privity with Honigstock. The trial court denied the motion after concluding that a question of fact existed regarding whether the “functional equivalent of privity” existed between the architects.

On appeal the First Dept. reversed and dismissed the third-party action holding that there was no question of fact on that issue.

ELEMENTS OF FUNCTIONAL EQUIVALENT OF PRIVITY

As summarized by the court, citing the court of appeals decision in Ossining UFSD:

”For a plaintiff to state a cause of action for negligent representation based on the existence of the functional equivalent of privity, three conditions must be satisfied:

1)      the defendant must have been aware that its representations were to be used for a particular purpose or purposes;

2)      the defendant must have intended that the other party rely on the representations for such purpose or purposes; and

3)      there must have been some conduct on the part of the defendant linking it to the other party which evinces the defendant’s understanding of that party’s reliance.”

The court held under the facts of this case that Honigstock failed to “allege either that Vance intended to Honigstock to rely on Vance in determining whether the plans complied with building codes and other regulations, or that Vance engaged in conduct evincing such an understanding. “

As result the third-party action against Vance was dismissed.

Note:

The issue of the functional equivalent of privity frequently arises in third-party suits by a contractor against the project architect, and has a hugh hurdle to meet. The above elements which must be pled to survive a motion to dismiss show why that’s the case.