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Johnson City Central School District v. Fidelity & Deposit Co. of Maryland
Citations: 263 A.D.2d 580; 693 N.Y.S.2d 669; 1999 N.Y. App. Div. LEXIS 7700
Court: Appellate Division of the Supreme Court of the State of New York; July 1, 1999; New York; State Appellate Court
An appeal was filed against an order from the Supreme Court of Broome County that granted summary judgment in favor of United Structures of America, Inc. (USA), dismissing the plaintiff's complaint. The case arose from a 1990 contract between the plaintiff and Daniel J. Lynch, Inc. for the construction of bus garages and a maintenance facility, with Lynch subcontracting USA for prefabricated metal buildings. In February 1994, two of these buildings collapsed under heavy snow, leading the plaintiff to sue multiple defendants, including USA, for negligence, breach of warranties, and strict products liability. The court dismissed the negligence and strict products liability claims because the plaintiff experienced only economic loss, and the breach of warranty claims due to a lack of privity with USA. The plaintiff, while conceding the lack of privity, argued that it was an intended third-party beneficiary of the Lynch-USA contract, which was not explicitly stated in the complaint but was supported by evidence in the record. The appellate court noted that complaints should be liberally construed to allow for all potential claims supported by evidence. It found that the plaintiff provided sufficient proof, including affidavits and documentary evidence, to suggest it might be an intended third-party beneficiary of the contract. The court referenced legal precedents affirming that a third party can recover if it is clear that the contracting parties intended to confer a benefit upon that third party. The contract documents and correspondence indicated that the plaintiff was the intended recipient of USA’s products, which supported the claim of intended beneficiary status. Since there were factual questions regarding this claim, the appellate court reversed the dismissal of the breach of contract claim while affirming the remainder of the lower court’s decision. The order and judgment were modified to allow the breach of contract claim to proceed.