Garrett v. Holiday Inns, Inc., 58 N.Y.2d 253 (1983)
A municipality can be held proportionately liable to property owners for negligently issuing a certificate of occupancy despite the absence of a direct duty to injured third parties, if the municipality breached a special duty to the owners, leading to foreseeable harm.
Summary
Following a motel fire, the motel guests sued, among others, the Town of Greece. The town was dismissed from the primary suit because the plaintiffs alleged only a general duty owed to the public. The motel owners then filed a third-party complaint against the town, alleging negligence in approving building plans and issuing a certificate of occupancy despite known fire and safety violations. The New York Court of Appeals held that while the town owed no duty to the motel guests directly, it could still be proportionately liable to the motel owners if a special duty to them was breached, causing foreseeable harm.
Facts
An extensive fire occurred at the Holiday Inn in the Town of Greece, resulting in wrongful death, personal injury, and property damage claims by motel guests. The guests sued Holiday Inns, the developers, owners, and the Town of Greece. The claims against the town were based on its failure to enforce fire and safety laws and adequately inspect the motel’s construction. The original complaints against the town were dismissed because they alleged only a violation of a general duty owed to the public.
Procedural History
The remaining defendants (motel owners and lessee/operator) then filed third-party complaints against the Town of Greece, seeking contribution or indemnification. Special Term denied the town’s motion to dismiss the third-party complaints. The Appellate Division reversed, holding the town could not be liable to the third-party plaintiffs absent a duty owed to the original plaintiffs (motel guests). The motel owners appealed to the New York Court of Appeals.
Issue(s)
Whether a municipality, not owing a duty to injured motel guests, can be held proportionately liable to the motel owners and operator for breaching an independent duty owed to them regarding the issuance of a certificate of occupancy and approval of construction alterations.
Holding
Yes, because a municipality can be held proportionately liable to property owners if it breaches a special duty owed to them, leading to foreseeable harm, even if no direct duty was owed to the injured third parties.
Court’s Reasoning
The court reasoned that apportionment rights arise when tortfeasors share responsibility for an injury, violating respective duties to the injured party. However, the court emphasized that proportionate liability among tortfeasors is analytically distinct from the duties owed to the injured person. Citing Nolechek v. Gesuale, the court noted that a duty to prevent foreseeable harm could exist independently of a duty to the injured party. The court stated, “If an independent obligation can be found on the part of a concurrent wrongdoer to prevent foreseeable harm, he should be held responsible for the portion of the damage attributable to his negligence, despite the fact that the duty violated was not one owing directly to the injured person.”
The court determined that municipalities can be liable for negligently exercising governmental functions when a special duty exists to the injured person, distinct from a general duty to the public. A special duty arises when a statute is enacted for the benefit of particular persons, a duty is voluntarily assumed and justifiably relied upon, or positive direction and control are assumed with a known, blatant, and dangerous safety violation. The court noted that the third-party complaints alleged known, blatant fire and safety code violations, yet the town approved building plan changes and issued a certificate of occupancy representing the premises as safe. If these allegations are proven, a basis for imposing liability on the town exists, potentially including economic damages suffered due to judgments in favor of the motel guests.
The court distinguished the discretionary nature of granting or denying a building permit from the mandatory duty to refuse a certificate of occupancy when blatant code violations are known. The court concluded there was no basis for implied indemnification as the third-party complaints did not support the theory that the appellants were being cast in damages solely for the negligence of the town.