69 N.Y.2d 777 (1987)
New York’s contribution statute (CPLR 1401) does not permit contribution between two parties when their potential liability to a third party arises solely from economic loss resulting from a breach of contract.
Summary
This case addresses whether CPLR 1401 allows contribution between parties whose potential liability to a third party stems from economic loss due to breach of contract. The Hudson City School District (District) sued Sargent, an architectural firm, and Thompson Construction, the general contractor, for a defective roof. Sargent sought contribution from Thompson. The Court of Appeals held that CPLR 1401, designed for tort liability apportionment, does not extend to pure breach of contract actions where the potential liability is solely for the contractual benefit of the bargain. This ruling reinforces the principle that contract liability is defined by the parties’ agreement.
Facts
The Hudson City School District contracted with Sargent to design and supervise the construction of a high school. The District also contracted with Thompson Construction to perform the construction work. The roof of the completed building began to leak shortly after Sargent issued its final certificate of completion in 1972. In 1980, the District sued both Sargent and Thompson for breach of contract, alleging a defective roof. Sargent was accused of failing to secure necessary guarantees, while Thompson was accused of improper construction.
Procedural History
The District Court initially dismissed the claim against Thompson based on the statute of limitations but allowed the claim against Sargent to proceed under the “continuous treatment” doctrine. Sargent then filed a third-party action against Thompson seeking contribution or indemnification. The trial court allowed Sargent’s third-party action. The Appellate Division reversed, dismissing the third-party complaint, concluding CPLR 1401 did not apply to liability purely for contractual benefit of the bargain. The Court of Appeals granted leave to appeal.
Issue(s)
Whether CPLR 1401 permits contribution between two parties whose potential liability to a third party is for economic loss resulting only from a breach of contract?
Holding
No, because CPLR 1401 was intended to address the apportionment of liability among tortfeasors and does not extend to cases involving pure breach of contract where the potential liability is solely for the contractual benefit of the bargain.
Court’s Reasoning
The court emphasized that CPLR 1401 was enacted to codify the principles established in Dole v. Dow Chemical Co., which drastically changed the law regarding apportionment among joint tortfeasors. The legislative history and common-law evolution of CPLR 1401 demonstrate its application to tort liability, including joint, concurrent, and successive tortfeasors, as well as strict liability cases. The court stated, “[i]t is the fact of liability to the same person for the same harm rather than the legal theory upon which tort liability is based which controls.” However, the court found nothing to indicate that CPLR 1401 was intended to apply to a pure breach of contract action. Allowing contribution in such cases would conflict with contract law principles that limit a contracting party’s liability to foreseeable damages at the time of contract formation. The court reasoned that Thompson was entitled to expect its liability to be determined by its own contractual undertaking and should not face liability based on Sargent’s separate contract. The court also rejected the argument that Sargent’s potential breach of a “duty of due care” transformed the contract claim into a tort claim, citing Clark-Fitzpatrick, Inc. v. Long Is. R. R. Co., 70 N.Y.2d 382, 390. The court concluded that no legal duty independent of Sargent’s contractual obligations was breached, and therefore, the contribution claim was properly dismissed.