Arell's Fine Jewelers, Inc. v. Honeywell, Inc.

Order modified on the law and as modified affirmed without costs, in accordance with the following Memorandum: On February 20, 1982, plaintiff’s jewelry store was burglarized, and $138,000 in property was taken. Plaintiff also alleges that, during the course of the burglary, various store fixtures were damaged by the intruders. Honeywell, Inc.’s predecessor, Rochester Central Alarms, Inc., had procured the burglary alarm from Automatic Fire Alarm Company (AFA) in 1976. The burglary alarm had been manufactured by AVCO Corporation. Plaintiff instituted an action in breach of contract against defendant Honeywell, contending that its losses were the result of the failure of the burglary alarm at Honeywell’s central station. Honeywell instituted a third-party action against AFA and AVCO, seeking to shift liability for damages to the third-party defendants on theories of negligence, strict products liability, and breach of express and implied warranties. Plaintiff then initiated an independent action against AFA and AVCO, asserting claims for negligence, strict products liability and breach of implied warranty. AFA cross-claimed against AVCO for contribution. Following joinder of — 1014 — issue, AVCO moved to dismiss the complaint, third-party complaint and cross claim asserted against it on the ground that they failed to state a cause of action (CPLR 3211 [a] [7]) and for summary judgment (CPLR 3212) on the ground that the damages sought were not recoverable upon the liability theories alleged against it. Supreme Court denied AVCO’s application in its entirety. AVCO is entitled to summary judgment on all claims sounding in negligence and strict products liability. Plaintiff’s losses are purely economic and not recoverable under either theory (see, Schiavone Constr. Co. v Mayo Corp., 56 NY2d 667, revg 81 AD2d 221 on dissenting opn below; Hemming v Certainteed Corp., 97 AD2d 976). Even assuming that plaintiff’s damages were attributable to the burglary alarm, they must be characterized as economic because they resulted only from the failure of the burglary alarm to perform as intended and not from any accidental occurrence (see, Richman v Albert, 127 AD2d 992, lv denied 70 NY2d 745; Antel Oldsmobile-Cadillac v Sirus Leasing Co., 101 AD2d 688, 688-689; Hemming v Certainteed Corp., supra; Fireman’s Fund Am. Ins. Cos. v Burns Elec. Sec. Servs., 93 Ill App 3d 298, 417 NE2d 131). Because plaintiff’s negligence and strict products liability claims must be dismissed, AFA’s cross claim for contribution and Honeywell’s third-party cause of action for contribution must also be dismissed. The existence of tort liability is a prerequisite to any claim for contribution (Board of Educ. v Sargent, Webster, Crenshaw & Folley, 71 NY2d 21, 27-28). Plaintiff’s third cause of action against AVCO for breach of implied warranty must also be dismissed. Since plaintiff does not seek damages for personal injury, it cannot assert such a cause of action against AVCO because the parties were not in privity (see, UCC 2-318; Butler v Caldwell & Cook, 122 AD2d 559, 560; Pronti v DML of Elmira, 103 AD2d 916; Hole v General Motors Corp., 83 AD2d 715). In addition, a breach of implied warranty claim accrues at the time of delivery. The burglary alarm system was delivered to Honeywell's predecessor in 1976. This cause of action is barred by the four-year statute of limitations (see, Uniform Commercial Code § 2-725). Finally, Honeywell’s implied indemnification claim against AVCO should not be dismissed. A third-party defendant’s liability for implied indemnification is based upon breach of some duty owed either to the injured party or to the third-party plaintiff (see, Garrett v Holiday Inns, 58 NY2d 253, 259-261; McDermott v City of New York, 50 NY2d 211, 218-219, n 5). Although AVCO owed no contractual duty to plaintiff, it is — 1015 — possible that some warranty duty was owed by it to Honeywell. In this regard, there are unresolved factual issues, i.e., whether AVCO made direct and public representations in sales literature to Honeywell’s predecessor (see, Randy Knitwear v American Cyanamid Co., 11 NY2d 5; County of Chenango Indus. Dev. Agency v Lockwood Greene Engrs., 114 AD2d 728, 730; All-O-Matic Indus. v Southern Specialty Paper Co., 49 AD2d 935) and whether AFA was an agent for Honeywell’s predecessor in interest (see, Utica Observer Dispatch v Booth, 106 AD2d 863). Thus, Supreme Court properly denied so much of AVCO’s motion seeking dismissal of Honeywell’s cause of action for implied indemnification. All concur, except Balio, J., who dissents in part and votes to modify, in the following Memorandum.