532 Madison Avenue Gourmet Foods, Inc. v. Finlandia Center, Inc.

750 N.E.2d 1097 (N.Y. 2001)

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Nature of the Case

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Facts

A section of the south wall of 540 Madison Avenue, a 39-story office tower, partially collapsed and bricks, mortar, and other material fell onto Madison Avenue at 55th Street, a prime commercial location crammed with stores and skyscrapers. Because of this event, it was necessary to close off the surrounding areas. 532 Madison Avenue Gourmet Foods (P) operates a 24-hour delicatessen one-half block south of 540 Madison and was closed for five weeks. Other stores and entities also sued because they were shut down as well. The Supreme Court dismissed Ps' negligence claims on the ground that they could not establish that Finlandia (D) owed a duty of care for purely economic loss in the absence of personal injury or property damage, and dismissed the public nuisance claims on the ground that the injuries were the same in kind as those suffered by all of the businesses in the community. Additional claims for gross negligence and negligence per se were dismissed on the ground that Ps could not establish a duty owed by Ds, and their private nuisance cause of action was dismissed on the ground that they could not establish either intentional or negligent wrongdoing.

The Goldberg, Weprin & Ustin v Tishman Construction case involves a collapse of a 48-story construction elevator tower on West 43rd Street between Sixth and Seventh Avenues -- the heart of bustling Times Square. Immediately after the accident, the City prohibited all traffic in a wide area of midtown Manhattan and also evacuated nearby buildings for varying time periods. From this second incident, Plaintiff law firm sought damages for economic loss on behalf of itself and a proposed class “of all persons in the vicinity of Broadway and 42nd Street, New York, New York, whose businesses were caused to be closed” as well as a subclass of area residents who were evacuated from their homes. Plaintiff alleged gross negligence, strict liability, and public and private nuisance. In this second action, the Supreme Court concluded that the failure to allege personal injury or property damage barred recovery in negligence. The court further rejected recovery for strict liability and dismissed both the public nuisance claim (because plaintiff was unable to show special damages) and the private nuisance claim (because plaintiff could not show that the harm threatened only one person or relatively few). The Appellate Division affirmed dismissal of the Goldberg Weprin complaint, concluding that, absent property damage, the connection between defendants' activities and the economic losses of the purported class of plaintiffs was “too tenuous and remote to permit recovery on any tort theory” The court, however, reinstated the negligence and public nuisance claims of plaintiffs 532 Madison and 5th Avenue Chocolatiere, holding that defendants' duty to keep their premises in reasonably safe condition extended to “those businesses in such close proximity that their negligent acts could be reasonably foreseen to cause injury” and that, as such, they established a special injury distinct from the general inconvenience to the community at large.