Ragucci v. Professional Construction Services

25 A.D.3d 43, 803 N.Y.S.2d 139
CourtAppellate Division of the Supreme Court of the State of New York
DecidedOctober 31, 2005
StatusPublished
Cited by23 cases

This text of 25 A.D.3d 43 (Ragucci v. Professional Construction Services) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ragucci v. Professional Construction Services, 25 A.D.3d 43, 803 N.Y.S.2d 139 (N.Y. Ct. App. 2005).

Opinion

OPINION OF THE COURT

Krausman, J.

More than 20 years ago, the Legislature enacted General Business Law § 399-c, which prohibits the use of mandatory arbitration clauses in contracts for the sale or purchase of “consumer goods.” We are now asked to examine the scope of General Business Law § 399-c, and determine whether it applies to a contract to provide architectural services in connection with the construction of a home. For the reasons which follow, we find that the parties’ contract falls within the statute’s broad definition of “consumer goods,” and that the clause requiring the plaintiff homeowners to submit their dispute to arbitration is thus unenforceable. Accordingly, we affirm the order of the Supreme Court which denied the architect defendants’ motion to stay all proceedings in this action insofar as asserted against them, and to compel arbitration.

In December 1999 the plaintiffs Martin Ragucci and Margaret Ragucci entered into a contract to purchase property on Royce Street in Brooklyn for the construction of a new home. The plaintiffs’ daughter, Maureen, is severely disabled, and thus they intended their new home to be handicapped-accessible, with special features including an elevator which would enable Maureen to be transported from the basement-level garage to the upper floors. After purchasing the Royce Street property, the plaintiffs entered into a contract retaining the architectural firm of Maranga Architect & Associates to design and supervise the construction of their new home. The parties’ contract, which was a standard form created by the American Institute of Architects, contained a compulsory arbitration clause requiring all claims or disputes “arising out of . . . this agreement” to be decided by arbitration unless the parties “mutually agree otherwise.” The arbitration clause further specified that arbitration of potential disputes was to be conducted in accordance with the “Construction Industry Arbitration Rules of the American Arbitration Association.” In addition, the arbitration clause provided that “[t]he award rendered by the arbitrator or [45]*45arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.”

During the construction of their new home, the plaintiffs became dissatisfied both with the work being performed by their general contractor, and the services being provided by the architectural firm of Maranga Architect & Associates. The plaintiffs ultimately fired their general contractor and hired other contractors to complete the work. The plaintiffs claim that before firing their general contractor, they repeatedly asked the architectural firm to send an employee to the premises to monitor construction. According to the plaintiffs, the firm did not do so until January 18, 2001, and by that date there allegedly were numerous inconsistencies between the construction performed and the architectural drawings, which could have been avoided by proper monitoring. The plaintiffs also allege that the architectural firm “unilaterally” terminated the parties’ contract on April 8, 2002.

About one year later, the plaintiffs commenced this action against several parties, including the general contractor they had fired, the architectural firm of Maranga Architect & Associates, and the firm’s principal, Gary Maranga (hereinafter the architect defendants). The complaint alleged, inter alia, that the architect defendants committed malpractice by designing the home with an inclined driveway too steep to allow Maureen’s customized van to be driven into the garage, or to safely accommodate her wheelchair. The complaint further charged that the architect defendants breached the parties’ contract by refusing to send an employee to monitor construction of the premises, and by failing to notify the New York City Department of Buildings of “As-Built” revisions to the architectural plans. The complaint additionally alleged that the architect defendants engaged in deceptive trade practices in violation of General Business Law § 349, the Deceptive Trade Practices Act.

Shortly after the commencement of the action, the architect defendants moved pursuant to CPLR 2201 and 7503 to stay all proceedings in the action insofar as asserted against them, and to compel arbitration. In support of the motion, the architect defendants pointed out that their services were performed in accordance with a written contract which contained an arbitration clause. The architect defendants thus submitted that arbitration was the forum which the parties had agreed to use in the event of a dispute arising out of the performance of the contract. [46]*46In opposition to the motion, the plaintiffs argued that enforcement of the arbitration clause contained in the parties’ contract was barred by General Business Law § 399-c, which prohibits mandatory arbitration clauses in contracts for the sale or purchase of consumer goods. In support of their position, the plaintiffs contended that the subject contract for architectural services fell within the scope of the statute because General Business Law § 399-c (1) (b) defines the term “consumer goods” to include “services purchased or paid for by a consumer, the intended use or benefit of which is intended for the personal, family or household purposes of such consumer.” In reply, the architect defendants submitted that General Business Law § 399-c was inapplicable because the subject contract called for the provision of professional services in connection with the construction of a house, and not merely for the purchase of consumer goods. '

The Supreme Court denied the architect defendants’ motion, holding that the services they provided in connection with the construction of the plaintiffs’ home fell within the ambit of the statute’s definition of “consumer goods.” On appeal, the architect defendants continue to maintain that General Business Law § 399-c does not apply because the subject contract for architectural services cannot be considered a contract for the sale or purchase of consumer goods as contemplated by the statute.

At issue on appeal is the scope of General Business Law § 399-c. This statute, which became effective on September 5, 1984, was “designed to prevent sales contracts from including clauses precommitting consumers to arbitrate disputes rather than resort to Small Claims suits, refusal to pay for defective goods, or other remedies” (Givens, Practice Commentaries, McKinney’s Cons Laws of NY, Book 19, General Business Law § 399-c, at 771). In urging the enactment of section 399-c, the New York State Consumer Protection Board noted that while arbitration can sometimes provide a “quick, inexpensive and simple resolution” to disputes between consumers and sellers, no contract “should deprive a consumer of the right to take the dispute further and seek judicial redress” (Mem of State Consumer Protection Board, Bill Jacket, L 1984, ch 946, at 9). Similarly, in a memorandum submitted in connection with the enactment of General Business Law § 399-c, Assemblyman Jose E. Serrano stated that “[c]onsumers should have the advantage of having contract disputes handled by the judicial system or by an arbitrator,” as [47]*47well as “the ability to choose between arbitration or judicial resolution of their disputes after the time when a dispute arises” (Mem in Support of L 1984, ch 946, 1984 NY Legis Ann, at 325).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Chrzan v. Malinowski
2025 NY Slip Op 05788 (Appellate Division of the Supreme Court of New York, 2025)
Smith v. Nobiletti Bldrs., Inc.
2019 NY Slip Op 8240 (Appellate Division of the Supreme Court of New York, 2019)
Schiffer v. Slomin's, Inc.
48 Misc. 3d 15 (Appellate Terms of the Supreme Court of New York, 2015)
Balsam v. Fioriglio
123 A.D.3d 750 (Appellate Division of the Supreme Court of New York, 2014)
Wang v. Phoenix Satellite Television US, Inc.
976 F. Supp. 2d 527 (S.D. New York, 2013)
Schiffer v. Slomin's
39 Misc. 3d 414 (New York District Court, 2013)
Seidel v. Board of Assessors
88 A.D.3d 369 (Appellate Division of the Supreme Court of New York, 2011)
People v. Overton
86 A.D.3d 4 (Appellate Division of the Supreme Court of New York, 2011)
New York Telephone Co. v. Supervisor of Town of North Hempstead
77 A.D.3d 121 (Appellate Division of the Supreme Court of New York, 2010)
Byrnes v. Castaldi
72 A.D.3d 718 (Appellate Division of the Supreme Court of New York, 2010)
Davis v. Davis
71 A.D.3d 13 (Appellate Division of the Supreme Court of New York, 2009)
Pro Home Builders, Inc. v. Greenfield
67 A.D.3d 803 (Appellate Division of the Supreme Court of New York, 2009)
Maraia v. Orange Regional Medical Center
63 A.D.3d 1113 (Appellate Division of the Supreme Court of New York, 2009)
Zakrzewska v. the New School
598 F. Supp. 2d 426 (S.D. New York, 2009)
Erin Construction & Development Co. v. Meltzer
58 A.D.3d 729 (Appellate Division of the Supreme Court of New York, 2009)
Janssen v. Incorporated Village of Rockville Centre
59 A.D.3d 15 (Appellate Division of the Supreme Court of New York, 2008)
Gabrielli v. Dobson
51 A.D.3d 571 (Appellate Division of the Supreme Court of New York, 2008)
State Division of Human Rights v. Berler
46 A.D.3d 32 (Appellate Division of the Supreme Court of New York, 2007)
49 WB, LLC v. Village of Haverstraw
44 A.D.3d 226 (Appellate Division of the Supreme Court of New York, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
25 A.D.3d 43, 803 N.Y.S.2d 139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ragucci-v-professional-construction-services-nyappdiv-2005.