Preview
FILED: NEW YORK COUNTY CLERK 07/09/2014 INDEX NO. 651068/2014
NYSCEF DOC. NO. 32 RECEIVED NYSCEF: 07/09/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
------------------------------------------------------------x
AARON FUCHS and GIL SELINGER,
Plaintiffs, Index no. 651068/2014
v.
BUILDINGLINK.COM LLC,
Defendant.
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MEMORANDUM OF LAW IN OPPOSITION TO BUILDINGLINK.COM LLC’S
MOTION TO DISMISS
By: Kelly D. Talcott
The Law Offices of Kelly D. Talcott
34 Grove Street
P.O. Box 43
Sea Cliff, New York 11579
v.516.515.1545
f.516.871.0682
Attorney for Plaintiffs
Aaron Fuchs and Gil Selinger
Contents
I. INTRODUCTION.................................................................................................... 1
II. FACTUAL BACKGROUND ................................................................................... 1
III. ARGUMENT ....................................................................................................... 6
a. PLAINTIFFS ARE THIRD-PARTY BENEFICIARIES UNDER THE
AGREEMENT ................................................................................................................ 6
b. THE AGREEMENT IS CLEAR THAT PLAINTIFFS ARE ITS DIRECT
BENEFICIARIES ......................................................................................................... 14
c. PLAINTIFFS ARE ALSO PARTIES UNDER THE AGREEMENT ...................... 15
d. BUILDINGLINK’S FAILURE TO RESTORE FULL ACCESS TO PLAINTIFFS
RENDERS IT IN BREACH OF THE AGREEMENT ................................................... 16
e. DOCUMENTARY EVIDENCE DOES NOT PROVE THAT BUILDINGLINK DID
NOT VIOLATE THE AGREEMENT ........................................................................... 18
f. DEFENDANT’S ATTEMPT TO LIMIT DAMAGES DOES NOT PRECLUDE ITS
LIABLITY .................................................................................................................... 21
g. THE AGREEMENT DOES NOT PROVIDE FOR RESTRICTED SYSTEM
ACCESS ....................................................................................................................... 22
IV. CONCLUSION .................................................................................................. 23
1
Cases
Alicea v. City of New York, 145 A.D.2d 315 (1st Dept. 1988) ......................................... 14
All Am. Moving and Storage, Inc. v. Andrews, 96 A.D.3d 674 (1st Dept. 2012) .............. 14
Breytman v. Olinville Realty, LLC, 54 A.D.3d 703 (2d Dept. 2008) ............................... 18
Condren, Walker & Co., Inc. v. Wolf, 19 A.D.3d 151 (1st Dept. 2005) ........................... 14
Edge Mgt. Consulting, Inc. v. Blank, 35 A.D.2d 364 (1st Dept. 2006) ............................ 14
Guggenheimer v Ginzburg, 43 NY2d 268 (1977)........................................................... 19
Key Intl Mfg v. Morse/Diesel, 142 A.D.2d 448 (2d Dept. 1988) ....................................... 7
Lawrence v. Fox, 20 N.Y. 268 (1859) .............................................................................. 6
Leon v. Martinez, 89 N.Y.2d 83 (1994) ........................................................................... 6
Matter of White Plains Realty, LLC v. Cappelli Enters., Inc., 108 A.D.3d 634 (2d Dept.
2013) ............................................................................................................. 14, 18, 19
Motor Vehicle Mfrs. v. State, 75 N.Y.2d 175 (1990) ...................................................... 21
Natl. Union Fire Ins. Co. of Pittsburgh, PA v. Red Apple Group, Inc., 309 A.D.2d 657 (1st
Dept. 2003) ............................................................................................................... 14
Nepco Forged Prods. v Consolidated Edison Co., 99 A.D.2d 508 (2d Dept. 1984) .......... 7
Peltz v. Peltz, 2007 NY Slip. Op. 51762 (Supreme Court, Nassau Co., September 4,
2007) ........................................................................................................................... 7
Port Chester Elec. v. Atlas, 40 NY 2d 652 (1976)............................................................ 6
Statutes
BCS 715(g) ..................................................................................................................... 1
Other Authorities
Restatement (Third) Agency section 6.03 ...................................................................... 15
2
I. INTRODUCTION
Plaintiffs Aaron Fuchs and Gil Selinger respectfully submit this memorandum of
law in opposition to defendant BuildingLink.com LLC’s motion to dismiss the amended
complaint in this action. Because (a) plaintiffs are principals of the contract between
BuildingLink and The Residences at Worldwide Plaza; (b) the contract is replete with
references to benefits and obligations flowing to and from Permitted Users such as
plaintiffs; and (c) BuildingLink has breached that contract by failing to provide services
per the contract to plaintiffs, BuildingLink’s motion should be denied.
II. FACTUAL BACKGROUND
The January 24, 2013 BuildingLink agreement (the “Agreement”) annexed to
defendant’s moving papers at Kestenbaum Aff’t Exh. 1 is, as defendant represents,
between BuildingLink and “The Residences at Worldwide Plaza” (“WWP”). It appears
to have been signed by “Robert J. Finnochio,” as “President” of “The Residences at
Worldwide Plaza.”
As shown by Exhibit 1 to the accompanying affidavit of Aaron Fuchs, the bylaws
of The Residences at Worldwide Plaza provide that “The President of the Residential
Section shall be the chief executive officer thereof and . . . . shall have all of the general
powers and duties which are incident to the office of president of a stock corporation
organized under the Business Corporation Law of the State of New York . . . .” Fuchs
Aff’t Exh. 1. BCS 715(g) provides that “All officers as between themselves and the
corporation shall have such authority and perform such duties in the management of the
corporation as may be provided in the by-laws or, to the extent not so provided, by the
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board.” As noted, Mr. Finnochio signed the Agreement as president of The Residences at
Worldwide Plaza.
The WWP bylaws specifically provide that “In exercising their respective powers
and performing their respective duties under the Declaration and these By-Laws, each
Board shall act in good faith as, and shall be, the agent of the Unit Owners such Board
represents . . . . “ Fuchs Aff’t Exh. 1 at 2.21 (emphasis added). And while the
Agreement fails to incorporate the provision, the bylaws further direct that “Every
contract made by any Board or by any managing agent or manager thereof shall state that
it is made by such Board, managing agent or manager only as agent for all Unit Owners.”
Accordingly, the Agreement is a direct agreement between defendant and plaintiff
Fuchs, as the principal of agent Finnochio, who signed the Agreement as Fuchs’s agent.
And both plaintiffs have been deprived of the full range of services provided to WWP by
BuildingLink under the terms of the Agreement.
Further a review of the Agreement shows that it repeatedly references the services
that BuildingLink is required to provide to plaintiffs and others at WWP. The Agreement
describes the “Services” as “establishing, hosting and presenting a series of web pages,
screen displays, input forms and templates, information storage functions and notification
functions that provide various Internet-based management and communication services to
tenants, building employees, owners and/or managers of the building.” Kestenbaum
Aff’t Exh. 1 at p. 2 of 8, second unnumbered paragraph (emphasis added).
The Agreement also defines so-called “Permitted Users” for whose benefit the
BuildingLink system and its services are being provided. These consist of “tenants or
apartment owners or shareholders of the Building (‘Tenants’), Customer’s Board of
2
Directors, Board of Managers, members, managers or officers as applicable (the
‘Board’), employees of Customer (‘Building Employees’), and the managing agent of the
Building and such managing agent’s employees (collectively, the ‘Managing Agent’),
such Tenants, Board, Building Employees and Managing Agent and their respective
authorized representatives, collectively to be referred to in this Agreement as ‘Permitted
Users.’” Kestenbaum Aff’t Exh. 1 at 2 of 8, third unnumbered paragraph.
In the Agreement, defendant promised that “Customer and other Permitted Users
will be able to, without charge, add to, or change the content of the information they
desire to include on, or make accessible through, the Program.” Kestenbaum Aff’t Exh. 1
at page 2 of 8, para. 3 (emphasis added). Further, “Customer and each Permitted User
may modify without charge the content of the Building Information 1 as frequently as it
and they desire.” Id. (emphasis added).
The Agreement’s license provisions further reference both Customer and
Permitted Users. The license under the Agreement is granted “to enable Customer (and
the Permitted Users) to use the Program and receive the Services.” Kestenbaum Aff’t
Exh. 1 at page 3 of 8, para. 5 (emphasis added). The Agreement states that “The Services
may be used only in connection with the maintenance, management, operation and use of
the Building and facilitation of communications, record keeping and task tracking relating
to matters affecting the maintenance, management, operation or use of the Building
between and among the various Permitted Users of the Program . . . and for no other
purpose.” Kestenbaum Aff’t Exh. 1, at 3 of 8, para. 6(a) (emphasis added). The
1
“Building Information” consists of “any data, documentation, records, listings, offers, statements, advice,
signatures or other information relating specifically to the Building and to affairs relating to the
management, operation or use of the Building, which from time to time is posted on or made accessible
through the Program.” Kestenbaum Aff’t Exh. 1. at 2 of 8, para. 3.
3
Agreement thus contemplates that plaintiffs – both as principals and as Permitted Users --
will have the ability to use the BuildingLink system to communicate concerning matters
affecting the WWP building.
The Agreement further contains a number of provisions that impose obligations
on Permitted Users, and that purport to limit the rights of Permitted Users in connection
with their use of the BuildingLink system. For example, upon termination of the
Agreement, “Permitted Users shall immediately cease regular use of the Program.”
Kestenbaum Aff’t Exh. 1, at 4 of 8, para. 7(c). Defendant “does not warrant that . . . the
Program . . . will meet the needs of Customer or Permitted Users . . .” Kestenbaum Aff’t
Exh. 1, at 7 or 8, para. 17. And “[i]t is solely the responsibility of Customer and the
Permitted Users to evaluate the accuracy, completeness, usefulness, security and validity
of all building information, and Customer and the Permitted Users, as applicable, will be
solely responsible for the accuracy and integrity of any building information posted by
them, respectively.” Kestenbaum Aff’t Exh. 1, at 7 of 8, para. 18(a). “BuildingLink will
have no direct or indirect responsibility or liability for any damage or loss caused by or in
connection with the availability of any Linked Site or the use of, or reliance on, any
linked site by Customer or any Permitted User.” Kestenbaum Aff’t Exh. 1, at 8 of 8,
para. 19(b). Defendant also attempts to disclaim its potential liability to Permitted Users
in connection with a wide range of claims. Kestenbaum Aff’t Exh. 1, at 8 of 8, para. 20.
Contemplating that Permitted Users could sue and recover against defendant, the
Agreement further states that “in no event will BuildingLink’s liability under any claim
made by Customer or any Permitted User exceed the total amount of fees previously paid
by customer to BuildingLink for Services provided hereunder to the building.”
4
Kestenbaum Aff’t Ex. 1, at 8 of 8, para. 21. Further, both the Agreement (signed by Mr.
Finnochio as plaintiffs’ agent) and the Terms and Conditions (a click-through agreement
imposed on Permitted Users, but not signed by Mr. Finnochio) comprise “the complete
and exclusive agreement between the parties with respect to the subject matter hereof.”
Kestenbaum Aff’t Ex. 1, at 6 of 8, para. 16(c).
The Original Rychik Affirmation, submitted in support of defendant’s first motion
to dismiss, and annexed as Exhibit A to the accompanying Talcott Affirmation, falsely
described the pending suit between plaintiffs and certain individuals at WWP.2 While it
is a defamation action based on a publication by the defendants in that case accusing
plaintiffs of “repeatedly” making “false and libelous statements on BuildingLink,” it is
not correct as the Original Rychik Affirmation claimed that WWP’s “legal counsel
advised that Plaintiffs’ comments on the BuildingLink bulletin board constituted libel.”
Original Rychik Affirm. (Talcott Affirm. Exh. A) at para. 15. The letter from WWP’s
legal counsel said no such thing, described no such comments, and did not mention either
plaintiff. See Fuchs Aff’t Exh. 2.
The Original Kestenbaum affidavit submitted in support of defendant’s original
motion to dismiss, and annexed as Exhibit B to the Talcott Affirmation, simultaneously
claims that BuildingLink had the right to limit plaintiffs’ access to the BuildingLink
system (Original Kestenbaum Aff’t para. 3) and that BuildingLink did not change
plaintiffs’ access status on BuildingLink. Original Kestenbaum Aff’t para. 5. While the
question whether BuildingLink was responsible for limiting plaintiffs’ access to the
system is not an appropriate one to raise at this time – since on a motion to dismiss, all of
plaintiffs’ allegations must be treated as though true – in any event, the question is one
2
Fuchs, et ano. v Finnochio, et al., Index No. 150916/2014, Supreme Court, New York County.
5
best left to discovery. Further, defendant ignores the fact that whether or not it was
responsible for originally changing plaintiffs’ access to the BuildingLink system,
defendant did nothing when plaintiffs notified defendant that their access to the
BuildingLink system had been restricted and requested that it be fully restored. Thus,
even if defendant did not “flip the switch” to restrict plaintiffs’ full access to
BuildingLink, it is in violation of the Agreement – which as noted, states in several
places that Permitted Users will have the right to use the system to communicate,
meaning both posting information and reading information – by its months-long failure to
restore plaintiffs to full service. And this Court, consistent with its equity powers, has the
power to direct defendant to restore full access to plaintiffs, regardless of to what extent
plaintiffs prove damages or defendant shows it is immune therefrom.
III. ARGUMENT
While when evaluating a motion to dismiss based on CPLR 3211(a)(7), “the
pleading is to be afforded a liberal construction . . . “ The court should “accept the facts
alleged as true, accord plaintiffs the benefit of every possible favorable inference, and
determine only whether the facts alleged fir within any cognizable legal theory.” Leon v.
Martinez, 89 N.Y.2d 83, 87-88 (1994).
a. PLAINTIFFS ARE THIRD-PARTY BENEFICIARIES UNDER THE
AGREEMENT
“It is old law that a third party may sue as a beneficiary on a contract made for
his benefit.” Port Chester Elec. v. Atlas, 40 NY 2d 652, 655 (1976), citing Lawrence v.
Fox, 20 N.Y. 268 (1859). “However, an intent to benefit the third party must be shown,”
Id. “[T]o bring an action to recover as the third-party beneficiary of a contract, the third-
6
party must establish that it was the specific intent of the contracting parties to benefit that
third-party.” Peltz v. Peltz, 2007 NY Slip. Op. 51762 (Supreme Court, Nassau Co.,
September 4, 2007). "Where performance is to be made directly to a third party, that
party is generally deemed an intended beneficiary of the contract and is entitled to
enforce it or there is, at least, a presumption that the contract was for the benefit of the
third party." Key Intl Mfg v. Morse/Diesel, 142 A.D.2d 448, 455 (2d Dept. 1988), quoting
from Nepco Forged Prods. v Consolidated Edison Co., 99 A.D.2d 508 (2d Dept. 1984),
citations omitted.
In this case, the Agreement specifically states that defendant will make the
BuildingLink system available to Permitted Users such as plaintiffs for a wide range of
uses. The Agreement covenants that “Permitted Users will be able to, without charge,
add to, or change the content of the information they desire to include on, or make
accessible through, the Program.” Kestenbaum Aff’t Exh. 1 at page 2 of 8, para. 3. In
addition, “each Permitted User may modify without charge the content of the Building
Information as frequently as it and they desire.” Id. By restricting plaintiffs’ access to
BuildingLink to a “read-only” level of functionality, however, defendant has violated
those covenants to plaintiffs, who are Permitted Users, because plaintiffs may no longer
interact with the BuildingLink system except on a “read-only” basis.
The Agreement makes repeated references to “Permitted Users,” both in terms of
obligations BuildingLink owes to such Permitted Users, but also in terms of obligations
owed by or limitations imposed on Permitted Users by the Agreement. For example, the
Agreement’s license is granted by BuildingLink “to enable Customer (and the Permitted
Users) to use the Program and receive the Services.” Kestenbaum Aff’t Exh. 1 at page 3
7
of 8, para. 5. The Agreement specifically contemplates that “The Services may be used
only in connection with the maintenance, management, operation and use of the Building
and facilitation of communications, record keeping and task tracking relating to matters
affecting the maintenance, management, operation or use of the Building between and
among the various Permitted Users of the Program . . . and for no other purpose.”
Kestenbaum Aff’t Exh. 1, at 3 of 8, para. 6(a) (emphasis added). The Agreement thus
contemplates that plaintiffs – as Permitted Users -- will have the ability to use the
BuildingLink system to communicate concerning matters affecting the WWP building.
Further, upon termination of the Agreement, “Permitted Users shall immediately
cease regular use of the Program.” Kestenbaum Aff’t Exh. 1, at 4 of 8, para. 7(c).
Defendant “does not warrant that . . . the Program . . . will meet the needs of Customer or
Permitted Users . . .” Kestenbaum Aff’t Exh. 1, at 7 or 8, para. 17. And “[i]t is solely the
responsibility of Customer and the Permitted Users to evaluate the accuracy,
completeness, usefulness, security and validity of all building information, and Customer
and the Permitted Users, as applicable, will be solely responsible for the accuracy and
integrity of any building information posted by them, respectively.” Kestenbaum Aff’t
Exh. 1, at 7 of 8, para. 18(a). “BuildingLink will have no direct or indirect responsibility
or liability for any damage or loss caused by or in connection with the availability of any
Linked Site or the use of, or reliance on, any linked site by Customer or any Permitted
User.” Kestenbaum Aff’t Exh. 1, at 8 of 8, para. 19(b). Defendant also attempts to
disclaim liability against Permitted Users in connection with a wide range of claims.
Kestenbaum Aff’t Exh. 1, at 8 of 8, para. 20.
8
Contemplating that Permitted Users could sue and recover against defendant, the
Agreement further states that “in no event will BuildingLink’s liability under any claim
made by Customer or any Permitted User exceed the total amount of fees previously paid
by customer to BuildingLink for Services provided hereunder to the building.”
Kestenbaum Aff’t Ex. 1, at 8 of 8, para. 21 (emphasis added). Further, both the
Agreement (signed by Mr. Finnochio as plaintiffs’ agent) and the Terms and Conditions
(a click-through agreement directed at and agreed to by Permitted Users, but not signed
by Mr. Finnochio) together comprise “the complete and exclusive agreement between the
parties with respect to the subject matter hereof.” Kestenbaum Aff’t Ex. 1, at 6 of 8,
para. 16(c). It is clear that there are repeated references to, and rights and obligations
running to and from, Permitted Users throughout the Agreement. The Agreement is
clearly intended to benefit not only Worldwide Plaza, but also Permitted Users, and that
benefit is immediate and concrete, as set forth in the body of the Agreement itself.
Defendant points to language in the Agreement that purports to limit or restrict
plaintiffs from recovering damages against BuildingLink (Def. Mem. at 10-11). Whether
or not that language is applicable, and as discussed further below, it would not prevent
this Court from requiring defendant to restore plaintiffs’ full access to the BuildingLink
system. Indeed, plaintiffs have requested this relief in the amended complaint.
Furthermore, the Agreement specifically contemplates that Permitted Users might
bring lawsuits against BuildingLink; in paragraph 21, it states that, with certain
exceptions, “in no event will BuildingLink’s liability under any claim made by Customer
or any Permitted User exceed the total amount of fees previously paid by customer to
BuidlingLink for Services provided hereunder.” Kestenbaum Aff’t Exh. 1 at page 8 of 8,
9
para. 21 (emphasis added). In other paragraphs, defendant disclaims liability to
Permitted Users (see Kestenbaum Aff’t Exh. 1 pp. 7-8 of 8, paras. 18, 19, 20). In
paragraph 20, defendant further contemplates that a Permitted User may bring a claim
against defendant where there are damages to a Permitted User caused by defendant’s
failure “to use the security measures referred to in the second sentence of paragraph 12”
of the Agreement. Here, as in Diamond Castle Partners IV PRC, L.P. v.
IAC/Interactivecorp, 82 A.D.3d 421, 422 (1st Dept. 2011), “in light of the numerous
contract provisions granting plaintiffs enforceable rights,” the “no third-party
beneficiaries” language of paragraph 16 of the Agreement should be construed to refer to
persons other than Worldwide Plaza or Permitted Users.
Defendant concedes that the Agreement confers benefits on Permitted Users, but
argues that these benefits are not “sufficiently immediate to indicate the assumption of a
duty to compensate if the benefit is lost.” Def. Mem. at 10. As noted above, however,
paragraph 21 of the Agreement directly contradicts this, stating that “in no event will
BuidlingLink’s liability under any claim made by Owner or any Permitted User exceed
the total amount of fees previously paid by customer to BuildingLink for Services
provided hereunder to the building.” Kestenbaum Aff’t Exh. 1 at page 8 of 8, para. 21
(emphasis added). If there were no duty for defendant to compensate Permitted Users,
there would be no need for defendant to limit the potential amount of its liability to
Permitted Users. The Agreement thus contemplates that Permitted Users could bring
claims against defendant, and takes steps to attempt to limit the amount of defendant’s
liability in the event Permitted Users do so.
10
It is also clear from reading the Agreement that, in addition to Worldwide Plaza
as a whole, Permitted Users are the Agreement’s intended and not merely incidental
beneficiaries. As noted above, the Agreement is replete with references to Permitted
Users, and to the services defendant is obliged to provide to Permitted Users under the
Agreement’s terms. “Services” to be provided under the Agreement include
“establishing, hosting and presenting a series of web pages, screen displays, input forms
and templates, information storage functions and notification functions that provide
various Internet-based management and communication services to tenants, building
employees, owners and/or managers of the building.” Kestenbaum Aff’t Exh. 1 at p. 2 of
8, second unnumbered paragraph (emphasis added). It also defines the “Permitted Users”
for whose benefit the BuildingLink system is being provided. These consist of “tenants
or apartment owners or shareholders of the Building (‘Tenants’), Customer’s Board of
Directors, Board of Managers, members, managers or officers as applicable (the
‘Board’), employees of Customer (‘Building Employees’), and the managing agent of the
Building and such managing agent’s employees (collectively, the ‘Managing Agent’),
such Tenants, Board, Building Employees and Managing Agent and their respective
authorized representatives.” Kestenbaum Aff’t Exh. 1 at 2 of 8, third unnumbered
paragraph.
In addition, defendant promises that “BuildingLink will . . . provide an interface
and user environment including display or input templates for each [building page] (the
‘Templates’) that will enable Customer and other Permitted Users . . . to utilize the
Program.” It covenants that “Customer and other Permitted Users will be able to,
without charge, add to, or change the content of the information they desire to include on,
11
or make accessible through, the Program.” In addition, “Customer and each Permitted
User may modify without charge the content of the Building Information as frequently as
it and they desire.” Kestenbaum Aff’t Exh. 1 at page 2 of 8, para. 3 (emphasis added).
The Agreement further promises that “Customer will retain all right, title and
interest in and to the data the Permitted Users provide and the data that is generated
through the use of the Services.” Kestenbaum Aff’t Exh. 1 at page 2 of 8, para. 4
(emphasis added). The Agreement’s license provisions again reference both Customer
and Permitted Users. The license under the Agreement is granted “to enable Customer
(and the Permitted Users) to use the Program and receive the Services.” Kestenbaum
Aff’t Exh. 1 at page 3 of 8, para. 5 (emphasis added). The Agreement states that “The
Services may be used only in connection with the maintenance, management, operation
and use of the Building and facilitation of communications, record keeping and task
tracking relating to matters affecting the maintenance, management, operation or use of
the Building between and among the various Permitted Users of the Program . . . and for
no other purpose.” Kestenbaum Aff’t Exh. 1, at 3 of 8, para. 6(a) (emphasis added). The
Agreement thus contemplates that plaintiffs – as Permitted Users -- will have the ability
to use the BuildingLink system to communicate concerning matters affecting the WWP
building. Defendant has prevented plaintiffs from doing so, has failed to restore full
access when asked, and is thus in breach of the Agreement.
The Agreement also contemplates a situation where a Permitted User happens to
“commit a material breach of this Agreement.” Kestenbaum Aff’t Exh. 1, at 5 of 8, para.
9. Defendant fails to explain how a party who supposedly is not an intended beneficiary
of the Agreement can possibly breach it; and indeed, defendant’s remedy for such a
12
breach is severe: if the breach is not cured within ten business days following written
notice, BuildingLink has the option to terminate the Agreement.
Defendant also indemnifies Permitted Users in the event of a claim lodged against
them that their use of the BuildingLink system “infringes or violates any copyright or
other intangible rights, provided the Customer or the Permitted User seeking
indemnification, as applicable, promptly notifies BuildingLink of the matter, cooperates
with BuildingLink as reasonably requested (at BuildingLink’s expense), and permits
BuildingLink to control the investigation, defense and disposition of the same subject to
the reasonable approval of Customer and/or the Permitted User.” Kestenbaum Aff’t Exh.
1 at page 5 of 8, para. 10 (emphasis added). Defendant “warrants” to use “all such
security measures as are reasonable and customary . . . to protect Customer and Permitted
User data.” Kestenbaum Aff’t Exh. 1 at page 5 of 8, para. 12 (emphasis added). Except
as otherwise provided in the Agreement, “BuildingLink does not warrant that [the
BuildingLink system] will meet the needs of Customer or Permitted Users.”
Kestenbaum Aff’t Exh. 1 at page 7 of 8, para. 17. “Customer and Permitted Users, as
applicable, will be solely responsible for the accuracy and integrity of any building
information posted by them, respectively.” Kestenbaum Aff’t Exh. 1 at page 7 of 8, para.
18.
Finally, and as noted above, the Agreement’s limitation of liability clause
expressly contemplates that Permitted Users may be among those bringing claims against
defendant. Kestenbaum Aff’t Exh. 1 at page 8 of 8, para. 21.
These many and detailed references to Permitted Users in the Agreement and the
obligations running between defendant and Permitted Users make it clear that Permitted
13
Users – which include plaintiffs – are intended beneficiaries under the Agreement. It is
the Permitted Users who are the clear beneficiary “of the promised performance” by
defendant. Edge Mgt. Consulting, Inc. v. Blank, 35 A.D.2d 364, 368 (1st Dept. 2006).
See also Alicea v. City of New York, 145 A.D.2d 315, 318 (1st Dept. 1988) (“where the
performance is rendered directly to a third party, that party is generally considered an
intended beneficiary of the contract”); Matter of White Plains Realty, LLC v. Cappelli
Enters., Inc., 108 A.D.3d 634, 637 (2d Dept. 2013) (same).
b. THE AGREEMENT IS CLEAR THAT PLAINTIFFS ARE ITS
DIRECT BENEFICIARIES
Far from being “subordinate and tangential at best to the interests of [Worldwide
Plaza]” as defendant claims (Def. Mem. at 8), the interests of Permitted Users are a vital
part of the Agreement. Here, as in All Am. Moving and Storage, Inc. v. Andrews, 96
A.D.3d 674 (1st Dept. 2012), the Agreement clearly evinces an intent to benefit not only
Worldwide Plaza, but Permitted Users as well, and in this case does so repeatedly. And
while there is no release of claim obligation as in Condren, Walker & Co., Inc. v. Wolf,
19 A.D.3d 151 (1st Dept. 2005), the Agreement does indemnify both Worldwide Plaza
and Permitted Users from third-party intellectual property infringement claims. The
frequent references to Permitted Users in the Agreement, and the obligations that run
between BuildingLink and are similar to the various obligations in the insurance policy,
certificate of insurance, indemnification, and lease at issue in Natl. Union Fire Ins. Co. of
Pittsburgh, PA v. Red Apple Group, Inc., 309 A.D.2d 657 (1st Dept. 2003).
14
Accordingly, it is clear from the face of the BuildingLink Agreement that it
benefits not only Worldwide Plaza, but Permitted Users as well, and that Permitted Users
are intended beneficiaries of the Agreement.
c. PLAINTIFFS ARE ALSO PARTIES UNDER THE AGREEMENT
As noted above, the Agreement with defendant was signed by Robert Finocchio
in his capacity as president of the board of Worldwide Plaza. And under the Bylaws of
Worldwide Plaza, Finocchio was acting as agent for plaintiff Fuchs when he did so.
Fuchs Aff’t Ex. 1 at 2.21. While defendant argues that Finocchio was an “undisclosed
principal,” (Def. Mem. at 6) there is no question that (a) he was signing on behalf of
Worldwide Plaza; (b) he was not signing on behalf of himself personally, and (c)
defendant was well aware that unit owners such as Mr. Fuchs, and later Mr. Selinger,
would be intimately involved in the use of the BuildingLink system; indeed, the
Agreement is replete with references to “Permitted Users,” which includes unit owners.
While defendant relies on Restatement (Third) Agency section 6.03 and claims that the
Agreement “excludes the principal by its terms” (Def. Mem. at 6), that is not the case.
The language of the Agreement does not exclude principals; it states only that it “will not
create any rights or remedies in any party other than the parties hereto and no person is
entitled to assert any rights as a third party beneficiary under this Agreement.”
Kestenbaum Aff’t Ex. 1 para. 16(d).
As the Restatement makes clear, “[w]hen an agent acting with actual authority
[here, Mr. Finocchio] makes a contract on behalf of an undisclosed principal [here, Mr.
Fuchs and later Mr. Selinger], (1) unless excluded by the contract, the principal is a party
to the contract.” Restatement (Third) Agency section 6.03. The Agreement, however,
15
does not exclude principals; it only excludes “any parties other than the parties hereto.”
That does not include a principal such as Mr. Fuchs, who by definition under the
Restatement, “is a party to the contract.” Had the Agreement stated that it specifically
excludes “undisclosed principals,” defendant would have a better argument. The
Agreement, however, is not so specific.
Accordingly, Plaintiffs are proper defendants both as third party beneficiaries of
the Agreement and as principal parties to it.
d. BUILDINGLINK’S FAILURE TO RESTORE FULL ACCESS TO
PLAINTIFFS RENDERS IT IN BREACH OF THE AGREEMENT
There is no question here that there has been a breach of the Agreement. The
Agreement does not contemplate that any party has the power to restrict any Permitted
User’s access to the BuildingLink system to a “read-only” basis, as has been done in this
case. Defendant, in its original motion to dismiss, purported to speak for Worldwide
Plaza, and claimed that Worldwide Plaza (and not defendant) restricted plaintiffs’ access
to the BuildingLink system. Original Rychik Affirm. (Talcott Affirm. Exh. A) at para.
13. Now, however, defendant – again speaking through its counsel – claims only that the
“changes and any restrictions of access were not made by BuildingLink.” Rychik
Affirm. para. 10. In either case, defendant ignores the fact that, as set forth in the
amended complaint, it did nothing to restore that access after plaintiffs brought their
“read only” status to defendant’s attention and asked that their full system access be
restored.
Having disclaimed responsibility for restricting plaintiffs’ access to the system,
defendant claims that it had the right to do so anyway. Rychik Affirm. para. 16. Rychik
16
also testifies that defendant had no obligation to provide any particular level of service
under the Agreement – that “no provision in the Agreement between BuildingLink and
Customer prohibits – or even mentions – changing a user’s access to ‘read only’ or grants
any rights attendant thereto.” Rychik Affirm. para. 18. In other words, according to
Rychik’s argument, the Agreement imposed no service obligations whatsoever on
defendant. This, of course, is contrary to both the Agreement’s language and common
sense. The Agreement provides very specifically that Permitted Users will be able to use
the BuildingLink system to communicate with others, and to perform a wide range of
functions that require two-way communication between the user and the system.
Defendant agreed to provide such a system, and to make that system – and its features –
available to all Permitted Users. So while the Agreement may be silent about making a
user’s status “read-only,” doing so still violates the service promises that defendant
makes to Permitted Users because a Permitted User with “read-only” access cannot take
advantage of all of the features of the BuildingLink system provided to other Permitted
Users. .
While defendant’s original moti
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FILED: NEW YORK COUNTY CLERK 07/09/2014 INDEX NO. 651068/2014 NYSCEF DOC. NO. 32 RECEIVED NYSCEF: 07/09/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------------------------------x AARON FUCHS and GIL SELINGER, Plaintiffs, Index no. 651068/2014 v. BUILDINGLINK.COM LLC, Defendant. -------------------------------------------------------------x MEMORANDUM OF LAW IN OPPOSITION TO BUILDINGLINK.COM LLC’S MOTION TO DISMISS By: Kelly D. Talcott The Law Offices of Kelly D. Talcott 34 Grove Street P.O. Box 43 Sea Cliff, New York 11579 v.516.515.1545 f.516.871.0682 Attorney for Plaintiffs Aaron Fuchs and Gil Selinger Contents I. INTRODUCTION.................................................................................................... 1 II. FACTUAL BACKGROUND ................................................................................... 1 III. ARGUMENT ....................................................................................................... 6 a. PLAINTIFFS ARE THIRD-PARTY BENEFICIARIES UNDER THE AGREEMENT ................................................................................................................ 6 b. THE AGREEMENT IS CLEAR THAT PLAINTIFFS ARE ITS DIRECT BENEFICIARIES ......................................................................................................... 14 c. PLAINTIFFS ARE ALSO PARTIES UNDER THE AGREEMENT ...................... 15 d. BUILDINGLINK’S FAILURE TO RESTORE FULL ACCESS TO PLAINTIFFS RENDERS IT IN BREACH OF THE AGREEMENT ................................................... 16 e. DOCUMENTARY EVIDENCE DOES NOT PROVE THAT BUILDINGLINK DID NOT VIOLATE THE AGREEMENT ........................................................................... 18 f. DEFENDANT’S ATTEMPT TO LIMIT DAMAGES DOES NOT PRECLUDE ITS LIABLITY .................................................................................................................... 21 g. THE AGREEMENT DOES NOT PROVIDE FOR RESTRICTED SYSTEM ACCESS ....................................................................................................................... 22 IV. CONCLUSION .................................................................................................. 23 1 Cases Alicea v. City of New York, 145 A.D.2d 315 (1st Dept. 1988) ......................................... 14 All Am. Moving and Storage, Inc. v. Andrews, 96 A.D.3d 674 (1st Dept. 2012) .............. 14 Breytman v. Olinville Realty, LLC, 54 A.D.3d 703 (2d Dept. 2008) ............................... 18 Condren, Walker & Co., Inc. v. Wolf, 19 A.D.3d 151 (1st Dept. 2005) ........................... 14 Edge Mgt. Consulting, Inc. v. Blank, 35 A.D.2d 364 (1st Dept. 2006) ............................ 14 Guggenheimer v Ginzburg, 43 NY2d 268 (1977)........................................................... 19 Key Intl Mfg v. Morse/Diesel, 142 A.D.2d 448 (2d Dept. 1988) ....................................... 7 Lawrence v. Fox, 20 N.Y. 268 (1859) .............................................................................. 6 Leon v. Martinez, 89 N.Y.2d 83 (1994) ........................................................................... 6 Matter of White Plains Realty, LLC v. Cappelli Enters., Inc., 108 A.D.3d 634 (2d Dept. 2013) ............................................................................................................. 14, 18, 19 Motor Vehicle Mfrs. v. State, 75 N.Y.2d 175 (1990) ...................................................... 21 Natl. Union Fire Ins. Co. of Pittsburgh, PA v. Red Apple Group, Inc., 309 A.D.2d 657 (1st Dept. 2003) ............................................................................................................... 14 Nepco Forged Prods. v Consolidated Edison Co., 99 A.D.2d 508 (2d Dept. 1984) .......... 7 Peltz v. Peltz, 2007 NY Slip. Op. 51762 (Supreme Court, Nassau Co., September 4, 2007) ........................................................................................................................... 7 Port Chester Elec. v. Atlas, 40 NY 2d 652 (1976)............................................................ 6 Statutes BCS 715(g) ..................................................................................................................... 1 Other Authorities Restatement (Third) Agency section 6.03 ...................................................................... 15 2 I. INTRODUCTION Plaintiffs Aaron Fuchs and Gil Selinger respectfully submit this memorandum of law in opposition to defendant BuildingLink.com LLC’s motion to dismiss the amended complaint in this action. Because (a) plaintiffs are principals of the contract between BuildingLink and The Residences at Worldwide Plaza; (b) the contract is replete with references to benefits and obligations flowing to and from Permitted Users such as plaintiffs; and (c) BuildingLink has breached that contract by failing to provide services per the contract to plaintiffs, BuildingLink’s motion should be denied. II. FACTUAL BACKGROUND The January 24, 2013 BuildingLink agreement (the “Agreement”) annexed to defendant’s moving papers at Kestenbaum Aff’t Exh. 1 is, as defendant represents, between BuildingLink and “The Residences at Worldwide Plaza” (“WWP”). It appears to have been signed by “Robert J. Finnochio,” as “President” of “The Residences at Worldwide Plaza.” As shown by Exhibit 1 to the accompanying affidavit of Aaron Fuchs, the bylaws of The Residences at Worldwide Plaza provide that “The President of the Residential Section shall be the chief executive officer thereof and . . . . shall have all of the general powers and duties which are incident to the office of president of a stock corporation organized under the Business Corporation Law of the State of New York . . . .” Fuchs Aff’t Exh. 1. BCS 715(g) provides that “All officers as between themselves and the corporation shall have such authority and perform such duties in the management of the corporation as may be provided in the by-laws or, to the extent not so provided, by the 1 board.” As noted, Mr. Finnochio signed the Agreement as president of The Residences at Worldwide Plaza. The WWP bylaws specifically provide that “In exercising their respective powers and performing their respective duties under the Declaration and these By-Laws, each Board shall act in good faith as, and shall be, the agent of the Unit Owners such Board represents . . . . “ Fuchs Aff’t Exh. 1 at 2.21 (emphasis added). And while the Agreement fails to incorporate the provision, the bylaws further direct that “Every contract made by any Board or by any managing agent or manager thereof shall state that it is made by such Board, managing agent or manager only as agent for all Unit Owners.” Accordingly, the Agreement is a direct agreement between defendant and plaintiff Fuchs, as the principal of agent Finnochio, who signed the Agreement as Fuchs’s agent. And both plaintiffs have been deprived of the full range of services provided to WWP by BuildingLink under the terms of the Agreement. Further a review of the Agreement shows that it repeatedly references the services that BuildingLink is required to provide to plaintiffs and others at WWP. The Agreement describes the “Services” as “establishing, hosting and presenting a series of web pages, screen displays, input forms and templates, information storage functions and notification functions that provide various Internet-based management and communication services to tenants, building employees, owners and/or managers of the building.” Kestenbaum Aff’t Exh. 1 at p. 2 of 8, second unnumbered paragraph (emphasis added). The Agreement also defines so-called “Permitted Users” for whose benefit the BuildingLink system and its services are being provided. These consist of “tenants or apartment owners or shareholders of the Building (‘Tenants’), Customer’s Board of 2 Directors, Board of Managers, members, managers or officers as applicable (the ‘Board’), employees of Customer (‘Building Employees’), and the managing agent of the Building and such managing agent’s employees (collectively, the ‘Managing Agent’), such Tenants, Board, Building Employees and Managing Agent and their respective authorized representatives, collectively to be referred to in this Agreement as ‘Permitted Users.’” Kestenbaum Aff’t Exh. 1 at 2 of 8, third unnumbered paragraph. In the Agreement, defendant promised that “Customer and other Permitted Users will be able to, without charge, add to, or change the content of the information they desire to include on, or make accessible through, the Program.” Kestenbaum Aff’t Exh. 1 at page 2 of 8, para. 3 (emphasis added). Further, “Customer and each Permitted User may modify without charge the content of the Building Information 1 as frequently as it and they desire.” Id. (emphasis added). The Agreement’s license provisions further reference both Customer and Permitted Users. The license under the Agreement is granted “to enable Customer (and the Permitted Users) to use the Program and receive the Services.” Kestenbaum Aff’t Exh. 1 at page 3 of 8, para. 5 (emphasis added). The Agreement states that “The Services may be used only in connection with the maintenance, management, operation and use of the Building and facilitation of communications, record keeping and task tracking relating to matters affecting the maintenance, management, operation or use of the Building between and among the various Permitted Users of the Program . . . and for no other purpose.” Kestenbaum Aff’t Exh. 1, at 3 of 8, para. 6(a) (emphasis added). The 1 “Building Information” consists of “any data, documentation, records, listings, offers, statements, advice, signatures or other information relating specifically to the Building and to affairs relating to the management, operation or use of the Building, which from time to time is posted on or made accessible through the Program.” Kestenbaum Aff’t Exh. 1. at 2 of 8, para. 3. 3 Agreement thus contemplates that plaintiffs – both as principals and as Permitted Users -- will have the ability to use the BuildingLink system to communicate concerning matters affecting the WWP building. The Agreement further contains a number of provisions that impose obligations on Permitted Users, and that purport to limit the rights of Permitted Users in connection with their use of the BuildingLink system. For example, upon termination of the Agreement, “Permitted Users shall immediately cease regular use of the Program.” Kestenbaum Aff’t Exh. 1, at 4 of 8, para. 7(c). Defendant “does not warrant that . . . the Program . . . will meet the needs of Customer or Permitted Users . . .” Kestenbaum Aff’t Exh. 1, at 7 or 8, para. 17. And “[i]t is solely the responsibility of Customer and the Permitted Users to evaluate the accuracy, completeness, usefulness, security and validity of all building information, and Customer and the Permitted Users, as applicable, will be solely responsible for the accuracy and integrity of any building information posted by them, respectively.” Kestenbaum Aff’t Exh. 1, at 7 of 8, para. 18(a). “BuildingLink will have no direct or indirect responsibility or liability for any damage or loss caused by or in connection with the availability of any Linked Site or the use of, or reliance on, any linked site by Customer or any Permitted User.” Kestenbaum Aff’t Exh. 1, at 8 of 8, para. 19(b). Defendant also attempts to disclaim its potential liability to Permitted Users in connection with a wide range of claims. Kestenbaum Aff’t Exh. 1, at 8 of 8, para. 20. Contemplating that Permitted Users could sue and recover against defendant, the Agreement further states that “in no event will BuildingLink’s liability under any claim made by Customer or any Permitted User exceed the total amount of fees previously paid by customer to BuildingLink for Services provided hereunder to the building.” 4 Kestenbaum Aff’t Ex. 1, at 8 of 8, para. 21. Further, both the Agreement (signed by Mr. Finnochio as plaintiffs’ agent) and the Terms and Conditions (a click-through agreement imposed on Permitted Users, but not signed by Mr. Finnochio) comprise “the complete and exclusive agreement between the parties with respect to the subject matter hereof.” Kestenbaum Aff’t Ex. 1, at 6 of 8, para. 16(c). The Original Rychik Affirmation, submitted in support of defendant’s first motion to dismiss, and annexed as Exhibit A to the accompanying Talcott Affirmation, falsely described the pending suit between plaintiffs and certain individuals at WWP.2 While it is a defamation action based on a publication by the defendants in that case accusing plaintiffs of “repeatedly” making “false and libelous statements on BuildingLink,” it is not correct as the Original Rychik Affirmation claimed that WWP’s “legal counsel advised that Plaintiffs’ comments on the BuildingLink bulletin board constituted libel.” Original Rychik Affirm. (Talcott Affirm. Exh. A) at para. 15. The letter from WWP’s legal counsel said no such thing, described no such comments, and did not mention either plaintiff. See Fuchs Aff’t Exh. 2. The Original Kestenbaum affidavit submitted in support of defendant’s original motion to dismiss, and annexed as Exhibit B to the Talcott Affirmation, simultaneously claims that BuildingLink had the right to limit plaintiffs’ access to the BuildingLink system (Original Kestenbaum Aff’t para. 3) and that BuildingLink did not change plaintiffs’ access status on BuildingLink. Original Kestenbaum Aff’t para. 5. While the question whether BuildingLink was responsible for limiting plaintiffs’ access to the system is not an appropriate one to raise at this time – since on a motion to dismiss, all of plaintiffs’ allegations must be treated as though true – in any event, the question is one 2 Fuchs, et ano. v Finnochio, et al., Index No. 150916/2014, Supreme Court, New York County. 5 best left to discovery. Further, defendant ignores the fact that whether or not it was responsible for originally changing plaintiffs’ access to the BuildingLink system, defendant did nothing when plaintiffs notified defendant that their access to the BuildingLink system had been restricted and requested that it be fully restored. Thus, even if defendant did not “flip the switch” to restrict plaintiffs’ full access to BuildingLink, it is in violation of the Agreement – which as noted, states in several places that Permitted Users will have the right to use the system to communicate, meaning both posting information and reading information – by its months-long failure to restore plaintiffs to full service. And this Court, consistent with its equity powers, has the power to direct defendant to restore full access to plaintiffs, regardless of to what extent plaintiffs prove damages or defendant shows it is immune therefrom. III. ARGUMENT While when evaluating a motion to dismiss based on CPLR 3211(a)(7), “the pleading is to be afforded a liberal construction . . . “ The court should “accept the facts alleged as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts alleged fir within any cognizable legal theory.” Leon v. Martinez, 89 N.Y.2d 83, 87-88 (1994). a. PLAINTIFFS ARE THIRD-PARTY BENEFICIARIES UNDER THE AGREEMENT “It is old law that a third party may sue as a beneficiary on a contract made for his benefit.” Port Chester Elec. v. Atlas, 40 NY 2d 652, 655 (1976), citing Lawrence v. Fox, 20 N.Y. 268 (1859). “However, an intent to benefit the third party must be shown,” Id. “[T]o bring an action to recover as the third-party beneficiary of a contract, the third- 6 party must establish that it was the specific intent of the contracting parties to benefit that third-party.” Peltz v. Peltz, 2007 NY Slip. Op. 51762 (Supreme Court, Nassau Co., September 4, 2007). "Where performance is to be made directly to a third party, that party is generally deemed an intended beneficiary of the contract and is entitled to enforce it or there is, at least, a presumption that the contract was for the benefit of the third party." Key Intl Mfg v. Morse/Diesel, 142 A.D.2d 448, 455 (2d Dept. 1988), quoting from Nepco Forged Prods. v Consolidated Edison Co., 99 A.D.2d 508 (2d Dept. 1984), citations omitted. In this case, the Agreement specifically states that defendant will make the BuildingLink system available to Permitted Users such as plaintiffs for a wide range of uses. The Agreement covenants that “Permitted Users will be able to, without charge, add to, or change the content of the information they desire to include on, or make accessible through, the Program.” Kestenbaum Aff’t Exh. 1 at page 2 of 8, para. 3. In addition, “each Permitted User may modify without charge the content of the Building Information as frequently as it and they desire.” Id. By restricting plaintiffs’ access to BuildingLink to a “read-only” level of functionality, however, defendant has violated those covenants to plaintiffs, who are Permitted Users, because plaintiffs may no longer interact with the BuildingLink system except on a “read-only” basis. The Agreement makes repeated references to “Permitted Users,” both in terms of obligations BuildingLink owes to such Permitted Users, but also in terms of obligations owed by or limitations imposed on Permitted Users by the Agreement. For example, the Agreement’s license is granted by BuildingLink “to enable Customer (and the Permitted Users) to use the Program and receive the Services.” Kestenbaum Aff’t Exh. 1 at page 3 7 of 8, para. 5. The Agreement specifically contemplates that “The Services may be used only in connection with the maintenance, management, operation and use of the Building and facilitation of communications, record keeping and task tracking relating to matters affecting the maintenance, management, operation or use of the Building between and among the various Permitted Users of the Program . . . and for no other purpose.” Kestenbaum Aff’t Exh. 1, at 3 of 8, para. 6(a) (emphasis added). The Agreement thus contemplates that plaintiffs – as Permitted Users -- will have the ability to use the BuildingLink system to communicate concerning matters affecting the WWP building. Further, upon termination of the Agreement, “Permitted Users shall immediately cease regular use of the Program.” Kestenbaum Aff’t Exh. 1, at 4 of 8, para. 7(c). Defendant “does not warrant that . . . the Program . . . will meet the needs of Customer or Permitted Users . . .” Kestenbaum Aff’t Exh. 1, at 7 or 8, para. 17. And “[i]t is solely the responsibility of Customer and the Permitted Users to evaluate the accuracy, completeness, usefulness, security and validity of all building information, and Customer and the Permitted Users, as applicable, will be solely responsible for the accuracy and integrity of any building information posted by them, respectively.” Kestenbaum Aff’t Exh. 1, at 7 of 8, para. 18(a). “BuildingLink will have no direct or indirect responsibility or liability for any damage or loss caused by or in connection with the availability of any Linked Site or the use of, or reliance on, any linked site by Customer or any Permitted User.” Kestenbaum Aff’t Exh. 1, at 8 of 8, para. 19(b). Defendant also attempts to disclaim liability against Permitted Users in connection with a wide range of claims. Kestenbaum Aff’t Exh. 1, at 8 of 8, para. 20. 8 Contemplating that Permitted Users could sue and recover against defendant, the Agreement further states that “in no event will BuildingLink’s liability under any claim made by Customer or any Permitted User exceed the total amount of fees previously paid by customer to BuildingLink for Services provided hereunder to the building.” Kestenbaum Aff’t Ex. 1, at 8 of 8, para. 21 (emphasis added). Further, both the Agreement (signed by Mr. Finnochio as plaintiffs’ agent) and the Terms and Conditions (a click-through agreement directed at and agreed to by Permitted Users, but not signed by Mr. Finnochio) together comprise “the complete and exclusive agreement between the parties with respect to the subject matter hereof.” Kestenbaum Aff’t Ex. 1, at 6 of 8, para. 16(c). It is clear that there are repeated references to, and rights and obligations running to and from, Permitted Users throughout the Agreement. The Agreement is clearly intended to benefit not only Worldwide Plaza, but also Permitted Users, and that benefit is immediate and concrete, as set forth in the body of the Agreement itself. Defendant points to language in the Agreement that purports to limit or restrict plaintiffs from recovering damages against BuildingLink (Def. Mem. at 10-11). Whether or not that language is applicable, and as discussed further below, it would not prevent this Court from requiring defendant to restore plaintiffs’ full access to the BuildingLink system. Indeed, plaintiffs have requested this relief in the amended complaint. Furthermore, the Agreement specifically contemplates that Permitted Users might bring lawsuits against BuildingLink; in paragraph 21, it states that, with certain exceptions, “in no event will BuildingLink’s liability under any claim made by Customer or any Permitted User exceed the total amount of fees previously paid by customer to BuidlingLink for Services provided hereunder.” Kestenbaum Aff’t Exh. 1 at page 8 of 8, 9 para. 21 (emphasis added). In other paragraphs, defendant disclaims liability to Permitted Users (see Kestenbaum Aff’t Exh. 1 pp. 7-8 of 8, paras. 18, 19, 20). In paragraph 20, defendant further contemplates that a Permitted User may bring a claim against defendant where there are damages to a Permitted User caused by defendant’s failure “to use the security measures referred to in the second sentence of paragraph 12” of the Agreement. Here, as in Diamond Castle Partners IV PRC, L.P. v. IAC/Interactivecorp, 82 A.D.3d 421, 422 (1st Dept. 2011), “in light of the numerous contract provisions granting plaintiffs enforceable rights,” the “no third-party beneficiaries” language of paragraph 16 of the Agreement should be construed to refer to persons other than Worldwide Plaza or Permitted Users. Defendant concedes that the Agreement confers benefits on Permitted Users, but argues that these benefits are not “sufficiently immediate to indicate the assumption of a duty to compensate if the benefit is lost.” Def. Mem. at 10. As noted above, however, paragraph 21 of the Agreement directly contradicts this, stating that “in no event will BuidlingLink’s liability under any claim made by Owner or any Permitted User exceed the total amount of fees previously paid by customer to BuildingLink for Services provided hereunder to the building.” Kestenbaum Aff’t Exh. 1 at page 8 of 8, para. 21 (emphasis added). If there were no duty for defendant to compensate Permitted Users, there would be no need for defendant to limit the potential amount of its liability to Permitted Users. The Agreement thus contemplates that Permitted Users could bring claims against defendant, and takes steps to attempt to limit the amount of defendant’s liability in the event Permitted Users do so. 10 It is also clear from reading the Agreement that, in addition to Worldwide Plaza as a whole, Permitted Users are the Agreement’s intended and not merely incidental beneficiaries. As noted above, the Agreement is replete with references to Permitted Users, and to the services defendant is obliged to provide to Permitted Users under the Agreement’s terms. “Services” to be provided under the Agreement include “establishing, hosting and presenting a series of web pages, screen displays, input forms and templates, information storage functions and notification functions that provide various Internet-based management and communication services to tenants, building employees, owners and/or managers of the building.” Kestenbaum Aff’t Exh. 1 at p. 2 of 8, second unnumbered paragraph (emphasis added). It also defines the “Permitted Users” for whose benefit the BuildingLink system is being provided. These consist of “tenants or apartment owners or shareholders of the Building (‘Tenants’), Customer’s Board of Directors, Board of Managers, members, managers or officers as applicable (the ‘Board’), employees of Customer (‘Building Employees’), and the managing agent of the Building and such managing agent’s employees (collectively, the ‘Managing Agent’), such Tenants, Board, Building Employees and Managing Agent and their respective authorized representatives.” Kestenbaum Aff’t Exh. 1 at 2 of 8, third unnumbered paragraph. In addition, defendant promises that “BuildingLink will . . . provide an interface and user environment including display or input templates for each [building page] (the ‘Templates’) that will enable Customer and other Permitted Users . . . to utilize the Program.” It covenants that “Customer and other Permitted Users will be able to, without charge, add to, or change the content of the information they desire to include on, 11 or make accessible through, the Program.” In addition, “Customer and each Permitted User may modify without charge the content of the Building Information as frequently as it and they desire.” Kestenbaum Aff’t Exh. 1 at page 2 of 8, para. 3 (emphasis added). The Agreement further promises that “Customer will retain all right, title and interest in and to the data the Permitted Users provide and the data that is generated through the use of the Services.” Kestenbaum Aff’t Exh. 1 at page 2 of 8, para. 4 (emphasis added). The Agreement’s license provisions again reference both Customer and Permitted Users. The license under the Agreement is granted “to enable Customer (and the Permitted Users) to use the Program and receive the Services.” Kestenbaum Aff’t Exh. 1 at page 3 of 8, para. 5 (emphasis added). The Agreement states that “The Services may be used only in connection with the maintenance, management, operation and use of the Building and facilitation of communications, record keeping and task tracking relating to matters affecting the maintenance, management, operation or use of the Building between and among the various Permitted Users of the Program . . . and for no other purpose.” Kestenbaum Aff’t Exh. 1, at 3 of 8, para. 6(a) (emphasis added). The Agreement thus contemplates that plaintiffs – as Permitted Users -- will have the ability to use the BuildingLink system to communicate concerning matters affecting the WWP building. Defendant has prevented plaintiffs from doing so, has failed to restore full access when asked, and is thus in breach of the Agreement. The Agreement also contemplates a situation where a Permitted User happens to “commit a material breach of this Agreement.” Kestenbaum Aff’t Exh. 1, at 5 of 8, para. 9. Defendant fails to explain how a party who supposedly is not an intended beneficiary of the Agreement can possibly breach it; and indeed, defendant’s remedy for such a 12 breach is severe: if the breach is not cured within ten business days following written notice, BuildingLink has the option to terminate the Agreement. Defendant also indemnifies Permitted Users in the event of a claim lodged against them that their use of the BuildingLink system “infringes or violates any copyright or other intangible rights, provided the Customer or the Permitted User seeking indemnification, as applicable, promptly notifies BuildingLink of the matter, cooperates with BuildingLink as reasonably requested (at BuildingLink’s expense), and permits BuildingLink to control the investigation, defense and disposition of the same subject to the reasonable approval of Customer and/or the Permitted User.” Kestenbaum Aff’t Exh. 1 at page 5 of 8, para. 10 (emphasis added). Defendant “warrants” to use “all such security measures as are reasonable and customary . . . to protect Customer and Permitted User data.” Kestenbaum Aff’t Exh. 1 at page 5 of 8, para. 12 (emphasis added). Except as otherwise provided in the Agreement, “BuildingLink does not warrant that [the BuildingLink system] will meet the needs of Customer or Permitted Users.” Kestenbaum Aff’t Exh. 1 at page 7 of 8, para. 17. “Customer and Permitted Users, as applicable, will be solely responsible for the accuracy and integrity of any building information posted by them, respectively.” Kestenbaum Aff’t Exh. 1 at page 7 of 8, para. 18. Finally, and as noted above, the Agreement’s limitation of liability clause expressly contemplates that Permitted Users may be among those bringing claims against defendant. Kestenbaum Aff’t Exh. 1 at page 8 of 8, para. 21. These many and detailed references to Permitted Users in the Agreement and the obligations running between defendant and Permitted Users make it clear that Permitted 13 Users – which include plaintiffs – are intended beneficiaries under the Agreement. It is the Permitted Users who are the clear beneficiary “of the promised performance” by defendant. Edge Mgt. Consulting, Inc. v. Blank, 35 A.D.2d 364, 368 (1st Dept. 2006). See also Alicea v. City of New York, 145 A.D.2d 315, 318 (1st Dept. 1988) (“where the performance is rendered directly to a third party, that party is generally considered an intended beneficiary of the contract”); Matter of White Plains Realty, LLC v. Cappelli Enters., Inc., 108 A.D.3d 634, 637 (2d Dept. 2013) (same). b. THE AGREEMENT IS CLEAR THAT PLAINTIFFS ARE ITS DIRECT BENEFICIARIES Far from being “subordinate and tangential at best to the interests of [Worldwide Plaza]” as defendant claims (Def. Mem. at 8), the interests of Permitted Users are a vital part of the Agreement. Here, as in All Am. Moving and Storage, Inc. v. Andrews, 96 A.D.3d 674 (1st Dept. 2012), the Agreement clearly evinces an intent to benefit not only Worldwide Plaza, but Permitted Users as well, and in this case does so repeatedly. And while there is no release of claim obligation as in Condren, Walker & Co., Inc. v. Wolf, 19 A.D.3d 151 (1st Dept. 2005), the Agreement does indemnify both Worldwide Plaza and Permitted Users from third-party intellectual property infringement claims. The frequent references to Permitted Users in the Agreement, and the obligations that run between BuildingLink and are similar to the various obligations in the insurance policy, certificate of insurance, indemnification, and lease at issue in Natl. Union Fire Ins. Co. of Pittsburgh, PA v. Red Apple Group, Inc., 309 A.D.2d 657 (1st Dept. 2003). 14 Accordingly, it is clear from the face of the BuildingLink Agreement that it benefits not only Worldwide Plaza, but Permitted Users as well, and that Permitted Users are intended beneficiaries of the Agreement. c. PLAINTIFFS ARE ALSO PARTIES UNDER THE AGREEMENT As noted above, the Agreement with defendant was signed by Robert Finocchio in his capacity as president of the board of Worldwide Plaza. And under the Bylaws of Worldwide Plaza, Finocchio was acting as agent for plaintiff Fuchs when he did so. Fuchs Aff’t Ex. 1 at 2.21. While defendant argues that Finocchio was an “undisclosed principal,” (Def. Mem. at 6) there is no question that (a) he was signing on behalf of Worldwide Plaza; (b) he was not signing on behalf of himself personally, and (c) defendant was well aware that unit owners such as Mr. Fuchs, and later Mr. Selinger, would be intimately involved in the use of the BuildingLink system; indeed, the Agreement is replete with references to “Permitted Users,” which includes unit owners. While defendant relies on Restatement (Third) Agency section 6.03 and claims that the Agreement “excludes the principal by its terms” (Def. Mem. at 6), that is not the case. The language of the Agreement does not exclude principals; it states only that it “will not create any rights or remedies in any party other than the parties hereto and no person is entitled to assert any rights as a third party beneficiary under this Agreement.” Kestenbaum Aff’t Ex. 1 para. 16(d). As the Restatement makes clear, “[w]hen an agent acting with actual authority [here, Mr. Finocchio] makes a contract on behalf of an undisclosed principal [here, Mr. Fuchs and later Mr. Selinger], (1) unless excluded by the contract, the principal is a party to the contract.” Restatement (Third) Agency section 6.03. The Agreement, however, 15 does not exclude principals; it only excludes “any parties other than the parties hereto.” That does not include a principal such as Mr. Fuchs, who by definition under the Restatement, “is a party to the contract.” Had the Agreement stated that it specifically excludes “undisclosed principals,” defendant would have a better argument. The Agreement, however, is not so specific. Accordingly, Plaintiffs are proper defendants both as third party beneficiaries of the Agreement and as principal parties to it. d. BUILDINGLINK’S FAILURE TO RESTORE FULL ACCESS TO PLAINTIFFS RENDERS IT IN BREACH OF THE AGREEMENT There is no question here that there has been a breach of the Agreement. The Agreement does not contemplate that any party has the power to restrict any Permitted User’s access to the BuildingLink system to a “read-only” basis, as has been done in this case. Defendant, in its original motion to dismiss, purported to speak for Worldwide Plaza, and claimed that Worldwide Plaza (and not defendant) restricted plaintiffs’ access to the BuildingLink system. Original Rychik Affirm. (Talcott Affirm. Exh. A) at para. 13. Now, however, defendant – again speaking through its counsel – claims only that the “changes and any restrictions of access were not made by BuildingLink.” Rychik Affirm. para. 10. In either case, defendant ignores the fact that, as set forth in the amended complaint, it did nothing to restore that access after plaintiffs brought their “read only” status to defendant’s attention and asked that their full system access be restored. Having disclaimed responsibility for restricting plaintiffs’ access to the system, defendant claims that it had the right to do so anyway. Rychik Affirm. para. 16. Rychik 16 also testifies that defendant had no obligation to provide any particular level of service under the Agreement – that “no provision in the Agreement between BuildingLink and Customer prohibits – or even mentions – changing a user’s access to ‘read only’ or grants any rights attendant thereto.” Rychik Affirm. para. 18. In other words, according to Rychik’s argument, the Agreement imposed no service obligations whatsoever on defendant. This, of course, is contrary to both the Agreement’s language and common sense. The Agreement provides very specifically that Permitted Users will be able to use the BuildingLink system to communicate with others, and to perform a wide range of functions that require two-way communication between the user and the system. Defendant agreed to provide such a system, and to make that system – and its features – available to all Permitted Users. So while the Agreement may be silent about making a user’s status “read-only,” doing so still violates the service promises that defendant makes to Permitted Users because a Permitted User with “read-only” access cannot take advantage of all of the features of the BuildingLink system provided to other Permitted Users. . While defendant’s original moti