Stapleton v. Barrett Crane Design & Eng'g, 17-657-cv

Background

Keywell (via Trustee Kelly Stapleton) contracted with general contractor Pavilion under a Master Agreement to build a structure for Keywell’s business.
After construction, Keywell sued Pavilion and Pavilion employee Li Zhi Cao for breach of contract and professional negligence, alleging the Structure did not meet the Master Agreement requirements; default judgments were entered against Pavilion and Cao.
Keywell also sued engineer/designer defendants Uzman and Barrett (and Barrett Crane Design & Engineering), claiming they breached the Master Agreement and committed professional negligence based on their role in the Structure’s design.
Uzman’s name appeared stamped on certain design drawings, but there is no evidence Uzman or Barrett had direct contact with Keywell or knew of the Master Agreement; the built structure differed from the stamped drawings.
The district court granted summary judgment for Uzman and Barrett; Keywell appealed, arguing privity/functional equivalent, and alternatively third‑party beneficiary status under oral contracts between Uzman/Barrett and Pavilion.
The Second Circuit affirmed, agreeing no reasonable jury could find privity or its functional equivalent and refusing to consider Keywell’s third‑party beneficiary theory raised for the first time at summary judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Keywell had contractual privity (or functional equivalent) with Uzman/Barrett under the Master Agreement	Keywell said Uzman/Barrett were bound by or functionally linked to the Master Agreement (e.g., Uzman’s stamp on drawings)	Uzman/Barrett argued they neither signed nor had direct dealings with Keywell and lacked intent to be bound	No privity or functional equivalent; summary judgment for Uzman/Barrett affirmed
Whether linking conduct (third Ossining prong) was established	Keywell argued the stamped drawings constituted linking conduct evidencing reliance	Defendants argued no evidence they delivered drawings to or communicated with Keywell; the final design differed	Stamped drawings alone insufficient; no genuine dispute on linking conduct
Whether Keywell could assert third‑party beneficiary rights from oral contracts between Pavilion and Uzman/Barrett	Keywell asserted third‑party beneficiary status to pursue breach of contract claims	Defendants maintained Keywell never had contractual relationship and this theory was not pleaded earlier	District court properly declined to consider third‑party beneficiary theory raised first in opposition to summary judgment; appellate court affirmed
Whether summary judgment was appropriate given the record evidence standard	Keywell relied on minimal/ circumstantial evidence to create triable issues	Defendants relied on undisputed lack of contact and contradictions between stamped drawings and built structure	Court held the evidence was insufficient to create a triable issue; summary judgment appropriate

Key Cases Cited

Costello v. City of Burlington, 632 F.3d 41 (2d Cir. 2011) (standard of review for summary judgment and viewing evidence for non‑movant)
Jeffreys v. City of New York, 426 F.3d 549 (2d Cir. 2005) (mere scintilla of evidence insufficient to defeat summary judgment)
Town of Oyster Bay v. Lizza Indus., Inc., 4 N.E.3d 944 (N.Y. 2013) (functional equivalent of privity may allow non‑contracting plaintiffs to sue for breach after completion)
City School District of Newburgh v. Hugh Stubbins & Assocs., Inc., 650 N.E.2d 399 (N.Y. 1995) (discussing functional equivalent of privity in construction context)
Ossining Union Free School District v. Anderson LaRocca Anderson, 539 N.E.2d 91 (N.Y. 1989) (three‑part test for functional equivalent of privity)