NEW YORK — Two contract electrical workers who say they were injured by exposure to toxic mold on a city project can pursue claims for financial loss but not for fraud or property damage, a New York trial court ordered Dec. 6. Kelly v. City of New York, et al., No. 14575/04 (N.Y. Sup., Queens Cty.).

New York Supreme Court Justice Peter J. O'Donoghue granted in part a motion by the City of New York and the New York City Industrial Development Agency, co-defendants in an action brought by workers at 22-09 Queens Plaza North.

Raymond J. Kelly and Bradley Lippman filed a notice of claim with the city on Jan. 2, 2004, stating their intention to make a monetary claim against the city for alleged negligence in exposing the two electrical workers to 'toxic and otherwise harmful substances.' The pair contend they became ill after being exposed to mold and mildew while working at Queens Plaza. New York's General Municipal Law Section 50-e requires notice before the filing of a lawsuit against the city.

On June 24, Kelly and Lippman filed suit, naming the City of New York, the City Industrial Development Agency and Queens Plaza owner/controller Pec Realty Corp. The city and Development Agency moved for summary judgment on each cause of action.

Justice O'Donoghue dismissed the fraud causes of action for failure to plead with particularity.

He awarded summary judgment to the city and Development Agency on claims of intentional, reckless and fraudulent conduct for plaintiffs' failure to provide notice of that cause of action. ''A theory of liability not mentioned in the notice of claim generally may not be asserted in a subsequent lawsuit,'' Justice O'Donoghue said, quoting Lieber v. Village of Spring Valley (40 F Supp 2d 525, 531).

For the same reason, Justice O'Donoghue granted summary judgment on property damage claims. He dismissed claims for punitive and treble damages, saying they are not recoverable where the only cause of action is ordinary negligence.

'On the other hand,' he ruled, 'the notice of claim does mention financial losses flowing from the alleged personal injuries such as 'lost wages and health care expense,' and General Municipal Law § 50-e does not operate here to bar such recovery.'

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