Summary
In Berger v. Clark, 79 Pa. 340, 345, the Supreme Court said: "It is a necessary consequence of the decided cases that she must contract in her own behalf.
Summary of this case from Dublino v. NataleOpinion
11-20-2017
Shmuel BERGER, Plaintiff, v. Shem ROKEACH, Clark C. McNeil, Breadberry Inc., Breadberry USA LLC, Meat at Breadberry Inc., Royal Parking Services, Inc., and MEG Services Inc., Defendants. Shem Rokeach, Third–Party Plaintiff, v. MEG Services Inc. and Royal Parking Services, Inc., Third–Party Defendants.
Jaroslawicz & Jaros PLLC, New York, for Plaintiff. Garry Pogil, Esq., New York, for Defendant.
Jaroslawicz & Jaros PLLC, New York, for Plaintiff.
Garry Pogil, Esq., New York, for Defendant.
DEBRA SILBER, J. In this personal injury action, defendant Breadberry Inc. (Breadberry Inc.) moves for leave to renew this court's denial of its motion for summary judgment (Motion Seq. # 10) and upon renewal, asks for an order, pursuant to CPLR 3212, granting it summary judgment "as to all claims and issues in favor of Breadberry, Inc." The court assumes counsel means summary judgment dismissing plaintiff's amended complaint and all cross claims as against Breadberry Inc. and will proceed accordingly.
Breadberry Inc.'s prior summary judgment motion, for an order dismissing Berger's original complaint, was denied by Decision and Order dated June 1, 2017, as Berger's amended complaint superceded his original complaint, which became a nullity. The court's denial was without prejudice to Breadberry Inc. filing a renewed summary judgment motion addressed to Berger's amended complaint after Breadberry Inc. served an answer to Berger's amended complaint. ( Berger v. Rokeach, 2017 WL 2423488, 2017 N.Y. Misc. LEXIS 2168, 2017 N.Y. Slip Op. 31192(U) [Sup.Ct., Kings Cty.] ).
Upon renewal, Breadberry Inc.'s motion for summary judgment is denied for the reasons stated herein.
Background
The Accident
On February 17, 2015, Berger, a pedestrian, sustained personal injuries when he was struck by a vehicle owned by defendant Rokeach and operated by defendant Clark C. McNeil (McNeil), a valet parking attendant who was providing valet parking for customers of "Breadberry," a supermarket at 1689 60th Street in Brooklyn (Breadberry Market). The accident occurred at the intersection of 12th Avenue and 62nd Street in Brooklyn when McNeil was returning Rokeach's vehicle to the Breadberry Market from the valet parking lot a few blocks away. At the time of the accident, Steven Pittsley (Pittsley), another valet parking attendant, was a passenger in the vehicle driven by McNeil.
The Valet Parking Contracts
1. The Valet Parking Contract
Under a September 30, 2014 contract between Breadberry Inc. (Movant herein) and defendant Royal Parking (Valet Parking Contract), Royal Parking agreed to provide valet parking services at the Breadberry Market. The Valet Parking Contract provides, in relevant part, that:
"Royal Parking ... is performing valet parking services at Breadberry [Market] located at 1689
60th Street, Brooklyn, N.Y. 11204. Royal Parking ... releases and discharges and will indemnify and hold Breadberry Inc. [harmless] ... of and against any and all rights and claims for damages, losses and/or injuries arising out of the ordinary course of business. Royal Parking ... takes all responsibility for any customer losses and lawsuits that may arise which relate to and/or involve our employees performing their valet duties. These losses include but are not limited to damages to customers' vehicles, bodily injury of
customers due to the negligence of our employees, missing property and/or valuables out of customers' cars. This release includes claims against Breadberry Inc., subsidiaries, affiliates, predecessors, successors, and assignees, and it's or their respective officers, directors, employees or representatives. Royal Parking ... will perform its services and maintain insurance coverage in the amount of Two Million Dollars ($2,000,000) liability and theft ..."
See E-file document # 184, Exhibit J to the the November 2, 2016 affirmation of Anthony E. DeLuca, Esq., submitted in support of Breadberry USA's summary judgment motion (Seq. # 9).
2. The Valet Parking Subcontract
Under a September 24, 2014 subcontract (an earlier date than the contract) between Royal Parking and defendant Meg (Valet Parking Subcontract), Royal Parking subcontracted with Meg to perform valet parking services at the Breadberry Market. The Valet Parking Subcontract provides in its entirety:
"Royal Parking Services Inc. subcontracts MEG Services Inc. to perform valet parking service at its contracted location Breadberry [Market] located at 1689 60th Street, Brooklyn, New York, 11204. Royal Parking Services Inc. will maintain insurance coverage throughout the contract period for any employees hired/managed by MEG Services Inc. at the contracted location Breadberry [Market]. Royal Parking Services Inc. releases and discharges and will indemnify and hold MEG Services Inc. of and against any and all rights and claims for damages, losses and/or injuries arising out of the ordinary course of business. Royal Parking Services Inc. takes all responsibilities for any customer losses and lawsuits that may arise which relate to and/or involve MEG Services Inc. employees performing
their valet duties."
See E-file document # 184, Exhibit J to the November 2, 2016 affirmation of Anthony E. DeLuca, Esq., submitted in support of Breadberry USA's summary judgment motion.
The Personal Injury Action
On February 24, 2015, Berger commenced this personal injury action against Shem Rokeach, McNeil, Breadberry Inc., Breadberry USA and Meat At Breadberry Inc. (Meat) by e-filing a summons and a verified complaint, asserting a single cause of action sounding in negligence.
Berger's original complaint alleged that defendants Breadberry Inc., Breadberry USA and Meat "jointly operate a gourmet food market located at 1689 60th Street ..." and "McNeil provided valet services for the Breadberry defendants" (complaint at ¶¶ 7 and 8). The complaint further alleges that "[d]ue to the defendants' recklessness, carelessness and negligence, plaintiff was caused to suffer severe and permanent personal injuries when he was struck by the vehicle owned by defendant Rokeach, being operated by defendant McNeil in the scope of his employment for the Breadberry defendants" (id. at ¶ 12).
On or about March 26, 2015, Rokeach answered Berger's complaint, denying the material allegations therein and asserting affirmative defenses and a cross claim for indemnification against McNeil.
On or about April 21, 2015, McNeil answered Berger's complaint, denying the material allegations therein and asserting affirmative defenses and cross claims for indemnification against Rokeach, Breadberry Inc., Breadberry USA and Meat.
On or about June 2, 2015, Breadberry USA answered Berger's complaint, denying the material allegations therein and asserting affirmative defenses and cross claims for indemnification against Rokeach, McNeil, Breadberry Inc. and Meat.
Breadberry Inc. and Meat failed to answer or otherwise respond to Berger's complaint.
On or about November 16, 2015, Rokeach (the vehicle owner) filed a third-party complaint which was amended on December 14, 2015, against Meg, Royal Parking, Breadberry Inc. and Meat, alleging that Meg and Royal Parking "offered and operated a valet parking service at the Breadberry Food Market ..." (third-party complaint at ¶¶ 9 and 10). The third-party complaint alleges that McNeil "was acting as an agent, servant and/or employee of" Meg, Royal Parking, Meat and Breadberry Inc. (id. at ¶¶ 11, 12, 19 and 20). In addition, the third-party complaint alleges that Breadberry Inc. and Meat owned and operated the Breadberry Market and "offered, operated and provided valet parking service to its customers" (id. at ¶¶ 13–18). Rokeach seeks a declaratory judgment (1) that his liability is "secondary and/or derivative only" (presumably he means vicarious only); (2) that he is entitled to contribution and/or indemnification from Royal and Meg; (3) that he is an intended third-party beneficiary under the third-party defendants' liability insurance policies, and as such, the third-party defendants owe him a defense and complete indemnification; and (4) that the third-party defendants breached their duty of care to safeguard his vehicle and for this reason also, he is entitled to indemnification from them.
Rokeach subsequently discontinued the third-party action against third-party defendants Breadberry Inc. and Meat. Rokeach, as third-party plaintiff, sought and obtained a default judgment against third-party defendant Meg on March 2, 2017. His third-party action against Royal Parking is pending and active.
On March 1, 2016, Berger amended his complaint to add Royal Parking as a direct defendant, alleging that Royal Parking "contracted to provide" and "provided" valet parking services for the Breadberry Market (amended complaint at ¶¶ 11 and 12). The amended complaint alleges that Berger was struck and injured by a vehicle operated by defendant McNeil "in the scope of his employment for the Breadberry defendants" and "in the scope of his employment for [Royal Parking]" (id. at ¶¶ 15 and 16).
On or about March 8, 2016, Royal Parking answered Berger's amended complaint, denying the material allegations therein and asserting affirmative defenses and cross claims for contribution against Rokeach, McNeil, Meg, Breadberry Inc. and Meat.
On or about March 14, 2016, McNeil answered Berger's amended complaint, denying the material allegations therein and asserting affirmative defenses and cross claims for indemnification against Rokeach, Breadberry Inc., Breadberry USA, Meat and Royal Parking.
On or about March 15, 2016, Rokeach answered Berger's amended complaint, denying the material allegations therein and asserting affirmative defenses and cross claims for indemnification: (1) against McNeil; (2) against Breadberry Inc., Breadberry USA, Meat and Royal Parking; (3) as a third-party beneficiary under the liability insurance policies held by Breadberry Inc., Breadberry USA, Meat and Royal Parking; (4) against Breadberry Inc., Breadberry USA, Meat and Royal Parking as a third-party beneficiary under the Valet Parking Contract and/or the Valet Parking Subcontract; and (5) based on a claim of breach of their duty to safeguard his vehicle, asserted against Breadberry Inc., Breadberry USA, Meat and Royal Parking.
On or about March 23, 2016, Breadberry USA answered Berger's amended complaint, denying the allegations therein and asserting affirmative defenses and cross claims for indemnification against Rokeach, McNeil, Breadberry Inc., Meat and Royal Parking.
On June 23, 2016, an order was issued in a second action, Berger v. Royal and Meg, 503299/15, which consolidated that action with this one, and thus added Meg as a direct defendant in the instant action. However, Berger has abandoned the action as against Meg, as he did not obtain a default judgment against it within a year.
As stated above, Rokeach obtained a default judgment on liability as against Meg in his third-party action.
Breadberry Inc.'s Default
Meanwhile, on March 18, 2016, Breadberry Inc. moved to vacate its default and for leave to interpose an answer to Berger's complaint, which was granted by a June 9, 2016 order. Despite the fact that Berger amended his complaint on March 1, 2016, Breadberry Inc. subsequently served an answer to Berger's original complaint. Breadberry Inc. did not serve or file an answer to Berger's amended complaint until June 23, 2017, after its motion for summary judgment was denied, with leave to renew after it answered the amended complaint, as described above.
Mr. Zalmen Herman, in his March 15, 2016 affidavit, included as Exhibit 3 to defendant's instant motion, and which was also included in the prior motion, states "Breadberry USA and Breadberry Inc. are essentially the same company, [sic ] having the same CEO, Samuel Gluck, and the same primary place of business ... It was Breadberry's [sic ] understanding that the answer that was filed on behalf of Breadberry USA would also be interposed as to Breadberry Inc.," Mr. Herman apparently is unaware that one entity is an LLC and one is a corporation.
Note Of Issue
On September 8, 2016, after the parties engaged in discovery, Berger filed a note of issue indicating that his personal injury action is ready for trial. The trial has been adjourned, due to motion practice, to November 30, 2017.
The Prior Summary Judgment Motions
Breadberry USA moved for summary judgment (Mot. Seq. # 9) dismissing Berger's amended complaint and all cross claims asserted against it on the grounds that "the parking valets assigned to the Breadberry store were hired, supervised and paid by Meg, and it had no relationship, contractual or otherwise, with either Royal Parking or Meg."
Breadberry Inc. moved for summary judgment (Mot. Seq. # 10) dismissing the original complaint on the grounds that "the person who hires an independent contractor is not vicariously liable for any alleged wrongdoing of the independent contractor." Breadberry Inc. contended that it could not be held liable because it "did not exercise any control as to the manner in which the services [provided by Meg] were carried out" based on the affidavits of Zalmen Herman, the manager of Breadberry Inc., and Mark Shirman, the president of Meg.
See E-file document # 188, the affirmation of Gary Pogil, Esq., submitted in support of the 11/4/16 summary judgment motion of Breadberry Inc., (Seq. # 10) (Pogil Affirmation) and E-file documents # 192 and # 193, Exhibits D and E to the above-referenced Pogil Affirmation.
Royal Parking moved for summary judgment (Mot. Seq. # 11) dismissing Berger's amended complaint, Rockeach's third-party complaint and all cross claims asserted against it. Royal Parking asserted that it could not be disputed that it had no employees performing any valet services at the Breadberry supermarket on the date of the alleged incident, nor did it supervise or control the Meg employees. Royal Parking argued that it could not be held liable for the negligence of McNeil, an employee of an independent contractor.
Berger, in opposition to all three summary judgment motions, argued that questions of fact precluded summary judgment. Rokeach adopted Berger's arguments in opposition to defendants' motions.
In a decision dated June 1, 2017, the court denied Royal Parking and Breadberry USA's summary judgment motions and denied Breadberry Inc.'s motion with leave to renew. The court granted Breadberry Inc. an additional 30 days to answer the plaintiff's amended complaint and 60 days to renew its motion ( Berger v. Rokeach, 2017 N.Y. Misc. LEXIS 2168, 2017 N.Y. Slip Op. 31192(U) ). Breadberry Inc. has since filed both its answer to the amended complaint and the instant motion to renew its summary judgment motion.
Breadberry Inc.'s Summary Judgment Motion
Breadberry Inc. now moves for summary judgment dismissing the amended complaint and all cross claims on the ground that the affirmative defense of "Independent Contractor" bars a finding of liability against an eligible defendant, as it is well-settled law that one who hires an independent contractor is not vicariously liable for the torts of such contractor, citing Chainani v. Board of Ed. of City of New York, 87 N.Y.2d 370, 639 N.Y.S.2d 971, 663 N.E.2d 283 [1995]. Breadberry Inc. argues that the uncontradicted evidence shows that it entered into a contract with Royal Parking Services (which in turn entered into a subcontractor agreement with Meg Services Inc.) and therefore is not liable for the accident caused by its independent contractor, as it did not exercise any control over the manner in which those services were carried out.
See Exhibit # 2 to the instant motion, copies of the alleged contracts.
See Affidavit of Zalmen Herman [Exhibit 3] dated March 15, 2016 and Affidavit of Mark Shirman [Exhibit 4] dated March 15, 2016 submitted in support of the instant motion of Breadberry Inc.
Breadberry Inc. points to the statement by Mr. Herman that "Breadberry Inc. did not have any control over the manner of delivery and did not have any control over the manner in which valet services would be carried out. The relationship between Royal Parking Services and Meg Services was one of independent contractor. Breadberry did not provide vehicles or any items to enable transport delivery."
Movant's counsel also cites the statement by Mr. Shirman, President of Meg Services, that "Breadberry Inc. did not have any control over the manner that the above services would be performed as such control was within the exclusive purview of either Royal or Meg. Likewise, Breadberry Inc. has never directed, controlled or even suggested in any way the manner in which the Plaintiff [sic] would be carrying out his duties. Furthermore, Meg and not Breadberry Inc. provided vehicles or any items to enable transport or delivery and Breadberry Inc. had no input as to such."
In addition, Breadberry Inc. cites the deposition testimony of non-party witness Steven Pittsley (Exhibit 5), who was in Rokeach's motor vehicle at the time of the accident. Mr. Pittsley stated "I was employed with Meg Services" and describes having to fill out paperwork after an interview with the owner, including a 1099 form, as well as showing him his driver's license and other documents. He also said he received his checks from Meg's owner, Mark Shirman.
Breadberry Inc. argues that it is undisputed that the relationship of Royal and Meg to Breadberry Inc. can only be characterized as one of an independent contractor. Its counsel argues that there is absolutely no evidence to dispute the fact that Breadberry has not exercised any control, even remotely, in the manner of delivery, or the manner in which the valet services would be carried out and that it retained no authority as to whether or not to terminate the employment of employees or subcontractors of Meg Services or of Royal Parking.
In particular, Breadberry Inc. takes issue with the court's citation of Spadaro v. Parking Systems Plus, Inc., 113 A.D.3d 833, 979 N.Y.S.2d 627 (2d Dept.2014). In that decision, the Appellate Division, Second Department held that a restaurant that provided valet parking services could be held liable for the negligence of a valet parking company and its valet parking attendant, who were alleged to be responsible for a car accident in which a pedestrian was killed, as the restaurant had contracted with the entity that employed the valet parking attendants. Defendant Breadberry Inc. avers that the Spadaro case, cited in the court's prior decision, is distinguishable from the instant action, as in that case, there were disputed issues of fact, such as whether there was comparative negligence on the part of the restaurant as it had permitted the parking attendants to double park cars in front of the restaurant, and that there is no similar issue of fact in the instant matter, where Breadberry, he claims, could not be found comparatively negligent.
In his opposition, the plaintiff argues that the findings of this court with regard to the summary judgment motion of defendant Breadberry USA, to wit that it admitted that it is Breadberry Inc.'s alter ego, requires the court to reach the same conclusion as it did with regard to Breadberry USA in its prior decision, as Breadberry USA hasn't moved to reargue, thus the court should adhere to its original decision. Plaintiff cites the Court's June 1, 2017 decision:
Here, Breadberry USA has failed to eliminate all triable issues of fact as to whether or not it owned and operated the Breadberry Market, where valet parking services were provided to customers, such as Rokeach. Although Breadberry Inc. is the entity that entered into the Valet Parking Contract with Royal Parking, Breadberry USA has produced uncontradicted testimonial evidence that Breadberry Inc. and Breadberry USA are alter egos. Zalmen Herman, a manager of Breadberry Inc., provided affidavit testimony confirming that Breadberry Inc. and Breadberry USA "are essentially the same company, having the same CEO, Samuel Gluck, and the same primary place of business: 1733 60th Street [in] Brooklyn ..." Consequently, Breadberry USA, which allegedly owned and operated the Breadberry Market, is not entitled to summary judgment dismissing Berger's amended complaint or the cross claims asserted by Rokeach or by McNeil, the valet parking attendant who was driving Rokeach's vehicle at the time of the accident.
( Berger v. Rokeach, 2017 N.Y. Misc. LEXIS 2168, 2017 N.Y. Slip Op. 31192 [U] ).
In addition, plaintiff's counsel provides and refers to his prior affirmation in opposition, which noted that Breadberry Inc. never produced a witness for a deposition, so it has not and cannot establish that it is without fault. Plaintiff also notes that a company that hires an independent contractor can be held liable to someone injured as a result of the contractor's conduct when the hiring entity selected a careless or incompetent person, citing New York Pattern Jury Instruction 2:258, which states as follows, and the cases which follow in the commentary:
Liability for the Conduct of Another—Independent Contractor—Hiring Incompetent Contractor
A person who hires an independent contractor may be liable to someone who is injured as a result of the contractor's conduct if it is shown that the person who hired the contractor was negligent in selecting a careless or incompetent person with whom to contract. Negligence is the failure to use reasonable care—that is, the care that a reasonably prudent person would have used under the same circumstances. A competent contractor is a contractor who possesses the knowledge, skill, and
experience that a contractor should have in order to do the work for which (he, she, it) is employed. An employer is entitled to rely upon the supposed qualifications and good reputation of a contractor, and is not bound to anticipate that the contractor would cause injury to AB.
If you find that defendant EF lacked that knowledge, skill or experience to perform the work for which (he, she, it) was hired by defendant CD, and if you further find that defendant CD knew, or in the use of reasonable care should have ascertained that EF was not qualified to undertake the work, then you will find that CD was negligent. But if you find that EF was a competent contractor, or if you find that CD did not know and could not, in the use of reasonable care, find out that EF was not qualified to do the work for which (he, she, it) was hired by CD, then you will find that CD was not negligent, and CD would not be liable for AB's (injuries, damages) caused by EF's negligence.
Plaintiff's counsel further avers that the Breadberry entities have failed to produce any evidence of their prudence in selecting Royal as the parking company, and that there is evidence which could be said to create an inference of negligence, such as the fact that Royal Parking had contracted out its services to Meg, a different entity, before Breadberry contracted with Royal, and the contract between Breadberry and Royal does not require Breadberry's approval of the subcontract. Plaintiff also points out that the driver (McNeil) had been in prison for seven and one half years just prior to being hired for this job, presumably without driving during that time, and thus hiring him was negligent. Plaintiff argues that there are clearly issues of fact as to Breadberry's negligent conduct which precludes summary judgment dismissing plaintiff's complaint.
Summary Judgment Analysis
Summary judgment is a drastic remedy that deprives a litigant of his or her day in court and should, therefore, only be employed when there is no doubt as to the absence of triable issues of material fact ( Kolivas v. Kirchoff, 14 A.D.3d 493, 787 N.Y.S.2d 392 [2d Dept.2005] ; Andre v. Pomeroy, 35 N.Y.2d 361, 364, 362 N.Y.S.2d 131, 320 N.E.2d 853 [1974] ). However, a motion for summary judgment will be granted if, upon all the papers and proof submitted, the cause of action or defense is established sufficiently to warrant directing judgment in favor of a party, as a matter of law ( CPLR 3212[b] ; Gilbert Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966, 967, 525 N.Y.S.2d 793, 520 N.E.2d 512 [1988] ; Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ).
"The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment, as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" ( Manicone v. City of New York, 75 A.D.3d 535, 537, 905 N.Y.S.2d 640 [2010], quoting Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ; see also Zuckerman, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 ; Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ). If it is determined that the movant has made a prima facie showing of entitlement to summary judgment, "the burden shifts to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" ( Garnham & Han Real Estate Brokers v. Oppenheimer, 148 A.D.2d 493, 538 N.Y.S.2d 837 [2d Dept.1989] ; see also Zuckerman, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 ).
In determining whether to grant summary judgment, the court must evaluate whether the issues of fact raised by the opposing party are genuine or unsubstantiated ( Gervasio v. Di Napoli, 134 A.D.2d 235, 236, 520 N.Y.S.2d 430 [2d Dept.1987] ; Assing v. United Rubber Supply Co., 126 A.D.2d 590, 511 N.Y.S.2d 31 [2d Dept.1987] ; Columbus Trust Co. v. Campolo, 110 A.D.2d 616, 487 N.Y.S.2d 105 [2d Dept.1985], affd. 66 N.Y.2d 701, 496 N.Y.S.2d 425, 487 N.E.2d 282 [1985] ). Mere conclusory statements, expressions of hope, or unsubstantiated allegations are insufficient to defeat a motion for summary judgment ( Gilbert Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966, 967, 525 N.Y.S.2d 793, 520 N.E.2d 512 [1988] ; Spodek v. Park Prop. Dev. Assoc., 263 A.D.2d 478, 693 N.Y.S.2d 199 [2d Dept.1999] ). "[A]verments merely stating conclusions of fact or of law are insufficient to defeat summary judgment" ( Banco Popular N. Am. v. Victory Taxi Mgt., 1 N.Y.3d 381, 383–384, 774 N.Y.S.2d 480, 806 N.E.2d 488 [2004], quoting Mallad Constr. Corp. v. County Fed. Sav. & Loan Assn., 32 N.Y.2d 285, 290, 344 N.Y.S.2d 925, 298 N.E.2d 96 [1973] ).
Discussion
Upon renewal, it is this court's finding that Breadberry Inc. is not entitled to summary judgment dismissing Berger's amended complaint or the cross claims. The court appreciates the opportunity to clarify and expand somewhat upon its earlier decision.
Berger v. Rokeach, 2017 Misc. LEXIS 2168, 2017 N.Y. Slip Op. 31192 [U].
First, as Breadberry USA has not moved to reargue the court's decision as to it, in light of Breadberry Inc.'s admission that they are essentially the "same company," the court is bound to reach the same conclusion as to both Breadberry entities.
The court notes that the "alter ego" doctrine has been applied to "pierce the corporate veil" between an individual and a corporation as well as between corporations and between LLCs or a combination thereof: the primary factor is control, and other factors considered include, but none are dispositive: overlap in ownership/officers/directors; common office space/telephone numbers/personnel; absence of corporate formalities; inadequate capitalization; and payment of obligations interchangeably between the entities. Second, the Appellate Division, Second Department has held that a restaurant that provided valet parking services can be held liable for the negligence of a valet parking company and its valet parking attendants who are alleged to have caused an accident in which a pedestrian was killed, even where the restaurant contracted with an independent contractor which employed the valet parking attendants (see Spadaro v. Parking Systems Plus, Inc., 113 A.D.3d 833, 979 N.Y.S.2d 627 ). Movant's attempt to distinguish this case from Spadaro is erroneous. The court in Spadero clearly states, contrary to counsel for Breadberry's interpretation, "the submissions of [the restaurant and the parking company] defendants presented triable issues of fact as to whether [the restaurant] could be held liable for the negligence, if any, of [the parking company]" ( Id. at 835–386, 979 N.Y.S.2d 627 ).
See Miramax Film Corp. v. Abraham, et al., 2003 WL 22832384, 2003 U.S. Dist. LEXIS 21346 (S.D.N.Y.2003) ; Millennium Constr., LLC v. Loupolover, 44 A.D.3d 1016, 1017, 845 N.Y.S.2d 110 (2d Dept.2007) ; John John, LLC v. Exit 63 Dev., LLC, 35 A.D.3d 540, 541, 826 N.Y.S.2d 657 (2d Dept.2006) [with corporation and individual]; Wm. Passalaqua Builders, Inc. v. Resnick Developers South Inc., 933 F.2d 131 (2d Cir.1991) ; ABN AMRO Bank N.V. v. MBIA Inc., 17 N.Y.3d 208, 928 N.Y.S.2d 647, 952 N.E.2d 463 (2011) [between corporations]; Last Time Beverage Corp. v. F & V Distribution Co., LLC, 98 A.D.3d 947, 951 N.Y.S.2d 77 (2d Dept.2012) [corporation and LLC]; Sweeney v. Kane, 6 A.D.3d 72, 773 N.Y.S.2d 420 (2d Dept.2004) ; State of N.Y. v. Easton, 169 Misc.2d 282, 647 N.Y.S.2d 904 (Sup.Ct. Albany Co 1995) [reverse piercing].
Third, and most importantly, Breadberry's analysis of the applicable law is incorrect. The existence and scope of an alleged tortfeasor's duty is, in the first instance, a legal question for determination by the court. Di Ponzio v. Riordan, 89 N.Y.2d 578, 657 N.Y.S.2d 377, 679 N.E.2d 616 (1997).
Here, the court finds that Breadberry's duty with regard to the plaintiff, a third-party, is somewhat different than its duty to Rokeach, its customer. With regard to the plaintiff', who was a pedestrian crossing a street, as the entity in control of the supermarket and its parking lot a few blocks away, Breadberry had a duty to exercise reasonable care in maintaining its properties in a reasonably safe condition and to have taken reasonable measures to control the foreseeable conduct of parties on the property with whom they contracted, that is, the parking attendants, to prevent them from either intentionally harming or creating an unreasonable risk of harm to others. This includes both their customers and the pedestrians who were anticipated to walk in the area where Breadberry's agents or employees were working. (See Di Ponzio v. Riordan, 89 N.Y.2d 578, 657 N.Y.S.2d 377, 679 N.E.2d 616 [1997] ; Basso v. Miller, 40 N.Y.2d 233, 386 N.Y.S.2d 564, 352 N.E.2d 868 (1976); Jaume v. Ry Mgt. Co., 2 A.D.3d 590, 769 N.Y.S.2d 303 [2d Dept.2003] ).
This duty arises when there is an ability and opportunity to control the conduct of its contractors, and an awareness of the need to do so. Id. Certainly that is the case here. By contrast, when a child visiting a patient with his parent ran into a patient at a medical facility and knocked her to the ground, the facility demonstrated that it did not have the ability to control the conduct of the child. Hillen v. Queens Long Is. Med. Group, P.C., 57 A.D.3d 946, 871 N.Y.S.2d 302 [2d Dept.2008].
Defendant Breadberry claims that it contracted out its valet parking service, did not pay any attention to the people hired by the subcontractor, and did not supervise, control or in any way involve itself in the work of the valet parking service offered to its customers. This does not make out a prima facie case for dismissal of the plaintiff's complaint. To assert that the supermarket signed a contract with a parking company and then essentially covered its eyes with a blindfold is not a basis for summary judgment dismissing the complaint. Breadberry was obligated to exercise due care in "the execution of the contract" which, here, refers to selecting a company with, at the minimum, both appropriate insurance and competent drivers. From the documents in the record, it is clear that Royal Parking executed its subcontract with Meg before it executed its contract with Breadberry. Both contracts are on Royal stationery, and each are essentially one paragraph long. The contract between Breadberry and Royal makes no reference to whether Royal could subcontract the work to another company, or if it did, if Breadberry had the right to approve the subcontract. The court notes that McNeil testified at his EBT that his paycheck was from Royal Parking, while his co-worker Pittsley testified that his check was from Meg, creating an inference that these companies may be related.
In any event, in these circumstances, Breadberry is responsible for the negligence of the parking attendants. To be clear, whether or not Breadberry was negligent, and plaintiff claims Breadberry was negligent, the court concludes that Breadberry's liability is also vicarious, pursuant to the doctrine of respondeat superior.
There are three circumstances which have been held to be exceptions to the general rule, in which a duty of care to a third party [the pedestrian herein] may arise out of a contractual obligation, or the performance thereof, and thereby subject the contracting party [Breadberry] to tort liability. ( Church v. Callanan Indus., 99 N.Y.2d 104, 752 N.Y.S.2d 254, 782 N.E.2d 50 [2002] ; Fried v. Signe Nielsen Landscape Architect, PC, 34 Misc.3d 1212[A], 2012 N.Y. Slip Op. 50062[U], 2012 WL 163832 [2012] ).
The first and third are applicable here. The first circumstance is where the promissor, [parking company] while engaged affirmatively in discharging a contractual obligation, [here, the provision of valet parking to customers] creates an unreasonable risk of harm to others, or increases that risk. This is sometimes described as "launching an instrument of harm." ( Espinal v. Melville Snow Contrs., 98 N.Y.2d 136, 746 N.Y.S.2d 120, 773 N.E.2d 485 [2002] ; Church v. Callanan Indus., 99 N.Y.2d 104, 752 N.Y.S.2d 254, 782 N.E.2d 50 ; Fried v. Signe Nielsen Landscape Architect, PC, 34 Misc.3d 1212 [A] ). To put incompetent or unqualified drivers on the road with an approximately five thousand pound vehicle would seem, to the undersigned, to qualify as launching an instrument of harm.
The third circumstance is where the obligor contracting party [parking company] has entirely displaced the obligee party's duty to perform a function, such as snow removal. The obligor under such circumstances may be liable for failing to make conditions safe for the injured party, even without an unreasonable risk of harm to others, as is required in the first circumstance, above. Palka v. Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579, 611 N.Y.S.2d 817, 634 N.E.2d 189 [1994] ; Church v. Callanan Indus., 99 N.Y.2d 104 at 110–112, 752 N.Y.S.2d 254, 782 N.E.2d 50 [internal quotation marks and citations omitted]; Espinal v. Melville Snow Contrs., 98 N.Y.2d 136, 746 N.Y.S.2d 120, 773 N.E.2d 485 ; Fried v. Signe Nielsen Landscape Architect, PC, 34 Misc.3d 1212[A] ).
Under this theory, as Breadberry offered all of its customers valet parking, its contractor had "entirely displaced the [market's] duty to perform a function." This analysis arises from long-standing authority in New York. Thus, "a contractor may be liable for an affirmative act of negligence which results in the creation of a condition dangerous to the public, such as on a street or sidewalk." (See, Church v. Callanan Indus., 99 N.Y.2d 104, 752 N.Y.S.2d 254, 782 N.E.2d 50 ; Minier v. City of New York, 85 A.D.3d 1134, 1134–35, 926 N.Y.S.2d 621 [2nd Dept.2011] [emphasis added]; Brown v. Welsbach Corp., 301 N.Y. 202, 205, 93 N.E.2d 640 [1950] ; Gurriell v. Town of Huntington, 129 A.D.2d 768, 770, 514 N.Y.S.2d 761 [2nd Dept.1987] ; Fried v. Signe Nielsen Landscape Architect, PC, 34 Misc.3d 1212[A] ).
With regard to Rokeach, the owner of the vehicle, the court finds that a customer who entrusts his or her vehicle to one of the available valets cannot be expected to find out who the valet's employer is and whether it has a good reputation before getting out of the car. The parking company was an agent of Breadberry, and as such, to make out a prima facie case for dismissal, Breadberry has to demonstrate that its parking attendant was completely free of any negligence with regard to the happening of the plaintiff's accident, and it has not done so.
Thus, to the extent that, after a trial between the plaintiff pedestrian and the driver McNeil, whereby the percentages of comparative fault are ascertained, as Rokeach is purely vicariously liable as the owner of the vehicle pursuant to VTL § 388, there is a presumption that he is entitled to common law defense and indemnification from Breadberry, as is asserted in his cross claim. (See Coque v. Wildflower Estates Devs., Inc., 31 A.D.3d 484,485, 818 N.Y.S.2d 546 [2nd Dept.2006]. See also Hernandez v. Lamar, 2014 WL 3543640, 2014 N.Y. Misc. LEXIS 3120 [Sup.Ct., Suffolk Co.] ). If Breadberry is entitled to contractual indemnification from Royal Parking, this is something that Breadberry may wish to assert and prosecute. But Rokeach is entitled to be indemnified by Breadberry.
The legislative history of VTL § 388 makes it clear that one of its purposes is to "make the owners of motor vehicles exercise some degree of care in respect to the persons employed [or authorized] by them to operate such motor vehicles" Murdza v. Zimmerman, 99 N.Y.2d 375 at footnote 3, 756 N.Y.S.2d 505, 786 N.E.2d 440 (2003). There was a point in New York that this statute was interpreted to mean that the vehicle owner was responsible for the negligence of valet parking attendants. See e.g. Carter v. Travelers Ins. Co., 113 A.D.2d 178, 495 N.Y.S.2d 168 [1st Dept.1985]. Then, as the New York Court of Appeals had held that VTL § 388 does not require insurers to cover every permissive driver as an additional insured, (See General Acc. Fire & Life Assur. Corp. v. Piazza, 4 N.Y.2d 659, 176 N.Y.S.2d 976, 152 N.E.2d 236 [1958] ), the Insurance Regulations were amended. That level of inquiry, as to the driver's qualifications, is no longer required of a vehicle owner for the bailment of a vehicle to a "car business," such as an auto repair shop or a parking lot, as the owner's vehicle insurance is not required in New York to cover the use of the vehicle by an employee of such a " car business," also referred to as an "auto business." (See 11 NYCRR § 60–1.1 ; National Union Fire Ins. Co. v. Progressive Ins. Co., 287 A.D.2d 697, 732 N.Y.S.2d 63 [2d Dept.2001] ; Eagle Insurance Co. v. Rosario, 8 A.D.3d 483, 779 N.Y.S.2d 112 [2d Dept.2004] ). In Strizik v. Home Indem. Co., 137 Misc.2d 12, 519 N.Y.S.2d 600 (Sup.Ct., Nassau Co.1987), the court cites Insurance Dept. Reg. 11 NYCRR § 60.1 [c][3][i], and states "Insurance Department Regulations reflect the above case law indicating that the mandatory provisions need not apply to any organization or its employee operating a public parking place with respect to any accident arising out of the use of a motor vehicle in connection therewith." Id. In the Strizik case, the valet parking attendant employed by a valet parking company that had contracted with a restaurant, brought a declaratory judgment action against the vehicle owner's insurance company, claiming that the company should provide him with a defense as a permissive user of the car and thus as an additional insured. The court denied the motion, and explains that the law in New York does not require auto insurers to cover persons who use the car, albeit with the owner's permission, if they are using it in "a car business."
A "car business" is defined therein as a business "engaged in operating a ... repair shop, service station, storage garage or public parking."
When it was subsequently argued, in a case where the restaurant's parking valet hit a pedestrian while moving a car between his employer's restaurant and the parking lot, that there is a distinction between Strizik, where the parking valet worked for an independent contractor, and a case where the parking valet worked directly for the restaurant, the business offering the valet parking service, the court disagreed, and states as follows:
Underwriters [the restaurant's insurance company] attempts to distinguish Strizik, arguing that the facts are "markedly different." Specifically, Underwriters argues that the valet in Strizik was an employee of an independent company hired by the restaurant owner, whereas here, the valet services provided were "incidental" to those provided by the restaurant. This distinction is unavailing .... [consider] the public policy implications.... When a business, restaurant or otherwise, holds itself out as offering a parking service, it is reasonable for an insured to assume that the business will be liable for its own negligence and the negligent acts of its employees. Their actions are largely beyond the automobile owners' direct control. The auto business exclusion reflects this assumption by relieving the auto insurer for liability from such negligence .... what is relevant is that they held themselves out to offer a service specifically excluded under the [vehicle owner's] policy, namely the parking of automobiles, and the accident occurred while that service was employed. [citations omitted] United States Underwriters Ins. Co. v. Kum Gang, Inc., 443 F.Supp.2d 348 [USDC E.D.N.Y.2006].
Thus, when Rokeach entrusted his vehicle to the valet parking employee, his insurance coverage was not in effect with regard to the parking attendant's acts, and thus Breadberry's, or the parking company's business insurance, was required to commence. Whether the insurance policy is provided or paid for by Breadberry supermarket or the valet parking company is between them. But it is clear that once Mr. Rokeach handed his car keys to the valet, his insurance coverage covered him and his vehicle, but not the parking attendant. Therefore, it would be totally contrary to the public policy of this State if a business that provides valet parking service [here, Breadberry supermarket] was not responsible for any injuries and losses that arise while the vehicle is in the care and custody of the supermarket's employees or subcontractors. Otherwise, the Legislature's entire statutory scheme, one that requires all cars on the road to be insured, would fail every time someone brought their car to a repair shop, a parking lot or a restaurant or other business with valet parking.
Where a valet parking attendant crashed a car into several parked cars, the vehicle owner's policy paid the vehicle owners for the damage, and then was entitled to bring a subrogation action against the parking company. Allstate Ins. Co. v. Ram Caterers of Flatbush LLC, 2012 WL 757013, 2012 N.Y. Misc. LEXIS 883, 2012 N.Y. Slip Op. 30466[U].
Therefore, the court finds this to be a separate and sufficient reason to deny Breadberry's motion, and finds their argument, that they cannot be liable as they had subcontracted the valet parking service they offered to an independent contractor, that they didn't employ the valet McNeil and that they didn't supervise the employees hired by Meg, to be completely unavailing.
As an alternative basis to analyze this motion, the court finds that the doctrine of ostensible agency , a/k/a the doctrine of apparent authority, may be applied to these facts. While this may seem to be a novel approach, this doctrine has been applied to cases outside the area of medical malpractice for almost a hundred years. The court notes that in the 2006 Federal District Court decision in United States Underwriters Ins. Co. v. Kum Gang, Inc., 443 F.Supp.2d 348 [USDC E.D.N.Y.2006] cited above, a declaratory judgment action with regard to the insurance coverage for the negligence of a valet parking attendant, that "it appears that no New York Court of Appeals case controls the disposition of the issue. Two New York Supreme Court cases, however, guide this Court's decision that the "auto business" exclusion in the [vehicle owner's] policy is enforceable, and therefore they have no duty to cover or defend [the restaurant or its driver]." Id. at 363. The issue before this court similarly pushes the boundaries of public policy and requires a clear decision from the court.
See Thomas Moore and Matthew Gaier, "Hospital Liability Under Ostensible Agency," New York Law Journal, October 2, 2017.
The earliest reported case in the prior century that the court could find on this issue is Hannon v. Siegel–Cooper Co., 167 N.Y. 244, 60 N.E. 597 [1901]. In that case, admittedly one which can be categorized as dental malpractice, a department store advertised that there was a dental practice in their store, and when a patron claimed injury for dental malpractice, the court found the department store was estopped from denying its liability for the conduct of someone whom it held out as its agent. Later, in Santise v. Martins, Inc., 258 A.D. 663, 17 N.Y.S.2d 741 [2d Dept.1940], a plaintiff sued a shoe store for injuries to her foot which arose when she tried on a pair of shoes which had a nail protruding from it into the sole of the shoe. The store moved to dismiss the action in the lower court on the grounds that they had subcontracted that part of the shoe store to another business, an "independent operator." The court dismissed the complaint, but the Appellate Division reversed the dismissal, and said "in our opinion this view was erroneous. It was not essential that the plaintiff prove defendant's ownership, operation or control of the department in which the accident occurred. It was sufficient if she established that the defendant held itself out as such to the public," citing Hannon v. Siegel–Cooper Co.
More recently, this doctrine has been applied to a hotel, where the hotel moved to dismiss, on the ground that the plaintiff was injured when she tripped on a defective walkway which the hotel claimed was "owned ... by [a franchisee] an independent contractor responsible for the day to day operations of the hotel." The court concluded that the motion was premature and discovery needed to take place, as movant "did not provide any evidence that [the franchisee] complied with the requirements [in the franchise agreement] that [the franchisee] disclose that it was an independent legal entity ... and to place notices of independent ownership on the premises." Stern v. Starwood Hotels & Resorts Worldwide, Inc., 149 A.D.3d 496, 52 N.Y.S.3d 58 [1st Dept.2017]. The Second Department has also concluded that a franchisor may be responsible for the negligence of its franchisee. See Friedler v. Palyompis, 12 A.D.3d 637, 784 N.Y.S.2d 902 [2d Dept.2004].
In another case, the doctrine of apparent agency was applied to a resort sued when a guest was killed on a snowmobile tour arranged by the resort with an independent contractor. The resort's website listed snowmobiling among the activities offered at the resort. The Third Department denied the resort's motion to dismiss, in Taylor v. The Point at Saranac Lake, Inc., 135 A.D.3d 1147, 23 N.Y.S.3d 682 [3d Dept.2016] and explains the doctrine [at 1148, 23 N.Y.S.3d 682 ] as follows:
Defendants argue that the Supreme Court erred in denying their motion for summary judgment, as hoteliers are not absolute insurers of the safety of their guests and, generally, owe no duty of care to guests who are injured while under the supervision of an unaffiliated entity away from
hotel property. We note, however, that plaintiff does not base her claims upon a direct breach of a duty owed to her or to decedent by defendants or their employees. Rather, she asserts that defendants are vicariously liable for ASR's [snowmobile tour company] negligence because of the alleged existence of an ostensible agency relationship between them. Indeed, "[i]t is fundamental to the principal/agent relationship that [a principal] is liable to a third person for the wrongful or negligent acts ... of its agent when made within the general or apparent scope of the agent's authority." To establish a negligence claim based upon an apparent agency theory, a plaintiff must show evidence of " words or conduct of the principal ... communicated to a third party, which give rise to a reasonable belief and appearance that the agent possesses authority to [act on the principal's behalf]". Here, the evidence includes a screenshot of the resort's website that can be read to suggest that snowmobiling is a service provided by defendants' agents or employees, as it is listed among the winter activities available on the premises. Further, Bishop [contractor] testified that Graham [resort] directed him to not discuss money with the guests and to bill the resort for the cost of the tour because "he wanted the customers to feel like this was something that they were contracting with [the resort] directly to do." Indeed, plaintiff stated that she and decedent only dealt with the resort staff in organizing the tour and had never heard of ASR prior to the tour's commencement. Viewing this evidence in a light most favorable to plaintiff as the nonmoving party, we find that Supreme Court properly denied the portion of defendants' motion seeking dismissal of plaintiff's negligence claim based upon the doctrine of apparent agency. In our view, defendants' promotional materials, together with the testimony regarding the overall experience that defendants and their staff strive to provide for guests of the resort, create a question
of fact as to whether plaintiff could have reasonably believed that ASR possessed the authority to conduct the snowmobile tour as defendants' agent. [citations omitted].
In another action, a local travel agency which was a foreign rental car agency's majority shareholder was not dismissed from an action by a plaintiff who was referred to the foreign company by the local company, rented a car from the foreign company and was injured in an accident, stating "if it is found that there exists an apparent or ostensible agency between the Hertz defendants and Hertz Italiana, this may serve as a basis for vicarious liability on the part of the Hertz defendants." Fogel v. Hertz International, Ltd., 141 A.D.2d 375, 529 N.Y.S.2d 484 [1st Dept.1988].
Although the valet parking service was "free," and offered as a courtesy by Breadberry's supermarket business, it doesn't matter whether the supermarket charged its patrons separately for the valet service or indirectly by the prices in the store; what is relevant is that they held themselves out to offer a service specifically excluded under the vehicle owner's insurance policy, namely, the parking of automobiles, thus Breadberry had a duty to provide, directly or through its contractor, liability insurance. (See, United States Underwriters Ins. Co. v. Kum Gang, Inc., 443 F.Supp.2d 348 [USDC, E.D.N.Y.2006] ).
The auto business exclusion reflects this, by relieving the vehicle owner's auto insurer of liability for negligence on the part of the workers in a "car business," which inures to the owner's benefit in the form of lower premiums. "To include the excluded class in the ordinary policy would tend only to increase the premium therefor and put a burden upon the insurer which does not in reason or in principle belong to him." ( United States Underwriters Ins. Co. v. Kum Gang, Inc., 443 F.Supp.2d 348 quoting Nationwide Mutual v. Exchange Mut. Ins. Co., 49 Misc.2d 707, 711, 268 N.Y.S.2d 495 [Sup.Ct., Onondaga 1966] ).
The essentially undisputed evidence in the record is that Breadberry Inc. offered a valet parking service to its customers. That service required taking the vehicle from the supermarket premises to the valet parking lot and then returning it. The substance of the matter is that Breadberry engaged in, among other things, the business of valet parking. Whether it directly employed staff for this purpose or outsourced that business to an independent parking service is irrelevant, and cannot serve to cloud the "clear and unmistakable" language of the "auto exclusion" which bars coverage for the driver when the vehicle is being driven by someone in a "car business." (See, United States Underwriters Ins. Co. v. Kum Gang, Inc., 443 F.Supp.2d 348, 362–366 ). The vehicle owner's liability is thus purely vicarious in entrusting the car to a car business.
In this case, Breadberry Inc. has failed to establish its prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against it. Accordingly, it is
ORDERED that the branch of Breadberry Inc.'s motion to renew its prior motion is granted, and the branch of its motion seeking summary judgment is denied in its entirety.
To the extent, if any, that this decision conflicts in its analysis with the court's reasoning in the court's prior decision, Berger v. Rokeach, 2017 N.Y. LEXIS 2168, 2017 N.Y. Slip Op. 31192[U], this decision shall control.