Opinion
No. 10–3162.
2013-01-8
Milton PERLA and Maria Perla, Plaintiffs, v. DAYTREE CUSTOM BUILDERS, INC., Defendant.
Lurie, Ilchert, Mac Donnell & Ryan, New York, Attorney for Plaintiffs. Devitt Spellman Barrett, LLP, Smithtown, Attorney for Defendant.
Lurie, Ilchert, Mac Donnell & Ryan, New York, Attorney for Plaintiffs. Devitt Spellman Barrett, LLP, Smithtown, Attorney for Defendant.
THOMAS F. WHELAN, J.
Upon the following papers numbered 1 to 39 read on this motion to strike and motion for summary judgment; Notice of Motion/ Order to Show Cause and supporting papers 1–21; 22–29; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 30–37; Replying Affidavits and supporting papers 38–39; Other; (and after hearing counsel in support and opposed to the motion) it is,
ORDERED that the motion (004) by plaintiffs to strike and for summary judgment and the motion (005) by defendant for summary judgment are consolidated for the purposes of this determination; and it is further
ORDERED that the motion (004) by plaintiffs for an order pursuant to CPLR 3126 striking defendant's answer or, in the alternative, striking defendant's first affirmative defense that plaintiff's action is barred by the Workers' Compensation Law and for an order pursuant to CPLR 3212(e) granting plaintiffs partial summary judgment on their cause of action alleging violation of Labor Law § 240(1) is determined herein; and it is further
ORDERED that the motion (005) by defendant for an order pursuant to CPLR 3212 granting defendant summary judgment dismissing the complaint is denied.
This is an action to recover damages, personally and derivatively, for injuries allegedly sustained by plaintiff Milton Perla on January 8, 2010 when he fell from the roof of a new extension under construction at premises known as 216 Cedrus Avenue, East Northport, New York. Plaintiff alleges that at the time of the accident he was employed as a laborer by non-party Daytree Construction Co., Inc. (Daytree Construction). In addition, plaintiff alleges that defendant, Daytree Custom Builders, Inc., contracted with his employer Daytree Construction to perform said construction.
Plaintiffs' complaint filed on January 26, 2010 alleges a first cause of action for common-law negligence, a second cause of action claiming violation of Labor Law §§ 200, 240 and 241(6), and a third, derivative, cause of action for loss of services on behalf of plaintiff Maria Perla. In its answer dated May 19, 2010, defendant asserted a first affirmative defense that “any injury or injuries alleged to have been sustained by the plaintiff was while working within the scope of his employment as an employee of Milton Perla [sic], and that plaintiff's remedy properly comes under Workers' Compensation Act of the State of New York and this action is barred thereby and Daytree Custom Builders, Inc., procured compensation insurance under the provision of the Workers' Compensation Act of the State of New York.” The Court's computerized records indicate that the note of issue in this action was filed on January 6, 2011 and then stricken by order of this Court dated July 1, 2011 to enable defendant to conduct further discovery.
Plaintiffs seek an order pursuant to CPLR 3126 striking defendant's answer or, in the alternative, striking defendant's first affirmative defense that plaintiff's action is barred by the Workers' Compensation Law on the ground that defendant has consistently refused throughout the course of this litigation to provide plaintiffs with crucial documentary discovery. Plaintiffs assert that defendant has failed to provide a complete response to their requests in their Notice for Discovery and Inspection dated January 6, 2012 for documents and records supporting defendant's claims, as raised in the affidavit dated March 22, 2011 of Clara Datre, defendant's president, that defendant and Daytree Construction are alter egos and that plaintiff's receipt of workers' compensation benefits precludes this action.
Plaintiffs note that the documents annexed to defendant's Response to Notice for Discovery and Inspection dated May 21, 2012 indicate that the general liability policy for defendant does not insure Daytree Construction and that the workers' compensation policy for Daytree Construction does not insure defendant. In addition, plaintiffs produce a certificate of workers' compensation insurance coverage filed on behalf of defendant with the Town of Huntington's Building and Housing Department in December 2009 to show that there was a separate workers' compensation insurance policy in existence for Daytree Construction during the relevant time period. Plaintiff's submissions include their Notice for Discovery and Inspection dated January 6, 2012 and defendant's responses.
Defendant contends in opposition that plaintiffs' request must be denied inasmuch as plaintiffs have not made any effort to resolve the discovery dispute and have failed to supply the required affirmation of good faith. In addition, defendant contends that plaintiffs have failed to explain how the confidential corporate tax returns and bank records that they demand are relevant to the alter ego defense and argues that their production would be cumulative, superfluous and irrelevant. Defendant explains that the workers' compensation policy issued to Daytree Construction indicates that it is a renewal of a policy that was originally issued to defendant, which did not have employees in the field, to obtain a permit and then renewed in favor of Daytree Construction to perform the work.
In reply, plaintiffs question why there are two separate policy numbers for two separate workers' compensation policies covering the same time period if defendant and Daytree Construction were both insured under the same policy as claimed by defendant. In addition, plaintiffs continue to seek supporting documentation to claims in defendant's submitted affidavits that defendant manages and controls Daytree Construction and provides it with all of its income.
A court may strike an answer as a sanction if a defendant refuses to obey a disclosure order or wilfully fails to disclose information that the court determines should have been disclosed ( seeCPLR 3126; Hoi Wah Lai v. Mack, 89 AD3d 990, 933 N.Y.S.2d 712 [2d Dept 2011]; Thompson v. Dallas BBQ, 84 AD3d 1221, 923 N.Y.S.2d 357 [2d Dept 2011]; Mazza v. Seneca, 72 AD3d 754, 899 N.Y.S.2d 294 [2d Dept 2010] ). The drastic remedy of striking an answer is inappropriate unless there is a clear showing that defendant's failure to comply with discovery demands was willful or contumacious ( see Hoi Wah Lai v. Mack, 89 AD3d 990,supra; Polsky v. Tuckman, 85 AD3d 750, 924 N.Y.S.2d 830 [2d Dept 2011]; Moray v. City of Yonkers, 76 AD3d 618, 906 N.Y.S.2d 508 [2d Dept 2010] ). Willful and contumacious conduct may be inferred from a party's repeated failure to comply with court-ordered discovery together with inadequate explanations for the failures to comply or failure to comply with court-ordered discovery over an extended period of time ( see Orgel v. Stewart Tit. Ins. Co., 91 AD3d 922, 938 N.Y.S.2d 131 [2d Dept 2012], lv denied19 NY3d 803, 946 N.Y.S.2d 106 [2012];Commisso v. Orshan, 85 AD3d 845, 925 N.Y.S.2d 612 [2d Dept 2011]; Rock City Sound, Inc. v.. Bashian & Farber, LLP, 83 AD3d 685, 920 N.Y.S.2d 394 [2d Dept 2011]; Friedman, Harfenist, Langer & Kraut v. Richard Bruce Rosenthal, 79 AD3d 798, 914 N.Y.S.2d 196 [2d Dept 2010] ).
Here, plaintiffs' request is not supported by an affirmation of good faith, as required by 22 NYCRR § 202.7 ( see Uniform Rules for the Trial Courts [22 NYCRR] § 202.7[a][2],[c]; Hoi Wah Lai v. Mack, 89 AD3d 990,supra; Quiroz v. Beitia, 68 AD3d 957, 893 N.Y.S.2d 70 [2d Dept 2009]; Dennis v. City of New York, 304 A.D.2d 611, 758 N.Y.S.2d 661 [2d Dept 2003] ). In addition, plaintiffs have failed to make the requisite showing that defendant's failure to completely comply with discovery demands was willful or contumacious ( see Hoi Wah Lai v. Mack, 89 AD3d 990,supra ). Therefore, that portion of plaintiffs' motion is denied.
Plaintiffs also seek partial summary judgment on their cause of action alleging violation of Labor Law § 240(1) on the ground that plaintiff was subjected to an elevation-related risk and was not provided with a proper or adequate safety devices to prevent his fall. Plaintiff asserts in his affidavit in support that he was not provided with any safety lines, safety belts, scaffolding, lifelines, crawling boards, toe boards or other fall-arresting devices and that there was no fencing, safety rails, guardrails or other such devices placed around the perimeter of the roof. Plaintiff's submissions include the pleadings, the affidavits of plaintiff and of Stanley H. Fein, a professional engineer, the deposition transcripts of plaintiff, Thomas Datre and Clara Datre, and the affidavits of Clara Datre.
Defendant requests summary judgment dismissing the complaint on the ground that the record demonstrates that defendant is the alter ego of plaintiff's employer such that plaintiff's recovery is barred by the Workers' Compensation Law. Defendant also argues that plaintiff's motion for partial summary judgment should be denied based on plaintiff's refusal to follow instructions and use available safety devices. Defendant's submissions include the pleadings, and the affidavits of Kimberly Graziano and Thomas Datre.
Plaintiff's deposition testimony on December 8, 2011 reveals that he first began working for Daytree Construction as an hourly employee in 1994, that he was trained by Tom Datre, and that he worked continuously for Daytree Construction on residential construction from 1994 to 2010. Plaintiff testified that while working for Daytree Construction he never wore a harness or a safety rope and never used a cleat or netting. In addition, he testified that he never heard of defendant, Daytree Custom Builders. Plaintiff explained that at the time of his accident, he and his boss, Tom Datre, had been working on a one-level extension to an existing home for approximately one month and that they were the only workers at the site. He stated that the box truck that he took to the work site had no hard hats, belts, harnesses, rope, netting or safety devices. Plaintiff also testified that the accident occurred on the second day of sheathing the middle top portion of the roof. He did not request any safety equipment prior to the accident. Plaintiff further testified that the accident occurred when he was standing on the roof peak and was pushing snow down one side of the roof with a broom, after being instructed to do so by his boss, and he lost his balance and slipped. According to plaintiff, his boss told him one day prior that he wanted the snow removed because he did not want the plywood to “delaminate.” Plaintiff also stated that he did receive workers' compensation benefits.
Thomas Datre testified at his deposition on January 5, 2012 that he is self-employed, that he and his wife, Clara Datre, are the officers of Daytree Custom Builders, Inc., and that the company has two employees consisting of an office manager and a secretary. He explained that his business builds mostly new homes but sometimes they renovate. Mr. Datre added that he and his wife were also officers of Daytree Construction Co., Inc., which employed plaintiff, and that its business involved performing the labor, framing and finishing work, at the job sites. He explained that both companies shared the same office space but that one company “was for the contracts for any new homes or renovation jobs we did, and the other one was just strictly for the labor on the jobs.” Mr. Datre stated that plaintiff was never employed by defendant, Daytree Custom Builders, Inc., and that it was common practice in 2009 and 2010 for defendant and Daytree Construction to enter into a contract for work to be performed by Daytree Construction. In addition, he testified that while plaintiff took the company box truck which contained all of the equipment including ladders and scaffolding used by Daytree Construction to the work site, he drove an SUV, which did not contain any equipment. According to Mr. Datre, the box truck contained safety equipment such as rope and hard hats. He added that a toe board was the only safety device used on the date of the accident, and that it consisted of a two-by-four nailed to the plywood into the rafters for safety as well as to bring plywood up to the worker on the roof. Also according to Mr. Datre, at the time that he arrived at the job site the morning of plaintiff's accident, plaintiff was standing on a ladder pushing the snow off of the top of the rafters with a six-foot push broom so that he could put the sheathing down. Mr. Datre denied giving plaintiff instructions about clearing snow off of the roof and stated that the broom had never been used prior to this time to clean snow off of the job site. Mr. Datre further stated that after they had completed installing sheets of plywood on one side of the roof and just prior to plaintiff's fall as plaintiff was nailing the last piece of plywood, he told plaintiff he was going to make a “one-by-four push” to push the snow off of the other side of the roof. He believed that the “one-by-four push” broom was a safety device. Mr. Datre did not witness plaintiff's fall. He also testified that there were toe boards, one foot wide, along the entire length of the bottom of the other side of the roof that he and plaintiff had installed one day earlier. According to Mr. Datre, plaintiff explained to him at the emergency room that same day that plaintiff “stepped over” to clean the snow with a broom and slipped.
Mr. Datre's affidavit dated March 24, 2011 indicates that on the morning of the accident, after the first row of sheathing was completed, he installed a two-by-four cleat along the bottom for safety and that as he and plaintiff approached the roof ridge he advised plaintiff that the snow had to be removed from on the other side of the roof. He states that he “specifically instructed” plaintiff “to stay on the side of the roof with the dry plywood and cleat” while he descended to make a one-by-four push shovel. Mr. Datre also states that after the accident, plaintiff told him that he stepped on wet plywood while removing snow with a broom. Mr. Datre further states that “[p]laintiff did exactly what I instructed him not to do” and began to remove snow before he could return with the push broom and before he could install cleats.
At her deposition on March 9, 2012, Clara Datre testified that the two companies filed separate income tax returns and maintained separate accounts in the same bank. By affidavit dated March 22, 2011, Clara Datre states that defendant and Daytree Construction use the same administrative personnel, office, office equipment, material and supplies and the same vehicles. In addition, she states that they maintain the same policies of insurance and that the workers' compensation policy providing plaintiff's benefits is the same policy issued to defendant. Mrs. Datre adds that defendant manages and controls Daytree Construction and provides defendant with all of its income.
The affidavit dated September 13, 2012 of Kimberly Graziano, president of K.A.G. Insurance, the insurance brokers for defendant and Daytree Construction, explains that Daytree Construction was solely listed on the workers' compensation policy because it was a renewal of a policy that had been in existence prior to the incorporation of defendant, and defendant was solely listed on the certificate of workers' compensation insurance and the general liability policy because it was the company that executed the construction contract and would be performing the work. She adds that nevertheless both corporations were covered by the workers' compensation policy and the general liability policy.
“[T]he receipt of workers' compensation benefits is the exclusive remedy that a worker may obtain against an employer for losses suffered as a result of an injury sustained in the course of employment” (Slikas v. Cyclone Realty, LLC, 78 AD3d 144, 150, 908 N.Y.S.2d 117 [2d Dept 2010]; seeWorkers' Compensation Law §§ 10, 11, 29[6]; Reich v. Manhattan Boiler & Equip. Corp., 91 N.Y.2d 772, 676 N.Y.S.2d 110 [1998];Hofweber v. Soros, 57 AD3d 848, 870 N.Y.S.2d 98 [2d Dept 2008]; Pereira v. St. Joseph's Cemetery, 54 AD3d 835, 864 N.Y.S.2d 491 [2d Dept 2008] ). The exclusivity provisions of the Workers' Compensation Law also extend to entities which are alter egos of, or engaged in a joint venture with, the injured worker's employer ( see Gonzalez v. Woodbourne Arboretum, Inc., 100 AD3d 694, 954 N.Y.S.2d 113 [2d Dept 2012]; Samuel v. Fourth Ave. Assoc., LLC, 75 AD3d 594, 906 N.Y.S.2d 67 [2d Dept 2010]; Degale–Selier v. Preferred Mgt. & Leasing Corp., 57 AD3d 825, 870 N.Y.S.2d 94 [2d Dept 2008] ).
A defendant may establish itself as the alter ego of a plaintiff's employer by demonstrating that one of the entities controls the other or that the two operate as a single integrated entity ( see Samuel v. Fourth Ave. Assoc., LLC, 75 AD3d 594,supra; Cappella v. Suresky at Hatfield Lane, LLC, 55 AD3d 522, 864 N.Y.S.2d 316 [2d Dept 2008]; Ortega v. Noxxen Realty Corp., 26 AD3d 361, 809 N.Y.S.2d 546 [2d Dept 2006]; Crespo v. Pucciarelli, 21 AD3d 1048, 803 N.Y.S.2d 586 [2d Dept 2005]; Thompson v. Bernard G. Janowitz Constr. Corp., 301 A.D.2d 588, 754 N.Y.S.2d 50 [2d Dept 2003]; Dennihy v. Episcopal Health Servs., 283 A.D.2d 542, 724 N.Y.S.2d 768 [2d Dept 2001] ). Closely associated corporations, even ones that share directors and officers, will not be considered alter egos of each other if they were formed for different purposes, neither is a subsidiary of the other, their finances are not integrated, assets are not commingled, and the principals treat the two entities as separate and distinct ( see Lee v. Arnan Dev. Corp., 77 AD3d 1261, 909 N.Y.S.2d 826 [3d Dept 2010]; Longshore v. Paul Davis Systems of Capital Dist., 304 A.D.2d 964, 759 N.Y.S.2d 204 [3d Dept 2003] ). In addition, a mere showing that the entities are related is insufficient where a defendant cannot demonstrate that one of the entities controls the day-to-day operations of the other ( see Samuel v. Fourth Ave. Assoc., LLC, 75 AD3d 594,supra; Mournet v. Educational & Cultural Trust Fund of Elec. Indus., 303 A.D.2d 474, 756 N.Y.S.2d 433 [2d Dept 2003]; Constantine v. Premier Cab Corp., 295 A.D.2d 303, 743 N.Y.S.2d 516 [2d Dept 2002] ).
Here, although defendant submitted some evidence that defendant and plaintiff's employer, Daytree Construction, were related entities, that is, function as one company and share a common purpose, defendant failed to submit sufficient evidentiary proof to establish that it was an alter ego of plaintiff's employer Daytree Construction entitling defendant to judgment as a matter of law ( see Andrade v. Brookwood Communities, Inc., 97 AD3d 711, 947 N.Y.S.2d 912 [2d Dept 2012]; Slikas v. Cyclone Realty, LLC, 78 AD3d 144,supra; Samuel v. Fourth Avenue Assoc., LLC, 75 AD3d 594,supra; cf., Ortega v. Noxxen Realty Corp., 26 AD3d 361, 809 N.Y.S.2d 546 [2d Dept 2006]; Crespo v. Pucciarelli, 21 AD3d 1048, 803 N.Y.S.2d 586 [2d Dept 2005]; Thompson v. Bernard G. Janowitz Constr. Corp., 301 A.D.2d 588, 754 N.Y.S.2d 50 [2d Dept 2003] ).
Instead, the submissions raise a question of fact as to whether defendant is an “alter ego” of Daytree Construction ( see George v. IBC Sales Corp., 76 AD3d 950, 907 N.Y.S.2d 507 [2d Dept 2010]; Cruceta v. Funnel Equities, Inc., 286 A.D.2d 747, 730 N.Y.S.2d 531 [2d Dept 2001] ). Therefore, defendant's motion for summary judgment dismissing the complaint is denied. Inasmuch as it cannot be determined at this juncture whether defendant is entitled to immunity under the Workers' Compensation Law, plaintiffs' motion for partial summary judgment as to liability on the Labor Law § 240(1) claim must be addressed on the merits ( see Mendoza v. Velastate Corp., 99 AD3d 401, 951 N.Y.S.2d 513 [1st Dept 2012] ).
Labor Law § 240(1) imposes absolute liability on building owners and contractors whose failure to “provide proper protection to workers employed on a construction site” proximately causes injury to a worker ( see Wilinski v. 334 East 92nd Hous. Dev. Fund Corp., 18 NY3d 1, 935 N.Y.S.2d 551 [2011];Misseritti v. Mark IV Const. Co., Inc., 86 N.Y.2d 487, 490, 634 N.Y.S.2d 35 [1995];Henry v.. Eleventh Ave., L.P., 87 AD3d 523, 524, 928 N.Y.S.2d 72 [2d Dept 2011] ). The type of accident triggering Labor Law § 240(1) coverage is one that will sustain the allegation that an adequate “scaffold, hoist, stay, ladder or other protective device” would have “shield[ed] the injured worker from harm directly flowing from the application of the force of gravity to an object or person” (Runner v. New York Stock Exch., Inc., 13 NY3d 599, 603, 895 N.Y.S.2d 279 [2009], quoting Ross v. Curtis–Palmer Hydro–Elec. Co., 81 N.Y.2d 494, 501, 601 N.Y.S.2d 49 [1993] [emphasis removed]; see Salazar v. Novalex Contr. Corp., 18 NY3d 134, 936 N.Y.S.2d 624 [2011] ). “Where there is no statutory violation, or where the plaintiff is the sole proximate cause of his or her own injuries, there can be no recovery under Labor Law § 240(1)” (Treu v. Cappelletti, 71 AD3d 994, 997, 897 N.Y.S.2d 199 [2d Dept 2010]; see Poracki v. St. Mary's R.C. Church, 82 AD3d 1192, 1194, 920 N.Y.S.2d 233 [2d Dept 2011] ). Also, “[w]here the inconsistent versions of how the accident occurred raise a question of fact as to the credibility of the injured plaintiff, they [are] insufficient to prove, as a matter of law, that the defendants' failure to provide the injured plaintiff with proper protection proximately caused his injuries” (Reborchick v. Broadway Mall Props., Inc., 10 AD3d 713,714, 781 N.Y.S.2d 899 [2d Dept 2004]; see Duran v. Kijak Family Partners, L.P., 63 AD3d 992, 994, 883 N.Y.S.2d 226 [2d Dept 2009] ).
Here, plaintiffs established their prima facie entitlement to judgment as a matter of law by submitting evidence sufficient to demonstrate that plaintiff was not provided with an adequate safety device and that this failure was a proximate cause of his injuries ( see Henry v. Eleventh Ave., L.P., 87 AD3d 523,supra; see also Vetrano v. J. Kokolakis Contr., Inc., 100 AD3d 984, 954 N.Y.S.2d 646 [2d Dept 2012] ). The burden then shifted to defendant to come forward with sufficient evidence to raise a triable issue of fact ( see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 508 N.Y.S.2d 923 [1986];Zuckerman v. City of New York, 49 N.Y.2d 557, 427 N.Y.S.2d 595 [1980] ). Defendant failed to raise an issue of fact that plaintiff's failure to heed his boss's instructions to stay on the dry side of the roof was the sole proximate cause of his injuries ( see Gordon v. Eastern Ry. Supply, 82 N.Y.2d 555, 606 N.Y.S.2d 127 [1993];Wonderling v. CSX Transp. Inc., 34 AD3d 1244, 824 N.Y.S.2d 839 [4th Dept 2006]; Guaman v. New Sprout Presbyt. Church of NY, 33 AD3d 758, 822 N.Y.S.2d 635 [2d Dept 2006]; Adams v. Cimato Bros., 207 A.D.2d 997, 617 N.Y.S.2d 251 [4th Dept 1994]; cf. Serrano v. Popovic, 91 AD3d 626, 936 N.Y.S.2d 254 [2d Dept 2012] ), and any comparative negligence on the plaintiff's behalf is not a defense to a claim under Labor Law § 240(1) ( see Stolt v. General Foods Corp., 81 N.Y.2d 918, 597 N.Y.S.2d 650 [1993];Kwang Ho Kim v. D & W Shin Realty Corp., 47 AD3d 616, 852 N.Y.S.2d 138 [2d Dept 2008]; cf. Yax v. Development Team, Inc., 67 AD3d 1003, 893 N.Y.S.2d 554 [2d Dept 2009] ). In addition, there is no evidence that plaintiff refused to use a safety device or that the “one-by-four push” broom was a safety device ( see Santo v. Scro, 43 AD3d 897, 841 N.Y.S.2d 627 [2d Dept 2007]; cf., Ortiz v. 164 Atlantic Ave., LLC, 77 AD3d 807, 909 N.Y.S.2d 745 [2d Dept 2010]; Devine v. Chase Manhattan Bank, N.A., 276 A.D.2d 664, 717 N.Y.S.2d 544 [2d Dept 2000] ). Therefore, that portion of plaintiffs' motion for partial summary judgment on liability for violation of Labor Law § 240(1) is granted contingent upon a determination at trial that the complaint against defendant is not barred by the exclusivity provisions of the Workers' Compensation Law ( see Nelson v. Shaner Cable, Inc., 2 AD3d 1371, 770 N.Y.S.2d 498 [4th Dept 2003] ).
Accordingly, that portion of the motion by plaintiffs for partial summary judgment on their Labor Law § 240(1) claim is granted contingent upon a determination at trial that the complaint against defendant is not barred by the exclusivity provisions of the Workers' Compensation Law, and the remaining portion of plaintiffs' motion and the motion by defendant are denied.