Opinion
No. 302217/07.
2012-06-1
Faye ROIMESHER, Plaintiffs, v. 770 LEXINGTON ASSOCIATES, LLC, Jo Morgan Chase, Colgate Scaffolding & Equipment Corp., “XYZ Corp.” (said name being fictitious and unknown meant to be the corporation who performed blacktop work at the accident location), Consolidated Edison Company of New York, Inc., O'Farrell Scaffolding & Equipment Corp and Consolidated Installations Incorporated, Defendants.
Alex Niederman, 770 Lexington Associates, LLC, New York, for Defendant. Law Office of Irina Kushel, Colgate Scaffolding & Equipment Corp, New York, for Defendant.
Alex Niederman, 770 Lexington Associates, LLC, New York, for Defendant. Law Office of Irina Kushel, Colgate Scaffolding & Equipment Corp, New York, for Defendant.
KENNETH THOMPSON, J.
Defendant COLGATE SCAFFOLDING & EQUIPMENT CORP.'s post-trial application pursuant to CPLR §§ 4211 and 4213 for contractual indemnification against Co-defendant 770 LEXINGTON ASSOCIATES LLC is DENIED.
Defendant COLGATE SCAFFOLDING & EQUIPMENT CORP (Colgate) contracted to provide a sidewalk bridge for 770 Lexington Avenue, New York, N.Y. (Building). The Contract was executed by a Mr. Charles DiMaggio on behalf of a 770 Realty Associates LLC (770 Realty). Plaintiff named 770 LEXINGTON ASSOCIATES LLC (770 Lexington) as a Defendant because it owned the Building abutting the sidewalk where she tripped and fell. And named Colgate as a Defendant because they had installed and erected the sidewalk bridge over the area where she tripped and fell. Both Colgate and 770 Lexington were found not liable for Plaintiff's injuries after trial in July 2011. This post-trial application stems from an unresolved contractual indemnification issue.
Colgate is seeking reimbursement for attorney's fees from 770 Lexington under the Contract's indemnification clause. Colgate argues that it is entitled to these fees from 770 Lexington—instead of 770 Realty—because it intended to contract with the Building's actual owner. And the Contract should be either ratified or reformed to reflect this intent. 770 Lexington opposes the motion on the grounds that it was found not negligent at trial; it is a separate and distinct legal entity from 770 Realty; and the indemnification clause is unclear and ambiguous.
The Court is unmoved by Colgate's claims that 770 Lexington is fraudulently trying to avoid liability under the Contract by having its agent misidentify it. There is no evidence that: 770 Lexington and 770 Realty are, in actuality, the same entity; 770 Realty was not an existing and viable entity capable of entering into the Contract with Colgate; 770 Realty did not live up to its obligations under the Contract; 770 Lexington benefitted from or assumed any rights under the Contract; or that 770 Realty's agent attempted to deceive Colgate as to his principal's identity. The obligation Colgate is claiming that 770 Lexington is trying to avoid arises under the Contract's indemnification clause, which the Court finds is too ambiguous to enforce regardless of whom Colgate intended to be liable.
Ratification
The Court finds that there is no basis to ratify the Contract because there is no evidence that it was signed on behalf of an undisclosed or nonexistent principal that actually benefitted from Colgate's equipment or services. Mr. DiMaggio testified, and both Peter O'Farrell and Anthony Gogliormella averred, that the Contract was being signed on behalf of 770 Realty. Compare Imero Fiorentino Associates, Inc. v. Green, 85 A.D.2d 419, 420–21 (finding that “[s]ince the [purported agent] admits that he signed on behalf of a nonexistent principal, he is individually liable under the ... agreement”).
There is no evidence that 770 Realty did not exist at the time the Contract was executed. There is also no evidence that 770 Lexington actually benefitted from the Contract or was in any way involved in the transaction. Compare id. at 421 (finding that “in the absence of any denial by defendant ..., it is fair to infer that the corporate defendant not only ratified the ... agreement ..., but it also accepted the ... equipment and services for use”). Colgate annexed litigation bills but failed to proffer any evidence that an entity other than 770 Realty actually paid for its equipment and services.
Reformation
The Court finds that there is no basis to reform the Contract because there is no evidence of a mutual mistake or fraud.
The burden upon a party seeking reformation is a heavy one since it is presumed that a deliberately prepared and executed written instrument accurately reflects the true intention of the parties: The proponent of reformation must show in no uncertain terms not only that mistake or fraud exists, but exactly what was really agreed upon between the parties.
Greater N.Y. Mut. Ins. Co. v. United States Underwriters Ins. Co ., 36 AD3d 441, 442–43 (citations omitted). “In the case of mutual mistake, it must be alleged that the parties have reached an oral agreement and, unknown to either, the signed writing does not express that agreement.” United States Underwriters Ins. Co., 36 AD3d at 443 (citations omitted). Both Peter O'Farrell and Anthony Gogliormella averred that they were told by Mr. DiMaggio that 770 Realty was the contracting party, a fact reflected in the February 26, 2007 version of the Contract.
[I]n the case of unilateral mistake, it must be alleged that one party to the agreement fraudulently misled the other, and that the subsequent writing does not express the intended agreement. A bare, conclusory claim of unilateral mistake, which is unsupported by legally sufficient allegations of fraud, fails to state a cause of action for reformation. The essential elements of a claim of fraud are misrepresentation of a material fact, falsity, scienter and deception.
Id. (citations omitted).
The Court does not find that there was a misrepresentation of a material fact in this matter, scienter or deception. Colgate contends that the Contract should be reformed to reflect 770 Lexington as the contracting party since that entity was the actual owner of the Building. The entity who actually owned the Building, however, is immaterial to a finding of which entity was the “intended” party to the Contract. “When the language of a contract is unambiguous, a court will enforce its plain meaning rather than rewrite the agreement, and its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence.” H. Fox & Co., Inc. v. Blumenfeld, 24 AD3d 722.
The Contract unequivocally states that Colgate's “Customer” was 770 Realty Associates. Nowhere in the Contract does it state or imply that the “Owner of 770 Lexington Avenue, New York, NY” is, or should be, a party to the agreement. There is also no basis to infer that “Customer” and “Owner” are interchangeable terms since the Contract expressly distinguishes the two. ( See Contract at ¶ 4 (stating that “[i]f partial dismantling of a bridge/scaffold/shoring is required by the Owner or Customer, the additional cost for lost time with be charged to the customer”).) Colgate has also failed to provide either evidence or argument that Mr. DiMaggio was aware that 770 Lexington was the actual Owner of the Building or that he was intentionally trying to withhold that fact.
Indemnification
The Court agrees with Colgate's assertion that a non-negligent party must indemnify another non-negligent party when “the indemnification agreement requires” it. See Brown v. Two Exchange Plaza Partners, 76 N.Y.2d 172, 178 (finding that “although there is no evidence of negligence on A & M's part, the indemnification agreement requires A & M to indemnify Fuller”) (citations omitted). This Court finds, however, that Colgate is not entitled to have 770 Lexington reimburse it for attorney's fees because the indemnification clause is unclear and ambiguous as to who was obligated to indemnify Colgate.
When a party is under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed. The promise should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding facts and circumstances.
Rodrigues v. N & S Bldg. Contrs., Inc., 5 NY3d 427, 433 (citations omitted). “Indemnification provisions of a contract must be strictly construed and any ambiguity construed against the drafter.” Mejia v. Trs. of Net Realty Holding Trust, 304 A.D.2d 627, 628 (citations omitted).
The Contract mentions: a “Contractor,” who was responsible “on all past due payments” under the Contract, as well as “all attorney's fees, court costs and expenses” should any past due payment issues be referred to collection. (Contract at pg. 1, Terms for Payment); a “Customer,” who was responsible for insurance ( id. at ¶ 2), inspection ( id. at ¶ 3), “additional costs for lost time” ( id. at ¶ 4), “safe use of the bridge/scaffold/shoring” ( id. at ¶ 5), reimbursing Colgate for replacement materials ( id. at ¶ 6), and paying for permit renewals ( id. at ¶ 7) and any violations ( id. at ¶ 9); and the Building's Owner, who has no enumerated obligations under the Contract ( id. at ¶¶ 1 & 4).
The clause at issue states that, Colgate Scaffolding & Equipment Corp is hereby indemnified for all damages, losses, injuries, costs and expenses of any kind and nature caused as a result of the condition of the sidewalk existence of tree pits and any trip and fall hazards and any entry on the sidewalk bridge and/or scaffold, for the duration of time that the sidewalk bridge remains at the premises and for all times after the sidewalk bridge has been removed from the premises.
The Contract assigns specific obligations to the “Contractor” and the “Customer,” and alludes to the building's “Owner.” The indemnification clause fails, however, to mention any of these parties. 770 Lexington does not have a common-law duty to indemnify Colgate because a jury found that it was not negligent in regards to Plaintiff's accident. Nor does the language and purpose of the Contract imply that 770 Lexington intended to undertake that responsibility. Colgate maintains that it intended to be indemnified by the building Owner, yet the clause that it drafted fails to clearly and unambiguously state that the building Owner intended to indemnify Colgate.
The foregoing shall constitute the decision and order of this Court.