Opinion
L24/2017
03-05-2020
STATE of New York, Plaintiff, v. AXEL ANDERSON, INC. and Joseph F. Artego, Defendants. Axel Anderson, Inc., Third-Party Plaintiff, v. Wright Equipment Corp., Inc., Third-Party Defendant.
Letitia A. James, Attorney General of the State of New York By: Denis R. Hurley, Jr., Assistant Attorney General, Attorney for Respondent, The Capitol, Albany, New York 12224-0341 Lester Schwab Katz & Dwyer, LLP By: Thomas B. Coppola, Esq., Attorneys for Defendants Axel Anderson, Inc. and Joseph F. Artego, 100 Wall Street, New York, New York 10005 Haworth Barber & Gerstman, LLC, Attorneys for Third-Party Defendant Wright Equipment Corp. By: Barry Gerstman, Esq., 45 Broadway, Suite 2110, New York, New York 10006
Letitia A. James, Attorney General of the State of New York By: Denis R. Hurley, Jr., Assistant Attorney General, Attorney for Respondent, The Capitol, Albany, New York 12224-0341
Lester Schwab Katz & Dwyer, LLP By: Thomas B. Coppola, Esq., Attorneys for Defendants Axel Anderson, Inc. and Joseph F. Artego, 100 Wall Street, New York, New York 10005
Haworth Barber & Gerstman, LLC, Attorneys for Third-Party Defendant Wright Equipment Corp. By: Barry Gerstman, Esq., 45 Broadway, Suite 2110, New York, New York 10006
Denise A. Hartman, J.
The State of New York commenced this action against defendants Axel Anderson, Inc. and Joseph Artego seeking damages arising from an accident which occurred when an oversized piece of equipment known as a trommel that defendants were transporting on the Long Island Expressway struck the underside of the Halsey Manor Bridge. Defendants commenced a third-party action against Wright Equipment Corp., Inc., the owner of the trommel that had contracted with Axel Anderson to transport it, asserting claims for indemnification and contribution.
Pending before the Court are two post-discovery motions for summary judgment. First, the State seeks summary judgment against Axel Anderson and Artego as to liability, damages, and collection fees. Second, third-party defendant Wright Equipment seeks summary judgment dismissing the Axel Anderson's third-party complaint against it for indemnification and contribution.
For the reasons that follow, the State's motion is granted to the extent that it seeks summary judgment on the issue of liability, and it is denied to the extent it seeks summary judgment on the amount of damages and collection fees. Wright Equipment's motion is granted to the extent that it seeks dismissal of the indemnity claim and denied to the extent that it seeks dismissal of the claim for contribution.
Factual Background
In the spring of 2014, Wright Equipment arranged with Axel Anderson to transport a large item of equipment known as a trommel from a storage yard in Calverton, New York to a site in Ronkonkoma, New York. A trommel is a mechanical screening machine used to separate materials, such as stone or soil. The trommel involved here is a large, self-contained, wheeled unit that can be towed without being loaded onto a flatbed trailer.
On May 22, 2014, Axel Anderson's employee Joseph Artego, a commercial licensed driver, drove his truck to Wright's equipment yard where the trommel trailer had been prepared for transport. He engaged in some communications with Wright employees while hooking the trommel trailer to his truck, but he took no measurements. He drove off the lot toward his destination, accompanied by Wright Equipment employees in two separate vehicles, one in front of Artego's truck and one following behind. Soon after leaving the Wright Equipment yard, while driving along the Long Island Expressway, the trommel struck the underside of the Hasley Manor Bridge. The clearance under the Halsey Manor Bridge is approximately 14 feet, 6 inches. Vehicles and equipment exceeding 13 feet, 6 inches are prohibited from most highways without a special permit.
The Halsey Manor bridge sustained substantial damage, including distortion of the fascia girder over the westbound lanes of the Long Island Expressway. According to the State, the removal and replacement of the 40-feet-long damaged girder necessitated the erection of a temporary support beam, the closure of all westbound lanes of traffic, and diversion of traffic with attendant signage and concrete barriers. The State claims that it cost $1,593,309 to effectuate the repairs. Defendants' experts maintain that the erection of a temporary support beam and diversion costs were unnecessary and estimate the cost of repairs at $375,464.
Axel Anderson and Wright Equipment blame each other for the damage to the Halsey Manor Bridge caused by the oversized trommel. They submitted conflicting deposition testimony about what transpired at the equipment yard when defendant Artego picked up the trommel trailer and hitched it to his truck. Artego testified that Wright Equipment employees told him that the trommel had been prepared for transport and that they had measured the height of the trommel as 13 feet, 7 inches. He testified further that Wright Equipment employees knew the route and accompanied him from the equipment yard to their destination. A Wright Equipment employee agreed that when Artego arrived at the equipment yard the trommel was "folded, secured, and ready to go." But he said he told Artego that the height of the trommel was measured at 16 feet, and that Artego said it did not look that high and took no measurements himself.
Analysis
On a motion for summary judgment, "the proponent of [the] motion 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" ( Stonehill Capital Mgt. LLC v. Bank of the W. , 28 NY3d 439, 448 [2016] [internal quotation marks and citation omitted] ). Upon making a prima facie showing, "the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" ( Alvarez v. Prospect Hosp. , 68 NY2d 320, 324 [1986] ).
The State's Motion for Partial Summary Judgment Against Defendants on the Issue of Liability Is Granted.
Vehicle and Traffic Law § 385, which establishes maximum dimensions and weights of vehicles on New York highways, provides in relevant part:
"No person shall operate or move, or cause or knowingly permit to be operated or moved on any highway or bridge thereon, in any county not wholly included within a city, any vehicle or combination of vehicles of a size or weight exceeding the limitations provided for in this section....
2. The height of a vehicle from under side of tire to top of vehicle, inclusive of load, shall be not more than thirteen and one-half feet. Any damage to highways, bridges or highway structures resulting from the use of a vehicle exceeding thirteen feet in height where such excess height is the proximate cause of the accident shall be compensated for by the owner and operator of such vehicle " (Emphasis added).
This provision imposes per se liability on the owner and operator of a vehicle exceeding 13 feet, 6 inches, where such excess height is the proximate cause of damage to bridges and highway structures ( State of New York v. Gage , 53 AD2d 794, 795 [3d Dept 1976] ; New York State Thruway Auth. v. Maislin Bros. Transp. , 35 AD2d 301, 302-303 [4th Dept 1970] ).
Here, plaintiff has demonstrated prima facie that the trommel was being towed by a tractor owned by defendant Axel Anderson and operated by defendant Artego on the state highway; that the trommel struck and damaged the underside of the Halsey Manor Bridge, which has a clearance of approximately 14 feet, 6 inches; and that, therefore, the trommel necessarily exceeded the height limit set forth in Vehicle and Traffic Law § 385. Artego acknowledged at his deposition testimony that he did not measure the height of the trommel before he hitched it to his tractor. But, as he proceeded in the right, west-bound lane of the Long Island Expressway beneath the Halsey Manor Bridge, he heard a boom and felt a jolt. He pulled over and saw the trommel's cylinder/drum had been knocked off by the impact with the bridge and landed on the road. A Wright Equipment employee who occupied the truck following the tractor-trommel trailer combination similarly gave deposition testimony that he saw the top of the trommel collide with the bridge.
Plaintiff also submitted the affidavit of DOT's regional structures engineer, Ronald Kudla, to establish the minimum clearance of the Halsey Manor Bridge. He explained that DOT bridges are inspected every two years when vertical clearance measurements are taken. Attaching inspection records, he attested that the minimum vertical clearance over the right west-bound lane of the Long Island Expressway was 14 feet, 6 inches; the minimum vertical clearance over the other lanes was 14 feet, 8 inches. On the "Red Flag Report" prepared on May 22, 2014, which was also attached, the minimum vertical clearance was recorded as 14 feet, 7 inches. Kudla stated that the recordings in the biennial inspection reports and the Red Fag Report were consistent with the design plans for the bridge from 1972, which listed the design parameter for minimum vertical clearance as 14 feet, 6.75 inches.
With this evidence, the State has demonstrated prima facie that the trommel, towed by the tractor owned by defendant Axel Anderson and operated by defendant Artego on the state highway, struck and damaged the underside of the Halsey Manor Bridge; and that, because the Halsey Manor Bridge has a clearance of approximately 14 feet, 6 inches, the trommel must have exceeded the height requirement set forth in Vehicle and Traffic Law § 385. As a result, the State has established prima facie that defendants, as owner and operator of the tractor/trommel trailer combination, are liable to the State for the damage to the Halsey Manor Bridge.
In response, Axel Anderson has raised no question of fact on the issue of liability. While their argument that they reasonably relied on representations from employees of the Wright Equipment that the trommel did not significantly exceed the height limit may give rise to their third-party claim, it does not relieve defendants of their independent obligation to compensate the State as the owner and operator of a vehicle combination that exceeded the statutory height limit and caused damage to the bridge.
The State's Motion for Summary Judgment Against Defendants on the Issue of Damages Is Denied.
The State has provided little detail about the extent of the damage to the Halsey Manor Bridge and the nature and cost of the repairs. The Red Flag Report attached to Kudla's affidavit describes the damage to the Halsey Manor Bridge as including gouging, cracking, and misalignment of the G6 girder and associated cover plates, diaphragms, and flanges. The State also submitted the affidavit of Carlos Rojas, a licensed professional engineer employed by the Department of Transportation as an accident damage recovery coordinator. Based on his review of Department of Transportation files, which contained information prepared by his predecessor regarding the costs of repairing the Halsey Manor Bridge after the impact on May 22, 2014, he averred that the State paid $854,540.07 to a contractor to perform the bridge repairs; $690,056.92 to a contractor to construct a temporary cross-over ramp while the bridge repairs were being done; and $48,712.06 as the cost of DOT employees and equipment to conduct the emergency inspection of the bridge and construction inspection and monitoring, for a total cost of $1,593,309.05. Rojas attached the single-page compilation of costs prepared by his predecessor. Given the lack of detail provided regarding the repairs, plaintiff's submission is arguably insufficient to demonstrate prima facie the amount of damages.
In any event, defendants have raised material questions of fact in opposition. Defendants submitted the affidavit of licensed professional engineer Kelly Huff, who prepared a report assessing the damage and repairs to the Halsey Manor Bridge. After reviewing a long list of documents, she noted that the facia girder 6 (G6) had been previously damaged and rotated out of vertical, but that the May 22, 2014 impact exacerbated the rotation of the girder and damaged some connection plates and diaphragms. She concluded that while the replacement of the G6 girder due to excessive rotation may have been warranted, the installation of the carrier beam was not necessary, as temporary support columns were built beneath the damaged G6 girder to carry the deck loading. Defendants also submitted the affidavit of consulting engineer Barry Brower who analyzed the necessity and costs of repairs to the Halsey Manor Bridge based on his review of a long list of documents, including Rojas' affidavit and attached documentation. In his detailed report, Brower stated his conclusion that neither the carrier beam installation nor the crossover work was necessary. Adjusting the amounts claimed by the State to reflect his conclusion, he opined that the cost of reasonable repairs was $375,464.
Given this evidence, the Court finds that questions of fact exist about the necessity and cost of repairs that were made to the Halsey Manor Bridge after the May 22, 2014 impact. Plaintiff's motion for summary judgment on damages is therefore denied.
The State's Motion for Summary Judgment Against Defendants on the Issue of Collection Fees Is Denied.
The State claims that it is entitled to a 22% collection fee under State Finance Law § 18, which provides for a collection fee under certain circumstances detailed in the statute. Section 18 (2) provides that "a state agency shall mail a dated billing invoice or notice on or about the day it is dated," and gives the debtor 30 days to pay the amount demanded. Where the debtor fails to remit payment within 90 days of the submission of a billing invoice, the statute authorizes a collection fee, not to exceed 22% of the outstanding debt, "to cover the cost of processing, handling and collecting" the debt ( State Finance Law § 18 [5] ; see Lawyers' Fund for Client Protection of State of NY v. Bank Leumi Trust Co. of NY , 94 NY2d 398, 408 [2000] ; New York State Thruway Auth. v. Allied Waste Servs. of N. Am., LLC , 143 AD3d 1145, 1146-1147 [3d Dept 2016] ). The statute defines a "debt" as a "liquidated sum due and owing any state agency," with the term "liquidated" being defined as "an amount which is fixed or certain or capable of being readily calculated, whether or not the underlying liability or amount of the debt is disputed" ( State Finance Law § 18 [1] [b], [d] ; see New York State Thruway Auth. v. Allied Waste Servs. of N. Am., LLC , 143 AD3d at 1147 ] ).
Here, the State provides no evidence that it sent a bill or invoice for a liquidated sum prior to commencing this lawsuit. Instead it argues that it gave notice of the liquidated debt by service of the summons and complaint setting forth the claimed damages in this action. The State's argument continues that, because defendants have failed to pay such debt, and because the Attorney General's office charges the state agency 22% of the outstanding debt to prosecute collection actions, it is entitled to the full 22% collection fee. Defendants counter that the damages sought in this action do not constitute a liquidated debt within the meaning of State Finance Law § 18.
The State has not demonstrated that it is entitled to the 22% collection fee because it has provided no evidence that it sent defendants a bill or invoice before it commenced this action (compare State of New York v. JEDA Capital-Lenox, LLC , 59 Misc 3d 1214(A), *9 [Sup Ct, Albany County 2018], affd 176 AD3d 1443 [3d Dept 2019] ; and Commissioners of the State Ins. Fund v. Big Apple Intl. Contr. Corp. , 25 Misc 3d 1215(A), *4 [Sup Ct, NY County 2009] ). The billing procedure set forth in State Finance Law § 18 provides an opportunity for the debtor to pay the debt before the state agency incurs the costs associated with sending its cases to the Attorney General's Office for collection. Where no pre-lawsuit invoice is sent, the debtor is not given the opportunity to avoid collection fees (see Commissioners of State Ins. Fund v. Kassas , 5 Misc 3d 1012(A), *5 [Sup Ct, NY County 2004] [holding state plaintiff's "recovery of collection costs further depends on defendant's receipt of a bill"] ).
Moreover, the Third Department's decision in New York State Thruway Auth. v. Allied Waste Servs. of N. Am., LLC (143 AD3d 1145 ), which similarly involved a claim for damages arising from a collision with a state bridge overpass, appears to foreclose the State's argument that failure to pay after giving notice of the amount of a liquidated debt during the course of the lawsuit is sufficient to recover a collection fee. There, the agency had sent a notice of amount due based on early damage estimates, but the State decreased the amount demanded after further study during the lawsuit. Holding that the prior notice of the higher estimated amount was not a demand for a liquidated sum, the Third Department held that the State was not entitled to a collection fee under these circumstances. While not exactly on point, the Third Department at bottom disallowed a collection fee where a pre-litigation notice of liquidated debt was not provided.
Wright Equipment's Motion to Dismiss the Indemnification Claim Is Granted, But Its Motion to Dismiss the Contribution Claim Is Denied.
Axel Anderson's third-party complaint asserts claims for common law indemnification and contribution against Wright Equipment. In McCarthy v. Turner Constr., Inc. (17 NY3d 369, 374-375 [2011] ), the Court of Appeals summarized the principles underlying common law indemnity:
"A party's right to indemnification may arise from a contract or may be implied ‘based upon the law's notion of what is fair and proper as between the parties’ ( Mas v. Two Bridges Assocs. , 75 NY2d 680, 690 [1990] ). ‘Implied[, or common-law,] indemnity is a restitution concept which permits shifting the loss because to fail to do so would result in the unjust enrichment of one party at the expense of the other’ (id. , citing McDermott v. City of New York , 50 NY2d 211, 216-217 [1980] ; see also Rosado v. Proctor & Schwartz, Inc. , 66 NY2d 21, 24 [1985] [indemnity may be implied ‘to prevent a result which is regarded as unjust or unsatisfactory’ and ‘is frequently employed in favor of one who is vicariously liable for the tort of another’ (internal quotation marks and citations omitted) ] ). Common-law indemnification is generally available ‘in favor of one who is held responsible solely by operation of law because of his relation to the actual wrongdoer’ ( Mas , 75 NY2d at 690 ; see D'Ambrosio v. City of New York , 55 NY2d 454, 460 [1982] )."
Furthermore, the Court of Appeals held, "a party cannot obtain common-law indemnification unless it has been held to be vicariously liable without proof of any negligence or actual supervision on its own part" (id. at 377-378; see Harnden v. Lentzos , 169 AD3d 1228, 1229-1230 [3d Dept 2019] ; Hackert v. Emmanuel Cong. United Church of Christ , 130 AD3d 1292, 1295 [3d Dept 2015] ). Given these principles, Axel Anderson cannot pursue a claim for common law indemnification against Wright Equipment.
Under the Vehicle and Traffic Law, Axel Anderson and Artego, as owner and operator, respectively, of the trommel-towing tractor bore responsibility for ensuring that the towed trommel trailer did not exceed statutory height requirements and damage the State's highway structures. Unlike apartment owners who hire elevator companies to install and maintain elevators (see Rogers v. Dorchester Assoc. , 32 NY2d 553 [1973] ), for example, the owner and driver of tractors hauling potentially oversized loads are active tortfeasors involved in causing the damage when they collide with highway structures. They are not liable solely by operation of law (see Hackert v. Emmanuel Cong. United Church of Christ , 130 AD3d at 1295 ; Genesee/Wyoming YMCA v. Bovis Lend Lease LMB, Inc. , 98 AD3d 1242, 1244 [4th Dept 2012] ). As with other provisions of the Vehicle and Traffic Law, owners and operators of trailer-towing tractors, or any other vehicle on the road, are presumed to have the requisite knowledge of statutory requirements, including dimension requirements. They are involved in the business of transporting trailers and equipment. It is their prerogative to measure the trailers they haul, and they retain control to decline to transport oversized equipment or to seek special permits and travel over appropriate routes if necessary (see York v. Thompson Sta. Inc. , 172 AD3d 1593, 1597 [3d Dept 2019] ). Tractor owners and operators cannot wash their hands altogether of this liability by blindly relying on representations of the owner of the trailer or equipment to be hauled regarding compliance with Vehicle and Traffic Law § 385's height limits. Accordingly, Wright Equipment's motion for summary judgment dismissing Axel Anderson's common law indemnification claim against it must be granted.
On the other hand, Axel Anderson's contribution claim against Wright Equipment survives the present summary judgment motion. "The ‘critical requirement’ for apportionment by contribution under CPLR article 14 is that ‘[a] breach of duty by the contributing party must have had a part in causing or augmenting the injury for which contribution is sought’ " ( Raquet v. Braun , 90 NY2d 177, 183 [1972], quoting Nassau Roofing & Sheet Metal Co. v. Facilities Dev. Corp. , 71 NY2d 599, 603 [1988] ; see CPLR 1401 ; Santoro v. Poughkeepsie Crossings, LLC , 180 AD3d 12, 18 [2d Dept 2019] ; Johnson City Cent. School Dist. v. Fidelity and Deposit Co. of Md. , 272 AD2d 818, 819-920 [3d Dept 2000] ).
It is undisputed that Wright Equipment owned the trommel trailer. And, at the very least, there are questions of fact about whether Wright Equipment employees "cause[d] or knowingly permit[ted] to be operated or moved on any highway" a combination tractor/trommel trailer that exceeded the height limit of Vehicle and Traffic Law § 385. The testimony suggests that at least one Wright Equipment employee knew that the height of the trommel, folded, prepared and ready to go, was 16 feet. A Wright Equipment employee drove the truck at the head of the caravan that included Axel Anderson's tractor and oversized trommel trailer from the equipment yard to the delivery destination. Regardless of whether they object to referring to their participation in this caravan as an escort, Wright Equipment employees in the front truck appear to have chosen the route that took the caravan under the Halsey Manor Bridge, with Artego following their lead to the trommel trailer's destination, and another Wright Equipment truck following behind. Under these circumstances, Wright Equipment has not established prima facie the absence of any liability for contribution on its part, and its motion to dismiss the contribution claim must be denied.
Accordingly, it is hereby:
ORDERED that the State's motion is granted to the extent that it seeks summary judgment against Axel Anderson and Artego on the issue of liability; and it is
ORDERED that the State's motion is denied to the extent it seeks summary judgment against Axel Anderson and Artego on the amount of damages and collection fees; and it is
ORDERED that Wright Equipment's motion is granted to the extent that it seeks dismissal of Axel Anderson's indemnity claim; and it is
ORDERED that Wright Equipment's motion is denied to the extent that it seeks dismissal of Axel Anderson's claim for contribution.
This constitutes the decision and order of the Court. The original decision and order is being transmitted to plaintiff's counsel. All other papers are being transmitted to the County Clerk for filing. The signing of this decision and order does not constitute entry or filing under CPLR 2220 and counsel is not relieved from the applicable provisions of that rule respecting filing and service.
Papers Considered
1. Plaintiff's Notice of Motion for Summary Judgment, dated September 10, 2019;
2. Affirmation of Denis R. Hurley, Jr., AAG, dated September 10, 2019, with Exhibits A-K;
3. Plaintiff's Memorandum of Law in Support of Motion for Summary Judgment, dated September 10, 2019, with Exhibits A-B;
4. Affidavit of Carlos Rojas, P.E., dated August 14, 2019, with Exhibit A;
5. Affidavit of Ronald G. Kudla, dated August 19, 2019, with Exhibits A-B;
6. Affirmation of Thomas B. Coppola, Esq. in Opposition to Plaintiff's Motion, dated November 6, 2019, with Exhibit;
7. Affidavit of Kelly D. Huff, P.E., dated November 4, 2019, with Exhibits;
8. Affidavit of Barry A. Bower, dated November 1, 2019, with Exhibits;
9. Third-party Defendant's Notice of Motion for Summary Judgment, dated November 13, 2019;
10. Affirmation of Barry Gerstman, Esq. in Support of Motion for Summary Judgment, dated November 13, 2019, with Exhibits A-Q;
11. Affirmation of Daniel S. Kotler, Esq. in Opposition, dated December 12, 2019, with Exhibit A; and
12. Affirmation of Barry Gerstman, Esq. in Reply and in Further Support of Wright's Motion for Summary Judgment, dated January 10, 2020.