Opinion
107959/05.
Decided September 7, 2009.
(The plaintiffs' action was settled. This decision decided a motion involving a cross claim).
Bob Giard, Esq., Law Office of James J. Toomey, New York, NY, For Defendants Boston Properties and Times Square Tower Associates.
Frank Lombardo, Esq., Malapero Prisco LLP, New York, NY, for Defendant John Galin Sons, Inc.
In this action, plaintiff John McCarthy, a journeyman electrician, sought to recover damages for injuries he sustained when he fell from a ladder while at a building work site in Times Square on March 2, 2005. McCarthy and his wife, who asserted derivative claims, sued two owners of the building, defendants Boston Properties, Inc. and Times Square Tower Associates, LLC (collectively, the owners), and the general contractor on the job, defendant John Gallin Son, Inc. (Gallin). Gallin impleaded its subcontractor, Linear Technologies, Inc. (Linear), which impleaded its own subcontractor, Samuels Datacom, LLC (Samuels). Samuels was McCarthy's employer.
Following a bifurcated jury trial on the issue of negligence and settlement of a jury trial on damages, the owners move for judgment in their favor on their cross claim for common-law indemnification against Gallin.
FINDINGS OF FACT
Non-party Ann Taylor, Inc. hired Gallin as a construction manager, pursuant to a Standard Form of Agreement Between Owner and Construction Manager, AIA Document A121/Cmc and AGC Document 565 (1991) (Agreement). Giard Affirm., Ex F. Section 3.3.1 of the General Conditions of the Contract for Construction to the Agreement (AIA Document A201-1987) states, in pertinent part, "The Contractor [Gallin] shall supervise and direct the Work, using the Contractor's best skill and attention. The Contractor shall be solely responsible for and have control over construction means, methods, techniques, sequences and procedures for coordinating all portions of the Work under the Contract." Id., at 8.
By decision and order dated May 16, 2007, this Court granted, among other things, plaintiffs' motion for summary judgment as to liability on their Labor Law § 240 (1) against the owners. See Giard Affirm., Ex A (Decision). The Court found that "Gallin had no supervisory authority over Samuels's work," and that "Gallin did not provide any tools or ladders to the subcontractors who worked at the site." Decision, at 14. The decision was affirmed on appeal to the Appellate Division. McCarthy v Turner Constr., Inc. , 52 AD3d 333 (1st Dept 2008). Gallin did not direct McCarthy or his work. Giard Affirm., Ex G [Kondracki EBT], at 23. Gallin did not provide any ladders at the job site. Kondracki EBT, at 37, 46.
At a court conference with the parties' counsel on November 5, 2008, the parties agreed to separate trials of certain issues in this action. Lombardo Opp. Affirm., Ex C. The first trial was on the specific issue of whether plaintiff John McCarthy or his employer, Samuels, was negligent, and whether such negligence was a substantial factor in causing the accident. Id., at 3-4, 12. so as to trigger Linear's duty to indemnify Gallin and the owners. The second trial was on plaintiffs' damages. Id. at 3-4. The parties agreed that the Court would determine the remaining indemnification issues on papers to be submitted. Ibid.
It is undisputed that, at the first trial, the jury did not find that Samuels was negligent. The second trial was settled in open court for $1.6 million. Lombardo Opp. Affirm., Ex D. The owners agreed to pay half of the settlement amount; Gallin contributed the other half. Ibid. On the record, counsel to the owners stated, "At the present time there certainly is a common law indemnity claim that has been asserted by Boston Properties and Time Square Tower Associates that hasn't been disposed of." Tr., at 10. The Court noted,
"I don't think there's any doubt that Boston Properties and Times Square Associates asserted such a claim . . . But whether it has already been disposed, for example, as a result of the summary judgment decision which is law of the case and binding on everyone or whether otherwise anything said in this trial, it is premature to give you an advisory opinion on that now.
So, I understand your reservation of rights, but that doesn't — that doesn't determine, and it shouldn't be viewed as an agreement by anybody that such rights currently exists. So, it's whatever rights, if any, that you are reserving, and you can bring an appropriate motion to get that determined should you not be able to work that out amicably together."
Tr., at 11.
CONCLUSIONS OF LAW
As a threshold matter, Gallin argues that the motion is an untimely motion for summary judgment. This argument is unavailing. As set forth above, the parties agreed that, after the trials, the Court would determine the remaining indemnification issues on papers submitted. Thus, the parties agreed, in effect, to a bench trial of the owners' indemnification claims against Gallin, to be decided on papers by motion. See CPLR 4211. The Court expressly permitted the instant motion on the day of the settlement in open court. Tr., at 11. Thus, the owners' motion is not one for summary judgment, and not governed by the time frames of CPLR 3212.
Contrary to Gallin's argument, the record does not support a finding that the owners waived their cross claim for indemnification against Gallin at the court conference. "A waiver is not created by negligence, oversight, or thoughtlessness, and cannot be inferred from mere silence' [citation omitted]. Rather, there must be proof that there was a voluntary and intentional relinquishment of a known and otherwise enforceable right." Golfo v Kycia Assoc., Inc. , 45 AD3d 531 , 533 (2d Dept 2007) (internal quotation marks omitted); Courtney-Clarke v Rizzoli Intl. Publs., 251 AD2d 13 (1st Dept 1998). Here, nothing in the transcript of the conference with the Court on November 5, 2008 evinces an intent of Boston Properties LLC or Times Square Tower Associates, LLC to waive or discontinue their cross claim for indemnification against Gallin. On the contrary, Boston Properties LLC and Times Square Tower Associates, LLC continued to insist that their indemnification claim remained even after they offered $800,000 to settle the action.
"[I]t is well settled that a party may settle and then seek indemnification from the party responsible for the wrongdoing as long as the settling party shows that it may not be held liable in any degree." Cunha v City of New York , 12 NY3d 504 (2009); see Kelly v Diesel Constr. Div. of Carl A. Morse, Inc., 35 NY2d 1, 5 (1974). However, the owners and Gallin disagree as to the applicable standard for determining the party responsible for the wrongdoing.
The owners rely on Rodriguez v Metropolitan Life Ins. Co. ( 234 AD2d 156 (1st Dept 1996), and its progeny, such as Hernandez v Two E. End Ave Apt. Corp. ( 303 Ad2d 556 [2d Dept 2003]), which is often cited. In Rodriguez, the Appellate Division, First Department stated,
"a subcontractor may be obligated to indemnify under the common law upon proof that its actual negligence caused an accident, but it can also be held liable where it had the authority to direct, supervise and control the work giving rise to the injury'"
Rodriguez, 234 AD2d at 156, citing Terranova v City of New York, 197 AD2d 402 (1st Dept 1993) (emphasis supplied). Courts in the other judicial departments have repeated the standard set forth in Rodriguez and Hernandez. See e.g. Dipasquale v M.J. Ogiony Bldrs., Inc. , 60 AD3d 1338 (4th Dept 2009); Kader v City of NY Hous. Preserv. Dev. , 16 AD3d 461 (2d Dept 2005); Perri v Gilbert Johnson Enters., Ltd. , 14 AD3d 681 , 685 (2d Dept 2005); Johnson v Quail Bldrs., 247 Ad2d 699 (3d Dept 1998); Doyne v Barry, Bette, Led Duke, 246 AD2d 756 (3d Dept 1998); Welsh v County of Albany, 235 Ad2d 820 (3d Dept 1997). The owners contend that Gallin's contractual authority under its agreement with non-party Ann Taylor Inc. to supervise and direct construction work is sufficient to establish that it had the "authority to direct, supervise and control the work giving rise to the injury" articulated in Rodriguez and Hernandez.
Contrary to Gallin's contention, the owners are not asserting a claim as an alleged third-party beneficiary of Gallin's contract with non-party Ann Taylor, Inc. Rather, the owners adduce the contract as evidence of Gallin's authority to supervise McCarthy's work.
Gallin relies on cases holding that
"When an owner is held liable for injuries solely by virtue of the provisions of Labor Law § 240 (1) despite its lack of supervision or control over the work being done or proof of actual negligence, the owner is entitled to indemnity from the party who was actually responsible for the supervision, direction and control of the work the plaintiff was performing at the time of injury."
Carr v Jacob Perl Assoc., 201 AD2d 296, 297 (1st Dept 1994) (emphasis supplied); Cava Constr. Co., Inc. v Gealtec Remodeling Corp. , 58 AD3d 660 , 661-662 (2d Dept 2009); see also Young v Casabonne Bros., 145 AD2d 244 (3d Dept 1989).
To determine which standard should control, this Court returns to Rodriguez, which formulated the standard which differs from the cases that Gallin cited. Rodriguez cited Terranova v City of New York for the proposition that a subcontractor is liable for common-law indemnification where "it had the authority to direct, supervise and control the work giving rise to the injury." In Terranova, the quote appears in its full context as follows:
"Labor Law § 240 (1) imposes no liability on a subcontractor for job site injuries unless the subcontractor had the authority to direct, supervise and control the work giving rise to the injury, the burden being on the party asserting such liability, here the general contractor, to present evidence of the particular defendant's supervision and control of the activity which resulted in [the] injury" [citation omitted]. Of course, a subcontractor can also be held liable upon proof that its actual negligence contributed to the accident."
Terranova, 197 AD2d at 402 (emphasis added indicating matter quoted in Rodriguez). The court in Terranova discussed two bases of liability: (1) the liability of the subcontractor as agent under Labor Law § 240 (1), which is grounded upon the authority to direct, supervise, and control the work ( Russin v Louis N. Picciano Son, 54 NY2d 311, 318); and (2) the subcontractor's liability under a theory of negligence. It would appear that Rodriguez quoted the language from Terranova, which set forth an agent's liability under Labor Law § 240 (1), to formulate the subcontractor's liability for common-law indemnification. In doing so, Rodriguez holds that a subcontractor liable under Labor Law § 240 (1) is therefore liable for common-law indemnification to a party whose liability under the statute is only vicarious, i.e., the owner who neither controls nor directs the injured plaintiff's work.
In more recent decisions citing Rodriguez, the Appellate Division, First Department ruled that indemnification lies against the party that "had direct control over the work giving rise to the injury." Mejia v Levenbaum , 57 AD3d 216 (1st Dept 2008); Tighe v Hennegan Constr. Co., Inc. , 48 AD3d 201 (1st Dept 2008); see also Bronzino v NYNEX, 262 AD2d 236 (1st Dept 1999) (awarding common-law indemnification against the party with direct supervisory authority over plaintiff's work); see also Reilly v DiGiacomo Son, 261 AD2d 318 (1st Dept 1999) (summary judgment for contractual indemnification against general contractor denied for lack of evidence that was either negligent or exclusively supervised and controlled plaintiff's work site). Other cases define the party "actually responsible" for plaintiff's injuries as the party that "actually supervised, directed or controlled the work giving rise to the injury'." Delaney v Spiegel Assoc., 225 AD2d 1102, 1103 (4th Dept 1996) (citation omitted); Keck v Board of Trustees of Corning Community Coll., 229 AD2d 1016, 1017 (4th Dept 1996); Nappo v Menorah Campus, 216 AD2d 876, 877 (4th Dept 1996).
In light of the more recent appellate cases of the First Department, this Court may not follow the cases cited by the owners. Thus, to establish entitlement to common-law indemnification against a party "actually responsible" for the plaintiff's work, the indemnitee must establish that the party "had direct control over the work giving rise to the injury." Mejia, 57 AD3d 216, supra; Tighe, 48 AD3d 201, supra; Bronzino, 262 AD2d 236, supra. A contract for construction work with a general contractor or construction manager is not, in itself, sufficient to establish that the general contractor or construction manager actually supervised or had direct control over the injured plaintiff's work, when the general contractor or construction manager has contracted the plaintiff's work to a subcontractor. Under those circumstances, it is not reasonable to infer that the general contractor or construction manager had direct control over the plaintiff's work. Neither are the general contractor's or construction manager's inspection privileges or a general power of supervision over construction work sufficient to establish actual supervision or direct control. Otherwise, every general contractor or construction manager would owe a common law duty to indemnify the owner, because inspection privileges and/or a general power to supervise are typical duties of a general contractor or a construction manager, set forth the construction contract.
As the owners point out, in Ortega v Catamount Construction Corporation ( 264 AD2d 323 [1st Dept 1999]), the Appellate Division affirmed the ruling of the lower court granting the owner summary judgment against the construction manager for common-law indemnity, even though the appellate court stated that there was no evidence that the construction manager had direct supervision over the injured plaintiff's work. Ortega, 264 AD2d at 324. The Court agrees with Gallin that Ortega should not be followed in light of the recent appellate cases of the First Department.
In the prior decision and order dated May 7, 2007, the Court found that "Gallin had no supervisory authority over Samuels's work," and "Gallin did not provide any tools or ladders to the subcontractors who worked at the site." Decision, at 14. The Court has made the same findings on this motion, based on Kondracki's deposition testimony. Gallin's contract with non-party Ann Taylor, Inc. is not sufficient to establish that it is a party that had direct control over the work giving rise to the injury. Neither is sufficient the testimony that Gallin walked the job site for dangerous conditions, or that Gallin had given instructions at safety meetings. Thus, the owners are not entitled to common-law indemnification against Gallin.
CONCLUSION
Accordingly, the Court finds in favor of defendant Gallin, and Gallin is granted judgment dismissing the cross claim of defendants Boston Properties, Inc. and Times Square Tower Associates, LLC . It is hereby
ORDERED that the cross claim of defendants Boston Properties, Inc. and Times Square Tower Associates, LLC for contribution and common-law indemnity against defendant John Gallin Son, Inc. is dismissed; and it is further
ORDERED that the motion by defendants Boston Properties Inc. and Times Square Towers Associates, LLC is denied; and it is further
ORDERED that the Clerk is directed to enter judgment in favor of defendant John Gallin Son, Inc. accordingly.