Summary
striking down an administrative agency's regulation for expanding liability in a manner inconsistent with New York State Labor Law
Summary of this case from Mayfield v. EvansOpinion
Argued April 4, 2000.
May 11, 2000.
APPEAL, by permission of the Court of Appeals, from an order of the Appellate Division of the Supreme Court in the First Judicial Department, entered April 20, 1999, which affirmed an order of the Supreme Court (Douglas E. McKeon, J.), entered in Bronx County, granting motions by defendants and third-party defendants for summary judgment dismissing the complaint and the third-party complaint.
Weiss v. City of New York, 260 A.D.2d 249, affirmed.
Julien Schlesinger, P.C., New York City (David Jaroslawicz and Robert J. Tolchin of counsel), for appellants.
Faust Goetz Schenker Blee, L.L.P, New York City (Jonathan Inker and Marisa Goetz of counsel), of New York City IDA, third party defendant respondent.. Law Offices of Sherwin Rear, New York City (Sherwin Rear of counsel), for K B Furniture Warehouse, third-party defendant respondent..
This appeal deals with statutory and regulatory responsibilities concerning factory elevator safety under Article 11 of the Labor Law. Plaintiff, an employee at a furniture factory in the Bronx, was seriously injured when he fell down a factory elevator shaft that he claims was maintained in violation of applicable safety requirements. The issue before us is whether the defendant-building owner is statutorily liable for plaintiff's injuries even though it did not operate the factory. We hold that it is not.
In 1986, third-party defendant K B Furniture Warehouse entered into a sale and leaseback agreement with defendant, the New York City Industrial Development Agency ("N.Y.C.I.D.A."), in connection with the subject building. Under this arrangement, K B received financing by tendering title of the building to N.Y.C.I.D.A. and then leasing it back from N.Y.C.I.D.A. It is undisputed that N YC.I.D.A. had no involvement in or responsibility for the operation, maintenance or control of the building.
In his action against N.Y.C.I.D.A., plaintiff alleged that, as "owner" of the building, N.Y.C.I.D.A. was liable for failing to comply with various elevator safety regulations promulgated by the Board of Standards and Appeals pursuant to Labor Law § 255. N.Y.C.I.D.A. moved for dismissal, arguing that responsibility for observance of elevator safety regulations falls solely to the operator of the factory and that a non-operating owner is not statutorily liable. Supreme Court granted N.Y.C.I.D.A.'s motion to dismiss and the Appellate Division affirmed. Having granted leave, we affirm as well.
Plaintiff also sued defendants the City of New York and the New York City Department of Buildings (collectively, the "City"). Because plaintiff has abandoned its claims against the City, we confine our discussion to defendant N.Y.C.I.D.A.
Three provisions — two Labor Law statutes and one regulation — are at issue. The statutes, Labor Law §§ 255 and 316(1), address what must be done in connection with factory elevator safety and who is accountable. Section 255 requires that elevators be so "maintained and operated as to be safe for all persons." Section 316(1) provides that "except as in this article otherwise provided," liability for the nonobservance of factory safety provisions (including section 255) rests solely on "the person operating the factory."
The regulation, promulgated by the Board of Standards and Appeals pursuant to section 255, provides that "the owner shall be * * * punishable for the non-observance" of various elevator safety regulations here at issue (N.Y.C.R.R. 8-1.12[1]). The Board defines "owner" as the
"owner or owners of the freehold of the premises or the lessee or joint lessees of the whole thereof, or his, her or their agent in charge of the property" (N.Y.C.R.R. 8-1.1(d) [emphasis added]).
The parties disagree as to whether N.Y.C.R.R. 8-1.12(1), which imposes liability on owners, is inconsistent with Labor Law § 316(1), which imposes liability on operators. Plaintiff argues that fixing responsibility on a non-operating "owner" pursuant to the regulation is compatible with section 316(1) by virtue of that section's conditional language — "except as in this article otherwise provided." In response, N.Y.C.I.D.A. asserts that thestatutory obligation under section 316(1) extends only to factoryoperators and no other Article 11 section provides otherwise. N YC.I.D.A. contends that holding a non-operating owner responsible for elevator safety violations, as prescribed by N.Y.C.R.R. 8-1.12(1), an agency regulation, would contradict the clear language of section 316(1), the controlling statute. We agree with N.Y.C.I.D.A.
It is a fundamental principle of administrative law that an agency cannot promulgate rules that contravene the will of the Legislature (see, Finger Lakes Racing Assn v. New York State Racing Wagering Bd., 45 N.Y.2d 471, 480; see also,Beer Garden, Inc. v. New York State Liquor Auth., 79 N.Y.2d 266, 276-277; State Division of Human Rights v. Genesee Hosp., 50 N.Y.2d 113, 118). If an agency regulation is "out of harmony" with an applicable statute, the statute must prevail (Finger Lakes, supra, at 480-81).
By expanding liability administratively, N.Y.C.R.R. 8-1.12(1) conflicts with Labor Law § 316(1). This court previously has recognized that the Legislature, by enacting section 316(1), intended to confine Article 11 responsibility for elevator safety to factory operators. Over 60 years ago, in a case remarkably similar to the case now before us — Liebowitz v. Denison Realty Corp. ( 250 A.D. 204, aff'd 277 N.Y. 670) — plaintiff, a factory employee, met with a fatal mishap while using the factory's elevator. The owner had leased the entire factory building to plaintiff's employer, the company operating the factory. Plaintiff's estate sued the owner, alleging violations of applicable Board elevator safety regulations. The statutory and regulatory schemes governing factory elevator safety then in place were virtually as they are now.
Labor Law §§ 255 and 316(1) have not changed sinceLiebowitz was decided (McKinney 1930). The Board regulations then in place provided that factory elevators "shall at all times be maintained by the owner in a safe condition and in conformity with the requirements of these rules" (Elevator Rules of the Board of Standards and Appeals, Rule 1 [Revised May 13, 1919]).
Plaintiff's side prevailed at Supreme Court but the Appellate Division reversed, holding that the non-operating owner was "under no duty to maintain the elevator in a safe condition (Labor Law § 316)" (Liebowitz v. Denison Realty Corp., supra, 250 A.D. 204, 205 [1st Dept 1938]). This Court affirmed without opinion ( 277 N.Y. 670; see also, Sbuttoni v. 108-114 Park Place Corp., 23 N.Y.2d 796 [affirming lower court's dismissal of statutory claim against a non-operating owner for elevator safety violations]; Carlson v. Costan Corp., 9 N.Y.2d 705 [same]; Dell'Olio v. Mastronardi, 267 A.D. 829 ["If defendants did not operate and control the building * * * they would not be responsible for a violation of section 255 of the Labor Law."]).
The regulation upon which plaintiff relies is therefore invalid insofar as it conflicts with Labor Law § 316(1) by imposing liability on non-operating owners. Our conclusion is fortified by comparing sections 316(1) and 316(2). In enacting section 316(2), the Legislature provided that non-operating "owners" are ultimately responsible for complying with Article 11 only if their buildings are "tenant-factory buildings." Because a tenant-factory building — in contrast to the building in this case — is shared by multiple occupants, it is apparent that the Legislature went out of its way to impose liability on the owner to assure uniformity in compliance and accountability. Were we to conclude otherwise, section 316's distinction between tenant-factory owners and other factory owners (as N.Y.C.I.D.A., here) would be rendered meaningless.
The statute defines a "tenant-factory building" as "a building, separate parts of which are occupied and used by different persons and one or more of which parts is used as a factory" (Labor Law § 315[2]). Plaintiff concedes that the subject building is not a tenant-factory building.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
Order affirmed, with costs. Opinion by Judge Rosenblatt. Chief Judge Kaye and Judges Bellacosa, Smith, Levine, Ciparick and Wesley concur.