Brown v. Two Exchange Plaza Partners

146 A.D.2d 129, 539 N.Y.S.2d 889, 1989 N.Y. App. Div. LEXIS 4384
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 6, 1989
StatusPublished
Cited by27 cases

This text of 146 A.D.2d 129 (Brown v. Two Exchange Plaza Partners) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Two Exchange Plaza Partners, 146 A.D.2d 129, 539 N.Y.S.2d 889, 1989 N.Y. App. Div. LEXIS 4384 (N.Y. Ct. App. 1989).

Opinion

OPINION OF THE COURT

Wallach, J.

In the construction industry, agreements purporting to indemnify a party against liability for damage caused by his own negligence are void as against public policy (General Obligations Law § 5-322.1). Aside from this statutory prohibition, such agreements — "which are usually 'negotiated at arm’s length between * * * sophisticated business entities’ and which can be viewed as merely 'allocating the risk of liability to third parties between themselves, essentially through the employment of insurance’ ” (Gross v Sweet, 49 NY2d 102, 108, quoting Hogeland v Sibley, Lindsay & Curr [133]*133Co., 42 NY2d 153, 158, 161) — are not subject to any special level of scrutiny. It is no more suspect for such an agreement to require indemnification in circumstances not involving negligence by the indemnitor than it is for it not to require indemnification except in circumstances that do involve negligence by the indemnitor. Whether negligence by the indemnitor is required or not is a question without policy significance to be resolved by the parties themselves as a bargaining issue at the time of contract formation (cf., Levine v Shell Oil Co., 28 NY2d 205, 213).

Plaintiff, a lather, was working on the lobby/atrium of an office building under construction when the scaffold on which he was standing collapsed. The scaffold was erected by Heydt Contracting Corp. pursuant to a subcontract with the general contractor, George A. Fuller Company, and was designed to be used in common by all of the many trades needed in the lobby/atrium, including subcontractor A & M Wallboard Company, hired by Fuller to erect the walls and ceilings. A & M in turn hired Central Furring and Dry Wall Company, plaintiff’s employer, to install the suspension system for the ceiling, work which plaintiff was doing when he fell. At trial, none of the parties were able to show why the scaffold collapsed, and all of the witnesses were agreed that it appeared completely safe and without defects just before the accident.

Plaintiff sued Fuller, who impleaded Heydt, A & M and Central Furring, who cross-claimed against each other and counterclaimed against Fuller and plaintiff. At the close of evidence, plaintiff moved for a directed verdict against Fuller, arguing that the mere collapse of the scaffold was enough to make the general contractor liable to him under Labor Law § 240 (1). The trial court granted this motion, a ruling not challenged on appeal. Fuller then moved for a directed verdict against Heydt, A & M and Central Furring, arguing that each was negligent and thus liable over to it for contribution, and that each was also its statutory agent under Labor Law § 240 (1) and liable over to it for this reason as well; in addition, as against Heydt and A & M, Fuller argued that each was liable over to it by virtue of an indemnification clause in both of their subcontracts. That clause requires the subcontractor to indemnify Fuller against, among other things, personal injury to any person "arising out of, in connection with or as a consequence of the performance of the [subcontractor’s] Work and/or any act or omission of the Subcontractor or any of its [134]*134subcontractors * * * as it relates to the scope of this Contract.”

The trial court ruled that none of the third-party defendants were Fuller’s statutory agents and dismissed those claims. In addition, it held that not only was a directed verdict against A & M and Central Furring based on negligence not warranted, but that there was insufficient evidence of negligence against those two defendants even to submit to the jury, and it accordingly dismissed all claims against them for contribution; the question of Heydt’s negligence, however, was left for the jury. No decision was made as to whether Heydt and A & M were contractually liable to Fuller for indemnification, the court apparently reserving decision on that question. A & M and Central Furring did not participate further in the trial.

The trial court instructed the jury that, aside from plaintiffs damages, the only issue before it was whether "Fuller has established that Heydt was solely responsible for the accident and is therefore liable to Fuller.” Heydt’s attorney objected on the ground that the jury should be permitted to apportion damages as between Fuller and Heydt, but the court, despite no comment from Fuller’s attorney on this aspect of the charge, adhered to its view that Fuller was entirely responsible for plaintiff’s damages under Labor Law § 240 (1) unless the jury found Heydt’s negligence to be the sole cause of the accident. When the jury itself asked whether it could apportion damages as between Fuller and Heydt, the trial court reiterated this all-or-nothing instruction. The jury came back with a verdict of $2,350,000 for plaintiff and of $500,000 for his wife on her derivative loss of services cause of action, and found that Heydt was not negligent and therefore not liable over to Fuller.

Immediately after the verdict, Fuller moved to set it aside as excessive, and renewed its motion for judgment over against Heydt and A & M based on contractual indemnification. Insofar as the motion sought to set aside the verdict, it was denied; insofar as it sought judgment over, Fuller was directed to make it on papers. A request by Fuller for directions as to when to submit such a motion went unheeded by the court. Fuller made the motion almost two months later, characterizing it as one "for a judgment pursuant to Rule 4404 CPLR”. Heydt and A & M opposed on the ground that the motion was untimely under CPLR 4405; A & M, in addition, argued that in the event it was held liable to Fuller, [135]*135it should be granted judgment over against Central Furring based on the indemnification clause in their own subcontract. That clause requires the subcontractor to indemnify A & M against injuries "arising out of or resulting from the performance of the Subcontractor’s Work * * * to the extent caused in whole or in part by any negligent act or omission of the Subcontractor * * * regardless of whether it is caused in part by [A & M].”

The trial court deemed Fuller’s motion to be one pursuant to CPLR 4404 that had to be made within 15 days of the verdict under CPLR 4405, and accordingly denied it as untimely. The court also stated that if the merits were reached, it would deny the motion on the grounds that the indemnification clause contained in Fuller’s subcontracts was by its terms inapplicable unless the subcontractor was "in some way negligent”, and, in any event, unenforceable under General Obligations Law § 5-322.1 since Fuller was found liable under Labor Law § 240 and the subcontractors were not negligent.

Only Fuller appealed from the judgment and subsequent order, assigning as error the trial court’s rulings that Heydt and A & M are not liable over to it for contractual indemnification, that Heydt is not liable over to it as a statutory agent under Labor Law § 240 (1), that its posttrial motion was untimely, and that the damages awarded plaintiff and his wife are not excessive. Although it did not file a notice of appeal, A & M argues that its alternative claim against Central Furring for contractual indemnification is reviewable under CPLR 5501. After Fuller filed its brief, it settled its excessive verdict claim with plaintiffs by paying them $1,243,855.66 in full satisfaction of the judgment, a settlement in which Heydt, A & M and Central Furring did not take part.

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Bluebook (online)
146 A.D.2d 129, 539 N.Y.S.2d 889, 1989 N.Y. App. Div. LEXIS 4384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-two-exchange-plaza-partners-nyappdiv-1989.