Rodrigues v. N & S Building Contractors, Inc.

839 N.E.2d 357, 5 N.Y.3d 427, 805 N.Y.S.2d 299, 2005 NY Slip Op 7728, 2005 N.Y. LEXIS 2629

Opinions

OPINION OF THE COURT

Chief Judge Kaye.

Workers’ Compensation Law § 11 prohibits third-party indemnification or contribution claims against employers, except where the employee sustained a “grave injury,” or the claim is “based upon a provision in a written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to contribution to or indemnification of the claimant or person asserting the cause of action for the type of loss suffered.” This appeal centers on the latter exception, in particular whether the parties’ agreement satisfied statutory requirements for a viable indemnification claim. We conclude that it did.

Footnotes

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Facts

Third-party plaintiff N & S Building Contractors, Inc. was the general contractor for the construction of a single-family house located at 284 Jansen Road in Shawangunk, New York. N & S hired third-party defendant Caldas Concrete Company, Inc. as a subcontractor to erect the concrete foundation. The two companies had a longstanding relationship, having worked together approximately 20 times prior to the Jansen Road project. In February 2000 the parties entered into a one-page “Insurance, Indemnification and Safety Agreement.” The Agreement required Caldas to carry certain insurance, name N & S as an additional insured on its general liability policy and furnish N & S with a certificate from the insurer that insurance was in force. The Agreement further provided that

“[t]o the fullest extent permitted by law, Subcontractor [Caldas] shall indemnify and hold harmless N. & S. Building Contractors, Inc. and Owner against any claims, damages, losses, and expenses, including legal fees, arising out of or resulting from performance of subcontracted work to the extent caused in whole or in part by the Subcontractor or anyone directly or indirectly employed by the subcontractor.”

Finally, the Agreement stated that the “[s]afety of [Caldas’s] employees, whether or not in common work areas, is the responsibility of [Caldas].”

Caldas president Joaquin Januario signed the Agreement on February 7, 2000—the same date reflected on the certificate of liability insurance naming N & S as an additional insured under Caldas’s commercial general liability insurance policy. Approximately four months later, on June 20, 2000, Caldas began work at the Jansen Road site pursuant to an oral agreement with N&S. The following day, Jose Rodrigues, a Caldas employee working at the site, tripped, fell into a trench and was impaled on a piece of rebar. Rodrigues, and his wife derivatively, sued N&S alleging numerous causes of action, all subsequently withdrawn except those alleging violations of Labor Law § 241 (6).

N&S commenced a third-party action against Caldas and its insurer, Transcontinental Insurance Company, seeking indemnification based on the Agreement and claiming that Transcontinental’s refusal to defend and indemnify N&S was in bad faith. Supreme Court granted Caldas’s motion to dismiss that claim, concluding that, because “there was no written contract between N&S and Caldas for the work being performed at 284 Jensen [sic] Road, the site of the accident,” N & S’s claim could not be sustained. The Appellate Division affirmed, holding that “the agreement does not unambiguously and expressly provide that Caldas must indemnify N & S for injuries sustained by Caldas employees in the scope of their employment” (8 AD3d 876, 878 [3d Dept 2004]). The Court added that “[t]he agreement specifies neither the persons covered nor the types of losses covered, contains no reference to the instant job site and states only that Caldas agrees to indemnify N & S ‘[t]o the fullest extent permitted by law’ ” (id. n 2). We granted N&S leave to appeal and now reverse.

Discussion

N&S asks us to grant summary judgment declaring that Caldas must indemnify it for any losses sustained in the underlying personal injury action. Thus, we may grant the relief sought only if N & S has established, as a matter of law, that the Agreement entitled it to indemnity under Workers’ Compensation Law § 11 (see e.g. JMD Holding Corp. v Congress Fin. Corp., 4 NY3d 373, 384 [2005]).

At the outset, it is clear that, despite the Workers’ Compensation Law shield of employers from liability as joint tortfeasors, a third party may recover against an employer pursuant to contract (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 582 [1998]). Indeed, the statute expressly permits indemnification claims “based upon a provision in a written contract.” Thus, there is no question that the Workers’ Compensation Law allowed N & S and Caldas to enter into an agreement that would indemnify N & S for any losses it might suffer as a result of a personal injury action by a Caldas employee.

Whether the parties did in fact have such an agreement involves a two-part inquiry. First, we consider whether the parties entered into a written contract containing an indemnity provision applicable to the site or job where the injury giving rise to the indemnity claim took place. Second, if so, we examine whether the indemnity provision was sufficiently particular to meet the requirements of section 11.

Caldas argues, and Supreme Court held, that the absence of a written contract explicitly for the Jansen Road project bars N & S’s indemnity claim. We disagree.

The indemnification provision of the parties’ agreement applied to the “performance of subcontracted work” between them. The insurance provision similarly did not specify any particular job site or duration, and the safety provision made Caldas responsible for the safety of its workers, again without reference to any job site or time frame. In addition to the words of the Agreement, N & S vice-president Philip Neidermier testified at his deposition that the Agreement “refers to all of our sites that [Caldas] would work on . . . [i]ncluding that one [Jansen Road].” Caldas did not refute this evidence.

The language of the contract, as well as the testimony, make clear that the Agreement was purposely intended to, and did, apply to all jobs for which N & S hired Caldas as a subcontractor, including Jansen Road. In that no site is mentioned, the argument that the Agreement should not apply here because it does not specifically mention Jansen Road would render it inapplicable to any site or job N & S subcontracted to Caldas. An agreement should not be construed so as to render it meaningless.

The Agreement, moreover, satisfied section ll’s requirement of a “written contract.” Workers’ Compensation Law § 11 requires only that the indemnification claim arise from an indemnification provision in a written contract entered into before the injury. Here, the written agreement contained an indemnification provision, entered into before the injury.

Having concluded that the Agreement was a written contract between the parties applicable to the Jansen Road site, we next consider whether the indemnification provision was sufficiently clear and unambiguous. As we noted in Hooper Assoc. v AGS Computers (74 NY2d 487, 491-492 [1989] [citations omitted]),

“[w]hen 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.”

Here, the Agreement directly, firmly and explicitly evidenced Caldas’s promise to assume responsibility for the safety of its employees, procure insurance protecting N & S and indemnify it in the event of an on-the-job injury. That Caldas arranged for the insurance required by the Agreement is further evidence that Caldas itself recognized that it had undertaken that obligation.

The Appellate Division appears to have interpreted the written-contract exception to Workers’ Compensation Law § 11 to require that an indemnification provision specify the sites, persons and the types of losses covered. We are reluctant to impose specificity requirements not in the statute (see Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363 [2005]). So long as a written indemnification provision encompasses an agreement to indemnify the person asserting the indemnification claim for the type of loss suffered, it meets the requirements of the statute. That standard was satisfied here.

Accordingly, the order of the Appellate Division should be reversed, with costs, defendant and third-party plaintiff N & S Building Contractors, Inc.’s motion for summary judgment as to the third-party action granted and judgment granted declaring that N & S Building Contractors, Inc. is entitled to indemnification from third-party defendant Caldas Concrete Company, Inc. for any judgment obtained by plaintiff against N & S Building Contractors, Inc. in the main action, to the extent that such judgment is not the result of N & S Building Contractors, Inc.’s own wrongdoing.

In its answer to third-party complaint, Caldas asserted affirmative defenses and a counterclaim for apportionment, contribution and indemnification against N & S. Those defenses and the counterclaim were not resolved by the summary judgment motions that are the subject of the present appeal. Although we conclude that N & S has established a right to indemnification as a matter of law, we do not consider the facts. N & S, of course, would not be entitled to indemnification from Caldas for losses resulting from its own negligence.