Cunha v. City of New York, 13 N.Y.3d 502 (2009)
A party held strictly liable under the Labor Law is entitled to full common-law indemnification from the party wholly at fault, even if the strictly liable party settles the underlying claim.
Summary
Cunha sued the City for injuries sustained at a construction site. The City, in turn, sued HAKS, an engineering firm, for indemnification. Cunha settled with both the City and HAKS. The trial proceeded on the City’s indemnification claim against HAKS. The jury found HAKS negligent but only 40% at fault. The City sought a directed verdict for 100% indemnification, which was denied at trial but granted on appeal. The Court of Appeals affirmed, holding that the City, vicariously liable under Labor Law § 241(6), was entitled to full common-law indemnification from HAKS, the party actually at fault. The court emphasized that because no other tortfeasor was properly before the jury, HAKS was liable for 100% of the damages.
Facts
Cunha, an employee of JLJ Enterprises, was injured while working in a trench. The City hired JLJ as the prime contractor, and HAKS was contracted for engineering inspection services. City employees and inspectors determined a trench could no longer be cleared by machinery. JLJ ordered Cunha to dig by hand in the unprotected trench, which collapsed and injured him. The City conceded a Labor Law § 241(6) violation predicated on a violation of Industrial Code § 23-4.1 because the shoring and trench where the accident occurred was greater than five feet and the trench collapsed causing injury to plaintiff.
Procedural History
Cunha sued the City for Labor Law violations. The City brought a third-party action against HAKS for contractual and common-law indemnification. The City’s motion for summary judgment dismissing Cunha’s Labor Law § 200 claim and for indemnification against HAKS was initially denied. The City renewed its motion, and the Labor Law § 200 claim was dismissed. Cunha settled with the City and HAKS. The indemnification claim proceeded to trial, with the jury finding HAKS negligent and 40% at fault. The trial court denied the City’s motion for a directed verdict for 100% indemnification. The Appellate Division reversed, granting the City conditional judgment for 100% indemnification. The Court of Appeals granted leave to appeal and affirmed the Appellate Division.
Issue(s)
Whether a party, strictly liable under Labor Law § 241(6) and having settled with the plaintiff, is entitled to full common-law indemnification from the negligent third party when no other tortfeasor is properly before the court.
Holding
Yes, because a party held strictly liable under the Labor Law is entitled to “full indemnification from the party wholly at fault” (Chapel v Mitchell, 84 NY2d 345, 347 [1994]), and in this case, HAKS was the only possible negligent party before the court.
Court’s Reasoning
The Court of Appeals reasoned that the City’s voluntary concession of liability under Labor Law § 241(6) did not preclude its indemnification claim. The court emphasized that the City presented sufficient evidence to demonstrate vicarious liability, and HAKS waived its right to a jury determination on this issue by failing to request it. Citing Rosado v Proctor & Schwartz, 66 NY2d 21 (1985), the court stated that a party may settle and seek indemnification as long as they show they may not be held liable in any degree. The court found the City’s active negligence was not at issue. The court distinguished the case from Frank v Meadowlakes Dev. Corp., 6 NY3d 687 (2006), noting that no Article 16 issue existed, as no other tortfeasor could be found liable. The court interpreted the jury’s allocation of only 40% fault to HAKS as potentially attributing culpability to Cunha’s employer (JLJ), but JLJ’s fault was irrelevant because the plaintiff did not sustain a grave injury, precluding them from being part of the action. To the extent the jury might have considered plaintiff himself at fault, his negligence must be excluded. The court concluded that “once HAKS was found to be negligent—and since HAKS was the only possible negligent party to the lawsuit—the City was entitled to 100% indemnification from HAKS.” Because the court found in favor of the City on its common-law indemnification claim, it did not address the contractual indemnification claim.