Associated Dry Goods Corp. v. Posillico Constr. Co., 31 N.Y.2d 308 (1972)
A party seeking indemnification for negligence must be passively, and not actively, negligent; active negligence involves more than a failure to discover a dangerous condition unless the party had actual notice and acquiesced in the condition’s continuation.
Summary
Associated Dry Goods Corp. (Lord & Taylor) sued Posillico Construction after a customer fell in their parking lot due to construction debris. Associated sought indemnification from Posillico, claiming Posillico’s work created the hazard. The jury found Posillico actively negligent and Associated passively negligent. The Appellate Division reversed the finding of passive negligence. The Court of Appeals reinstated the original judgment, holding that Associated’s negligence was passive because it was based on constructive, not actual, notice of the dangerous condition. This distinction is crucial for determining the right to indemnification.
Facts
Associated owned a department store with a parking lot across the street. Nassau County hired Posillico to widen the road, which involved work near Associated’s parking lot. Posillico transplanted hedges, leaving gravel and stones in the parking lot. A customer fell on the stones and sued both Associated and Posillico. Associated’s assistant manager testified he inspected the lot the morning of the accident and saw nothing unusual, but after the fall, he believed the stones were construction debris. Associated’s service manager also admitted to seeing the stones after the fall but not before.
Procedural History
The trial court found both Posillico and Associated liable to the plaintiff. The jury issued a special verdict finding Posillico actively negligent and Associated passively negligent, entitling Associated to indemnification. The Appellate Division affirmed the judgment against Posillico but reversed the finding of passive negligence against Associated and dismissed Associated’s cross-claim for indemnification. The Court of Appeals reversed the Appellate Division’s decision, reinstating the trial court’s judgment regarding indemnification.
Issue(s)
Whether Associated’s failure to maintain a safe parking lot constituted active negligence, barring its claim for indemnification from Posillico, who created the dangerous condition.
Holding
No, because Associated’s liability was based on constructive notice, not actual notice, of the dangerous condition. Therefore, Associated’s negligence was passive, and it is entitled to indemnification from Posillico.
Court’s Reasoning
The Court of Appeals focused on the distinction between active and passive negligence in determining the right to indemnification. The court stated, “the culpability of the party seeking indemnity determines whether recovery over will be permitted…that is, the party seeking indemnity must not be in pari delicto with the party against whom such recovery is sought.” The court emphasized that while active negligence can arise from both actions and omissions, a landowner’s failure to discover and remedy a condition created by another is generally passive negligence. However, a key exception exists: a party with actual notice of a dangerous condition who “acquiesced in the continuation of the condition” is considered in pari delicto and cannot seek indemnity. The court distinguished between actual and constructive notice, noting that “in a case where there is no actual notice but there is only constructive notice, because of failure to discover that which could reasonably have been discovered, the defendant cannot be charged with acquiescence in the dangerous condition as a bar to indemnity.” The court found that Associated was only charged with constructive notice and therefore their negligence was passive. The Appellate Division erred in finding active negligence based on a “merely casual inspection” because this still amounted to only constructive notice. Therefore, the court reinstated the trial court’s judgment, allowing Associated to seek indemnification from Posillico.