New York Law Review

Tag: construction accident

  • O’Connor v. Serge Elevator Co., 46 N.Y.2d 563 (1979): Scope of Indemnity for Injuries Arising Out of Contract Work

    O’Connor v. Serge Elevator Co., 46 N.Y.2d 563 (1979)

    An indemnity clause in a contract that covers personal injuries “arising out of the work which is the subject of this contract” extends to injuries sustained by a subcontractor’s employee while traveling to or from their designated workplace within the project site, as such movement is a necessary component of performing the contracted work.

    Summary

    Sean O’Connor, an employee of drywall installer A & M Wallboard, Inc., was injured by an elevator installed by Serge Elevator Company at a construction site. O’Connor sued Serge and the general contractor, K.W. Construction Corp. K.W. sought indemnification from Serge and A & M based on indemnity clauses in their respective contracts. The Court of Appeals held that K.W. was entitled to indemnity from A & M because O’Connor’s injury “arose out of the work” covered by the subcontract, as the injury occurred while O’Connor was traveling to his work area, a necessary part of performing the subcontract. However, the court dismissed the appeal against Serge Elevator because K.W. had been granted a new trial against Serge, and was therefore not “aggrieved” by the lower court’s order.

    Facts

    Sean O’Connor, an employee of A & M Wallboard, Inc. (a drywall subcontractor), was injured at a 32-story construction site in Manhattan. O’Connor was struck by an elevator installed by Serge Elevator Company (the elevator subcontractor) while he was leaving his workplace for lunch. K.W. Construction Corp. was the general contractor for the project.

    Procedural History

    O’Connor sued Serge and K.W. K.W. sought indemnification from Serge and A & M under their respective contracts’ indemnity clauses. The trial court ruled in favor of O’Connor against K.W. but dismissed K.W.’s indemnity claims against both Serge and A & M. The Appellate Division modified this ruling, reinstating K.W.’s cross-claim against Serge and ordering a new trial on that issue. K.W. appealed to the Court of Appeals.

    Issue(s)

    1. Whether K.W. was an aggrieved party entitled to appeal the Appellate Division’s order regarding Serge Elevator Company.
    2. Whether the indemnity clause in A & M’s contract covered O’Connor’s injuries.

    Holding

    1. No, because K.W. was granted a new trial against Serge, it was not an aggrieved party and could not appeal that portion of the order.
    2. Yes, because O’Connor’s injuries arose out of the work which was the subject of the contract between K.W. and A & M.

    Court’s Reasoning

    Regarding the appeal against Serge, the Court of Appeals found that K.W. was not “aggrieved” by the Appellate Division’s order because it had been granted a new trial against Serge. Thus, K.W. lacked the standing to appeal that portion of the order. The court cited Lee v. Gander, 271 N.Y. 568 and CPLR 5511.

    Regarding the indemnity claim against A & M, the court focused on the language of the indemnity clause, which covered personal injuries “arising out of the work which is the subject of this contract”. The court reasoned that A & M’s employees’ ability to reach and leave their workplaces was essential to performing the contract. Therefore, O’Connor’s injuries, which occurred while traveling to or from his work area, were deemed as a matter of law to have arisen out of the work. The court concluded that K.W. was entitled to indemnification from A & M. This decision emphasizes a practical and common-sense interpretation of indemnity clauses, recognizing that access to the worksite is integral to the completion of the contracted work. As the Court stated: “The contract could not be performed, of course, unless A & M’s employees could reach and leave their workplaces on the job site. The instant injuries, occurring during such a movement, must be deemed as a matter of law to have arisen out of the work. Thus, K. W. was entitled to indemnity from A & M.”

  • De Milio v. Borghard, 55 N.Y.2d 220 (1982): Non-Delegable Duty and Common-Law Indemnity in Construction Accidents

    55 N.Y.2d 220 (1982)

    When a party’s liability arises from a non-delegable duty imposed by statute, and that party did not exercise actual control over the work that caused the injury, they are entitled to common-law indemnity from the party directly responsible for the negligent act.

    Summary

    This case concerns a construction worker’s injury and the allocation of liability between the property owner (New York Telephone) and the subcontractor (Lakelands Precast). The Court of Appeals modified the lower court’s order, holding that the trial court erred in refusing to charge contributory negligence as a bar to recovery. Further, because New York Telephone’s liability arose solely from its non-delegable duty under Labor Law § 241(6) and it did not exercise actual control over the work, it was entitled to indemnification from Lakelands, the party whose employee’s negligence caused the injury. The Court ordered a new trial on New York Telephone’s liability to the plaintiffs and, if found liable, directed a verdict in its favor on its claim over against Lakelands.

    Facts

    The plaintiff, a construction worker, was injured during the offloading of a vault at a construction site. Lakelands Precast, Inc., was the subcontractor responsible for offloading the vault. New York Telephone Company was the owner of the property and held responsible for the project’s compliance with Labor Law.

    Procedural History

    The trial court initially ruled against New York Telephone. The Appellate Division affirmed. New York Telephone appealed to the New York Court of Appeals. The Court of Appeals modified the order, granting a new trial on New York Telephone’s liability and directing a verdict in its favor against Lakelands Precast on the claim over, should it be found liable to the plaintiffs.

    Issue(s)

    1. Whether the trial court erred in refusing to charge contributory negligence as a bar to recovery by the plaintiffs.

    2. Whether New York Telephone, whose liability arises from a non-delegable duty under Labor Law § 241(6), is entitled to common-law indemnity from Lakelands Precast, the subcontractor whose employee’s negligence caused the injury, given that New York Telephone did not exercise actual control over the work.

    Holding

    1. Yes, because the trial court erred in refusing to charge contributory negligence as a bar to recovery by plaintiffs.

    2. Yes, because New York Telephone’s liability stemmed from a non-delegable duty, and there was no evidence it exercised actual control over the offloading operation. Therefore, it is entitled to common-law indemnity from Lakelands Precast.

    Court’s Reasoning

    The Court reasoned that the trial court erred by not allowing the jury to consider the plaintiffs’ contributory negligence. Regarding indemnity, the Court emphasized that New York Telephone’s liability was based on the non-delegable duty imposed by Labor Law § 241(6). This section of the Labor Law imposes a duty upon owners and general contractors to provide reasonable and adequate protection and safety to construction workers. However, the court noted, “There being no evidence that it [New York Telephone] had authority to exercise or in fact did exercise control over the offloading of the vault by Lakelands’ employee in the course of which the plaintiff’s injury occurred, New York Telephone was entitled under principles of common-law indemnity to a directed verdict on its claim over.” The key factor was the lack of evidence that New York Telephone controlled the specific work that led to the injury. Because Lakelands Precast was directly responsible for the negligent act, New York Telephone was entitled to indemnification for any liability arising from its statutory duty. This case illustrates the principle that a party held liable due to a non-delegable duty can seek indemnification from the party whose direct negligence caused the harm, provided the former did not exercise control over the negligent act. This prevents unfair allocation of liability when a party is only vicariously liable due to statute and did not contribute to the negligence.

  • Vey v. Port Authority, 54 N.Y.2d 221 (1981): Enforceability of Broad Indemnification Clauses in Subcontracts

    Vey v. Port Authority of New York and New Jersey, 54 N.Y.2d 221 (1981)

    A broad indemnification clause in a subcontract, requiring the subcontractor to indemnify the contractor against all claims arising out of the work, is enforceable even when the contractor’s liability to a third party arises from a separate indemnification agreement.

    Summary

    This case concerns the enforceability of an indemnification clause in a subcontract. An employee of Ermco Erectors, Inc. (Ermco) was injured at a Port Authority construction site. The Port Authority had contracted with Grand Iron Works, Inc. (Grand Iron), who then subcontracted with Ermco. The employee sued the Port Authority, who then sought indemnification from Grand Iron based on their contract. Grand Iron, in turn, sought indemnification from Ermco based on a clause in their subcontract. The Court of Appeals held that the broad language of the indemnification clause in the Grand Iron-Ermco contract required Ermco to indemnify Grand Iron for all damages arising from Ermco’s work, regardless of how the original claim arose. This decision emphasizes the importance of clear and comprehensive language in indemnification agreements.

    Facts

    Clarence Vey, an employee of Ermco, was injured while working on a construction project at a bus terminal owned by the Port Authority. Vey fell into an open stairway. The Port Authority had contracted with Grand Iron to fabricate and erect structural steel. Grand Iron subcontracted the steel erection to Ermco. Vey and his wife sued the Port Authority, Carlin-Atlas Construction Co., Inc., and Empire City Iron Works. The defendants brought third-party actions against Grand Iron and Ermco.

    Procedural History

    The parties stipulated to damages of $1,200,000. The trial court determined that the Port Authority and Ermco were each 50% liable. The Port Authority sought indemnification from Grand Iron, who then sought indemnification from Ermco based on both the indemnification clause in their contract and common-law tort principles. The Supreme Court granted Grand Iron’s cross-claim. The Appellate Division modified, disallowing contractual indemnity, holding Ermco liable only for contribution based on its 50% tort liability. The Court of Appeals modified the Appellate Division’s order, reinstating Grand Iron’s judgment against Ermco.

    Issue(s)

    Whether a contractual provision requiring the subcontractor to indemnify the contractor against all claims arising out of the work covered by the contract requires indemnification when the contractor is held liable to the owner under an indemnification clause in a separate contract.

    Holding

    Yes, because the broad language of the indemnification provision in Grand Iron’s contract with Ermco demonstrates that the parties intended Grand Iron to be indemnified by Ermco against all liability arising out of Ermco’s work for Grand Iron at the Port Authority’s construction site.

    Court’s Reasoning

    The Court focused on the specific language of the indemnification clause, which required Ermco to indemnify Grand Iron for all “damages, claims or demands arising out of the work covered by this contract.” The Court reasoned that Vey’s injury occurred while he was performing work for Ermco, Grand Iron’s subcontractor. The fact that the Port Authority could seek indemnification only from Grand Iron did not prevent Grand Iron from seeking indemnification from Ermco, since the original claim arose from Ermco’s execution of its contract with Grand Iron.

    The Court also emphasized the broad language of the indemnification provision, stating that it “evidences a clear intent by the parties for Ermco to assume all liability arising out of their work at this construction site.” The provision did not limit the subcontractor’s liability to its own acts or omissions. Quoting Hogeland v Sibley, Lindsay & Curr Co., 42 NY2d 153, the court implied that the specific mention of employees and the public in the provision indicates an intent to indemnify Grand Iron against all claims arising out of the work Ermco contracted to perform.

    The Court further noted that Grand Iron was never present at the construction site, having subcontracted the erection work to Ermco, which made Ermco responsible for ensuring the work was done safely. Therefore, the court found that the indemnification provision was intended to totally indemnify Grand Iron for any liability arising from the Ermco-Grand Iron contract, which was let pursuant to Grand Iron’s contractual responsibilities to the Port Authority. The court concluded, “We believe the clear language of the indemnification provision, strengthened by the surrounding facts and circumstances, demonstrates that the parties intended Grand Iron to be indemnified by Ermco against all liability arising out of Ermco’s work for Grand Iron at the Port Authority’s construction site.”

  • Kelly v. Diesel Constr. Co., 35 N.Y.2d 1 (1974): Indemnification Rights for Vicariously Liable Parties Under Labor Law

    Kelly v. Diesel Constr. Co., 35 N.Y.2d 1 (1974)

    A general contractor held vicariously liable under Labor Law §§ 240 and 241 for a subcontractor’s negligence is entitled to indemnification from the negligent subcontractor, aligning liability with fault and recognizing the prevalence of insurance in construction projects.

    Summary

    Harold Kelly, a steamfitter, was injured when a personnel hoist fell. He sued Diesel, the general contractor, and White, the hoist company responsible for maintenance. The jury found White solely negligent. However, the trial court held Diesel liable based on a nondelegable duty under Labor Law §§ 240 and 241, but also granted Diesel indemnification from White. The Court of Appeals affirmed, holding that Diesel, vicariously liable, was entitled to indemnification from White, the actively negligent party. The decision reflects a shift towards aligning liability with fault, especially considering the prevalence of insurance coverage in construction.

    Facts

    Diesel, as general contractor, was constructing a 40-story office building. Kelly, an employee of a subcontractor, Raisler Corporation, was injured when a personnel hoist, provided for all workers, fell 20 floors. Diesel contracted with White to supply and maintain the hoist, including its brakes and safety devices. White regularly inspected the hoist.

    Procedural History

    The liability issue was tried before a jury, which found White solely liable to Kelly. The trial court initially set aside the verdict in favor of Diesel and directed a verdict against Diesel as a matter of law, imputing White’s negligence to Diesel based on a “nondelegable duty” under Labor Law §§ 240 and 241. The court then awarded Diesel full indemnification from White under the rule of Dole v. Dow Chem. Co. The Appellate Division affirmed. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether a general contractor, held liable to an injured subcontractor’s employee under Labor Law §§ 240 and 241 due to the negligence of a hoist company, is entitled to common-law indemnification or contribution from the negligent hoist company, absent an indemnification agreement.

    Holding

    Yes, because the general contractor’s liability was solely vicarious, arising from the hoist company’s negligence, and modern legal doctrine favors apportioning damages based on fault, especially considering the prevalence of insurance coverage.

    Court’s Reasoning

    The court reasoned that historically, Labor Law §§ 240 and 241 had been interpreted to impose nondelegable duties on owners and general contractors, denying them indemnification even if a joint tortfeasor was solely responsible. This was based on the policy of promoting safety. However, the court recognized this policy was undermined by the fact that liability could be shifted through insurance or indemnification agreements. The court moved away from the “active-passive” tortfeasor distinction established in cases like Semanchuck v. Fifth Ave. & 37th St. Corp., in favor of the principles of Dole v. Dow Chem. Co., which promote apportionment of damages based on fault. It emphasized that Diesel’s liability was vicarious, imputed from White’s negligence. The court stated, “There is no good reason to continue the artificial policy involved in denying an owner or contractor, liable vicariously only under the applicable sections of the Labor Law, from obtaining indemnification under common-law principles.” The court noted the universality of insurance coverage, arguing that the focus should be on which insurance carrier bears the cost, aligning liability with the party at fault to incentivize safety. The court clarified that Labor Law §§ 240 and 241 still serve the important function of mandating first instance liability on the owner or general contractor to ensure the injured workman’s recovery but should not bar common-law indemnification from the party that caused the accident. The Court stated, “The statutes mandate first instance liability on the owner or general contractor so that, with respect to the injured workman, the owner or general contractor cannot escape liability for accidents caused by his subcontractor or supplier.” Ultimately, the court concluded that the one who should pay ultimately for his actual fault is primarily liable, and the one who must pay because of first instance liability to third parties but who ought to be able to recover from one guilty of actual fault, is secondarily liable.

  • Joyce v. Rumsey Realty Corp., 17 N.Y.2d 118 (1966): Strict Liability for Labor Law Violations Resulting in Injury

    Joyce v. Rumsey Realty Corp., 17 N.Y.2d 118 (1966)

    A contractor’s violation of the New York Labor Law, specifically the requirement to complete flooring as a building progresses, constitutes conclusive evidence of negligence and imposes absolute liability when a worker is injured as a result of that violation.

    Summary

    The plaintiff, a construction worker, was injured when a plank he was standing on broke, causing him to fall through an uncovered opening to the basement. The defendant, the contractor, had failed to comply with New York Labor Law requiring flooring to be completed as the building progressed. The Court of Appeals held that the contractor’s violation of the Labor Law constituted conclusive evidence of negligence, and the plaintiff was entitled to a directed verdict on the issue of liability. The court reasoned that the statute imposes an absolute and unconditional duty on the contractor, and the worker’s injury directly resulted from the contractor’s failure to fulfill that duty. The fact that the plank broke was considered a concurrent cause, not negating the contractor’s primary liability.

    Facts

    The plaintiff was working on the fourth floor of a building under construction. The first, second, and third floors had not been fully floored as required by the New York Labor Law. The plaintiff was moving planks when the plank he was standing on broke. As a result, the plaintiff fell through the open floors into the basement, sustaining injuries.

    Procedural History

    The trial court directed a verdict for the plaintiff against the defendant Bumsey, the contractor, on the issue of liability, leaving the determination of damages to the jury. The contractor appealed this decision, arguing that the breaking of the plank was an intervening cause that should negate their liability. The Court of Appeals affirmed the trial court’s decision, holding that the contractor’s violation of the Labor Law constituted conclusive evidence of negligence.

    Issue(s)

    Whether a contractor’s failure to comply with the New York Labor Law requiring flooring to be completed as a building progresses constitutes conclusive evidence of negligence when a worker is injured as a result of falling through an uncovered opening, warranting a directed verdict on the issue of liability.

    Holding

    Yes, because the statute imposes an absolute and unconditional duty on the contractor to complete flooring, and the worker’s injury directly resulted from the contractor’s failure to fulfill that duty. The violation of the statute is conclusive evidence of negligence, regardless of other contributing factors.

    Court’s Reasoning

    The Court of Appeals emphasized that the New York Labor Law imposes a “flat and unvarying” duty on contractors to complete flooring as a building progresses. Citing prior cases like Koenig v. Patrick Constr. Corp., the court reiterated that “For breach of that duty, thus absolutely imposed, the wrongdoer is rendered liable without regard to his care or lack of it.” The court further stated that a violation of such a statute is “conclusive evidence of negligence,” warranting a directed verdict. The court rejected the argument that the breaking of the plank was an intervening cause, stating that “Something must project him into the hole but that something cannot be more than a concurrent cause of the injury.” The court feared that allowing a jury to find no cause of action would nullify the statute’s protective intent for workers in situations such as the plaintiff’s. The court concluded that the statute places absolute and unconditional liability on the contractor in favor of the workman who falls through the floor opening that the statute insists must be covered.