Kurek v. Port Chester Housing Authority, 18 N.Y.2d 450 (1966)

A contractual indemnification clause can provide indemnity for a party’s own active negligence if the contract language is sufficiently broad and unequivocal, demonstrating a clear intent by the parties to provide such coverage.

Summary

Mrs. Kurek, a tenant in a housing project, was injured by a defective washing machine in the building’s laundry room. She sued both the Housing Authority and the laundry service company. The Housing Authority cross-claimed against the laundry service for indemnity. The jury found both defendants liable, and the trial judge granted the Housing Authority’s contractual cross-claim. The Court of Appeals affirmed, holding that the indemnification clause was broad enough to cover the Housing Authority’s own active negligence because the language of the contract demonstrated a clear intention to provide such coverage.

Facts

Mrs. Kurek, a tenant in a housing project operated by the Port Chester Housing Authority, was injured when a washing machine in the building’s laundry room unexpectedly restarted. The washing machines were owned and serviced by John Liammari, doing business as Westchester Metered Laundry Service. The Housing Authority received a monthly sum and a percentage of revenue for allowing the machines to be placed in the basement and for providing water and electricity.

Procedural History

Mrs. Kurek and her husband sued the Port Chester Housing Authority and John Liammari for personal injuries and loss of services. The Housing Authority cross-claimed against Liammari for indemnity based on a contractual provision and common-law right. The trial court found for the plaintiffs against both defendants and in favor of the Authority on its contractual cross-claim. The Appellate Division affirmed the judgment upon a stipulation by the plaintiffs agreeing to accept a reduced judgment. The Court of Appeals granted further review.

Issue(s)

1. Whether there was sufficient evidence to justify the verdict against both the Housing Authority and Liammari.

2. Whether the trial judge was correct in allowing recovery on the cross-claim in favor of the Housing Authority, given that the Authority may have been actively negligent.

Holding

1. Yes, because there was sufficient evidence in the record from which the jury could have reached its determination that the injury to the plaintiffs resulted from the negligence of both defendants.

2. Yes, because the contractual indemnification clause was broad enough to cover the Authority’s own active negligence, given the unmistakable intent of the parties as expressed in the contract.

Court’s Reasoning

The Court of Appeals affirmed the lower courts’ decisions. Regarding the cross-claim, the court acknowledged that the Housing Authority’s negligence was considered “active,” precluding common-law indemnification. However, the court focused on the contractual indemnity clause, which stated that the Licensee (Liammari) would “hold the Authority and State of New York harmless against all claims and demands of persons not parties to this agreement, of whatsoever kind or nature, which may arise in connection with the installation, operation, maintenance, servicing, supervision, ownership and control of the Machines…or which may arise in the performance of this Contract.”

The court emphasized that such clauses are strictly construed and that “contracts will not be construed to indemnify a person against his own negligence unless such intention is expressed in unequivocal terms” (Thompson-Starrett Co. v. Otis Elevator Co., 271 N.Y. 36, 41). However, the court also cautioned against construing these provisions in a way that would render them meaningless, particularly where common-law indemnity would already apply to passive negligence. The Court noted prior cases like Jordan v. City of New York, 3 A.D.2d 507, 509, affd. 5 N.Y.2d 723, where indemnification was permitted even when the language didn’t expressly cover active negligence, because that was the parties’ clear intent.

The court found the indemnification clause here sufficiently broad, covering “all claims and demands” of third persons “of whatsoever kind or nature” arising out of the machines’ operation and maintenance. The claim against the Authority arose from the operation and maintenance of the machine. Therefore, the agreement applied unless the court were to disregard the clear and unequivocal wording of the agreement. The court stated, “Unless we are to disregard the clear and unequivocal wording of this agreement and engraft an exception to the ‘claims * * * of whatsoever kind or nature’ for which indemnification is provided, the agreement must be held applicable here.”