Board of Ed., Union Free School Dist. No. 3, Town of Brookhaven v. Valden Associates, Inc.

• Decision Date: 22 March 1979
• Citation: Board of Ed., Union Free School Dist. No. 3, Town of Brookhaven v. Valden Associates, Inc., 416 N.Y.S.2d 202, 46 N.Y.2d 653, 389 N.E.2d 798 (N.Y. 1979)
• Parties: , 389 N.E.2d 798 BOARD OF EDUCATION, UNION FREE SCHOOL DISTRICT NO. 3, TOWN OF BROOKHAVEN, Appellant, v. VALDEN ASSOCIATES, INC., et al., Respondents, et al., Defendants. BOARD OF EDUCATION, UNION FREE SCHOOL DISTRICT NO. 3, TOWN OF BROOKHAVEN, Appellant, v. ALDORO ELECTRIC CORP., Respondent, et al., Defendants.
• Court: New York Court of Appeals Court of Appeals

Page 202

416 N.Y.S.2d 202

46 N.Y.2d 653, 389 N.E.2d 798

BOARD OF EDUCATION, UNION FREE SCHOOL DISTRICT NO. 3, TOWN

OF BROOKHAVEN, Appellant, v. VALDEN ASSOCIATES, INC., et al., Respondents, et al., Defendants.

BOARD OF EDUCATION, UNION FREE SCHOOL DISTRICT NO. 3, TOWN

OF BROOKHAVEN, Appellant, v. ALDORO ELECTRIC CORP., Respondent, et al., Defendants.

Court of Appeals of New York.

March 22, 1979.

Milton B. Pfeffer, New York City, for appellant.

John F. Mulholland, Garden City, for Valden Associates, Inc., respondent.

Francis X. McGowan, New York City, for Aldoro Electric Corp., respondent.

OPINION OF THE COURT

PER CURIAM.

This appeal concerns the validity of certain provisions contained in a construction contract which required the owner to provide "fire, extended coverage, vandalism and malicious mischief insurance upon the entire structure on which the work of the Contract is to be done and upon the materials, in or adjacent thereto and intended for use thereon, to One Hundred Percent of the insurable value thereof." It also provided that "(t)he Owner, Contractor, and all subcontractors waive all rights, each against the others, for damages caused by fire or other perils covered by insurance provided for under the terms of the Contract Documents, except such rights as they may have to the proceeds of insurance." The owner did make provision for the required insurance, and during the course of the project a fire broke out, allegedly due to the negligence of the contractor or the subcontractors, causing damage to the building. The insurer paid the owner its damages pursuant to the policy, and then this action was commenced against the contractor and subcontractors, in which the owner is the named plaintiff but the actual plaintiff in interest is the insurer as a subrogee.

Defendants argue that the contractual provisions quoted above constitute a defense to this action. Plaintiff contends, however, that so viewed, those contractual provisions are unenforceable pursuant to section 5-323 of the General Obligations Law, which provides as follows: "Every covenant, agreement or understanding in or in connection with or collateral to any contract or agreement affecting real property made or entered into, whereby or whereunder a contractor exempts himself from liability for injuries to person or property caused by or resulting from the negligence of such contractor, his agent, servants or employees, as a result of work performed or services rendered...