Brooks v. Judlau Contracting, Inc.

• Decision Date: 21 October 2008
• Docket Number: No. 147,147
• Citation: 898 N.E.2d 549,11 N.Y.3d 204
• Parties: Stephen J. BROOKS et al., Plaintiffs, v. JUDLAU CONTRACTING, INC., Defendant and Third-Party Plaintiff-Appellant. Thunderbird Constructors, Inc., Third-Party Defendant-Respondent.
• Court: New York Court of Appeals Court of Appeals

898 N.E.2d 549

11 N.Y.3d 204

Stephen J. BROOKS et al., Plaintiffs, v.JUDLAU CONTRACTING, INC., Defendant and Third-Party Plaintiff-AppellantThunderbird Constructors, Inc., Third-Party Defendant-Respondent.

No. 147

Court of Appeals of New York.

October 21, 2008.

Wilson, Elser, Moskowitz, Edelman & Dicker LLP, Chicago, IL (Melissa A. Murphy-Petros of counsel), and Wilson, Elser, Moskowitz, Edelman & Dicker LLP, New York City (Richard E. Lerner of counsel), for defendant and third-party plaintiff-appellant.

Cerussi & Spring, White Plains (Peter Riggs of counsel), for third-party defendant-respondent.

OPINION OF THE COURT

CIPARICK, J.

This appeal asks us to determine the question left open in Itri Brick & Concrete Corp. v. Aetna Cas. & Sur. Co.,89 N.Y.2d 786, 658 N.Y.S.2d 903, 680 N.E.2d 1200[1997] as to whether section 5-322.1 of the General Obligations Law allows a general contractor—who has been found to be partially at fault—to enforce an indemnification provision against its subcontractor for that portion of damages attributable to the negligence of the subcontractor.We conclude that the statute does permit a partially negligent general contractor to seek contractual indemnification from its subcontractor so long as the indemnification provision does not purport to indemnify the general contractor for its own negligence.As such, the provision is enforceable and does not violate General Obligations Law § 5-322.1.¹

An action for damages was brought by plaintiff, Stephen J. Brooks, an ironworker, against general contractor, Judlau Contracting, Inc., for injuries sustained on the job while employed by subcontractor, third-party defendantThunderbird Constructors, Inc.The construction project involved the renovation and restoration of a highway overpass.Upon grabbing onto a perimeter safety cable installed by defendant, Judlau, the cable came loose causing plaintiff to fall 18 feet to the pavement below and sustain injury.Judlau asserted a third-party claim for contractual indemnification against Thunderbird.The action was bifurcated—a damages trial as to the underlying tort was tried by a jury and the third-party contractual indemnification claim by the court.Following trial, Supreme Court granted Thunderbird's motion for a directed verdict dismissing Judlau's third-party claim holding that Judlau's installation of the safety cable in an "ineffective and unsafe manner" was a substantial factor in causing plaintiff's accident, that Judlau was accordingly actively negligent "at least to some degree" and that such negligence foreclosed Judlau's entitlement to contractual indemnification from Thunderbird.

The Appellate Division affirmed the dismissal of Judlau's third-party complaint against Thunderbird (39 A.D.3d 447, 833 N.Y.S.2d 223[2007]).It held that General Obligations Law § 5-322.1 bars contractual indemnification and that the contractual provision at issue was unenforceable, and further that the evidence in the underlying tort action established that Judlau negligently installed a safety cable causing plaintiff's injury.The court certified a question of law as to whether its order was properly made insofar as it affirmed the dismissal of the third-party claim for contractual indemnification.We now reverse and answer the question in the negative.²

There appears to be no dispute that Judlau is prohibited from filing a common-law contribution claim against Thunderbird because Thunderbird is plaintiff's employer and plaintiff did not sustain a grave injury within the meaning of Workers' Compensation Law § 11.Judlau asserts, however, that a claim for contractual indemnification lies since Thunderbird's negligence also contributed to plaintiff's injuries in that Thunderbird, having control of the workplace, failed to provide plaintiff with the necessary safety equipment to prevent his fall.

Unlike the indemnification provisions voided in Itri Brick, enforcement of the indemnification provision currently before us will not result in Judlau being indemnified for its own acts of negligence; rather, it is being indemnified only for those acts attributable to the subcontractor, Thunderbird.The indemnification provision of the agreement provides that

"[t]he Contractor shall not be liable for any loss or casualty incurred or caused by or to the Subcontractor.The Subcontractor shall maintain full and complete insurance on its work until final acceptance of the General Contract.The Subcontractor assumes all risk of loss for all of its work regardless of whether the Subcontractor had previously been paid for it.The Contractor is not responsible to provide any protective service for the Subcontractor's benefit.The Subcontractor shall, to the fullest extent permitted by law, hold the Contractor and the Owner, their agents, employees and representatives harmless from any and all liability, costs, damages, attorneys' fee, and expenses from any claims or causes of action of whatever nature arising from the Subcontractor's work, including all claims relating to its subcontractors, suppliers or employees, or by reason of any claim or dispute of any person or entity for damages from any cause directly or indirectly relating to any action or failure to act by the Subcontractor, its representatives, employees, subcontractors, or suppliers.The Subcontractor acknowledges that specific consideration has been received by it for this Indemnification."

Contrary to Thunderbird's assertion, this provision does not violate General Obligations Law § 5-322.1 as it does not require Thunderbird to indemnify Judlau for its own negligence.The provision is clear, obligating Thunderbird to indemnify Judlau only when it is shown that damages were caused by Thunderbird's own negligence.³

As we stated in Itri Brick,the Legislature enacted General Obligations Law § 5-322.1 in order to

"prevent a prevalent practice in the construction industry of requiring subcontractors to assume liability by contract for the negligence of others.The Legislature concluded that such `coercive' bidding requirements unnecessarily increased the cost of construction by limiting the number of contractors able to obtain the necessary hold harmless insurance, and unfairly imposed liability on subcontractors for the negligence of others over whom they had no control.The agreements also needlessly created expensive double coverage for hold harmless or...