Brown v. Two Exchange Plaza Partners

• Decision Date: 07 June 1990
• Citation: 76 N.Y.2d 172,556 N.Y.S.2d 991,556 N.E.2d 430
• Parties: , 556 N.E.2d 430 Paul BROWN et al., Respondents, v. TWO EXCHANGE PLAZA PARTNERS, Defendant, and George A. Fuller Company, Defendant and Third-Party Plaintiff-Respondent. Heydt Contracting Corp. et al., Third-Party Defendants-Respondents; A & M Wallboard Company, Third-Party Defendant-Appellant; Heydt Contracting Corporation, Fourth-Party Plaintiff-Respondent; Walter F. Umla, Inc., et al., Fourth-Party Defendants-Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 991

556 N.Y.S.2d 991

76 N.Y.2d 172, 556 N.E.2d 430

Paul BROWN et al., Respondents, v. TWO EXCHANGE PLAZA PARTNERS, Defendant and George A. Fuller Company, Defendant and Third-Party Plaintiff-Respondent Heydt Contracting Corp. et al., Third-Party Defendants-Respondents A & M Wallboard Company, Third-Party Defendant-Appellant Heydt Contracting Corporation, Fourth-Party Plaintiff-Respondent; Walter F. Umla, Inc., et al., Fourth-Party Defendants-Respondents.

Court of Appeals of New York.

June 7, 1990.

[76 N.Y.2d 173] [556 N.E.2d 431] Anthony J. McNulty and Dudley M. Thompson, New York City, for third-party defendant-appellant.

[76 N.Y.2d 174] Ignatius John Melito and S. Dwight Stephens, New York City, for defendant and third-party plaintiff-respondent.

Joseph D. Ahearn and Joseph W. Conklin, New York City, for Central Furring & Dry Wall Co., third-party defendant-respondent.

[76 N.Y.2d 175] Theodore H. Rosenblatt, New York City, for Heydt Contracting Corp., third-party defendant-respondent and fourth-party plaintiff-respondent.

OPINION OF THE COURT

SIMONS, Judge.

The general contractor in this building construction case has been held liable to a worker injured in the performance of a subcontractor's work solely by reason of Labor Law § 240(1). The subcontractor had agreed to indemnify the contractor for such liability and the issue submitted is whether General Obligations Law § 5-322.1 bars enforcement of that provision in their contract. We hold that the indemnification agreement is enforceable under these circumstances, in which there has been no finding of negligence on the part of the general contractor, and therefore affirm the order of the Appellate Division.

I

Plaintiff Paul Brown was an employee of Central Furring & Dry Wall Company, a subcontractor working on the lobby/atrium of an office building under construction in Manhattan. He was injured when the scaffold on which he was standing collapsed. The building was owned by defendant Two Exchange Plaza Partners who hired defendant George A. Fuller Company as general contractor. Fuller in turn subcontracted with Heydt Contracting Corporation for erection of the scaffold, to be used by all of the subcontractors in the lobby/atrium, and with A & M Wallboard Company to erect the walls and ceilings of the building. A & M hired plaintiff's employer to install the suspension system for the ceiling. The present dispute concerns the indemnity clause in the contract between Fuller and A & M.

Plaintiffs commenced this action against Fuller and Two Exchange Plaza Partners seeking to recover for Brown's injuries and his wife's derivative damages. Fuller impleaded Heydt, A & M and Central Furring and those third-party defendants asserted cross claims against each other and counterclaims against Fuller and Two Exchange Plaza. ¹ The evidence at trial failed to establish why the scaffold collapsed. Nonetheless at the close of the evidence, the court directed a verdict against Fuller based on Labor Law § 240(1) and submitted the question of damages to the jury.

Fuller then moved for a directed verdict on its third-party claims against Heydt, A & M and Central Furring contending that each was liable to it as a statutory agent under Labor Law § 240(1), that each was negligent and thus liable to it for contribution, and that Heydt and A & M were liable to it under indemnification clauses in their subcontracts. The trial court ruled that none of the third-party defendants were Fuller's statutory agents and dismissed those claims. It dismissed Fuller's claims for contribution against A & M and Central Furring, holding that there was no evidence of negligence on their part to submit to the jury. It submitted the question of Heydt's negligence for the jury and reserved decision on Fuller's claim for indemnification from A & M and Heydt.

In submitting the question of Heydt's negligence to the jury, the court denied Heydt's request to charge the jury that fault could be apportioned between Fuller and Heydt and instructed it to render an "all or nothing" verdict. The jury returned a verdict against Fuller in the amount of $2,350,000 for plaintiff and $500,000 for his wife. ² It found that Heydt was not negligent and, therefore, not liable to Fuller. The court then took under advisement the question previously reserved, Fuller's right to judgment against A & M and Heydt based on the contractual indemnity provisions in their respective contracts, and directed the parties to prepare written submissions. ³ It subsequently denied the motion, holding Fuller's application untimely, but stated its belief that indemnity was not available unless the subcontractor was "in some way negligent" and that in any event the clause was unenforceable under General Obligations Law § 5-322.1 because Fuller was liable under Labor Law § 240(1).

Only Fuller appealed. The Appellate Division found the motion for indemnification timely and modified Supreme Court by awarding Fuller judgment over against A & M. 146 A.D.2d 129, 539 N.Y.S.2d 889. The court reasoned that A & M's contractual indemnification liability encompassed the situation here, where Fuller was sued by an employee of A & M's subcontractor for injuries suffered while performing A & M's work. It held further that General Obligations Law § 5-322.1 did not preclude enforcement of the indemnification clause even though A & M was not negligent and Fuller was liable under Labor Law § 240(1). The court affirmed the remainder of Supreme Court's judgment, rejecting Fuller's claim for indemnification from Heydt and A & M's claims that it was entitled to indemnification from Central Furring and that there should be a new trial on damages. We now affirm.

II

The indemnification clause in the contract between Fuller and A & M is written in broad terms. In it, A & M agreed to assume liability incurred by Fuller for personal injuries "or any other claim arising out of, in connection with or as a consequence of the performance of the Work and/or any acts or omission of the Subcontractor or any of its * * * subcontractors" (emphasis added). Thus, A & M was to indemnify Fuller in either of two situations: (1) where a claim arose out of, in connection with or as a consequence of the performance of A & M's work (see, O'Connor v. Serge Elevator Co., 58 N.Y.2d 655, 657, 458 N.Y.S.2d 518, 444 N.E.2d 982) or (2) where a claim arose out of the "acts or omission[s]" of A & M. Manifestly, the purpose of the clause was to broaden A & M's liability under common-law rules of implied indemnity (cf., Mas v. Two Bridges Assocs., 75 N.Y.2d 680, 555 N.Y.S.2d 669, 554 N.E.2d 1257; Guzman v. Haven Plaza Hous. Dev. Fund Co., 69 N.Y.2d 559, 567-568, 516 N.Y.S.2d 451, 509 N.E.2d 51). It provides for indemnification when the claim arises out of the subcontractor's work even though the subcontractor has not been negligent. By its terms the clause applies in this case in which plaintiff, an employee of the subcontractor hired by A & M, was injured while performing work called for in A & M's contract with Fuller. Therefore, although there is no evidence of negligence on A & M's part, the indemnification agreement requires A & M to indemnify Fuller (see, Walsh v. Morse Diesel, 143 A.D.2d 653, 654-655, 533 N.Y.S.2d 80).

III

A & M contends, nonetheless, that the indemnification clause is unenforceable because of the provisions of General Obligations Law § 5-322.1. That section declares void agreements purporting to indemnify contractors against liability for injuries "contributed to, caused by or resulting from the negligence of the promisee, his agents or employees, or indemnitee, whether such negligence be in whole or in part". ⁴ A & M argues that Fuller's liability under Labor Law § 240(1) is, for purposes of General Obligations Law § 5-322.1, the legal equivalent of a finding of negligence and bars indemnification here. We disagree.

The legislative purpose underlying Labor Law § 240(1) was to place " ' "ultimate responsibility for safety practices at building construction jobs where such responsibility actually belongs, on the owner and general contractor" ' " (Bland v. Manocherian, 66 N.Y.2d 452, 459, 497 N.Y.S.2d 880, 488 N.E.2d 810, quoting 1969 N.Y. Legis. Ann., at 407) instead of on workers, who "are scarcely in a position to protect themselves from accident." (Koenig v. Patrick Constr. Corp., 298 N.Y. 313, 318, 83 N.E.2d 133.) To that end, the Legislature determined that owners or contractors shall be liable for failing to provide or erect safety devices necessary to give proper protection to a worker who sustains injuries proximately caused by that failure. Liability is not predicated on fault: it is imputed to the owner or contractor by statute and attaches irrespective of whether due care was exercised and without reference to principles of negligence (Zimmer v. Chemung County Performing Arts, 65 N.Y.2d 513, 521-522, 493 N.Y.S.2d 102, 482 N.E.2d 898; Crawford v. Leimzider, 100 A.D.2d 568, 569, 473 N.Y.S.2d 498). A violation of the statute is not the equivalent of negligence and does not give rise to an inference of negligence.

During trial...