CREF 546 W. 44th St. v. Hudson Meridian Constr. Grp.
| Docket Number | Index Nos. 655672/2019,595366/2022,MOTION SEQ. No. 004 |
| Decision Date | 18 October 2023 |
| Citation | 2023 NY Slip Op 33757 (U) |
| Parties | CREF 546 WEST 44TH STREET, LLC and PATRINELY GROUP, LLC, Plaintiffs, v. HUDSON MERIDIAN CONSTRUCTION GROUP, LLC and CODE CONSULTANTS PROFESSIONAL ENGINEERS, PC, Defendants. HUDSON MERIDIAN CONSTRUCTION GROUP, LLC Plaintiff, v. AMG SOLUTIONS LLC, BAY RESTORATION CORP., BLETSAS PLUMBING &HEATING CORP., CASSWAY CONTRACTING CORP., CHUTES ENTERPRISES LLC, D9, INC., HENICK-LANE, INC., LAWLER WOODWORK LLC, LET IT GROW, INCORPORATED, LIPPOLIS ELECTRIC, INC., OHANA METAL &IRON WORKS INC., and SHERIDIAN MECHANICAL CONTRACTING CORPORATION, Defendants. |
| Court | New York Supreme Court |
Unpublished Opinion
The following e-filed documents, listed by NYSCEF document number (Motion 004) 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90 91,92, 93, 94, 95, 96, 97, 98, 108, 113, 114, 115, 126, 127 128 were read on this motion to DISMISS.
Rich Intelisano & Katz, LLP, New York, NY (Daniel E. Katz and Robert J. Howard of counsel), for defendant/third-party plaintiff Hudson Meridian Construction Group, LLC.
Adelman Matz P.C., New York, NY (Gary Adelman, Sarah M. Matz, and David M. Marcus of counsel), for third-party defendant AMG Solutions LLC.
No appearance for third-party defendants Bay Restoration Corp, and Chutes Enterprises LLC.
PRESENT: HON. GERALD LEBOVITS Justice.
DECISION + ORDER ON MOTION
This action arises from a luxury residential construction project. The property owner, plaintiff CREF 546 W. 44th St., LLC, was sued by a nonparty for alleged violations of applicable accessibility statutes. CREF then brought this action against its general contractor, defendant/third-party plaintiff Hudson Meridian Construction Group, LLC. Hudson Meridian impleaded third-party defendant AMG Solutions, LLC, and other subcontractors on the project. AMG now moves to dismiss the third-party claims and cross-claims against it. The motion is granted in part and denied in part.
In 2014, CREF entered into an agreement with Hudson to construct a building at 546 West 44th Street in New York County (the "Project"). Hudson subcontracted with AMG to provide glass, metal, and woodwork at the Project.
The relationship between Hudson and AMG later soured. AMG claimed that Hudson had failed to pay $296,000 in services and materials rendered under their subcontract. In October 2017, AMG sued Hudson and other defendants in this court for breach of contract and Lien Law trust fund diversion, and to foreclose on a mechanic's lien. (See Index No. 159086/2017 [Shlomo Hagler, J.]) [the AMG Action].) Hudson counterclaimed, alleging that AMG had failed to perform its work in a timely manner and failed to provide necessary materials, thereby requiring Hudson to incur costs to replace deficient and substandard work by AMG. Hudson has moved for summary judgment in that action to dismiss AMG's claims and for judgment in Hudson's favor on the counterclaim. That motion remains pending.
In May 2018, Stason Sutton,who uses a wheelchair and is assisted in this litigation by the Fair Housing Justice Center, sued CREF and other defendants in the U.S. District Court for the Southern District of New York, alleging that they had failed to comply with federal, state, and local disability-accommodation statutes. (See Fair Housing Justice Ctr., Inc. v. CREF 546 West 44th Street, LLC, Dkt. No. 18-cv-2146 [the Sutton Action].) The action remains pending.
The Sutton Action led CREF to bring this action against Hudson and a design consulting firm (Code Consultants) retained by CREF in connection with the Project. CREF alleged that Hudson and Consultants (i) breached their contractual obligations to ensure that the Property complied with state and federal accessibility requirements; (ii) committed professional negligence; and (iii) breached contractual obligations to indemnify CREF for expenses arising from the Sutton Action. Hudson and Code Consultants moved to dismiss the claims against them. In July 2020, this court dismissed CREF's professional-negligence claims and its indemnification claims arising from liability for violations of federal law; and it denied the motion to dismiss with respect to CREF's breach-of-contract claims and its indemnification claims arising from liability for violations of state and local law. (See CREF 546 W. 44th St., LLC v. Hudson Meridian Constr. Group, LLC, 69 Mise 3d 747 [Sup Ct, NY County 2020].)
In May 2022, Hudson filed a third-party complaint against AMG and numerous other parties, including Chutes Enterprises LLC and Bay Restoration Corp. Hudson is asserting claims for contribution and for contractual and common-law indemnification. Chutes has cross-claimed against AMG for contribution. Bay has cross-claimed against AMG for contractual and common-law indemnification.
AMG now moves under CPLR 3211 (a) (1) (4) and (7) to dismiss Hudson's third-party claims against it, and the cross-claims brought against it by Chutes and Bay. AMG's motion with respect to Hudson's third-party claims is denied with respect to Hudson's contractual-indemnification claim and granted with respect to Hudson's common-law-indemnification and contribution claims. AMG's motion with respect to the cross-claims is granted without opposition.
AMG moves under CPLR 3211 (a) (7) to dismiss Hudson's claims against it for failure to state a cause of action. In considering a motion to dismiss under CPLR 3211 (a) (7), the court must accept the facts as alleged in support of the claim as true, afford the non-moving party the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within a cognizable legal theory. (Leon v. Martinez, 84 N.Y.2d 83, 87-88 [1994].) Applying this standard, AMG's motion is denied with respect to Hudson's contractual-indemnification claim, and granted with respect to Hudson's common-law-indemnification and contribution claims.[1]
The branch of AMG's motion seeking dismissal of Hudson's contractual-indemnification claim is denied. Section § 20.1 of the subcontract provides that "[t]o the fullest extent permitted by law," AMG will defend and indemnify Hudson from damages and losses (including reasonable attorney fees) arising "from the act, failure to act, omission, negligence, breach or default" by AMG "in connection with the performance of this Subcontract." (NYSCEF No. 89 at 23 [subcontract page 21].)
Hudson's third-party complaint alleges in support of the contractual-indemnification claim that, "to the extent that any negligent, deficient and defective construction work existed or exist[s] at the Project," those shortcomings do not result from Hudson's work, but instead from "negligent, improper and faulty work and/or design and/or materials performed and supplied by AMG." (NYSCEF No. 55 at ¶ 26.)
In moving to dismiss the contractual-indemnification claim, AMG argues, in effect, that this court should decline to credit this allegation. (See NYSCEF No. 80 at 17-19.) That is, AMG contends that it performed its work in strict compliance with the design plans it was provided, and that Hudson's potential liability does not stem from anything AMG did, but rather with defects in the plans that Hudson provided AMG. Indeed, AMG suggests, it did not perform work in the areas of the project at issue in the Sutton Action. (Id. at 18-19.) But AMG has not provided documentary evidence conclusively establishing that it performed its work in proper compliance with Hudson's plans and specifications, or that none of its work is at issue in the Sutton Action.[2]Absent that documentary evidence, this court may not treat the allegations of Hudson's complaint as untrue or unworthy of credit.
AMG also contends that "absent any negligence on the part of AMG, which Hudson failed to allege, AMG cannot be required to indemnify Hudson." (Id at 18.) But Hudson did allege that AMG's work was negligent. (See NYSCEF No. 55 at ¶ 26.) Regardless, the terms of the indemnification clause are not limited to "negligence" or a "breach" by AMG. (See NYSCEF No. 89 at 23 § 20.1.) Nor would it contravene General Obligations Law § 5-322.1 to read that clause as triggered by non-negligent conduct, as AMG asserts. (See NYSCEF No. 80 at 18, citing Gomez v. National Ctr. for Disability Servs., 306 A.D.2d 103, 103 [1st Dept 2003].) As Gomez reflects, § 5-322.1 bars requiring a party to a construction contract to indemnify another party for the indemnitee's own negligence. It does not also bar requiring indemnification by a non-negligent indemnitor, as AMG argues. (See Cackett v. Gladden Props., LLC, 183 A.D.3d 419, 421-422 [1st Dept 2020] [].)
To the extent AMG is arguing instead that the indemnification clause is unenforceable absent negligence by AMG because, in that scenario, any loss would necessarily stem from Hudson's negligence, that argument is unpersuasive. AMG has not established that absence of negligence on its part necessarily implies 100% negligence on Hudson's part. This lack of proof is particularly significant given the indemnification clause's "as permitted by law" proviso. That proviso, consistent with § 5-322.1, limits the scope of any indemnity obligation owed by AMG to that portion of Hudson's losses that does not stem from Hudson's own negligence. (See Brooks v. Judlau, 11 N.Y.3d 204, 208-210 [2008].)
The branch of AMG's motion seeking dismissal...
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