Jana v. West 129TH Street Realty Corp.

• Decision Date: 11 October 2005
• Docket Number: 6348.
• Citation: Jana v. West 129TH Street Realty Corp., 22 A.D.3d 274, 802 N.Y.S.2d 132, 2005 NY Slip Op 7459 (N.Y. App. Div. 2005)
• Parties: JANA L., Plaintiff, v. WEST 129TH STREET REALTY CORP. et al., Defendants, and WEST 129TH STREET REALTY CO., LLC, Appellant, and 408-412 WEST 129TH STREET ASSOCIATES, LLC, Respondent.
• Court: New York Supreme Court — Appellate Division

22 A.D.3d 274

802 N.Y.S.2d 132

2005 NY Slip Op 07459

JANA L., Plaintiff, v. WEST 129TH STREET REALTY CORP. et al., Defendants, and WEST 129TH STREET REALTY CO., LLC, Appellant, and 408-412 WEST 129TH STREET ASSOCIATES, LLC, Respondent.

6348.

Appellate Division of the Supreme Court of the State of New York, First Department.

October 11, 2005.

Order, Supreme Court, New York County (Edward H. Lehner, J.), entered February 24, 2005, which, to the extent appealed, denied the cross motion for summary judgment of defendant-appellant West 129th Street Realty Co., LLC (West Realty) on its cross claim for contractual indemnification against defendant-respondent 408-412 West 129th Street Associates, LLC (Associates), unanimously reversed, on the law, with costs, and the cross motion granted.

The underlying personal injury action was commenced by plaintiff Jana L. after she was assaulted by an intruder in her apartment on West 129th Street. The assault took place on January 25, 2001 at 12:30 P.M. Approximately 90 minutes later, ownership of the building in which the assault occurred passed from West Realty to Associates at a real estate closing which commenced at 2:00 P.M. and concluded at approximately 4:00 P.M. at law offices located in Lower Manhattan.

Plaintiff initially alleged that both sets of defendants were negligent and that they had violated sections of the Administrative Code of the City of New York by failing to provide adequate security in the apartment building. In answering plaintiff's second amended complaint, West Realty asserted a cross claim against Associates seeking contractual indemnification.

The claim was based on a provision in the purchase and sale agreement (Agreement) dated September 2000, by which West Realty contracted to sell the apartment building to Associates for $2.9 million. The provision in the Agreement, which set the date for closing as "on or before" January 30, 2001, was entitled "Indemnification" and provided, in relevant part, as follows: "Purchaser [Associates] shall indemnify and hold harmless Seller [West Realty] from any and all claims, losses, liabilities, costs, damages and expenses, including, but not limited to, court costs and reasonable attorneys' fees asserted against or incurred by Seller resulting from or arising out of the ownership, use or operation of the property on or subsequent to the Closing Date."

The closing was advanced to January 25, 2001, pursuant to an amendment, dated October 30, 2000, which also allowed for a reduction in the purchase price in the event of a closing before January 30. The record reflects that, pursuant to an assignment of leases agreement, Associates assumed all the duties and obligations of the landlord as of January 25, 2001; that Associates took out a general liability policy for the building providing coverage as of 12:01 A.M. on January 25, 2001; and that Associates posted notices on the premises directing tenants to call it with any building-related business occurring "on or after January 25, 2001."

Associates moved for summary judgment on June 25, 2004. Associates argued that since it did not own, possess, control, operate, manage or maintain the subject premises at the time of the assault, it had no relationship with the premises giving rise to any duty to plaintiff.

Subsequently, West Realty cross-moved for summary judgment arguing that Associates had expressly committed itself to indemnify West Realty for any liability resulting from any incident arising on or after the closing date of January 25, 2001. West Realty also relied on a provision in the Agreement that required allocations at the closing to be adjusted as of 11:59 P.M. on the date preceding the closing, that is, as of 11:59 P.M. on January 24, 2001.

Associates asserted that neither the indemnity provision, the agreement as a whole, nor the facts underlying the agreement evinced any intent of the parties to have Associates indemnify West Realty for its own negligence. Associates further argued that the indemnity provision could be interpreted as indemnifying West Realty for the negligent acts of Associates committed between the time of closing and the end of the day; and that the indemnity provision was ambiguous as to whose "ownership, use or operation of the property" triggered the obligation thereunder.

Additionally, Associates claimed that its managing member, Joseph Tahl, was "completely unaware" of the assault prior to the closing, and that had he known that Associates would be held liable, Associates "would not have proceeded with the closing on the terms set forth in the contract."

Supreme Court dismissed plaintiff's complaint against Associates¹ but rejected Associates' argument that the indemnification provision did not expressly indemnify West Realty for its own negligence.

The court correctly determined that the indemnification provision was valid and applicable to the personal injury cause of action brought by plaintiff, and thus to the possible damages awarded for any negligence on the part of West Realty (see Gross v Sweet, 49 NY2d 102, 108 [1979] [exoneration clauses negotiated by sophisticated business entities can be viewed as merely allocating the risk of liability to third parties through the employment of insurance]). The court further took note of the fact that "financial adjustments made at closing pursuant to the contract treated Associates as the owner of the building on January 25" and that the insurance policy obtained by Associates provided coverage for that entire day. The court therefore properly determined that the parties intended for Associates to be protected by insurance, and held that an intention to indemnify a party against his own negligence was clearly implied from the language of the entire agreement and the surrounding circumstances (see Margolin v New York Life Ins. Co., 32 NY2d 149, 153 [1973]).

Nevertheless, the motion court denied West Realty's motion for summary judgment, holding that a triable issue of fact was raised by the question of whether West Realty was aware of the assault prior to closing and failed to disclose this material fact to Associates, thus foreclosing Associates' option of...