Lamela v. Verticon, Ltd.

• Decision Date: 14 June 2018
• Docket Number: 524554
• Citation: 162 A.D.3d 1268,79 N.Y.S.3d 698
• Parties: James LAMELA et al., Plaintiffs, v. VERTICON, LTD., et al., Defendants and Third–Party Plaintiffs–Respondents, et al., Defendants; Lamela & Sons, Inc., Third–Party Defendant–Appellant.
• Court: New York Supreme Court — Appellate Division

162 A.D.3d 1268

79 N.Y.S.3d 698

James LAMELA et al., Plaintiffs,

v. VERTICON, LTD., et al., Defendants and Third–Party Plaintiffs–Respondents, et al., Defendants;Lamela & Sons, Inc., Third–Party Defendant–Appellant.

524554

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: May 4, 2018

Decided and Entered: June 14, 2018

Smith, Sovik, Kendrick & Sugnet, PC, Syracuse (Kevin E. Hulslander of counsel), for third-party defendant-appellant.

Goldberg Segalla LLP, Albany (William J. Greagan of counsel), for defendants and third-party plaintiffs-respondents.

Before: Garry, P.J., Egan Jr., Lynch, Mulvey and Rumsey, JJ.

MEMORANDUM AND ORDER

Garry, P.J.

Appeal from an amended order of the Supreme Court (Gilpatric, J.), entered October 28, 2016 in Ulster County, which, among other things, denied third-party defendant's motion for summary judgment dismissing the third-party complaint.

Plaintiffs in the underlying action were injured when an unsecured wall collapsed and knocked over an extended scissors lift that they were using to perform demolition work. Plaintiffs were employed by third-party defendant, Lamela & Sons, Inc., and the warehouse where the accident occurred was owned by defendant Satin Realty Associates, LLC and leased to defendant Satin Fine Foods, Inc. (hereinafter collectively referred to as Satin). Defendant Verticon, Ltd. was the general contractor and defendant Accurate Refrigeration Design, LLC was a subcontractor. Employees of Accurate's subcontractor, defendant Cooler Panel Pros Inc., were constructing the wall that collapsed when the accident occurred. Accurate was covered by an insurance policy issued by Hartford Casualty Insurance Company, and Verticon and Satin were additional insureds on that policy. After plaintiffs commenced the underlying action alleging negligence and violations of the Labor Law, Hartford accepted defense and indemnification obligations as to Accurate, Verticon and Satin. To avoid a conflict of interest, independent counsel was appointed to represent Accurate.

In July 2014, Supreme Court granted plaintiffs' motion for partial summary judgment as to liability pursuant to Labor Law § 240(1) against Verticon and Satin. Shortly thereafter, the action was settled in open court by a stipulation in which defendants and plaintiffs agreed on a total payment of $3.2 million, to be apportioned under an agreement by which Verticon and Satin would pay $2,199,999, Accurate would pay $1, and the remaining balance of $1 million would be paid by Cooler. Although Lamela was not a party to the stipulation, its counsel was present when the settlement was announced. Counsel for Lamela objected to the alleged bad faith of the insurance carriers in negotiating the resolution, apparently relative to the apportionment of liability, and expressly reserved its rights as to all existing cross claims and counterclaims.

After payments and releases were exchanged, Verticon and Satin filed an amended third-party complaint seeking contractual indemnification against Lamela. Lamela moved for summary judgment dismissing the amended third-party complaint, and Verticon and Satin cross-moved for summary judgment on the indemnification claim. At oral argument, counsel for Verticon and Satin clarified that the cross motion sought indemnification as to Satin only, as Supreme Court had previously found that there were questions of fact as to Verticon's negligence. Supreme Court found that Satin was entitled to contractual indemnification in the full amount that had been paid on its behalf under Hartford's policy, granted the cross motion and denied Lamela's motion. Lamela appeals.

A third-party indemnification claim may not be brought against an employer unless, as pertinent here, it is "based upon a provision in a written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to contribution to or indemnification of the claimant or person asserting the cause of action for the type of loss suffered" ( Workers' Compensation Law § 11 ; see Staub v. William H. Lane, Inc., 58 A.D.3d 933, 934, 870 N.Y.S.2d 630 [2009] ). Such an agreement is enforceable when "the parties entered into a written contract containing an indemnity provision applicable to the site or job where the injury giving rise to the indemnity claim took place ... [and] the indemnity provision was sufficiently particular to meet the requirements of [ Workers' Compensation Law § 11 ]" ( Rodrigues v. N & S Bldg. Contrs., Inc., 5 N.Y.3d 427, 432, 805 N.Y.S.2d 299, 839 N.E.2d 357 [2005] ; accord Miller v. Larkin, 149 A.D.3d 1240, 1241, 51 N.Y.S.3d 684 [2017] ).

Here, the governing construction contract contained a provision by which Lamela expressly agreed to indemnify Verticon and Satin against "any and all suits, actions, claims, debts, demands, damages, liquidated damages, consequential damages, liabilities ... and expenses of whatsoever kind or nature ... arising from the use or operation by [Lamela] of construction equipment, tools, scaffolding or facilities furnished to [Lamela] to perform this [w]ork." In granting summary judgment to plaintiffs on their Labor Law § 240(1) claim, Supreme Court found that the scissors lift on which plaintiffs were working when the accident occurred was not placed to give proper protection to plaintiffs and that Satin, as the owner of the warehouse, was liable as a matter of law for this statutory violation. It was thus established that Satin's liability to plaintiffs arose from Lamela's "use or operation ... of construction equipment, tools, scaffolding or facilities" and fell squarely within the plain language of the indemnification provision (see Brown v. Two Exch. Plaza Partners, 76 N.Y.2d 172, 178, 556 N.Y.S.2d 991, 556 N.E.2d 430 [1990] ; Clute v. NYNEX Mobile Tech. Servs. Co., 184 A.D.2d 942, 944–945, 585 N.Y.S.2d 140 [1992] ). Accordingly, Satin made a prima facie showing of its entitlement to judgment as a matter of law on its contractual indemnification claim, shifting the burden to Lamela to demonstrate the existence of a triable question of fact (see Baginski v. Queen Grand Realty, LLC, 68 A.D.3d 905, 907–908, 891 N.Y.S.2d 448 [2009] ; see generally Alvarez...