Madeira v. Affordable Housing Foundation, Inc.

• Decision Date: 22 April 2004
• Docket Number: No. 01 CIV. 8779(CM).,01 CIV. 8779(CM).
• Citation: 315 F.Supp.2d 504
• Parties: Jose Raimundo MADEIRA, Plaintiff, v. AFFORDABLE HOUSING FOUNDATION, INC. and Mountain Developers Associates, LLC Defendants. Affordable Housing Foundation, Inc. and Mountain Developers Associates, LLC Third-Party Plaintiffs, v. Cleidson C. Silva d/b/a C & L Construction and Preferred National Insurance Co. Third-Party Defendants.
• Court: U.S. District Court — Southern District of New York

Page 504

315 F.Supp.2d 504

Jose Raimundo MADEIRA, Plaintiff, v. AFFORDABLE HOUSING FOUNDATION, INC. and Mountain Developers Associates, LLC Defendants.

Affordable Housing Foundation, Inc. and Mountain Developers Associates, LLC Third-Party Plaintiffs, v. Cleidson C. Silva d/b/a C & L Construction and Preferred National Insurance Co. Third-Party Defendants.

No. 01 CIV. 8779(CM).

United States District Court, S.D. New York.

April 22, 2004.

Richard Winograd, Ginarte, O'Dwyer, Winograd & Laracuente, New York City, for Plaintiff.

Dennis E.A. Lynch, Dorfman, Lynch & Knoebel, Nyack, NY, Donald Joseph Feerick, Jr., Donald Feerick, New City, NY, for Defendants/ThirdParty Plaintiff.

Susan Smodish, Jeffrey Samel & Partners, Joseph M. Glatstein, Williamson & Williamson, New York City, for ThirdParty Defendant.

MEMORANDUM DECISION AND ORDER DENYING THIRD-PARTY DEFENDANTS' MOTION FOR NEW TRIAL AND THIRD-PARTY PLAINTIFFS' MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT

MCMAHON, District Judge.

This is an action to recover damages for personal injuries sustained by plaintiff Jose Madeira in the course of his work on a construction site in Monroe, NY. The third-party action was thereafter commenced by Affordable Housing, the site owner, and Mountain Developers, the general contractor, for indemnification from plaintiff's employer Cleidson Silva d/b/a C & L Construction. Silva is covered by Preferred National Insurance, which was dismissed from the case at the close of the evidence.

The case was tried to a jury in two parts over the course of nine days. At the conclusion of Phase I, the jury found that defendants Affordable and Mountain had violated their duties under the "Scaffold Law," New York Labor Law § 240(1), and returned a verdict in favor of plaintiff Jose Madeira for $638,671.63. No issues of negligence on third-party liability were submitted to the jury in Phase I; plaintiff's claim was limited to a § 240(1) "strict liability" claim, and the jury considered only that issue. In the second phase of the trial, the jury determined that Paulo Miranda had entered into an indemnification agreement (DX4) on behalf of C & L Construction, and determined that C & L Construction was 82% liable for Madeira's accident and Mountain and Affordable were each 9% liable.

Third-party plaintiffs and third-party defendant Silva have both submitted post-trial motions for judgment notwithstanding the verdict pursuant to FRCP Rule 50(b). For the following reasons both motions are denied, without need for response from other parties.¹

Third-Party Plaintiffs' Motion for A Judgment Notwithstanding the Verdict Pursuant to FRCP 50(b)

Affordable and Mountain assign four grounds for setting aside the jury verdict. They argue:

First, that the jury's award of lost earnings to the plaintiff Jose Madeira was erroneous because he is an undocumented worker, and therefore ineligible for those damages;

Second, that the jury's apportionment of fault was erroneous because there was no finding of negligence in the "liability" phase of the trial (i.e. Phase I) to support that apportionment;

Third, that the preclusion of proof of lack of insurance was erroneous as a matter of law because, notwithstanding the stipulation that Affordable and Mountain were not additional insureds, there was a breach of the insurance clause of the indemnity agreement;

Finally, that the Court erred in dismissing Preferred, because the third-party plaintiffs were entitled to a defense and indemnity.

1. Plaintiff's Alien Status Does Not Deprive Him of His Right to Lost Earnings

Affordable and Mountain argue that, under the Supreme Court's reasoning in Hoffman Plastic v. NLRB, 535 U.S. 137, 122 S.Ct. 1275, 152 L.Ed.2d 271 (2002), plaintiff is not entitled to back pay and lost wages because such an award is contrary to the Immigration Reform and Control Act ("IRCA"). In Hoffman, the Supreme Court reviewed an NLRB award of back pay to alien workers who were terminated because of their participation in organizing a union, in violation of § 8(a)(3) of the National Labor Relations Act. The Court determined that an award of back pay for work not performed was contrary to the purposes underlying the IRCA, because under the IRCA scheme it is "impossible for an undocumented alien to obtain employment in the United States without some party directly contravening explicit congressional policies." Id., 147, 122 S.Ct. 1275. Consequently, the Court held that the NLRB could not award back pay to an illegal alien, ruling that such an award was beyond the Board's remedial discretion and "trivializes" the immigration laws. Id., 150, 122 S.Ct. 1275. Affordable and Mountain also cite two post-Hoffman cases in which courts have denied injured workers back pay or lost wages based on Hoffman. See Majlinger v. Cassino Contracting Corp., 1 Misc.3d 659, 766 N.Y.S.2d 332 (2003); Veliz v. Rental Corp., 313 F.Supp.2d 1317, 2003 WL 23355662 (M.D.Fla.2003).

This case involves a claim for relief under New York state law. No federal cause of action is asserted. Under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) a federal court sitting in diversity applies the substantive law of the state. I therefore look to the law of New York, not the National Labor Relations Act, for guidance.

Plaintiff's alien status does not prevent him from recovering compensatory damages for defendants' violation of New York Labor Law. See Public Admin. of Bronx County v. Equitable Life Assurance Society of U.S., 192 A.D.2d 325, 595 N.Y.S.2d 478 (1st Dept.1993)(an illegal alien may sue to recover damages for future lost earnings resulting from tortious injury); Cano v. Mallory Mgmt., 195 Misc.2d 666, 760 N.Y.S.2d 816 (2003) (plaintiff's status is not a bar to recovery, but may be a factual item to be presented to the jury); Mazur v. Rock-McGraw, Inc., 246 A.D.2d 515, 666 N.Y.S.2d 939 (2d Dep't 1998)(neither plaintiff's improper conduct in obtaining his employment nor his status as an illegal alien bar the maintenance of a suit for personal injuries based on asserted violations of Labor Law § 241). In New York, alien plaintiffs are free to establish that their earning capacity has been diminished as a result of an accident. Indeed, a post-Hoffman Official Opinion the Attorney General of New York concluded that Hoffman does not prevent the New York Department of Labor from enforcing the State's wage payment laws on behalf of illegal immigrants as long as no federal Constitutional or statutory right was implicated. See Formal Opinion No.2003-F3, N.Y. Op. Atty. Gen. No. F3, 2003 WL 22522840 (N.Y.A.G. October 21, 2003) citing Balbuena v. IDR Realty, LLC, N.Y. L.J., May 28, 2003, at 18 (Sup.Ct. N.Y. County May 16, 2003) (Hoffman does not inhibit State court's ability to award lost wages to an illegal immigrant in tort action brought under state common law); Cano, 195 Misc.2d 666, 760 N.Y.S.2d 816 (holding under federal law in Hoffman does not bar illegal immigrants from using New York State court system to "seek civil redress from alleged tortious conduct").

As I instructed the jury, under New York law, plaintiff's alien status is relevant to determining whether lost earnings are appropriate and, if so, how much should be awarded. See Cano, 195 Misc.2d at 666, 760 N.Y.S.2d 816. The jury obviously concluded that plaintiff would have obtained employment in the United States, where he has continuously resided since the accident, if he had not been severely injured by his fall. And the fact is, undocumented aliens do obtain work in the United States. Recognizing this incontrovertible fact, New York's public policy does not bar compensation in the form of back pay for undocumented workers who are injured in the manner of the instant plaintiff.

Affordable and Mountain do not clearly indicate whether they challenge only the back pay award (the only issue in Hoffman) or also the front pay award. With respect to the front pay issue, Hoffman is irrelevant. The jury was told that it could consider plaintiff's alien status in determining whether he would have continued to work and whether that work would be in the United States or elsewhere. Plaintiff's counsel argued to the jury that plaintiff hoped to remain in the United States (and was working on obtaining his documentation), but also told the jury that even if plaintiff were to be deported, he would be unable to work in Brazil. The jury was not required to specify where plaintiff would have earned money in the future, and clearly reached a verdict that he would have been able to earn some money somewhere, be it in the United States or elsewhere, were it not for his accident. The jury's determination will not be set aside.

2. The Jury's Apportionment of Fault was Supported by the Evidence

Affordable and Mountain argue that, because § 240(1) imposes strict liability, there was no finding of negligence in what they label the "liability" phase of the trial. That being so, they argue that C & L cannot seek to avoid indemnifying third-party plaintiffs on the ground that they were negligent.

This is incorrect. There was no finding of negligence in the first phase of the trial because negligence was irrelevant to plaintiff's claim against Affordable and Mountain under § 240(1). Affordable and Mountain could have been — and were — held liable to plaintiff irrespective of any negligence on their part. Negligence was, however, relevant to Phase II of the trial. The jury was, therefore, asked if Affordable or Mountain were negligent, and, if so, to apportion fault at the conclusion of Phase II.

The indemnification provision provides:

"To the fullest extent permitted by law, Subcontractor shall indemnify and hold harmless the General Contractor and Owner against any claims, damages, losses and expenses, including legal fees, arising out of or resulting from performance of subcontracted work to the extent caused in whole or part by the Subcontractor or anyone...