Norman Co. v. Nassau County

• Decision Date: 08 September 1970
• Parties: The NORMAN COMPANY, Inc., Plaintiff, v. COUNTY OF NASSAU, Defendant. COUNTY OF NASSAU, Defendant and Third-Party Plaintiff, v. DEPOT CONSTRUCTION CORP., Third-Party Defendant.
• Court: New York Supreme Court

Page 44

314 N.Y.S.2d 44

63 Misc.2d 965

The NORMAN COMPANY, Inc., Plaintiff, v. COUNTY OF NASSAU, Defendant.

COUNTY OF NASSAU, Defendant and Third-Party Plaintiff, v. DEPOT CONSTRUCTION CORP., Third-Party Defendant.

Supreme Court, Nassau County, Special Term, Part I.

Sept. 8, 1970.

Morris H. Schneider, County Atty., Mineola, for defendant and third-party plaintiff.

Salon, Grossman, Ortner & Dershowitz, New York City, for plaintiff.

Demov, Morris, Levin & Shein, New York City, for third-party defendant.

MENORANDUM

BERNARD S. MEYER, Justice.

Third party defendant Depot Construction Corporation moves to dismiss the County's third-party complaint. Plaintiff in the main action against the County is The Norman Company, Inc. which contracted with the County to install a sprinkler system as part of the construction of the Patterson Home. In its action against the County Norman seeks to recover damages for delay resulting from the failure of the County to coordinate the work of the contractors, to submit drawings on schedule, to approve drawings within required times, or 'to require the other prime contractors, and particularly the contractor for general construction, to submit the required progress schedules and/or to adhere to its progress schedule' (Complaint, 12). Depot was the contractor for general construction, and the County's third party complaint alleges that Depot failed to coordinate its work with Norman and other prime contractors, failed to submit drawings within required time and failed to 'submit required progress schedules and/or to adhere to its progress schedule'.

Under its contract Norman agreed 'to make no claim for damages for delay * * * occasioned by any act or omission to act by the County or any of its representatives.' The Norman complaint was dismissed on the basis of that provision, but the Appellate Division reversed, 27 A.D.2d 936, 278 N.Y.S.2d 719, noting that the quoted clause would not absolve the County if a trial demonstrates that it had 'actively or willfully interfered with plaintiff-contractor's performance', though the County would be exculpated if, 'after trial, the proof shows no unwarranted interference * * * and due diligence in coordinating supervision over the work of all the artisans employed' in the project. Depot now moves to dismiss the third party complaint on three grounds: (1) the County cannot recover over in a case in which it can be held liable to Norman only for active interference, (2) the County by letter dated December 4, 1961 granted Depot an extension of time, thereby acknowledging that the causes of delay were beyond Depot's control, and thus defeating the claim over, and (3) the third party complaint is legally insufficient on its face. The motion is denied.

Under its contract with the County Depot obligated itself to coordinate its work with that of other contractors (Article 11) and agreed to indemnify the County from claims arising out of 'any act of commission or omission of any nature whatsoever of either the County or the contractor' (Article 43). While the claim over pleads only the first obligation, the County's brief argues the second as well. Since the statute of limitations does not begin to run on the Article 43 claim until the County pays whatever judgment Norman may obtain against it, Musco v. Conte, 22 A.D.2d 121, 254 N.Y.S.2d 589, the County will be allowed in the interest of avoiding multiple suits to amend to state such an additional cause of action, if it be so advised. Depot's obligations under both Articles are, therefore, considered in the discussion that follows.

The active-passive cases upon which Depot's first point is based are inapplicable, because the County's claim over is upon its contract with Depot, not for implied indemnity. The rule that active conduct will defeat recovery over applies only when indemnity rests upon the concept that as between the person claiming indemnity and the person from whom it is claimed, the latter is 'primarily liable' to the injured third person, see Fladerer v. Needleman, 30 A.D.2d 371, 373, 292 N.Y.S.2d 277, 279. If in such a case the liability of each arises from active conduct, neither is primarily liable and there can be no recovery over because the basis upon which the law implies the right to indemnity does not exist. When, however, what the claimant-over seeks to enforce is his rights under his contract with the third party defendant, it is the contract provisions that determine recovery, Kurek v. Port Chester Housing Auth., 18 N.Y.2d 450, 276 N.Y.S.2d 612, 223 N.E.2d 25. Though a contract 'will not be construed to indemnify a person against his own negligence unless such intention is expressed in unequivocal terms,' Thompson-Starrett Co. v. Otis Elevator Co., 271 N.Y. 36, 41, 2 N.E.2d 35, this is because 'it is unnatural that one would agree to indemnify another, when he would otherwise be under no such legal obligation,' Kurek v. Port Chester Housing Auth., Supra, 18 N.Y.2d at p. 456, 276 N.Y.S.2d at p. 615, 223 N.E.2d at p. 28, not because there is any policy of law that the active or wilful breach of another contract forecloses recovery by a claimant-over on his contract with the third party defendant. While at first blush Vander Veer v. Tyrrell, 27 A.D.2d 958, 278 N.Y.S.2d 916, on second appeal 29 A.D.2d 255, 287 N.Y.S.2d 228, may seem contrary to that conclusion, its negligence setting and the fact that the contractual claim over there dismissed was for breach of an Implied rather than an Express contract provision sufficiently distinguish it from the instant case.

Depot's second argument is that by the extension letter of December 4, 1961 the County acknowledged that the causes of delay were beyond Depot's control and, therefore, will not now be heard to say otherwise. The letter, however, makes no reference to the contract and Depot's papers do not sufficiently demonstrate that the letter was issued under Article 12 of the contract for the court to say that there is no triable issue of fact. Moreover, the letter has no bearing on Depot's obligation under Article 43 which covers not only acts of Depot but of the County as well.

The contention that the third party complaint is legally insufficient turns on the interpretation of CPLR 1007, which describes an allowable claim over by a defendant as one 'against a person * * * who is or may be liable to him for all or part of the plaintiff's claim against him.' Do the quoted words require that the liability of the third party defendant result from the same acts as that of the defendant or simply that the third party defendant be responsible to defendant for the damages which the main action plaintiff may recover from defendant? See Hejza v. New York Central Railroad Co., 230 App.Div. 624, 626, 246 N.Y.S. 34, 38, or as Professor Carmody put it in relation to what was then Civil Practice Act Section 193: 'for the amount represented in a judgment obtained by the plaintiff against the defendant in the action', New York Practice (1924 Supp.) 61, as quoted in Travlos v. Commercial Union of America, Inc., 217 App.Div. 352, 357, 217 N.Y.S. 459, 465. For the answer to that question the legislative history of CPLR 1007 must be examined.

Because restrictive interpretation had almost emasculated CPA § 193(3), that provision was, on recommendation of the Judicial Council, 12 N.Y.Jud. Council Rep.1946, p. 192 ff., repealed in 1946 and a new section 193--a enacted. The new section contained not only the words quoted above from CPLR 1007 but also an additional sentence: 'The claim...