Service Sign Erectors Co., Inc. v. Allied Outdoor Advertising, Inc.
| Decision Date | 22 August 1991 |
| Citation | 573 N.Y.S.2d 513,175 A.D.2d 761 |
| Parties | SERVICE SIGN ERECTORS CO., INC., Plaintiff, v. ALLIED OUTDOOR ADVERTISING, INC., Defendant and Third-Party Plaintiff-Respondent-Appellant. New York City Transit Authority, et al., Third-Party Defendants-Appellants-Respondents. |
| Court | New York Supreme Court — Appellate Division |
Before MURPHY, P.J., and CARRO, WALLACH and RUBIN, JJ.
Order, Supreme Court, New York County (Leonard N. Cohen, J.), entered April 5, 1990, granting so much of third-party defendants' summary judgment motion as sought dismissal of the first cause of action in the third-party complaint, while denying that portion of the motion seeking dismissal of the second and third causes of action in that third-party complaint, unanimously modified, on the law, to grant dismissal of the second and third causes of action as well, and as so modified, affirmed, without costs.
Plaintiff ("Service Sign") was the subcontractor hired to construct a billboard which defendant and third-party plaintiff ("Allied") had agreed to build at third-party defendants' ("Authority's") Eastside bus depot in Manhattan, pursuant to a license agreement between Allied and the Authority for development of new outdoor advertising display revenues. Shortly after Service Sign began work at the depot, the Authority's administrator unilaterally ordered a halt when he learned that the bus facility was scheduled to undergo substantial renovation. Over the weekend, while no workers were on the site, the unfinished billboard structure collapsed due to insufficient support. When Allied refused to compensate Service Sign for the work done, the latter commenced this action for damages in breach of contract or quantum meruit. Allied then brought this third-party action, the first three causes of which were based on a theory of indemnification. A fourth cause of action, asserting liability apart from indemnity, was dismissed for failure to file timely notice of claim, and is no longer before us.
Allied urges that its third-party claims rest upon indemnification, not express, but implied. The independent action based upon implied obligation to indemnify has long been recognized by our courts (see, e.g., McDermott v. City of New York, 50 N.Y.2d 211, 217, 428 N.Y.S.2d 643, 406 N.E.2d 460; Brown v. Rosenbaum, 287 N.Y. 510, 518-519, 41 N.E.2d 77, cert. denied 316 U.S. 689, 62 S.Ct. 1282, 86 L.Ed. 1760). The principle derives from § 76 of the Restatement of Restitution, which provides that where a party has discharged a duty owed by him to...
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