Vey v. Port Authority of New York and New Jersey
| Citation | 445 N.Y.S.2d 84,54 N.Y.2d 221,429 N.E.2d 762 |
| Parties | , 429 N.E.2d 762 Clarence VEY et al., Plaintiffs, v. PORT AUTHORITY OF NEW YORK AND NEW JERSEY et al., Defendants. (And a Third- Party Action.). Port Authority of New York and New Jersey, Fourth-Party Plaintiff-Respondent, v. Grand Iron Works, Inc., et al., Fourth-Party Defendants-Appellants. (And a Fifth-Party Action.). |
| Decision Date | 23 November 1981 |
| Court | New York Court of Appeals |
The issue on appeal is whether a contractual provision requiring the subcontractor "to hold harmless and to indemnify and protect against all damages, claims or demands arising out of the work covered by this contract" requires indemnification when the contractor is held liable to the owner under an indemnification clause in a separate contract.
Plaintiff Clarence Vey, an employee of Ermco Erectors, Inc. (Ermco), was injured when he fell into an open stairway while working on the construction of an addition to a bus terminal owned by the Port Authority of New York and New Jersey (Port Authority). The Port Authority had contracted with Grand Iron Works, Inc. (Grand Iron), to fabricate and erect the structural steel necessary for this addition. Grand Iron subcontracted the erection of the steel to Ermco. Plaintiffs, Clarence Vey and his wife, Minnie Vey, brought this suit for injuries and loss of services against the Port Authority, the alleged general contractor Carlin-Atlas Construction Co., Inc. (Carlin-Atlas), and against Empire City Iron Works (Empire City), the company responsible for the construction of the stairway. * Third-party actions were brought by each of the defendants against Grand Iron and Ermco. All parties stipulated that the plaintiffs were to receive $1,200,000 in damages.
After a nonjury trial, solely on the issue of liability, it was determined that Port Authority and Ermco were each 50% liable. Since plaintiff Clarence Vey was an employee of Ermco, he could recover only workers' compensation benefits from Ermco, but he could recover the full amount of the judgment from the other tort-feasor, the Port Authority. (Kelly v. Long Is. Light. Co., 31 N.Y.2d 25, 30, 334 N.Y.S.2d 851, 286 N.E.2d 241.) The Port Authority then sought to recover over against Grand Iron on the basis of the indemnification clause in their contract. Grand Iron, in turn, cross-claimed against Ermco seeking indemnification not only on the basis of the indemnification clause in Grand Iron's contract with Ermco but also on the basis of the common-law tort doctrine that a principal who has been held liable in tort because of the negligence of its agent is entitled to indemnification from that agent.
Supreme Court granted Grand Iron's cross claim upon both theories. The Appellate Division modified that award by disallowing any recovery based upon contractual indemnity. The court reasoned that the Grand Iron-Ermco contract did not incorporate the indemnification provisions set forth in the Port Authority-Grand Iron contract and that the Grand Iron-Ermco contract indemnification provision evidenced "no intent by the parties to be bound by an indemnification arising out of a separate contract between different parties, but only against claims 'arising out of the work covered by this contract.' " (79 A.D.2d 920, 921, 434 N.Y.S.2d 412.) The Appellate Division concluded that "Ermco therefore is liable to Grand Iron only for contribution...
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