Wausau Business Ins. Co. v. Turner Const. Co.

• Decision Date: 19 July 2001
• Docket Number: No. 99 CIV. 0682(RWS).,99 CIV. 0682(RWS).
• Parties: WAUSAU BUSINESS INSURANCE COMPANY as subrogee to the rights of Central Synagogue, Plaintiff, v. TURNER CONSTRUCTION COMPANY, Amis Inc. and Aris Development Corporation, Defendants. Turner Construction Company, Third-Party Plaintiff, v. Trident Mechanical Systems, Inc., Trident Mechanical Systems, Inc., a division of Dualstar Technologies Corp., Trident Mechanical Systems, Inc., a wholly-owned subsidiary of Dualstar Technologies Corp., Dualstar Technologies Corp., Atkinson Koven Feinberg Engineers LLP, Schuman Lichtenstein Claman Efron Architects, Central Synagogue, and Amtex Electrical Corp., Third-Party Defendants. Central Synagogue, Fourth-Party Plaintiff, v. Accordia, Inc. and Accordia, Inc., d/b/a Accordia Northeast, Fourth-Party Defendants.
• Court: U.S. District Court — Southern District of New York

Page 488

151 F.Supp.2d 488

WAUSAU BUSINESS INSURANCE COMPANY as subrogee to the rights of Central Synagogue, Plaintiff, v. TURNER CONSTRUCTION COMPANY, Amis Inc. and Aris Development Corporation, Defendants.

Turner Construction Company, Third-Party Plaintiff, v. Trident Mechanical Systems, Inc., Trident Mechanical Systems, Inc., a division of Dualstar Technologies Corp., Trident Mechanical Systems, Inc., a wholly-owned subsidiary of Dualstar Technologies Corp., Dualstar Technologies Corp., Atkinson Koven Feinberg Engineers LLP, Schuman Lichtenstein Claman Efron Architects, Central Synagogue, and Amtex Electrical Corp., Third-Party Defendants.

Central Synagogue, Fourth-Party Plaintiff, v. Accordia, Inc. and Accordia, Inc., d/b/a Accordia Northeast, Fourth-Party Defendants.

No. 99 CIV. 0682(RWS).

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

July 19, 2001.

COPYRIGHT MATERIAL OMITTED

Cozen & O'Connor, New York City (Michael J. Sommi, Christopher C. Fallon, Jr., of Counsel), for Wausau Business Insurance Company.

Friedman Kaplan Seiler & Adelman, New York City (Bruce S. Kaplan, Robert D. Kaplan, Andrew R. Greengrass, of Counsel), for Central Synagogue.

Lester, Schwab, Katz & Dwyer, New York City (Seth I. Weinstein, of Counsel), for Amis, Inc.

Palmeri & Gaven, New York city (John J. Palmeri, of Counsel), for Aris Development Corp.

Torino & Bernstein, Mineola, NY, for Aris Development Corp.

Jones Hirsch Connors & Bull, New York City (Chris Christofides, James H. Rodgers, of Counsel), for Defendant/Third-Party Plaintiff.

Margolis Edelstein, Philadelphia, PA (Michael P. McKenna, of Counsel) McKeegan, McShane & Drago, New York City (George P. McKeegan, of Counsel), for Trident Mechanical systems, Inc.

Milber Makris Plousadis & Seiden, White Plains, NY (Peter Seiden, of Counsel), for Schuman Lichtenstein Claman Efron.

Gogick, Byrne & O'Neill, New York City (Stephen P. Schreckinger, of Counsel), for Atkinson Koven Painberg Engineers.

OPINION

SWEET, District Judge.

Defendant Turner Construction Company ("Turner") has moved for leave to file an interlocutory appeal of the following issues: (1) the June 4, 2001 order denying Turner's motion for a mistrial based on an alleged "Mary Carter" agreement between plaintiffs Wausau Business Insurance Company ("Wausau") and Central Synagogue and third-party defendants Trident Mechanical Systems, Inc. ("Trident") and Dualstar Technologies, Inc. ("Dualstar"); (2) the May 31, 2001 order dismissing all claims against defendant/third-party defendant Schuman Lichtenstein Claman Efron Architects ("SLCE"); (3) the April 30, 2001 order severing defendant/third party defendant Amtex Electrical Corp. ("Amtex") as a party to the Wausau trial; (4) the oral order denying Turner's motion to dismiss the entire jury pool due to a prospective juror's allegedly prejudicial statements; (5) whether counsel for Trident and counsel for Wausau improperly addressed the percentage of liability issue in closing arguments before the jury in the first phase of this bifurcated trial; and seeking (6) an order affirming the jury's verdict and certifying that order for immediate appeal to the Second Circuit Court of Appeals. Turner also seeks an order staying the commencement of the damage phase of the trial pending hearing and determination of the issues on appeal if the interlocutory order is granted. Defendant/Aris Development Corporation ("Aris") joins Turner's motion. Plaintiffs Wausau and Central Synagogue, as well as defendants/third-party defendants Trident, Dualstar, Schuman Lichtenstein Claman Efron Architects ("SLCE"), and Amtex oppose. For the reasons set forth below, the motion will be denied.

Title 28 United States Code section 1292 grants district courts discretion to issue interlocutory orders when an issue or issues involve "[1] controlling questions of law [2] as to which there is substantial ground for difference of opinion and that [3] an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b); see SEC v. Credit Bancorp, Ltd., 103 F.Supp.2d 223, 226 (S.D.N.Y. 2000). "The statute must be strictly construed and `only exceptional circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.'" Colon v. BIC USA, Inc., 2001 WL 88230, 2000 U.S. Dist. LEXIS 797, at *2 (S.D.N.Y. Jan. 30, 2001) (quoting Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 25 (2d Cir.1990)).

In considering a request for certification, a district court must carefully assess whether each of the three conditions has been met. See Primavera Familienstifung v. Askin, 139 F.Supp.2d 567 (S.D.N.Y.2001). To determine whether the first element has been met, district courts may consider whether reversal could result in dismissal or could significantly affect the conduct of the action, or whether the certified issue has precedential value for a large number of cases. See Klinghoffer, 921 F.2d at 24-25. A mere claim that the district court's ruling was incorrect does not demonstrate a substantial ground for difference of opinion under the second element. See Scott v. The Dime Savings Bank of New York, 1993 WL 350046 at *1, 1993 U.S. Dist. LEXIS 12325 at *3-4 (S.D.N.Y. Sept. 3, 1993). Finally, in considering whether the third factor has been met, district courts should assess whether the appeal "promises to advance the time for trial or shorten the time required for trial." In re Oxford Health Plans, Inc., 182 F.R.D. 51, 53 (S.D.N.Y.1998) (quotation omitted). See also In re Duplan Corp., 591 F.2d 139, 148 n. 11 (2d Cir.1978) ("The critical requirement is that [interlocutory appeal] have the potential for substantially accelerating the disposition of the litigation.").

The Second Circuit has repeatedly emphasized that district courts must "exercise great care in making a § 1292(b) certification." Westwood Pharmaceuticals, Inc. v. National Fuel Gas Dist Corp., 964 F.2d 85, 89 (2d Cir.1992). See also Klinghoffer, 921 F.2d at 25. Certification is appropriate only in "exceptional cases," where early appellate review "might avoid protracted and expensive litigation." Telectronics Proprietary, Ltd. v. Medtronic, Inc., 690 F.Supp. 170, 172 (S.D.N.Y.1987). Interlocutory appeal was not intended as a "vehicle to provide early review of difficult rulings in hard cases." German v. Federal Home Loan Mortgage Corp., 896 F.Supp. 1385, 1398 (S.D.N.Y. 1995). The benefit to the district court in avoiding an unnecessary trial must be weighed against the inefficiency of having the Court of Appeals hear multiple appeals in the same case. See Harriscom Svenska AB v. Harris Corp., 947 F.2d 627, 631 (2d Cir.1991).

1. Failure to Declare a Mistrial Due to the Alleged "Mary Carter Agreement"

In a prior opinion, this Court denied Turner's mid-trial motion for a mistrial due to its discovery of a secret agreement between plaintiffs and Trident/Dualstar. See Wausau Business Ins. Co. v. Turner Const. Co., No. 99 CIV. 0682(RWS), 2001 WL 604188 (S.D.N.Y. June 4, 2001) (Wausau III). Turner contends that an interlocutory appeal of this order is appropriate because the agreement was in fact an unlawful "Mary Carter agreement" that gave Trident an improper financial motive to deflect blame on Turner in light of the Turner's action against Trident's insurer, Kemper. At the time the prior opinion was issued, the parties to the settlement agreement had not yet memorialized it in writing. They have subsequently done so, and Trident has submitted the Joint Tortfeasor Release to the Court in support of its opposition to this motion. (Attachment to Horneff Letter of July 10, 2001.) A review of the release reveals no cause to alter the prior opinion.

As Turner has raised no new issues of law or fact creating substantial grounds for a difference of opinion as to controlling law on this issue, the motion for leave to file an interlocutory appeal of the order denying a mistrial is hereby denied.

2. Dismissal of SLCE

Turner first argues that its third-party complaint for indemnification from SLCE was dismissed in error for several reasons. First, Turner contends that it should have been able to continue its claim because SLCE was an active tortfeasor, while Turner was no more than a passive tortfeasor. (See Christofedes Letter of June 21, 2001 at 2.) However, plaintiff's complaint alleges that Turner engaged in affirmative acts of wrongdoing, which precludes recovery for indemnification, which precludes an action by Turner against SLCE for indemnity. See Orsini v. Kugel, 9 F.3d 1042 (2d Cir.1993) (party who has participated in wrongdoing may not benefit from common law or implied indemnity); Rockefeller University v. Tishman Construction Corp. of New York, 232 A.D.2d 155, 647 N.Y.S.2d 513 (N.Y.App. Div.1996) (same).

As set forth in a prior opinion, see Wausau Business Ins. Co. v. Turner Const. Co., 143 F.Supp.2d 336, 343 (S.D.N.Y.2001) (Wausau I), because Turner's responsibility as construction manager was to oversee the work of the other contractors and subcontractors, it is not entitled to indemnity if it was negligent in meeting this obligation. See Morse/Diesel, Inc. v. Trinity Industries, Inc., 859 F.2d 242, 247-48 (2d Cir.1988) (citing New York cases finding project managers with supervisory obligations over subcontractors liable for negligence); Kenny v. George A. Fuller Co., 87 A.D.2d 183, 189, 450 N.Y.S.2d 551, 555 (N.Y.App.Div.1982) (noting, in context of New York Labor Law's provision for contractor liability, "[l]egislative purpose of placing absolute liability upon the party or parties responsible for coordinating and supervising the entire construction project."); Carollo v. Tishman Constr. & Research Co., 109 Misc.2d 506, 440 N.Y.S.2d 437, (N.Y.Sup.Ct.1981) (finding passively negligent construction manager liable for active negligence of subcontractor because contract gave construction manager the penumbral...