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ROYAL INS. CO. OF AMERICA v. RU-VAL ELEC. CORP.

February 13, 1996

ROYAL INSURANCE COMPANY OF AMERICA and SAFEGUARD INSURANCE COMPANY, t/a ROYAL INSURANCE COMPANY as subrogees of Clement and Rose Vicari, Plaintiffs, against RU-VAL ELECTRIC CORP., THE NEW YORK BOARD OF FIRE UNDERWRITERS and THE AETNA CASUALTY AND SURETY COMPANY, Defendants -against- THE AETNA CASUALTY AND SURETY COMPANY, Third Party Defendant.


The opinion of the court was delivered by: WEINSTEIN

 Weinstein, J.

 I. Introduction

 II. Facts

 A. The Parties

 B. Town Ordinance

 III. Procedural History

 IV. New York Law Applicable

 V. Law Relating to Determination of Status as Servant or Independent Contractor.

 A. Generally.

 B. Policy Considerations Where Principal is Governmental Body

 C. Application to Facts

 VI. Law Relating to Statute of Limitations

 A. Claims Against Municipalities

 B. Contract and Tort Claims

 C. Application to Facts

 VII. Law Relating to Governmental Immunity

 A. Sovereign Immunity

 B. Modern Local Government Immunity

 C. Immunity and Independent Contractors

 D. Application to Facts

 VIII.Conclusion

 I. Introduction

 A fire caused significant property damage to a house, allegedly because of defective wiring. The involved insurance companies disagree about which of them is liable. One defendant, the New York Board of Fire Underwriters, seeks protection of local government immunity from tort liability and asserts various statute of limitations defenses against any liability for its alleged negligent inspection of the wiring. This memorandum addresses only the Board's motion for summary judgment.

 Its inspectors, the Board claims, are authorized by town ordinance as the town's representatives to perform electrical inspections, and thus are entitled to the immunity from tort liability that protects town employees. The Board also maintains that plaintiffs' claim is barred by applicable statutes of limitation. It argues that it and its inspectors, as authorized representatives of the municipality, are entitled to protection under General Municipal Law section 50-i (requiring that a suit against a town be brought within a year plus ninety days) and section 50-e (requiring that a municipality be notified of a claim within 90 days). Alternatively, it urges that under the general three-year negligence and six-year contract statutes of limitations the claim is barred because claims accrue at the latest at the time a certificate of passing inspection is issued by the Board.

 For the reasons indicated below, the Board's motion for summary judgment is granted because, while the Board is not entitled to the protection due a municipality or its employees, the suit against it is barred under general statutes of limitations.

 II. Facts

 A. The Parties

 Clement and Rose Vicari hired defendant Ru-Val Electric Corporation as an electrical contractor for the construction of their residence in Oyster Bay, Long Island. Ru-Val completed the work in January 1987. Defendant New York Board of Fire Underwriters inspected the electrical work on November 25, 1986 and issued a certificate of compliance with electrical codes on December 5, 1986.

 On August 24, 1992 a fire at the Vicari residence resulted in property damage. An investigation showed that the electrical work performed by Ru-Val violated numerous fire and safety codes and standards and that the violations contributed to the fire.

 Plaintiffs are insurers suing as subrogees of the Vicaris on their claim for property damage. They filed the original complaint in this action against Ru-Val on October 16, 1992. Ru-Val has been dissolved but its insurer, Aetna Casualty and Surety Company, is a defendant.

 Plaintiffs later named the Board as a defendant in an amended complaint, filed on November 4, 1993. They maintain that Ru-Val's code violations should have been detected by the Board inspector.

 The Board is a not-for-profit corporation formed in 1867 by insurance companies operating within New York pursuant to a special act of the State Legislature. Its purpose is to decrease fire losses. It has authority to perform electrical inspections and to investigate fraudulent claims. It also runs a "fire patrol" and engages in fire prevention and public relations work.

 Until 1977 the Board was the only private organization available to perform electrical inspections for municipalities within the State. Many municipalities, including the town of Oyster Bay, authorize the Board to perform electrical inspections and issue certificates of compliance with electrical codes.

 To accomplish its purposes, the Board maintains a central office in New York City and regional offices around the state. The parties have stipulated that the Board is responsible for hiring, training, supervising, assigning, scheduling, paying and firing its inspectors. The Board receives its fee ...


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