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Cunha v. City of New York

June 9, 2009

SEVERINO CUNHA ET AL., PLAINTIFFS,
v.
CITY OF NEW YORK, DEFENDANT.
CITY OF NEW YORK, THIRD-PARTY RESPONDENT,
v.
HAKS ENGINEERS, P.C., THIRD-PARTY APPELLANT.



The opinion of the court was delivered by: Pigott, J.

This opinion is uncorrected and subject to revision before publication in the New York Reports.

Plaintiff was injured while working on a roadway excavation in Brooklyn. The City of New York had hired plaintiff's employer, JLJ Enterprises, Inc., as the prime contractor for the work and Haks Engineers, P.C. to perform engineering inspection services in connection with the project.

The contract between the City and Haks contained certain indemnification provisions.

On May 14, 2002, City employees, as well as inspectors from Verizon and Con Ed, who were present on the job site, had determined that because a trench had telephone and cable lines running through it, it could no longer be cleared by machinery. As a result, plaintiff was ordered by JLJ to go into the trench to dig by hand. Because the trench was not protected by any shoring or sheeting, it collapsed, causing injury to plaintiff.

On November 15, 2002, plaintiff and his wife commenced a personal injury action against the City, alleging violations of Labor Law §§ 200, 240 and/or 241. In turn, the City commenced a third-party action against Haks seeking to recover on theories of contractual and common-law indemnification.

The City moved for summary judgment dismissing plaintiff's Labor Law § 200 claim as well as for judgment on its third-party claim for indemnification against Haks. That motion was denied. Thereafter, further discovery was conducted and a trial date was scheduled.

Four days before trial, the City renewed its motion for summary judgment by order to show cause. By an order, dated April 3, 2006, Supreme Court granted in part the City's motion, dismissing the Labor Law § 200 claim.

On the date trial was to commence on plaintiff's remaining Labor Law § 241 (6) cause of action*fn1, the parties indicated that a settlement agreement had been reached. The agreement provided that plaintiff was to receive $1.2 million, of which the City was to pay $800,000 and Haks was to pay $400,000. The City conceded a violation of Labor Law § 241 (6) premised on a violation of Industrial Code Rule 23.4 et seq. to wit: The shoring and trench where the accident occurred was greater than five feet and the trench collapsed causing injury to plaintiff.

Despite the settlement agreement, the City and Haks disputed the issue of liability and apportionment between them and the case proceeded to trial on the third-party action. At the end of the trial, the jury was asked to answer three questions on the verdict sheet, namely (1) "Was the defendant [Haks] negligent?", if so, (2) "Was the negligence of defendant [Haks] a substantial factor in bringing about the accident?", and (3) "What is the percentage of fault of defendant [Haks]?" The City objected to the third question, arguing that the jury should not be asked to apportion liability.

The jury found Haks negligent, that its negligence was a substantial factor in bringing about the accident, but that it was only 40% at fault for plaintiff's accident. The jury was not asked to, and did not, say where the other 60% of the fault lay.

After the jury was discharged, the City moved for a verdict to be directed against Haks in total of 100% based on the contract indemnification clauses. The City argued that because it was only vicariously liable and had no active negligence, it was entitled to a directed verdict on indemnity. Supreme Court denied the motion. The City appealed.

The Appellate Division reversed on the law and remitted the matter to Supreme Court for an entry of an amended judgment conditionally in favor of the City and against Haks in the amount of 100% of the damages recovered by plaintiffs from the City (45 AD3d 624). As relevant to this appeal, the court held that because the City was only vicariously liable for violating the provisions of the Labor Law, it was entitled to full common-law indemnification from Haks, the party actually responsible for the incident (id. at 626). Thus, the court held that it was error for the jury to be instructed to allocate fault (id.). It concluded that "[s]ince the jury found [Haks] was negligent, and that finding has not been appealed, the judgment must be reversed and an amended judgment must be entered awarding [the City] full common-law indemnification against [Haks] for the amount of its settlement with [the City]" (id.).

The same panel denied Haks' motion to reargue or for leave to appeal to this Court. We granted leave to appeal and now affirm.

This Court has recognized that an owner held strictly liable under the Labor Law is entitled to "full indemnification from the party wholly at fault" (Chapel v Mitchell, 84 NY2d 345, 347 [1994]). While the duty imposed by ยง 241 may not be delegated, the burden may be shifted to the party actually responsible for the accident, either by way of a claim for apportionment of damages, or by ...


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