TAYLOR v. CITY OF NEW YORK

Full title: WILLIAM TAYLOR, Plaintiff, v. THE CITY OF NEW YORK, GRACE INDUSTRIES…

Court: Supreme Court of the State of New York, New York County

Date published: Aug 12, 2010

2010 N.Y. Slip Op. 32164 (N.Y. Sup. Ct. 2010)

2010 N.Y. Slip Op. 51497

Opinion

114569/01.

August 12, 2010.

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] HON. CYNTHIA KERN, J.S.C.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion for:________________________________________

1, 2, 3 4, 5 6, 7, 8 9

Papers Numbered Notice of Motion and Affidavits Annexed................................ Answering Affidavits and Cross Motion.................................. Replying Affidavits.................................................... Exhibits...............................................................

Plaintiff commenced the instant action to recover damages for personal injuries he allegedly sustained when he fell while walking on planks that were placed over the sidewalk at 115^th Street and Lenox Avenue. Defendant A.J. Pegno Construction Corp.("Pegno"), incorrectly sued herein as Pegno Construction Corp. and A.J. Pegno Construction, now moves for summary judgment against co-defendant Grace Industries ("Grace") on its contractual indemnity claim. Defendants Pegno and Grace move to amend their answers to assert the affirmative defense that plaintiff lacks the capacity to sue due to the fact that he has filed for bankruptcy and then moves to dismiss plaintiff's complaint on this ground. Alternatively, Grace moves for summary judgment on the grounds that it did not create any defect in the wooden planking and did not have any actual or constructive notice of any defect. Defendant the City of New York (the "City") cross-moves for summary judgment on the ground that it did not have prior written notice of the alleged defect as required by Section 7-201 of the Administrative Code. For the reasons set forth more fully below, Pegno's motion for summary judgment on its contractual indemnity claim is granted. Defendants Grace and Pegno's motions to amend their answers are denied. Grace's motion for summary judgment is denied. Defendant City's motion for summary judgment is granted without opposition.

The relevant facts are as follows. On May 3, 2000, plaintiff allegedly fell and sustained personal injuries when one of the planks that was placed over the sidewalk at 115^th Street and Lenox Avenue split apart or gave way. At the time of plaintiff's accident, Pegno had contracted with the New York City Transit Authority to perform tunnel rehabilitation. Pegno subcontracted part of the project to Grace. Grace was responsible for utility work, curb work, sidewalk work and the resurfacing of Lenox Avenue from 112^th to 118^th Streets. As part of its work, Grace supplied pedestrian access to stores and buildings where the sidewalk was under construction. Grace installed the planking that plaintiff allegedly fell on. On or about May 8, 2007, plaintiff filed for bankruptcy under Chapter 13 of the bankruptcy code.

Pegno is entitled to indemnification from Grace pursuant to the contract between them. That contract provides:

The Subcontractor [Grace] further agrees to indemnify and save harmless A.J.Pegno and the Owner from all claims, demands, suits, costs or expenses because of bodily injury, sickness or disease sustained by any person(s) including his [sic] employees or damage to property arising out of his operations, work or materials under this Subcontract agreement, irrespective of whether claim demand or suit seeks damages arising out of tortious conduct, breach of contract or otherwise.

As an initial matter, this provision provides that Grace shall indemnify Pegno for any claims arising out of the "operations, work or materials" under the subcontract. This provision is broadly worded and does not require negligence on the part of Grace. "In contractual indemnification, the one seeking indemnity need only establish that it was free from any negligence" if the contract provides that the indemnitor is to indemnify the indemnitee regardless of the indemnitee's negligence or lack thereof. Correia v Prof. Data Mgmt., Inc., 259 A.D.2d 60, 65 (1^st Dept 1999); see Robinson v City of New York, 8 Misc.3d 1012(A) (Bronx Cty 2005). If the indemnification provision is broadly worded to require indemnification for acts "arising out of' the indemnitor's performance, it is irrelevant whether the proposed indemnitor was negligent. See Correia, 259 A.D. at 65; Robinson, 8 Misc.3d 1012(A). Moreover, in another case involving this same contract, the First Department held that Pegno was entitled to indemnification where there was no evidence of Pegno's negligence. See Warnett v A.J.Pegno Constr. Corp., 1 A.D.3d 207 (1^st Dept 2003).

In the instant case, Pegno has met its initial burden of showing that it is free from negligence. There is no testimony that Pegno supervised Grace's work, gave Grace employees directions or inspected Grace's work. Eqbal Rasheed, an employee of Pegno at the time of the project, testified that he did not know if any Pegno employee inspected Grace's work or ensured that Grace was performing pursuant to specifications set out in the contract. In opposition, plaintiff has not submitted any evidence raising an issue of fact regarding whether Pegno was negligent in its supervision of the project. The parties' reliance on the Buccini line of cases to determine whether Pegno was negligent is misplaced as those cases pertain only to claims brought pursuant to the Labor Law. See Buccini v 1568 Broadway Associates, 250 A.D.2d 466 (1^st Dept. 1998). In addition, Pegno is entitled to recover its attorneys' fees and expenses. A broadly worded indemnity clause that includes "costs and expenses" includes reimbursement for attorneys' fees. See DiPerna v ABC, 200 A.D.2d 267, 269-70 (1^st Dept 1994). Therefore, because the contract is broadly worded and does not require any negligence on the part of Grace, Pegno is entitled to indemnification and attorneys' fees and expenses.

Finally, the fact that a declaratory judgment action in which Pegno's insurer seeks a declaration that Grace's insurer should provide Pegno with a defense in this action is irrelevant to determining whether Grace must indemnify Pegno. In the pending declaratory judgment action, Pegno's insurer is suing Grace's insurer. The contract that forms the basis of that action is the insurance contract between Grace and its insurance company. That is a completely separate contract from the one at issue in the instant action. In the instant action, the contract between Pegno and Grace is at issue. Any decision in the declaratory judgment action has no effect on the current action. Whether or not Grace's insurance company is found to have a duty to defend Pegno is separate from whether or not Grace has a legal obligation to indemnify Pegno. While the outcome of the declaratory judgment action may affect who ultimately has to pay to indemnify Pegno, the outcome of that case does not affect the legal rights at issue here.

The court now turns to defendants Grace and Pegno's motions to amend their answers. They are not entitled to amend their answers as their proposed amendments are without merit. Pursuant to CPLR § 3025 (b), leave to amend a pleading should be freely given unless the pleading is devoid of merit or will result in undue prejudice or surprise to the other party resulting from the delay. See McCaskey, Davis and Associates, Inc. v. New York City Health and Hospitals Corp., 59 N.Y.2d 755 (1983). Grace and Pegno seek to amend their answers to include the affirmative defense that plaintiff is without capacity to sue since he has filed for bankruptcy proceedings. The Second Circuit has unequivocally held that a Chapter 13 debtor may pursue litigation even if the action was not listed as an asset in the bankruptcy petition. See Olick v Parker Parsley Petroleum Co., 145 F.3d 513 (2^nd Cir. 1998). In Olick, the Second Circuit specifically distinguished Chapter 13 debtors from Chapter 7 debtors, who cannot pursue such an action. See id.; see also Murray v Board of Education of the City of New York, 248 B.R. 484 (S.D.N.Y. 2000); Giovinco v Goldman, 276 A.D.2d 469 (2^nd Dept 2000). However, there are two New York state cases to the contrary. See Gray v City of New York, 58 A.D.3d 448 (1^st Dept 2009) (bankruptcy debtor cannot sue on cause of action listed as asset no matter which chapter of the bankruptcy laws he filed under); Best v Metlife Auto and Home Ins. Co., 7 Misc.3d 242 (Sup. Ct. Richmond Cty 2004). Nonetheless, federal cases are controlling on this issue because they have expertise in interpreting federal law such as the bankruptcy law. See Brenen v Dahlstrom Metallic Door Co., 189 A.D. 685 (1^st Dept 1919). Therefore, this court follows Olick and its progeny holding that a Chapter 13 debtor has capacity to sue on a cause of action even if that claim was not listed as an asset in the bankruptcy proceeding.

The other cases cited by Grace and Pegno are irrelevant as they either involve Chapter 11 or Chapter 7 debtors ( see Bromley v Fleet Bank, 240 A.D.2d 611 (2d Dept 1997); Dynamics Corp. of America v Marine Midland Bank-New York, 69 N.Y.2d 191 (1987); Evolino v Scappatura, 162 A.D.2d 654 (2d Dept 1990)), were decided prior to Olick, 145 F.3d 513, ( see Bromley, 240 A.D.2d 611, Dynamics Corp., 69 N.Y.2d 191, Evolino, 162 A.D.2d 654, Quiros v Polow, 135 A.D.2d 697 (2^nd Dept 1987)) or do not identify which Chapter the plaintiff filed bankruptcy under and, as such, no conclusion can be drawn from them. See R. Della Realty Corp. v Block 6222 Constr. Corp., 65 A.D.3d 1323 (2^nd Dept 2009); Whelan v Longo, 7 N.Y.3d 821 (2006); Quinn v Guerra, 26 A.D.3d 872 (4^th Dept 2006), Monson v Israeli, 35 A.D.3d 680 (2^nd Dept 2006), Gazes v Bennett, 38 A.D.3d 287 (1^st Dept 2007), Wright v Meyers Spencer, LLP, 46 A.D.3d 805 (2^nd Dept. 2007), Barranco v Cabrini Medical Center, 50 A.D.3d 281 (1^st Dept 2008). Since this court holds that plaintiff does have capacity to sue in this action, Grace and Pegno's motions to amend their answers to assert as a defense the lack of such capacity are "patently devoid of merit" and are therefore denied.

The court now turns to Grace's motion for summary judgment dismissing plaintiff's complaint against it. Grace is not entitled to summary judgment as there are questions of fact as to whether Grace was negligent in the construction of the planks which split, causing plaintiff's injuries. "To impose liability upon a defendant in a trip-and-fall action, there must be evidence that a dangerous or defective condition existed, and that the defendant either created the condition or had actual or constructive notice of it." Starling v Suffolk County Water Auth., 63 A.D.3d 822, 823 (2^nd Dept 2009) (citations omitted).

In the instant case, while it is undisputed that Grace did not have any notice of any defective condition, there are issues of fact as to whether Grace created the defect by not attaching the planks together properly. Plaintiff raised this issue by testifying that "the planks were just joined side by side" and that nothing was "holding them stable." Grace submitted no evidence to the contrary. Moreover, Grace's argument that plaintiff assumed the risk of injury is without merit as plaintiff used the boards as they were intended to be used. Nor was the condition open and obvious as Grace contends since the planks did not split apart until plaintiff stepped on them.

Accordingly, Pegno's motion for summary judgment on its contractual indemnity claim is granted. Defendants Grace and Pegno's motions to amend their answers are denied. Grace's motion for summary judgment is denied. Finally, the City's motion for summary judgment dismissing the complaint against it on the grounds that it did not have prior written notice is granted without opposition. This constitutes the decision and order of the court.