New York Hospital Medical Center of Queens, Appellant,v.Microtech Contracting Corp., Respondent.BriefN.Y.January 6, 2014To be Argued by: TIMOTHY J. O’SHAUGHNESSY (Time Requested: 15 Minutes) APL-2013-00073 Suffolk County Clerk’s Index No. 35567/10 Appellate Division, Second Department Docket No. 2011-08990 Court of Appeals of the State of New York THE NEW YORK HOSPITAL MEDICAL CENTER OF QUEENS, Plaintiff-Appellant, – against – MICROTECH CONTRACTING CORP., Defendant-Respondent. BRIEF FOR PLAINTIFF-APPELLANT Of Counsel: MATTHEW W. NAPARTY TIMOTHY J. O’SHAUGHNESSY MAURO LILLING NAPARTY LLP 130 Crossways Park Drive, Suite 100 Woodbury, New York 11797 Tel.: (516) 487-5800 Fax: (516) 487-5811 Appellate Counsel to: FARLEY, HOLOHAN & GLOCKNER, LLP Attorneys for Plaintiff-Appellant Date Completed: May 31, 2013 TABLE OF CONTENTS CORPORATE DISCLOSURE STATEMENT (RULE 500.1[f])............... 1 RELATED LITIGATION (RULE 500.13[a]) ............................................ 1 PRELIMINARY STATEMENT................................................................. 2 THIS COURT'S JURISDICTION.............................................................. 4 QUESTION PRESENTED.......................................................................... 5 FACTS .................. -....................................................................................... 5 THE APPELLATE DIVISION DECISION ............................................... 7 ARGUMENT THE ORDER OF THE APPELLATE DIVISION SHOULD BE REVERSED AND MICROTECH'S MOTION DENIED BECAUSE MICROTECH' S MOTION WAS BASED ENTIRELY ON AN ILLEGAL CONTRACT .......................................................................... 9 The Employment Contracts Between Microtech And Each Of The Lema Brothers Were In Blatant Violation OfiRCA ................. 9 New York Courts Do Not Enforce Illegal Contracts........................ 11 There Is No Reason In Public Policy To Enforce The Employment Contracts With The Lemas............................... ... .. . .. .. . . . .. .. . .. .. . .... .. .. . . 22 CONCLUSION............................................................................................ 27 i TABLE OF AUTHORITIES Cases Balbuena v. !DR Realty LLC, 6 N. Y.3d 338 (2006) ..................................................................... 5, 11, 22 Barker v. Kallash, 63 N.Y.2d 19 (1984) ................................................................................ 11 Carmine v. Murphy, 285 N.Y. 413 (1941) ................................................................................ 12 Clarke v. Town of Russia, 283 N.Y. 272 (1940) ................................................................................ 15 Coque v. Wildflower Estates Developers, Inc., 58 A.D.3d 44 (2nd Dept. 2008) .............................................................. 22 El Gemayel v. Seaman, 72 N.Y.2d 701 (1988) .............................................................................. 13 Flegenheimer v. Brogan, 284 N.Y. 268 (1940) ................................................................................ 16 Graziano v. 118-17 Liberty Ave. Mgmt. Corp., 209 A.D.2d 582 (2nd Dept. 1994) .......................................................... 24 Hettich v. Hettich, 304 N.Y. 8 (1952) .................................................................................... 23 Int'l Spangels Corp. v. Marrow Mfg. Corp., 294 N.Y. 295 (1945) ................................................................................ 12 Lloyd Capital Corp. v. Pat Henchar, Inc., 80 N.Y.2d 124 (1992) ........................................................................ 17, 18 Majlinger v. Cassino Contracting Corp., 25 A.D.3d 14 (2nd Dept. 2005), aff' d sub nom. Balbuena v. !DR Realty LLC, 6 N.Y. 3d 338 (2006) ............................................................................... 22 ii Manning by Manning v. Brown, 91 N.Y.2d 116 (1997) .............................................................................. 11 McCarthy v. Turner Canst., Inc., 17 N.Y.3d 369 (2011) .............................................................................. 24 McConnell v. Commonwealth Pictures Corp., 7 N.Y.2d 465 (1960) ................................................................................ 16 Morgan Munitions Supply Co. v. Studebaker Corp. of Am., 226 N.Y. 94 (1919) ................................................................................... 14 Nostrom v. A. W. Chesterton Co., 15 N.Y.3d 502 (2010) .............................................................................. 25 Reiner v. N. Am. Newspaper Alliance, 259 N.Y. 250 (1932) ................................................................................ 15 Richards Conditioning Corp. v. Oleet, 21 N.Y.2d 895 (1968) .............................................................................. 13 Riggs v. Palmer, 115 N.Y. 506 (1889) ................................................................................ 11 Robitzek v. Reliance Intercontinental Corp., 7 A.D.2d 407 (1st Dept. 1959), aff' d without op., 7 N.Y.2d 1041 (1960) .............................................................................. 14 Spivak v. Sachs, 16 N.Y.2d 163 (1965) .............................................................................. 13 Sprung v. Jaffe, 3 N.Y.2d 539 (1957) ................................................................................ 16 Stone v. Freeman, 298 N.Y. 268 (1948) ................................................................................ 12 iii Statutes Educational Law§ 224 ....................................................................................... 14 Labor Law§ 240(1) .............................................................................................. 7 Labor Law§ 241(6) .............................................................................................. 7 Penal Law § 939 .................................................................................................. 14 Worker's Comp. Law§ 11 .................................................................... 5, 6, 9, 19 8 USC 1324a .......................................................................................................... 5 8 USC 1324a(a)(1)(A) .......................................................................................... 9 8 USC 1324a(a)(1)(B) .......................................................................................... 9 8 USC 1324a(a)(2) .............................................................................................. 14 8 USC 1324a(b) ................................................................................................... 10 8 USC 1324a(b)(1) .............................................................................................. 10 8 USC 1324a(b)(2) .............................................................................................. 10 8 USC 1324a(b)(3) .............................................................................................. 10 8 USC 1324a(e)(4) .............................................................................................. 10 8 USC 1324a(f)(1) .............................................................................................. 10 8 USC 1324c(a) ..................................................................................................... 5 Legislative Reports House Rep. No. 99-682, part I, 1986 U.S.C.C.A.N. 5649 ........................... 19 iv CORPORATE DISCLOSURE STATEMENT (RULE 500.1ff]) Plaintiff-Appellant New York Hospital Medical Center of Queens is a New York not-for-profit corporation. It is affiliated with the New York-Presbyterian Healthcare System, Inc., a New York not-for-profit corporation. Its only wholly- or substantially-owned subsidiaries are New York Hospital Queens Foundation, Inc., a New York not-for-profit corporation, and Main Street Radiology at Bayside, LLC, a New York Limited liability company. Subsidiaries controlled by agreement are: (1) CRT Surgical Associates, P.C., a New York professional corporation; (2) New York Queens OB/GYN, P.C., a New York professional corporation; (3) Main Street Medical Associates, P.C., a New York professional corporation; and (4) New York Queens Medicine and Surgery, P.C., a New York professional corporation. RELATED LITIGATION (RULE 500.13fa]) The present action seeks contribution and/or indemnification for payments Plaintiff-Appellant was forced to make as the defendant in Lema v. New York Hospital Medical Center of Queens (Sup. Ct. Queens Co., no. 20562/08). That lawsuit is concluded. PRELIMINARY STATEMENT Plaintiff-Appellant New York Hospital Medical Center of Queens ("the Hospital") contracted with Defendant-Respondent Microtech Contracting Corp. ("Microtech") for Microtech to perform certain demolition and construction work on the Hospital's property. Microtech hired two brothers, the Lemas, who are not authorized to work in the United States. Microtech set them to work on the Hospital's property performing demolition with no instructions and no safety devices. The Lemas were injured on their first day on the job. The Lemas sued the Hospital under the Labor Law and had a recovery. The Hospital now brings this separate action against Microtech for contribution and/or indemnification. For purposes of this appeal, it is assumed that there was no written contractual contribution or indemnification provision between the parties and that neither of the Lemas suffered a "grave injury" under Workers' Compensation Law ("WCL") section 11. Microtech moved to dismiss the complaint for failure to state a cause of action on the ground that section 11 bars actions against employers for contribution or indemnity in the absence of a written agreement or a grave injury. Both Supreme Court and the Appellate Division ruled in favor of Microtech, after 2 which the Appellate Division granted the Hospital's motion for leave to appeal to this Court. In this Court, the Hospital argues only that the employment contracts between Microtech and the Lemas were illegal contracts that are unenforceable in New York Courts. Thus, Microtech may not defend this case on the ground that the Lemas were its employees and therefore the action is barred by section 11 of the WCL. Microtech violated federal law when it hired the Lemas without asking for any documentation showing that they were authorized to work in the United States. Furthermore, there is no reason in public policy why this Court should not follow the general rule that illegal contracts are not enforced by the Courts. Microtech blatantly violated the law. Pursuant to a well-known pattern of exploitation of undocumented workers, there is every indication that the Lemas were to be paid off the books at lower rates than documented workers would command. The fact that they were given dangerous work is demonstrated by the fact that they were injured before they could complete one afternoon of work. The Lemas received benefits under the WCL and also recovered against the Hospital under the Labor Law. 3 In sum, public policy is served by forcing Microtech, which violated both federal law and the Labor Law, to reimburse the Hospital for its payments to the Lemas. Requiring employers to pay contribution and indemnification in these circumstances will provide employers with an incentive not to hire persons not authorized to work in the United States. THIS COURT'S .JURISDICTION The Hospital timely appealed from Supreme Court's order dismissing the complaint (2-1 0). 1 The Appellate Division's order affirming Supreme Court's dismissal of the complaint was a final order (109-16). The Hospital timely moved in the Appellate Division for reargument or leave to appeal (108-09). The Appellate Division granted the Hospital leave to appeal to this Court (108). The argument presented by the Hospital on this appeal was preserved in Supreme Court (87 -94) and in the Appellate Division in the Hospital's appellant's brief at pages 6-10. The Hospital will furnish a copy of its appellant's brief in the Appellate Division upon request. 1 Numbers in parentheses refer to pages in the Record on Appeal. 4 QUESTION PRESENTED Does the bar against contribution and indemnification from employers in WCL § 11 apply here, where Microtech relies on an illegal contract in order to show that is was the employer of the Lemas? FACTS Microtech hired the Lemas on March 6, 2008 (67). The Lemas were not authorized to work in the United States (67). No one at Microtech ever asked the Lemas to produce documentation of their authorization to work in the United States and thus Microtech violated the Immigration Reform and Control Act of 1986 ("IRCA") (67, 72, 77). Pub. L. 99-603,100 U.S. Stat. 3359; see 8 USC 1324a. Importantly, IRCA does not make it a crime for an undocumented worker to accept employment or to work. Balbuena v. IDR Realty LLC, 6 N.Y.3d 338, 354 (1986). It is, however, a crime for an undocumented worker to provide false documentation to a prospective employer in order to induce the employer to hire him or her. 8 USC 1324c(a). Thus, where, as here, the prospective employer does not ask for documentation and the prospective employee does not provide any, the employer violates federal law but the undocumented individual does not. 5 Luis Lema testified that a friend of his who worked for Microtech telephoned him on March 6, 2008 and asked Mr. Lema if he wanted to work (74-75). The friend said that there was demolition work to be done (75). His friend gave him the name of a supervisor at Microtech (76). Mr. Lema telephoned the supervisor and the supervisor told him to meet him at a gas station (76). The supervisor did not ask whether he had a green card (77). Mr. Lema and his brother went to the gas station and the supervisor arrived and said he would pay $29 per hour to clean out a room and perform demolition (78). The supervisor took the two Lema brothers to a room in the basement at the Hospital and gave them a chipping gun and a sledge hammer (79-80). He did not give them instructions on how to use the chipping gun and sledge hammer; he just left (80). The Lemas were injured that very day when a chimney fell on them (68; see 81-82). They received Workers' Compensation benefits from Microtech's carrier but also commenced a lawsuit against the Hospital (34- 41, 68). The Lemas obtained summary judgment on liability in their case against the Hospital under sections 240(1) and 241(6) of the Labor Law and the parties entered into a high-low agreement at the damages trial; the Lemas 6 were paid by the Hospital after the verdict pursuant to the high-low agreement (81-85). Meanwhile, the Hospital had commenced this action for contribution and indemnification and Microtech moved to dismiss for failure to state a cause of action in lieu of answering ( 12-13, 4 7 -55). Supreme Court granted the motion, reasoning only that there is no exception to the bar against third-party actions for cases in which the injured employee was not authorized to work in the United States (7 -8). THE APPELLATE DIVISION DECISION In the lower courts the parties had joined issue on the question of whether IRCA preempts the provision in WCL § 11 barring an action by the Hospital against Microtech in these circumstances (see 112-15). (The Hospital does not present that argument to this Court.) The Appellate Division's decision addressed the preemption argument almost exclusively. The Appellate Division stated that it is the Hospital's position that Micro tech's violation of the law "should result in the loss of protections provided to employers under the Workers' Compensation Law .... " (112). The Court observed that New York and many other states have enacted workers' compensation laws pursuant to their role in regulating occupational health and safety (111-12). The Court then discussed IRCA, including its 7 preemption prov1s10n, the Supremacy Clause and the law of federal preemption ( 112-13 ). The Court went on to address the question of whether IRCA preempts these laws and concluded that it does not (113-15). The Court noted that although depriving Micro tech "of the protections of the WCL may ultimately further the policies behind the IRCA, where, as here, no federal preemption exists, the proper course of action is not to create such a rule through a judicial determination, but, rather, to allow the New York Legislature to enact an appropriate rule based upon its policy preferences with respect to the welfare of state workers" (115) (citation omitted). The Court also noted that accepting the Hospital's position would relieve the Hospital of its responsibility to ensure a safe construction site for workers under the Labor Law (114-15) (citation omitted). The Appellate Division held, "We conclude that the IRCA does not preempt the applicable provisions of the Workers' Compensation Law and that the violations of the IRCA alleged here do not abrogate the protections provided to the defendant by Workers' Compensation Law § 11 from third- party claims for contribution and indemnification" (115). 8 The Hospital moved for reargument and leave to appeal, principally on the ground that the Appellate Division had overlooked its argument that Microtech's defense to this action is based entirely on an illegal contract. The Appellate Division denied the motion for reargument, but granted the motion for leave to appeal (1 08). ARGUMENT THE ORDER OF THE APPELLATE DIVISION SHOULD BE REVERSED AND MICROTECH'S MOTION DENIED BECAUSE MICROTECH'S MOTION WAS BASED ENTIRELY ON AN ILLEGAL CONTRACT The Employment Contracts Between Microtech And Each Of The Lema Brothers Were In Blatant Violation Of /RCA There is no question that the contract between Microtech and the Lemas was illegal. IRCA provides, to begin, that it is unlawful to hire an alien not authorized to work in the United States knowing that the alien is not authorized to work in the United States. 8 USC 1324a(a)(l)(A). There is every indication in this record that Microtech knew that the Lemas were not authorized to work in this country. A friend telephoned Luis Lema asking if he wanted to work; the friend gave him a supervisor's telephone number; and the supervisor took the Lemas to the work site, gave them tools and left. This happened in a matter of hours. The Lemas were never asked whether 9 they were authorized to work in the United States, they were never asked for documentation of any kind and they never filled out any forms. At the very least, there is an issue of fact on this record as to whether Microtech hired the Lemas knowing that they were not authorized to work in the United States. In addition, however, IRCA provides that it is unlawful to hire anyone without requiring the person being hired to produce documentation demonstrating that the person is authorized to work in the United States. 8 USC 1324a(a)(l)(B), 1324a(b). The employer must attest, under penalty of perjury and on a form supplied by the federal government, that the employer reviewed documents demonstrating the identity of the person hired and the fact that the person is authorized to work in the United States. Id. 1324a(b)(l). The employer must also obtain an attestation from the person hired that the person is authorized to work in the United States. Id. 1324a(b)(2). Finally the employer must retain these two attestations. ld. 1324a(b)(3). Obviously Microtech did none of these things. It is a crime, punishable by fine or imprisonment of up to six months, for a person to commit a pattern or practice of knowingly hiring persons who are not authorized to work or failing to meet the attestation requirements. Id. 10 1324a(f)(l). A civil penalty may be imposed, apparently in the alternative. I d. 1324a( e)( 4 ). On this record, then, it is beyond question that Microtech failed to meet the statutory attestation requirement as to each of the two Lema brothers. New York Courts Do Not Enforce Illegal Contracts It has long been well-settled in New York that the Courts will not assist parties to take advantage of their own wrongs. Riggs v. Palmer (115 N.Y. 506, 511 [1889]). This principle applies when a party sues in tort for injuries received while the party was committing a serious crime. Manning v. Brown (91 N.Y.2d 116 [1997]) (plaintiff injured while driving and riding in stolen car); Barker v. Kallash (63 N.Y.2d 19 [1984]) (plaintiff injured while assembling pipe bomb); cf. Balbuena v. IDR Realty LLC (6 N.Y.3d 338, 361 [2006]) (working without authorization to work in the United States is not such a crime). This principle applies with equal force when a contract is involved. A party cannot sue on an illegal contract; illegal contracts simply are unenforceable and the Courts leave parties to an illegal contract where they 11 find them. This Court has many, many times dismissed actions brought on illegal contracts. In Carmine v. Murphy (285 N.Y. 413 [1941]), a seller of alcoholic beverages sued for goods sold and delivered. This Court dismissed the complaint because the plaintiff had no license to sell alcoholic beverages. In International Span gels Corp. v. Marrow Manufacturing Corp. (294 N.Y. 295 [1945]), the plaintiff sued for goods sold and delivered. This Court dismissed the complaint because the plaintiff could not show that the goods were sold at a price that was permissible under wartime price controls. In Stone v. Freeman (298 N.Y. 268 [1948]), the plaintiff, a broker, sued the defendant, a vendor, for commissions allegedly earned. The defendant counterclaimed on the ground that the defendant gave the plaintiff money to bribe the purchaser's purchasing agent but the plaintiff gave the purchasing agent only some of that money. Accordingly the defendant counterclaimed for the amount the plaintiff was supposed to give the purchasing agent but did not. Before this Court was the plaintiff's motion to dismiss the defendant's counterclaims. This Court of course granted the motion to dismiss the counterclaims. 12 In Spivak v. Sachs (16 N.Y.2d 163 [1965]), a California attorney sued for payment for legal services provided in New York. This Court dismissed the complaint because the plaintiff was not admitted to practice law in New York. This Court reiterated in El Gamoyel v. Seaman (72 N.Y.2d 701, 705- 06 [ 1988]), that a contract to provide legal services is not enforceable by a person who is not a licensed attorney. And in Richards Conditioning Corp. v. Oleet (21 N.Y.2d 895 [1968]), the plaintiff contractor sued for the balance owed on a contract for the installation of an air conditioning system. This Court held that the plaintiff could not sue because the installation was not licensed and the plaintiff employed unlicensed installers. Microtech might attempt to argue that the contracts between the Lemas and itself were not illegal but rather that only the formation of those contracts was illegal and the demolition and construction services to be performed by the Lemas were not illegal. This would be a distinction without a difference. There is no difference, in this context at least, between the formation of a contract and its performance. In the above cases, for example, alcoholic beverages, the goods in International Spangles and legal services are not illegal either. 13 Here, it was illegal for Microtech to hire the Lemas, just as it would be illegal for it to hire anyone, without requiring documentation of the Lemas' authorization to work in the United States. And there is every indication that Micro tech knew that the Lemas were not authorized to work in this country. Furthermore, IRCA provides that upon learning that an employee is not authorized to work in the United States the employer must discharge the employee immediately. 8 USC 1324a(a)(2). Finally, many times this Court has found a contract illegal and unenforceable when it could have been argued that only the formation of the contract was illegal. In Morgan Munitions Supply Co. v. Studebaker Corp. (226 N.Y. 94, 99 [1919]), this Court held that a contract procured by the commission of a crime is unenforceable even if executed. The plaintiff had impersonated another person in obtaining the contract, which was a violation of former Penal Law 939, making it a crime to make a false statement in writing to obtain employment. See also Robitzek v. Reliance Intercontinental Corp. (7 A.D.2d 407 [1st Dept. 1959], aff'd without op., 7 N.Y.2d 1041 [ 1960]) (plaintiff violated former 939 and Education Law 224, making it a crime to misrepresent that one has received a degree from an institution of higher learning). 14 In a very unusual and interesting case, Reiner v. North American Newspaper Alliance (259 N.Y. 250 [1932]), the plaintiff booked a passage on the GrafZeppelin from Europe to the United States. Apparently the terms of the contract of passage prohibited passengers from publishing news about the flight for some time afterward so that the carrier could enter into an exclusive contract to publicize the flight. The plaintiff, in violation of the terms of passage, entered into a contract with the defendant to transmit reports to the defendant by radio. When the plaintiff sued for payment, the defendant argued that the contract between them was illegal and unenforceable because it was in violation of the plaintiff's contract with the carrier. This Court agreed and dismissed the complaint. In Clarke v. Town of Russia (283 N.Y. 272 [1940]), the decedent was a justice of the peace of the defendant town and was killed while working on a highway for the town. At common law, a contract between a municipality and one of its officers was illegal. This Court held that the decedent's contract of employment was void, the relationship of employee and employer never existed and the plaintiff could not recover Workers' Compensation benefits for the death. 15 In Flegenheimer v. Brogan (284 N.Y. 268 [1940]), the plaintiff administrator claimed that the defendant had acquired stock in a corporation from the deceased through subterfuge. However, the defendant claimed that in fact the stock was issued to the defendant in order to hide the decedent's interest in the corporation. This Court denied the plaintiff's motion to strike this defense. In Sprung v. Jaffe (3 N.Y.2d 539 [1957]), this Court observed that if the plaintiff's acquisition of the cause of action sued upon amounted to champerty, the complaint would have to be dismissed. And in McConnell v. Commonwealth Pictures Corp. (7 N.Y.2d 465 [ 1960]), the plaintiff had contracted with the defendant to act as its agent in brokering a deal and to receive a fee and a commission in return. The plaintiff sued for the commission and the defendant refused to pay on the ground that the plaintiff had bribed a third party to close the deal. This Court noted that although the contract between the plaintiff and the defendant was perfectly legal, the plaintiff was suing to receive the fruits of a crime. This Court reversed the lower courts' grant of the plaintiff's motion to strike the relevant defenses. Similarly here, for Microtech to avoid the Hospital's claim for contribution and/or indemnification on the ground of its 16 employment contracts with the Lemas would be for Microtech to receive a substantial benefit under the law from its blatantly illegal actions in hiring and employing the Lemas. In sum, this Court's precedents compel the conclusion that the illegal contract by which Microtech employed the Lemas is unenforceable and may not be raised by Microtech as a bar to the Hospital's otherwise-meritorious claim for contribution and/or indemnification. In 1992 this Court stated, in Lloyd Capital Corp. v. Pat Henchar. Inc. (80 N.Y.2d 124, 127 [1992]), that illegal contracts generally are unenforceable but that this general rule does not always apply where contracts that violate statutory provisions are merely malum prohibitum. This Court stated that if the statute does not expressly state that its violation will deprive parties of the right to sue on the contract, and the denial of relief would be wholly out of proportion to the requirements of public policy, the right to recover will not be denied. In that case the plaintiff had loaned the defendant money. It turned out that the loan violated applicable Small Business Administration regulations because the interest rate exceeded the limit by 0.625 percent and a commitment fee was charged, in the amount of $1,280, when commitment fees were prohibited. The plaintiff reduced the 17 interest rate to slightly below the legal maximum and credited the defendant's account in the amount of the commitment fee. The defendant nevertheless argued that the loan was unenforceable. This Court first determined that the loan was not usurious under New York law. The Court then stated that the regulatory violation was malum prohibitum and not malum in se and that the regulations were not intended to protect public health and safety, but rather to carry out federal small business policy. Id. at 128. This Court observed that the purpose of the regulations was to encourage the growth of small businesses by compensating for the difficulty they may have in obtaining financing from conventional lenders. Id. at 128. This Court also noted that under federal law the Small Business Administration could redress violations by the revocation and suspension of licenses and cease and desist orders and that private parties may recover penalties where the violation also exceeds the permissible bounds of applicable State law. I d. at 128. This Court concluded that the loan was not unenforceable. This Court did not mention any of its previous cases cited above. Even under this standard, Microtech should not be permitted to raise WCL § 11 's bar to third-party actions against the employer. As stated in the 18 House Judiciary Committee report on the bill that became IRCA, "The purposes of the bill are to control illegal immigration to the U.S., make limited changes in the system for legal immigration, and provide a controlled legalization program for certain undocumented aliens who have entered this country prior to 1982." House Rep. No. 99-682, part I, 1986 U.S.C.C.A.N. 5649, 5649. The House Judiciary Committee Report states further: This legislation seeks to close the back door on illegal immigration so that the front door on legal immigration may remain open. The principal means of closing the back door, or curtailing future illegal immigration, is through employer sanctions. The bill would prohibit the employment of aliens who are unauthorized to work in the United States because they either entered the country illegally, or are in an immigration status which does not permit employment. U.S. employers who violate this prohibition would be subject to civil and criminal penalties. Employment is the magnet that attracts aliens here illegally or, in the case of nonimmigrants, leads them to accept employment in violation of their status. Employers will be deterred by the penalties in this legislation from hiring unauthorized aliens and this, in turn, will deter aliens from entering illegally or violating their status in search of employment. * * * Now, as in the past, the Committee remains convinced that legislation containing employer sanctions is the most humane, credible and effective way to respond to the large-scale influx of undocumented aliens. While there is no doubt that many who enter illegally do so for the best of 19 motives -- to seek a better life for themselves and their families -- immigration must proceed in a legal, orderly and regulated fashion. As a sovereign nation, we must secure our borders. In fact, the Committee is worried that failure to control our borders could lead to increasing resentment against the continued admission of lawful immigrants and refugees. * * * Since most undocumented aliens enter this country to find jobs, the Committee believes it is essential to require employers to share the responsibility to address this serious problem. The need for control is underscored by international demographics. Undocumented aliens tend to come from countries with high population growth and few employment opportunities. The United States is not in a position to redress this imbalance by absorbing these workers into our economy and our population. U.S. unemployment currently stands at 7%, and is much higher among the minority groups with whom undocumented workers compete for jobs most directly. * * * Unless employer sanctions are enacted, the Committee is concerned that the situation will continue to worsen. * * * Sanctions, coupled with improved border enforcement, is the only effective way to reduce illegal entry and in the Committee's judgment it is the most practical and cost-effective way to address this complex problem. 20 This was not an adjustment of the relationships in a certain part of the economy. Congress considered many factors and balanced many opposing interests in coming to agreement on IRCA and IRCA's scheme for requiring employers to verify that new hires are authorized to work in the United States. As the present debate about immigration reform and the pending bills in Congress on that subject demonstrate, the purpose of IRCA and the entire body of federal immigration law is not merely to adjust the legal relationships between employers and potential employees who are not citizens, but to address the entire subject of immigration into this country and nothing less than the type of society that we are going to be in the future. Nor is the "forfeiture" by Microtech here out of proportion to the requirements of public policy. As shown, the public policy is of the gravest importance. Microtech cannot complain of being forced to pay for the Lemas' injuries where it hired them in blatant disregard of the requirements of IRCA and put them to work with no instructions, no safety devices and no inspection of the worksite for safety issues. 21 There Is No Reason In Public Policy To Enforce The Employment Contracts With The Lemas There has been much litigation addressing the impact of IRCA on the ability of workers not authorized to work in the United States to recover lost wages and other damages under State law. ~' Balbuena (6 N.Y.3d 338); Coque v. Wildflower Estates Developers. Inc. (58 A.D.3d 44 [2nd Dept. 2008]). The decisions in this area have little if any bearing on the present case because in those cases the plaintiffs were suing in tort for personal injuries and not on their employment contracts. There is, however, one aspect of those decisions that is highly relevant here. Several decisions have recognized that in some circumstances, ironically, permitting an injured worker to recover despite an arguable violation of IRCA would actually further the purposes of the immigration laws. ~, Balbuena (6 N.Y.3d 338); Majlinger v. Cassino Contracting Corp. (25 A.D.3d 14 [2nd Dept. 2005], aff'd sub nom. Balbuena v. IDR Realty LLC (6 N.Y.3d 338 [2006]). The reasoning is that if employers and others are able to avoid paying damages to injured unauthorized workers, then employers, particularly in the construction industry, will have an incentive to hire unauthorized workers. 22 The same reasoning applies here. If the Lemas had been authorized to work in the United States, Microtech would not be liable to the Hospital for contribution and/or indemnity because of the bar of WCL § 11 (and because there was no grave injury and no written contribution or indemnification agreement). But because the Lemas were not authorized to work, Microtech now will find itself forced to pay contribution or indemnification. The threat of third-party liability thus gives employers an incentive not to hire persons not authorized to work in the United States. And this incentive comes at no cost to the injured workers, who would continue to receive Workers' Compensation benefits and damages under the Labor Law if warranted. Microtech may argue that none of the cases cited above involved a party setting up an illegal contract as a defense. In fact, we have not found such a case, although we did find a matrimonial case in which a party was not permitted to rely on a "void" contract to defend the action. Hettich v. Hettich (304 N.Y. 8 [1952]) (wife sued on 1932 separation agreement; husband defended on 1935 agreement; 1935 agreement held void under matrimonial law and wife permitted to sue on 1932 agreement). But Microtech has no case holding that the principle against parties benefitting from illegal contracts applies only to parties making claims based on illegal 23 contracts and not to parties defending claims. There is no reason why this principle should be so limited. In fact, what makes this case unusual is that the Hospital is not a party to the illegal employment contract. This is a stronger case for refusing to give effect to an illegal contract that the usual case in which the two parties before the Court entered into an illegal contract. Here, the Hospital is not a party to the illegal contract and has committed no violation of IRCA. The Appellate Division observed that adoption OT the Hospital's position allegedly would relieve landowners of their responsibility to ensure a safe construction site for workers under the Labor Law. But the liability of a landowner under section 240(1) is purely vicarious. McCarthy v. Turner Construction, Inc. (17 N.Y.3d 369, 378 [2011]). A property owner held liable under section 240( 1) is entitled to indemnification against the negligent party, in this case Microtech, who was in control of the work and did not provide the injured worker with appropriate safety devices or otherwise take appropriate precautions to prevent the injury. Graziano v. 118-17 Liberty Avenue Management Corp. (209 A.D.2d 582 [2nd Dept. 1994]). The same is true of liability under section 241(6), at least where, as 24 we believe the proof will show here, the landowner played no role at the work site. Nostrom v. A.W. Chesterton Co. (15 N.Y.3d 502, 506 [2010]). Moreover, there is no statutory bar to contribution or indemnification if the worker suffers a "grave injury" or there is a contractual provision for contribution or indemnification. WCL § 11. In fact, the landowner has no duty to have a safety inspector on site, but rather only to respond to the worker in damages if the person with responsibility over and control of the work site permits or commits a violation of the Labor Law. Indeed, contribution and/or indemnification was the rule before the 1996 amendments to WCL § 11, which instituted the bar on third-party claims in the absence of a grave injury or a written agreement between the third party such as a landowner owner and the employer. L. 1996, c. 635, § 2. Microtech may argue that nothing in the Workers' Compensation Law itself provides that it does not apply when the contract of employment is somehow illegal and that it should be up to the Legislature to enact such a provision if it sees fit. But the principle that Courts will not give effect to illegal contracts is a fundamental one and Microtech voluntarily took itself out of the Workers' Compensation Law scheme when it hired the Lemas in blatant violation of federal law. If, as we believe it will, this Court agrees 25 with us and refuses to give effect to Microtech's illegal contract with the Lemas, the Legislature might choose to amend the Workers' Compensation Law to abrogate the principle against enforcement of illegal contracts in this instance. However, the fact that the Legislature might do this is no reason for this Court not to follow the principle against enforcement of illegal contracts, especially when following that principle would be in furtherance of the purposes of IRCA, the law that Microtech violated. 26 CONCLUSION The order appealed from should be reversed, Micro tech's motion denied and the Hospital granted such other and further relief as the Court deems proper. Dated: Of Counsel Woodbury, New York May 31, 2013 MATTHEWW. NAPARTY TIMOTHY J. O'SHAUGHNESSY Respectfully submitted, MAURO LILLING NAP ARTY LLP By:~~ 130 Crossways Park Drive, Suite 100 Woodbury, New York 11797 (516) 487-5800 Appellate counsel to: Farley, Holohan & Glockner, LLP Attorneys for Plaintiff-Appellant 27