Justin Nazario, Respondent,v.222 Broadway, LLC, et al., Respondents.---------------------------------222 Broadway, LLC, et al., Third-Party Respondents, v. Knight Electrical Services Corp., Third-Party Appellant. (And Other Third-Party Actions.)BriefN.Y.November 15, 2016To be Argued by: DENNIS R. SMITH New York County Clerk’s Index Nos. 105608/11, 590740/11, 590163/12 and 590212/12 New York Supreme Court Appellate Division—First Department JUSTIN NAZARIO, Plaintiff-Appellant-Cross-Respondent, – against – 222 BROADWAY, LLC, JONES LANG LASALLE AMERICAS, INC. and LIME ENERGY CO., Defendants-Respondents. ––––––––––––––––––––––––––––––– 222 BROADWAY, LLC and JONES LANG LASALLE AMERICAS, INC., Third-Party Plaintiffs-Respondents, – against – KNIGHT ELECTRICAL SERVICES CORP., Third-Party Defendant-Respondent-Cross-Appellant. ––––––––––––––––––––––––––––––– (For Continuation of Caption See Inside Cover) BRIEF FOR DEFENDANT-RESPONDENT LIME ENERGY CO. Of Counsel: THOMAS F. CERUSSI DENNIS R. SMITH CERUSSI & SPRING, P.C. Attorneys for Defendant-Respondent Lime Energy Co. One North Broadway, 11th Floor White Plains, New York 10601 (914) 948-1200 tcerussi@cerussilaw.com PRINTED ON RECYCLED PAPER Index No. 105608/11 Third-Party Index No. 590740/11 JONES LANG LASALLE AMERICAS, INC., Second Third-Party Plaintiff-Respondent, – against – KNIGHT ELECTRICAL SERVICES CORP., Second Third-Party Defendant-Respondent-Cross-Appellant. –––––––––––––––––––––––––––––– 222 BROADWAY, LLC, Third Third-Party Plaintiff-Respondent, – against – KNIGHT ELECTRICAL SERVICES CORP., Third Third-Party Defendant-Respondent-Cross-Appellant. Second Third-Party Index No. 590163/12 Third Third-Party Index No. 590212/12 TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................... ii PRELIMINARY STATEMENT ............................................................................... 1 COUNTER STATEMENT OF FACTS .................................................................... 3 LEGAL ARGUMENT POINT I ANY LIABILITY IMPOSED UPON LIME UNDER LABOR LAW § § 240 (1) AND/OR 241(6) IN THIS INSTANCE IS PURELY VICARIOUS IN NATURE ................................................................................................................. 12 A. Any Potential Liability Under Labor Law § 240(1) Is Purely Vicarious ............................................................................................. 13 B. Any Potential Liability Under Labor Law § 241(6) Is Purely Vicarious ............................................................................................. 18 POINT II KNIGHT OWES LIME CONTRACTUAL INDEMNIFICATION ....................... 24 A. The Authority To Supervise, Direct, Or Control The Work Does Not Constitute Negligence As A Matter Of Law ................................ 27 B. Since LIME Had No Negligence In The Happening Of PLAINTIFF's Injuries, GOL 5-322.1 Is Inapplicable To The Facts Of This Case ............................................................................. 30 C. KNIGHT Waived Its Right To Compel Arbitration ........................... 31 D. Illinois Law Does Not Bear A Reasonable Relationship To The Parties Of The Subcontract Or The Transaction ................................. 33 CONCLUSION ........................................................................................................ 36 ii TABLE OF AUTHORITIES Cases Accessory Corp. v. Capco Wai Shing, LLC, 39 A.D.3d 344 (1st Dep’t 2007) ....... 32 Allied Bldg. Inspectors Intl. Union of Operating Engrs., Local Union No. 211, AFL-CIO v. Office of Labor Relations of City of N.Y., 45 N.Y.2d 735 (1978) ... 33 Brown v. Two Exchange Plaza Partners, 76 N.Y.2d 172 (1990) ............... 18, 26, 30 Bucci v. McDermott, 156 A.D.2d 328 (1st Dep’t 1989) .......................................... 32 Cohen v. Rockefeller Center, Inc., 292 A.D.2d 151 (1st Dep't 2002) ............... 26, 32 Collins v. Switzer Construction Group, Inc., 69 A.D.3d 407 (1st Dep’t 2010) ...... 31 De Sapio v. Kohlmeyer, 35 N.Y.2d 402 (1974) ................................................. 31, 33 DePillo v. Greater Auburn Land Co., Inc., 236 A.D.2d 863 (4th Dep't 1997) ....... 22 Drzewinski v. Atlantic Scaffold & Ladder Company, Inc., 70 N.Y.2d 774 (1987) . 24 Finucane v. Interior Constr. Corp., 264 A.D.2d 618 (1st Dep’t 1999) ............ 34, 35 Fresco v. 157 East 72nd Street Condominium, 2 A.D.3d 326 (1st Dep't 2003) ....... 26 Guzman v. 170 W. End Ave. Assoc., 115 A.D.3d 462 (1st Dep’t 2014) .................. 13 Hoelle v. New York Equities Co., 258 A.D.2d 253 (1st Dep't 1999) ....................... 21 Hugh O'Kane Electric CO,. LLC v. MasTec N. Am., Inc., 19 A.D.3d 126 (1st Dep’t 2005) .................................................................................................... 34 Isnardi v. Genovese Drug Stores, Inc., 242 A.D.2d 672 (2d Dep’t 1997) .............. 24 Itri Brick & Concrete Corp. v. Aetna Cas. & Sur. Co., 89 N.Y.2d 786 (1997) ...... 30 Kennelty v. Darlind Construction, Inc., 260 A.D.2d 443 (2d Dep’t 1999) ............. 24 iii Lazzaro v. MJM Industries, Inc., 288 A.D.2d 440 (2d Dep’t 2001) ....................... 24 Mathews v. Bank of America, 107 A.D.3d 495 (1st Dep’t 2013) ............................ 30 McGuinness v. Hertz Corp., 15 A.D.3d 160 (1st Dep't 2005) ................................. 21 Morin v. Hamlet Golf Development Corp., 270 A.D.2d 321 (2d Dep't 2000) ........ 19 Negroni v. East 67th St. Owners, Inc., 249 A.D.2d 79 (1st Dep't 1998) ................. 20 O'Sullivan v. IDI Construction Co., Inc., 28 A.D.3d 225 (1st Dep't 2006), aff'd, 7 N.Y.3d 805 (2006) ................................................................................... 28 Parisi v. Laewen Development of Wappinger Falls, LP, 5 A.D.3d 648 (2d Dep’t 2004) .................................................................................................... 29 Rainer v. Gray-Line Dev. Co., LLC, 117 A.D.3d 634 (1st Dep’t 2014) ................. 13 Rizzuto v. L.A. Wenger Contracting Co., Inc., 91 N.Y.2d 343 (1998); id. at 348-49 19 Sheridan v. Beaver Tower, Inc., 229 A.D.2d 302 (1st Dep't 1996) ......................... 22 Sherrill v. Grayco Bldrs., Inc., 64 N.Y.2d 261 (1985) ................................ 31, 32, 33 Sprague v. Peckham Materials Corp., 240 A.D.2d 392 (2d Dep't 1997)................ 21 Stark v. Molod Sptiz DeSantis & Stark, P.C., 29 A.D.3d 481 (1st Dep’t 2006) ..... 32 Tapia v. 126 First Avenue, L.L.C., 282 A.D.2d 220 (1st Dep't 2001) ..................... 26 Vanek v. Fifth Avenue Management Associates, 75 A.D.2d 559 (1st Dep’t 1980) . 26 Warnitz v. Liro Group, Ltd, 254 A.D.2d 411 (2d Dep't 1998) ................................ 22 Welsbach Elec. Corp. v. MasTec, N. Am., Inc., 7 N.Y.3d 624 (2006) .................... 34 WWW Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157 (1990) ................................... 24 PRELIMINARY STATEMENT This action arises out of an incident in which plaintiff, JUSTIN NAZARIO (“PLAINTIFF”), an electrician, was working at a construction site located at the premises of 222 Broadway, New York, New York on October 30, 2010. At approximately 9:00 a.m. on that date, PLAINTIFF, while in the course of his employment with KNIGHT ELECTRICAL SERVICES CORP. (“KNIGHT”), was allegedly caused to fall from a ladder as a result of receiving an electrical shock while he was in the process of replacing a light fixture. Prior to October 30, 2010, KNIGHT had been retained by LIME ENERGY CO. (“LIME”) pursuant to a written subcontract agreement (“Subcontract”) to perform the electrical retrofitting services at the subject premises. LIME is entitled to contractual indemnification against KNIGHT. The Subcontract provides that KNIGHT will indemnify LIME and pay its attorneys’ fees when a claim arises out work performed pursuant to the Subcontract. This claim arose out KNIGHT’s work pursuant to the Subcontract. LIME did not perform any of the work, supply any of the materials, or direct the manner in which work was done. While LIME possessed the authority to supervise the work, it certainly did not exercise such supervision over PLAINTIFF’s work. In fact, PLAINTIFF does not 2 even challenge the dismissal of his claims under Labor Law § 200 and common law negligence, nor does KNIGHT. Since LIME was not actively negligent, KNIGHT is unable to invoke General Obligations Law § 5-322.1 so as to avoid its contractual obligation to indemnify LIME. Therefore, the lower Court correctly granted LIME contractual indemnification against KNIGHT. Now, for the first time on appeal, KNIGHT argues that Illinois law applies. However, the only apparent connection in the Subcontract that arguably relates to Illinois is the arbitration provision that requires any disputes to be submitted to the American Arbitration Association of Illinois. (R 983). Since KNIGHT has long since waived any right to enforce the Subcontract’s arbitration provision, there is no reasonable relationship to Illinois that would warrant enforcement of the Subcontract’s choice-of-law provision, especially at this late stage in the litigation. For these reasons, LIME respectfully requests that this Court affirm the lower Court’s decision insofar as it granted LIME contractual indemnification against KNIGHT. 3 COUNTER STATEMENT OF FACTS In October, 2010, there was a lighting retrofit project in progress on most of the floors of the subject premises. LIME had been retained by JONES LANG LASALLE AMERICAS, INC. (“JONES LANG”) to perform this work pursuant to a written Purchase Order Service Contract, dated May 19, 2008 (“Service Contract”). (R 431, 462, 521-524, 537, 549- 550, 605-606 & 889-973). The scope of the work involved the removal of the 277 volt existing lamps, fixtures and ballasts, followed by the installation of new energy efficient ballasts and lamps. (R 448, 527-528, 552, 594-596 & 600). LIME walked the building, looked at all the fixtures and picked the ones eligible for the retrofit project. (R 433). Thereafter, LIME entered into the Subcontract with KNIGHT whereby the entirety of the physical work, labor, equipment and materials for the lighting retrofit project was delegated to KNIGHT. (R 457, 529, 600-601, 889-973 & 978-985). All of the electrical work was performed by KNIGHT. (R 529-530). LIME did not have any employees present on the job site during the course of KNIGHT’s work at the project nor did they maintain any offices or 4 shanties on the site. (R 529, 530 & 531-532). LIME did not supply any equipment or materials to any KNIGHT employees, including PLAINTIFF. (R 244-245, 246-247, 531, 594, 611, 642 & 668). LIME did not have any electricians assigned to the project. (R 529-530). LIME performed no physical work on the project whatsoever. (R 529-530). Pursuant to the Subcontract, KNIGHT was to indemnify LIME against all claims, liability, loss or expense caused or created by KNIGHT, or its employees “arising” from the Work performed pursuant to the Subcontract. (R 983). Specifically, §IX.E of the Subcontract states, in pertinent part, as follows: "Subcontractor agrees to indemnify, defend, save, and hold harmless Lime....against all claims, liability, loss or expense caused or created by Subcontractor, its employees....whether or not through its or their negligence, arising from the Work performed hereunder. Subcontractor shall, at its own expense, defend any and all actions, pay all attorney's fees, and all costs and other expenses arising from all loss, liability, claims, suits or demands of every kind on account of injury...to any person...caused by, arising out of, or in any way associated with the performance of the Work under this Subcontract. (R 983). In addition to the indemnification of LIME, under the Subcontract, KNIGHT was responsible for providing all labor, materials, equipment, tools, support, services, supervision, safety and personal protection 5 equipment required to perform the work at the premises (R 978 §I); supplying all necessary tools, ladders and carts to perform the work at the premises (R 978 §III.A.2); establishing and implementing a safety program at the premises (R 980 §V.A); and maintaining all equipment, including ladders, in good working condition (R 980 §V.B). KNIGHT was also the “in-house maintenance” electrical company at the building at the time of that work was being performed on the retrofit project pursuant to the Subcontract. KNIGHT had entered into a separate written agreement with JONES LANG for preventative maintenance and electrical work at the premises. (R 456-459, 484 & 633-634). There were locked electrical closets on every floor with a circuit breaker or switch that could turn off the electricity to the floor. (R 480-481 & 632). The keys to the locks for the electrical closest were kept with the in-house electricians of KNIGHT. (R 482, 488-489 & 632-635). KNIGHT had approximately one (1) dozen, six (6) foot fiberglass and wooden ladders at the premises that were used in connection with its general maintenance contract work as the in-house electricians. All of the ladders which were used on the subject project were provided by KNIGHT, including the one that PLAINTIFF was using at the time of the subject incident. (R 485-487, 609-611 & 668). 6 On Saturday, October 30, 2010, there were twelve (12) to fifteen (15) KNIGHT employees working on the subject project including PLAINTIFF, an apprentice electrician. (R 231,233-234, 627 & 641). PLAINTIFF’s supervisor at that time was KNIGHT’s Service Manager, Romulo DeLeon, who was also the most senior KNIGHT employee at the project. (R 432, 594 & 602-603). October 30, 2010 was the first and only day which PLAINTIFF worked at the project. PLAINTIFF testified that no one other than Mr. DeLeon gave him any direction or instruction, or told him how to perform his work. (R 240-241 & 282). PLAINTIFF entered the building at approximately 8:00 a.m. with some of the other KNIGHT workers. (R 241). He then went up to the 14th floor with the other KNIGHT employees and was assigned a ladder and told where to go to begin the electrical retrofit work by Mr. DeLeon. (R 240-241, 641-642 & 675). PLAINTIFF described his work that day as having to remove the lens, grills, bulbs, pans, ballasts and sockets within the existing lighting fixtures. (R 243-244). He testified that the actual physical work started after he had been being given the okay to begin his work by Mr. DeLeon. (R 243-244, 285-286, 306 & 319-320). 7 Prior to the time of the happening of his accident, at approximately 9:00 a.m., PLAINTIFF had completed work on approximately two (2) of the ceiling fixtures. (R 234 & 252). At the time of the subject incident, PLAINTIFF was in the process of removing the third fixture and was standing on either the third or fourth step of a ten (10) step, wooden ladder which he had used while working on the other two (2) prior fixtures. (R 253 & 255). PLAINTIFF had checked the ladder when he first set it up that morning and made sure that the metal side brackets that kept the ladder open were in place. He also checked to make sure that the ladder was fully- extended and that there were four (4) feet of space at the bottom of each of the legs of the ladder. (R 254 & 318). PLAINTIFF did not experience any problems with the ladder that morning prior to the time of the happening of his accident. (R 255). At the time of the incident, PLAINTIFF was working on the third light fixture and was attempting to detach the ballast from the housing on which it was mounted. He performed this process by removing two (2) screws with a nut driver that he had with him on his tool belt. (R 259 & 261). 8 Prior to attempting to remove the fixture, PLAINTIFF had tested it and there was no electricity or power running to it. (R 261-262, 289 & 293- 294). PLAINTIFF further testified that as far as he knew, the tester was operating properly at that time. (R 262). At the time of the incident, PLAINTIFF was pulling down on two (2) wires that were connected from the ballast to the BX wire through the feed in the ceiling with his bare, right hand. (R 264). He was also holding the second rung from the top of the ladder with his bare, left hand when all of a sudden the power “suddenly came on” causing him to get shocked and fall backwards off the ladder to the floor while the ladder fell over and landed next to him, still in an open position. (R 264-273, 276, 292 & 319). This happened approximately three (3) minutes after PLAINTIFF had tested the third light fixture and found that the power was off. (R 289). The KNIGHT Service Manager and most senior KNIGHT employee on the project, Mr. DeLeon, testified that the electrical retrofit work could not be performed if there was electricity running to the light fixtures. (R 637-638). He further testified that it was his job to “kill” the electricity by entering the electrical closets to shut off the breakers in order to deenergize the light fixtures. (R 638). 9 After shutting the breakers, Mr. DeLeon would close the electrical panel door to the circuit breakers and then lock the door to the electrical closet with a set of keys which he possessed. (R 638-639). “Lock-out / tag-out” is a safety procedure which uses a “lock” and “tag” that is placed on a circuit breaker which shows that the circuit has been locked out, and by whom, for the purpose of warning no one to tamper with it. (R 591-592). KNIGHT was responsible for performing “lock-out / tag- out” for the work being performed pursuant to the Subcontract. (R 557). Mr. DeLeon testified that KNIGHT did not use a “lock-out tag-out” procedure because, according to him, it was not necessary as he knew the door to the electrical closet was locked after he deenergized the power. (R 639). Mr. DeLeon testified that after he arrived at the floor where PLAINTIFF was working, it took him approximately fifteen (15) to twenty (20) minutes to turn off and deenergize the power because he did not have keys to two (2) of the electrical rooms. Mr. DeLeon then had to contact, via radio, the KNIGHT “in-house” electrician to have him bring up the proper keys for the two (2) closets. (R 676-677). In the interim, Mr. DeLeon did not tell his men, including PLAINTIFF, to wait until they heard from him before starting their work on the floor. (R 677). 10 After receiving the correct keys approximately five (5) to ten (10) minutes later, Mr. DeLeon went to both of the remaining electrical closets and shut-off each of the individual circuit breakers, including those for the emergency lighting. He then locked both closet doors. (R 679-682 & 687). According to Mr. DeLeon, this process would have shut-off all power and electricity except for the emergency lighting, which would still be powered by a back-up battery of approximately twenty-four (24) volts. (R 687, 691 & 692-693).1 Mr. DeLeon testified that power could be turned off to the fixtures by using the wall switches such that a worker could commence work prior to the power being turned off from the electrical closet. (R 683). But PLAINTIFF was unaware of any procedures followed that day to make sure the switches had been turned off. (R 300-302). However, Mr. DeLeon testified that prior to the closet keys being delivered by the KNIGHT “in-house” electrician, the wall light switches had been turned off by one of the KNIGHT workers and that the workers thereafter had commenced their work on the floor. (R 702-703). 1 PLAINTIFF was not working on the emergency light fixtures at the time of his accident. (R 287). 11 Mr. DeLeon further testified that no instructions or directions were ever given to the KNIGHT employees that work should not be commenced by turning off power through the wall switches. It was common practice to change a ballast just by turning off the switch. (R 694-695). Moreover, Mr. DeLeon testified that all of the KNIGHT workers were provided with a tester and should have tested the ballasts before working on it even if the power had been turned off by shutting the breakers or the wall switch. (R 688-689). According to Mr. DeLeon, “this accident happened right before [he] shut all of the breakers off” and that the power would have had to have in fact been on in order for PLAINTIFF to have been “electrocuted” and that it should not have been. (R 652-653 & 671-672). Mr. DeLeon did not know why the electricity was on while PLAINTIFF was working. (R 654-655). After the accident, he went back to the two (2) electrical closets and verified that he had turned off every circuit breaker that was there. (R 694). Mr. DeLeon testified that no one from LIME gave him or the KNIGHT workers any instructions on the project nor had he ever met with anybody from LIME while on the project. (R 665). 12 LEGAL ARGUMENT POINT I ANY LIABILITY IMPOSED UPON LIME UNDER LABOR LAW §§ 240(1) AND/OR 241(6) IN THIS INSTANCE IS PURELY VICARIOUS IN NATURE PLAINTIFF filed a motion for summary judgment on the issue of liability against all defendants, including LIME, based upon alleged violations of Labor Law §§ 240(1) and 241(6). In support of his § 241(6) claim, PLAINTIFF further alleged a violation of 12 NYCRR 1.13(b)(4) and 12 NYCRR 1.13(b)(5) of the Industrial Code. Although PLAINTIFF states that LIME exercised supervision over KNIGHT’s work so as to establish it was statutorily liable as a contractor for purposes of liability under Labor Law §§ 240 (1) and § 241 (6), LIME did not contest its status as a contractor for purposes of liability under Labor Law §§ 240 (1) and § 241 (6). Rather, LIME sought, inter alia, dismissal of PLAINTIFF's Labor Law § 200 and common law negligence claims. The lower Court found “LIME did not do any of the work, supply any of the materials, or direct the manner in which work was done.” (R 16). It further stated “it is clear that the [accident] occurred due to the manner in which the work was being done, and that it happened without the participation of [LIME].” (R 17). 13 Thus, any liability is purely vicarious in light of the Court's unchallenged dismissal of the Labor Law § 200 and common-law negligence claims against LIME. See Guzman v. 170 W. End Ave. Assoc., 115 A.D.3d 462 (1st Dep’t 2014); Rainer v. Gray-Line Dev. Co., LLC, 117 A.D.3d 634 (1st Dep’t 2014). A. Any Potential Liability Under Labor Law § 240(1) Is Purely Vicarious With respect to PLAINTIFF’s Labor Law § 240(1) claim, PLAINTIFF argues that: (a) the ladder upon which he was working at the time of the subject incident failed to prevent him from falling; and (b) he was never provided with the proper safety devices and/or equipment to prevent him from falling in the event of the ladder’s failure. Whatever the merits of PLAINTIFF’s claim with respect to his § 240(1) claim, it must be emphasized that LIME entered into a Subcontract with PLAINTIFF’s employer, KNIGHT, whereby KNIGHT was responsible for providing all labor, materials, equipment, tools, support, services, supervision, safety and personal protection equipment required to perform the work at the premises (R 978 §I); supplying all necessary tools, ladders and carts to perform the work at the premises (R 978 §III.A.2); establishing and implementing a safety program at the premises (R 980 14 §V.A); and maintaining all equipment, including ladders, in good working condition (R 980 §V.B). It is undisputed that LIME did not provide the subject ladder to PLAINTIFF. All of the ladders which were used on the subject project were provided by KNIGHT, including the one that PLAINTIFF was using at the time of the subject incident. (R 485-487, 609-611 & 668). Furthermore, under its Subcontract with LIME, KNIGHT was responsible for the safety of its employees on the project. (R 544-545). Additionally, PLAINTIFF confirmed the equipment he used was either his own personal equipment or equipment that was supplied to him by his employer, KNIGHT. (R 244-245 & 246-247). Consistently, Mr. DeLeon testified PLAINTIFF brought his own tools, and was assigned one of KNIGHT’s ladders to use. (R 642 & 668). Significantly, LIME did not direct, control or supervise KNIGHT’s work at the site, including PLAINTIFF herein nor did it dictate the “means and methods” of how KNIGHT or PLAINTIFF performed work at the site. PLAINTIFF testified that he received his instructions exclusively from his employer, KNIGHT, including on the date of his accident. (R 240-241 & 281-282). Specifically, PLAINTIFF testified at his deposition: 15 Q: Did anyone other than Mr. DeLeon give you any instructions or tell you how to do your work on this project? A: No. (R 240-241). Likewise, Mr. DeLeon testified that LIME did not provide any direction or instruction to KNIGHT regarding its work at the premises. (R 601 & 665). Specifically, Mr. DeLeon testified: Q: During the course of this job, at any point in time from the beginning to the end, did you ever have any communications with anyone from Lime Electric? A: No, sir. *** Q: Did anybody from Lime ever come and give you instructions? A: No. Q: Did you ever meet anybody from Lime? A: No. (R 601 & 665). Thus, it is clear that LIME did not dictate the means and methods of how KNIGHT or PLAINTIFF performed their work. LIME did not supervise PLAINTIFF’s work; Mr. DeLeon admitted he supervised KNIGHT employees performing work on the date of the accident. (R 586, 587, 630 & 673). LIME’s senior project manager at this time was Joseph Potyak who confirmed LIME had no involvement in the electrical retrofitting work at the job site. As senior project manager, Mr. Potyak had the occasion to visit sites where this type of work was being 16 performed (R 520), and he was involved with this particular project from commencement to completion (R 530). At his deposition he explained the extent of his involvement at this project: Q: What, if any, involvement did you have with that particular job? A: As a project manager, which would involve approving labor invoices, processing material, purchase orders, that would be it for that project. (R 521). He further testified that the entirety of the work to be performed was delegated by LIME to KNIGHT. (R 529). LIME did not have any employees present on the job site during the course of KNIGHT’s work at the project nor did it maintain any offices and/or shanties at the site. (R 529, 531 & 532). LIME did not have any electricians assigned to the project (R 529-530) nor did LIME perform any physical work or labor at the project. (R 530). LIME did not have site safety inspectors at the job site because, as Mr. Potyak pointed out, KNIGHT was responsible for site safety at the jobsite. (R 544-545). This is consistent with the language of the Subcontract which states KNIGHT was responsible for providing all labor, materials, equipment, tools, support, services, supervision, safety and personal protection equipment required to perform the work at the subject premises 17 (R 978 §I); supplying all necessary tools, ladders and carts to perform the work at the premises (R 978 §III.A.2); establishing and implementing a safety program at the premises (R 978 §V.A); and maintaining all equipment, including ladders, in good working condition (see, R 978 §V.B). Moreover, LIME did not have the responsibility to shut-off the electrical system before KNIGHT’s workers began their work at the site; KNIGHT did. According the testimony of KNIGHT’s Service Manager, Mr. DeLeon, it was his job to shut off the electricity on the floor where PLAINTIFF was assigned to work. (R 638). PLAINTIFF's accident occurred while Mr. DeLeon was in the act of shutting off electricity to the floor where PLAINTIFF was assigned. (R 673). Clearly, the record shows that LIME neither controlled nor supervised the activity that gave rise to PLAINTIFF’s injury. As there is no evidence in the record that LIME was actively negligent, it can only be potentially held statutorily liable by operation of § 240(1). Therefore, the result of PLAINTIFF’s motion for summary judgment under § 240(1) does not affect LIME’s entitlement to contractual indemnification against KNIGHT as awarded by the lower Court. 18 B. Any Potential Liability Under Labor Law § 241(6) Is Purely Vicarious PLAINTIFF had brought a claim against LIME based upon a violation of Labor Law § 241 (6), and more specifically, violations of §§ 23-1.13 (b) (4) and (b) (5) of the Industrial Code of the State of New York which state the following: 12 NYCRR 23-1.13 (b) (4) provides, in relevant parts, as follows: (4) Protection of employees. No employer shall suffer or permit an employee to work in such proximity to any part of an electric power circuit that he may contact such circuit in the course of his work unless the employee is protected against electric shock by de-energizing the circuit and grounding it or by guarding such circuit by effective insulation or other means. 12 NYCRR 23-1.13 (b) (5) provides as follows: (5) Guarding of switches or other circuit interrupting devices. If protection for employees consists of de- energizing circuits, employers shall cause open switches or other circuit interrupting devices to be guarded against inadvertent closing until such employees are no longer exposed. The proposition that an owner or general contractor, held liable solely by virtue of § 240(1), may obtain common law and/or contractual indemnification notwithstanding General Obligations Law § 5-322.1, is by now, so well-established and familiar to the bar as to not require extended discussion. See, e.g., Brown v. Two Exchange Plaza Partners, 76 N.Y.2d 19 172, 179 (1990) (the violation of duty imposed by § 240(1) does not, by itself, constitute negligence); Morin v. Hamlet Golf Development Corp., 270 A.D.2d 321 (2d Dep't 2000) (“It is well settled that a general contractor who has been held vicariously liable under § 240(1) is entitled to full common- law indemnification from the party actually at fault so long as the general contractor can show that it did not direct, control, or supervise the work being performed”). However, what may sometimes be overlooked is that an owner's or general contractor's liability under § 241(6) is also generally vicarious in nature. Some potential confusion no doubt arises from the fact that a violation of § 241(6) is often said to be some evidence of negligence. That does not mean such a violation is some evidence of the general contractor's negligence. As the Court of Appeals has explained: “Section 241(6) imposes a nondelegable duty upon an owner or general contractor to respond in damages for injuries sustained due to another party's negligence . . . If proven, the general contractor (or owner, as the case may be) is vicariously liable without regard to his or her own fault.” See, Rizzuto v. L.A. Wenger Contracting Co., Inc., 91 N.Y.2d 343, 350 (1998); id. at 348-49 (“§ 241(6) imposes liability upon a general contractor for the negligence of 20 subcontractor, even in the absence of control or supervision”) (emphasis in original). Consequently, a general contractor found potentially liable under § 241(6) is generally entitled to contractual and/or common law indemnification, as such liability is generally only vicarious.2 One illustration of this principle may be seen in Negroni v. East 67th St. Owners, Inc., 249 A.D.2d 79 (1st Dep't 1998). In Negroni, the plaintiff, employed by third-party defendant, United Wood Works, fell through an unguarded opening. The First Department held that summary judgment on the plaintiff's Labor Law § 240 was properly granted, and that the defendant's motion to dismiss the § 241(6) claim was properly denied. The Court then addressed the impact of these findings on the owner's claim for indemnification: [S]ince plaintiff, in response to defendant's cross motion for summary judgment, made no showing that defendant exercised any control over the worksite or the contractor's performance, that branch of the cross-motion seeking dismissal of plaintiff's Labor Law § 200 action should have been granted. 2 Further potential for confusion is presented by the fact that a general contractor's liability under Labor Law § 241(6) is not always vicarious. For example, general contractors are frequently contractually obligated to keep the worksite clean and orderly. In such instances, a violation of Industrial Code § 23-1.7 may be properly attributable to the general contractor's failure to discharge his contractually imposed duty, and raise an issue of fact as to his primary negligence. No such issue is presented here. 21 Since, under the facts herein, defendant owner's liability, whether pursuant to Labor Law § §240(1) or 241(6), would be vicarious, defendant was entitled to, and should have been granted, common-law indemnification against the third-party defendant contractor. Id. at 80-81. Numerous other such cases can be cited. See, e.g., McGuinness v. Hertz Corp., 15 A.D.3d 160 (1st Dep't 2005) (granting summary judgment dismissing the Labor Law §§ 200 and 240(1) claims, finding a question of fact as to a violation of Labor Law § 241(6), and granting enforcement of the contractual indemnification provision because, in the absence of any evidence of active negligence, the general contractor's liability under § 241(6) was only vicarious); Hoelle v. New York Equities Co., 258 A.D.2d 253, 254-55 (1st Dep't 1999) (plaintiff was injured when the scaffold on which he was working fell into an opening; “Since this injury plainly occurred during the course of the subcontractor's work, and there is no evidence that the general contractor was itself negligent, the general contractor is entitled to summary judgment on its contractual indemnification claim”); Sprague v. Peckham Materials Corp., 240 A.D.2d 392, 394 (2d Dep't 1997) (holding that “When a defendant owner is held liable under Labor Law §§ 240(1) and 241(6) for a plaintiff's injuries, the owner of the worksite is entitled to indemnification from the plaintiff's 22 employer upon a showing that the defendant did not direct or control the work of the plaintiff”); Sheridan v. Beaver Tower, Inc., 229 A.D.2d 302 (1st Dep't 1996) (finding that summary judgment was properly granted to the plaintiffs on the Labor Law § 240(1) claim; that summary judgment dismissing the § 241(6) claim was properly denied; that the plaintiffs' § 200 claim should have been dismissed, because the dangerous condition arose from the subcontractor's means and methods; and that in the absence of supervisory control over the work, summary judgment should have been granted on the indemnification claims against the subcontractor); see also, Warnitz v. Liro Group, Ltd, 254 A.D.2d 411, 412 (2d Dep't 1998) (“No finding of negligence on Liro's part being possible, the Supreme Court correctly enforced the indemnification agreement”); DePillo v. Greater Auburn Land Co., Inc., 236 A.D.2d 863, 864 (4th Dep't 1997) (“Because the record is devoid of evidence that [the general contractor] directed, controlled or supervised the manner in which plaintiff performed his work, it was entitled to summary judgment on its cross-claim for common law indemnification”). Similarly here, there is no admissible evidence in the record that LIME exercised any direction, control or supervision over KNIGHT’s work at the project, or over the “means and methods” employed in its work. On 23 the contrary, the record abundantly establishes that LIME did not exercise any control over that work, and was not, therefore, actively negligent. Nor did LIME have any duty to provide any equipment to KNIGHT, or to PLAINTIFF. Accordingly, it follows that LIME's alleged liability under § 241(6) would only be vicarious, and presents no bar to its entitlement to summary judgment on its claim for contractual indemnification against KNIGHT. In sum, LIME remains entitled to contractual indemnification from KNIGHT as any liability which may imposed upon it under Labor Law §§ 240(1) and/or 241(6) in this instance is purely vicarious in nature since LIME has established through admissible evidence that it is free from any negligence whatsoever. 24 POINT II KNIGHT OWES LIME CONTRACTUAL INDEMNIFICATION "A party is entitled to full contractual indemnification provided that the intention to indemnify can be clearly implied from the language and purposes of the entire agreement and the surrounding facts and circumstances [internal quotation marks and citations omitted]". See, Drzewinski v. Atlantic Scaffold & Ladder Company, Inc., 70 N.Y.2d 774, 777 (1987). It is well-settled law that when people enter into a clear and complete agreement, their writing should as a rule be enforced according to its terms. See, WWW Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157 (1990). Where the language of a contract between parties clearly reflects the intention that one party be entitled to full contractual indemnification and the party to be indemnified was neither negligent nor in control or supervision of the manner in which the plaintiff performed his work at the time of his injury, the party is entitled to summary judgment on a contractual cause of action against the contractor. See, Lazzaro v. MJM Industries, Inc., 288 A.D.2d 440 (2d Dep’t 2001); Kennelty v. Darlind Construction, Inc., 260 A.D.2d 443 (2d Dep’t 1999); Isnardi v. Genovese Drug Stores, Inc., 242 A.D.2d 672 (2d Dep’t 1997). 25 Here, KNIGHT agreed to the following indemnification obligation: "Subcontractor agrees to indemnify, defend, save, and hold harmless Lime....against all claims, liability, loss or expense caused or created by Subcontractor, its employees....whether or not through its or their negligence, arising from the Work performed hereunder. Subcontractor shall, at its own expense, defend any and all actions, pay all attorney's fees, and all costs and other expenses arising from all loss, liability, claims, suits or demands of every kind on account of injury...to any person...caused by, arising out of, or in any way associated with the performance of the Work under this Subcontract.” (See, Exhibit 1). Thus, as relevant here, KNIGHT agreed, "to indemnify [LIME] against all claims (including attorney's fees) "arising from the Work," so long as any such claims were both "on account of injury" and "caused by, arising out of, or in any way associated with the performance of the Work under this Subcontract” by KNIGHT or its employees. There is no dispute that PLAINTIFF's claims are “caused by, arising out of, or in any way associated with the performance of the work under this Subcontract." It is also beyond dispute that PLAINTIFF's claims are "on account of injury." The record is clear that LIME was not negligent nor did it direct, control or supervise PLAINTIFF’s work. Since LIME was not negligent and had nothing to do with the happening of PLAINTIFF's accident and resultant injuries, GOL 5-322.1 is inapplicable to the facts of this case and 26 does not serve as a bar to enforcement of the indemnification provision. Therefore, any liability attributable to LIME as the general contractor of the electrical retrofit project should pass through to KNIGHT, the entity who was actively involved in the work being performed at the time of PLAINTIFF’s accident and alleged injury. See, Cohen v. Rockefeller Center, Inc., 292 A.D.2d 151 (1st Dep't 2002); Tapia v. 126 First Avenue, L.L.C., 282 A.D.2d 220 (1st Dep't 2001); and Fresco v. 157 East 72nd Street Condominium, 2 A.D.3d 326 (1st Dep't 2003). Furthermore, here, contractual indemnification should be awarded to LIME because any liability which may imposed upon it under Labor Law §§ 240(1) and/or 241(6) in this instance is purely vicarious in nature since LIME is free from any negligence whatsoever. See, Brown v. Two Exchange Plaza Partners, 76 N.Y.2d 172 (1990). Liability is only imposed because LIME was the general contractor of the project in the building in which PLAINTIFF’s accident occurred. Consequently, the burden imposed by §§ 240(1) and 241(6) should be shifted to the party actually responsible for the event which results in the imposition of liability under that provision, namely: KNIGHT. See, Vanek v. Fifth Avenue Management Associates, 75 A.D.2d 559 (1st Dep’t 1980). 27 Lastly, the express language of the Subcontract provides that KNIGHT shall pay all attorney’s fees, costs and expenses arising from all suits on account of injury to any person arising out of the performance of work under the Subcontract. Based upon the foregoing, LIME is entitled to contractual indemnification from KNIGHT, and is further entitled to recover any and all attorneys’ fees, costs and expenses which it has it incurred in defending the within action herein. A. The Authority To Supervise, Direct, Or Control The Work Does Not Constitute Negligence As A Matter Of Law KNIGHT argues that LIME's negligence precludes contractual indemnification. However, the lower Court correctly dismissed PLAINTIFF's common-law negligence and Labor Law § 200 claims against LIME (R 17), because as set forth in Point I above, nothing in the record shows that LIME supervised or controlled the activity that gave rise to the injury so as to render it liable. It is uncontested that LIME did not direct, control, supervise or instruct PLAINTIFF regarding how to perform his work at any time, including on the date and time of his accident; it did not dictate the means and methods of how KNIGHT or PLAINTIFF performed their work; it did 28 not provide any equipment or materials to PLAINTIFF; and, it did not have the responsibility to shut-off the electrical system before KNIGHT workers began their work at the site. Rather, KNIGHT argues that LIME was actively negligent in failing to properly supervise the safety of the job site. (KNIGHT Brief at 43). To arrive at this conclusion, KNIGHT argues that LIME’s Service Contract with JONES LANG prohibited it from delegating job site safety to KNIGHT. (KNIGHT Brief at 40). However, KNIGHT provides no citation to support its claim. Moreover, the fact that a general contractor has overall responsibility to the owner for the safety and quality of the work performed by the subcontractors and has the ability to stop the work is insufficient to establish the degree of supervision and control necessary to sustain liability under § 200 and common law negligence. See, O'Sullivan v. IDI Construction Co., Inc., 28 A.D.3d 225 (1st Dep't 2006), aff'd, 7 N.Y.3d 805 (2006).3 For liability to be imposed, the general contractor must have directed and controlled the manner in which the work was performed, not merely possessed general supervisory authority. See, Parisi v. Laewen Development 29 of Wappinger Falls, LP, 5 A.D.3d 648, (2d Dep’t 2004); see also, Dennis v. City of New York, 304 A.D.2d 611 (2d Dep’t 2003). The retention of the right to generally supervise the work, to stop the contractor's work if a safety violation is noted, or to ensure compliance with safety regulations does not amount to the supervision and control of the work site necessary to impose liability on an owner or general contractor pursuant to Labor Law § 200. See, Dennis, 304 A.D.2d at 612: “The contractual duty to oversee the performance of work, inspect the work site and ensure compliance with safety regulations does not constitute supervision and control over the subcontractor's methods of work.” There is no evidence in the record that LIME exercised any control over KNIGHT’s worksite, or over the means and methods KNIGHT employed in its work. On the contrary, the record abundantly establishes that LIME did not exercise control over that work, and was not, therefore, actively negligent. Nor did LIME have any duty to provide equipment or materials to KNIGHT, whether for performance of its work or for safety equipment. It follows that LIME’s alleged liability under Labor Law §§ 3 KNIGHT’s reliance upon Picaso v. 345 E 73 Owners Corp. 101 A.D. 3d 511 (1st Dep’t 2012) and Mathews v. Bank of America, 107 A.D. 3d 495 (1st Dep’t 2013) is misplaced insofar as neither case stands for the proposition that the authority to supervise, direct, or control the work constitutes negligence as a matter of law. 30 240(1) and 241(6) can only be vicarious, and that LIME is entitled to contractual indemnification against KNIGHT. B. Since LIME Had No Negligence In The Happening Of PLAINTIFF's Injuries, GOL 5-322.1 Is Inapplicable To The Facts Of This Case There is no merit to the KNIGHT's argument that General Obligations Law § 5-322.1 renders the indemnification provision unenforceable. Although the indemnification clause in the Subcontract purports to indemnify LIME for its own negligence, it is nevertheless enforceable because there is no view of the evidence that LIME was actually negligent, as set forth more fully in Point I above. The lower Court correctly dismissed the Labor Law § 200 and common-law negligence claims against LIME. (R 17). The lower Court found that “LIME did not do any of the work, supply any of the materials, or direct the manner in which work was done.” (R 16). Thus, because LIME's liability would be purely vicarious under Labor Law § 240 (1), or § 241 (6), enforcement of the indemnification provision does not run afoul of General Obligations Law § 5-322.1. See Itri Brick & Concrete Corp. v. Aetna Cas. & Sur. Co., 89 N.Y.2d 786, 795 (1997); Brown v. Two Exch. Plaza Partners, 76 N.Y2d 172, 179 (1990); see also Mathews v. Bank of America, 107 A.D.3d 495 (1st Dep’t 2013) (even if the 31 indemnification clause does not contain “savings” language, it may nevertheless be enforced where, as here, the party to be indemnified is free of any negligence); Collins v. Switzer Construction Group, Inc., 69 A.D.3d 407 (1st Dep’t 2010) (holding enforcement of the indemnification provision does not run afoul of General Obligations Law § 5-322.1 where, as here, there is no evidence that defendants were actually negligent). C. KNIGHT Waived Its Right To Compel Arbitration As part of its appeal, KNIGHT argues, for the first time, that Illinois law should be applied so as to bar enforcement of the indemnification provision.4 But the Subcontract at issue has no apparent relation to Illinois, apart from a provision requiring arbitration by the American Arbitration Association of Illinois. (R 983). Moreover, that arbitration provision has long since been waived by KNIGHT, leaving no justification for the application of Illinois law under the present circumstances. A party’s right to compel arbitration and the right to stay the action does not remain absolute, but may be waived by, for example, interposing a counterclaim, giving notice of trial, or participating in discovery. See Sherrill v. Grayco Bldrs., Inc., 64 N.Y.2d 261 (1985); De Sapio v. Kohlmeyer, 35 N.Y.2d 402 (1974) (procuring deposition of plaintiff and 32 interposing a cross claim on apportionment of liability constitutes waiver of any right to arbitration); Accessory Corp. v. Capco Wai Shing, LLC, 39 A.D.3d 344 (1st Dep’t 2007) (in dicta, participation in discovery would have constituted an affirmative acceptance of judicial forum); Stark v. Molod Sptiz DeSantis & Stark, P.C., 29 A.D.3d 481 (1st Dep’t 2006); Bucci v. McDermott, 156 A.D.2d 328 (1st Dep’t 1989) (participation in litigation for one year waives right to arbitration). A party will be deemed to have waived a contractual right to arbitrate when the party's "litigation activity manifested a preference `clearly inconsistent with [its] later claim that the parties were obligated to settle their differences by arbitration.'" Sherrill v. Grayco Bldrs., 64 N.Y.2d 261, 272 (1985), quoting Matter of Zimmerman v. Cohen, 236 N.Y. 15, 19 (1923). In evaluating a waiver-of-the-right-to-arbitrate claim, the Court of Appeals has provided the following guidance to courts: "In the absence of unreasonable delay, so long as the defendant's actions are consistent with an assertion of the right to arbitrate, there is no waiver. However, where the defendant's participation in the lawsuit manifests an affirmative acceptance 4 It is far from clear, that even if applied, Illinois law would, in fact, bar enforcement of said provision. 33 of the judicial forum, with whatever advantages it may offer in the particular case, her actions are then inconsistent with a later claim that only the arbitral forum is satisfactory.” De Sapio v. Kohlmeyer, 35 N.Y.2d 402, 405 (1974); see Allied Bldg. Inspectors Intl. Union of Operating Engrs., Local Union No. 211, AFL-CIO v. Office of Labor Relations of City of N.Y., 45 N.Y.2d 735, 737 (1978). Through its actions KNIGHT manifested a preference clearly inconsistent with its claim that the parties were obligated to settle their differences by arbitration. See Sherrill, 64 N.Y.2d at 272. Far from employing a defensive posture, KNIGHT actively participated in every phase of this litigation, from discovery to appellate practice, thereby manifesting an affirmative acceptance of the judicial forum (see De Sapio, 35 N.Y.2d at 405-406). By seeking and accepting the benefits of litigation, KNIGHT has waived its contractual right to compel arbitration. "Once the right to arbitrate a particular dispute has been lost by an election to litigate it cannot be recaptured." Sherrill, 64 N.Y.2d at 274. D. Illinois Law Does Not Bear A Reasonable Relationship To The Parties Of The Subcontract Or The Transaction KNIGHT’s argument that Illinois law should be applied was not raised below. Moreover, the facts in the record demonstrate that neither 34 party to the Subcontract bears a reasonable relationship to Illinois. Where a contract provides that the law of a non-forum state will govern, New York courts will honor such provision if the chosen state has a substantial relationship to the parties or the transaction, and honoring such provision does not violate a fundamental public policy of the forum state. See Welsbach Elec. Corp. v. MasTec, N. Am., Inc., 7 N.Y.3d 624 (2006); Hugh O'Kane Electric CO,. LLC v. MasTec N. Am., Inc., 19 A.D.3d 126, 127 (1st Dep’t 2005); Finucane v. Interior Constr. Corp., 264 A.D.2d 618, 620 (1st Dep’t 1999) ("[w]here, as here, the parties have agreed on the law that will govern their contract, it is the policy of the courts of this State to enforce that choice of law, provided that (a) the law of the State selected has a reasonable relation[ship] to the agreement and (b) the law chosen does not violate a fundamental public policy of New York") (internal citations omitted). In Finucane, this Court held that the laws of the state selected by the parties in their contract (Oklahoma) bore a reasonable relationship to the contract because one party to the contract maintained its principal place of business located in Oklahoma. Finucane, 264 A.D.2d at 620. The Court stated further that "even if New York were deemed to have a greater interest in the litigation, the fact that Wiltel's principal place of business is located in 35 Oklahoma is a sufficient basis to support enforcement of the parties' contractual choice of law." Finucane, 264 A.D.2d at 620. In contrast to Finucane, the Subcontract containing the subject choice of law provision reveals that both KNIGHT and LIME’s principal places of business are located in New York. (R 978). Mr. Potyak testified that LIME maintained a headquarters in North Carolina. (R 513). In its Verified Answer to Third Third-Party Complaint, KNIGHT admitted that it is a New York corporation duly formed under the laws of New York (R 94 & 102). In addition, PLAINTIFF’s injury arose out of work he performed for KNIGHT at the premises of 222 Broadway which is also located in New York. (R 199). Apart from the now waived arbitration provision, Illinois has no connection to the transaction or the parties to the Subcontract. Therefore, is no reasonable relationship to the State of Illinois that would warrant enforcement of the Subcontract’s choice-of-law provision, especially at this late stage of the litigation. CONCLUSION For the reasons set forth above, it is respectfully requested that this Court uphold the decision of the lower Court granting LIME ENERGY CO. summary judgment on its claim for contractual indemnification against KNIGHT ELECTRICAL SERVICES CORP. since any liability which may be imposed upon LIME ENERGY CO. under Labor Law §§ 240(1) and/or 241 ( 6) in this instance is purely vicarious in nature. Dated: White Plains, New York March 4, 2015 Respectfully submitted, // / / . / ' /; ~·· /) ,/". ._i .• l . ·. ···.·j//(_ ..... / ··::r.· . " / C ,/ / < ~-:r··n' ,' \ -e"' thom~ F~ Cer~ssi, E~ Dennis R. Smith, Esq. CERUSSI & SPRING Attorneys for Defendant LIME ENERGY CO. One North Broadway, Suite 1100 White Plains. New York I 0601 Tel. No. (914) 948-1200 36 APPELLATE DIVISION – FIRST DEPARTMENT PRINTING SPECIFICATIONS STATEMENT I hereby certify pursuant to 22 NYCRR § 600.10 that the foregoing brief was prepared on a computer using Microsoft Word Type. A proportionally spaced typeface was used, as follows: Name of typeface: Times New Roman Point size: 14 Line spacing: Double Word Count: The total number of words in this brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citations, proof of service, and this Statement is 7,381. Dated: White Plains, New York March 4, 2015 Thomas F. Cerussi, Esq. Dennis R. Smith, Esq. CERUSSI & SPRING Attorneys for Defendant LIME ENERGY CO. One North Broadway, Suite 1100 White Plains, New York 10601 Tel. No. (914) 948-1200