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.Nov 15, 2016LAWRENCE, WORDEN, RAINIS & BARD, P.C. ATTORNEYS AT LAW 225 BROAD HOLLOW ROAD. SUITE lOSE MEL VILLE, NEW YORK 1174 7 TELEPHONE ( 631) 694-0033 TELEFAX (63!) 694-9331 www.lwrlawver.com New York State Court of Appeals 20 Eagle Street Albany NY 12207-1095 Att: John P. Asiello, August 26, 2016 Chief Clerk & Legal Counsel to the Court LESLIE McHUGH Direct Line: ( 631) 694-0033 x 233 firstname.lastname@example.org Re: Nazario v. 222 Broadway, et al. APL-2016-00135 Our File No.: 25-3221-14 This letter brief is respectfully served on behalf of defendants/respondents Jones Lang Lasalle Americas, Inc. ("JLL") and 222 Broadway, LLC ("222") and responds to the submission made on behalf of third-party defendant/appellant Knight Electrical Services Corp. ("Knight"). OVERVIEW Pursuant to motion practice in the Lower Court, and as affirmed by the Appellate Division, First Department in its order modifying the order of the trial court, JLL has been found to be entitled to contractual indemnification by Knight. This holding was appropriate because a contract between Knight and defendant/respondent Lime Energy Co. ("Lime") requires Knight to indemnify Lime's "clients," as that term is used in the contract, for claims arising from Knight's work under that contract. JLL, as property manager for the building, had contracted with Lime for the work in question; Lime then subcontracted the labor obligations for the project to Knight. As such, the intention under the agreement was that JLL be indemnified as a "client" of Lime. The contract makes clear that the design and products are being provided by Lime to the "clients" and that Knight is being hired to supply labor for the installation for the "clients" benefit. In compliance with NY GOL § 5.322.1, the contract required the "clients" to be indemnified for claims arising from the work of Knight, and not for the independent negligence of the "clients." Further, JLL had no direct involvement with the installation during which plaintiff was injured, and was not negligent as to plaintiff for the purposes of General Obligations Law § 5-322.1. It is further submitted that the Appellate Division erred in granting summary judgment to plaintiff on the Labor Law § 240(1) cause of action because there is no evidence in the record that the ladder on which plaintiff was standing was defective and/or that any specific safety devices would have prevented plaintiffs accident. Plaintiff suffered an electric shock from touching live wires during his work 2 installing the new electrical equipment and was knocked from his six foot ladder as a result. His testimony as to the occurrence raises questions of fact as to whether there was a violation of Labor Law § 240( 1) and whether any such violation was a proximate cause of plaintiffs accident. FACTS A: Summary Plaintiff Justin Nazario was an apprentice electrician in the employ of Knight Electrical Services Corp. ("Knight") on October 30, 20 l 0, the date of loss herein (specific references to evidentiary exhibits are provided below). He was working on a lighting renovation project at premises subject to a long term lease by tenant, Bank of America, at 222 Broadway, NY, NY, and claims that he was standing on an A-frame ladder holding a wire which became energized and shocked him, causing him to fall off the ladder. The accident allegedly occurred when Mr. Nazario's supervisor, Romulo DeLeon, was delayed in accessing an electrical closet so as to de-energize the circuits because Knight "house" electricians controlled the keys for said closet. Plaintiff/ Appellant has withdrawn his claims based on common law negligence and NY Labor Law§ 200 as to JLL (the property manager for tenant, Bank of America) and 222 Broadway, LLC (the building lessor) (R: 1395). 3 Plaintiffs counsel has moved for summary judgment under Labor Law § § 240( 1) and 241(6). The Trial Court denied that motion, however, the Appellate Division modified the order and reversed the Trial Court on the issue of Labor Law§ 240(1) liability, granting plaintiff summary judgment on that claim. The Appellate Division also properly affirmed the Trial Court's grant of summary judgment to Jones Lang Lasalle Americas, Inc. ("JLL") on its claim for contractual indemnification against Knight. The issue of liability under § 241 (6) of the Labor Law was not reached by the Appellate Division because of the grant of summary judgment under Labor Law § 240( 1 ). In support of his summary judgment motion on the issue of Labor Law § 240(1), however, plaintiff had not submitted any expert opinion as to purported defects in the ladder, nor as to any other safety devices applicable to a Labor Law § 240 claim, which might have prevented plaintiffs accident. Further, plaintiff himself had testified that there was no problem or defect with the ladder, Therefore, a question of fact remained as to whether the defendants violated § 240(1) of the Labor Law and whether any such violation was a proximate cause of the plaintiffs injuries, to the extent that judgment under CPLR 3212 was improper. Defendant/respondent 222 Broadway, LLC ("222") was the owner and lessor under a long term lease of the entire building to Bank of America where 4 plaintiffs accident occurred. Defendant/respondent JLL was the property manager of the property pursuant to its contract with Bank of America, the tenant at the location (contract, R: 735-819). Third-party defendant/appellant Knight, plaintiffs employer, was the electrical service contractor at the building, pursuant to an ongoing Service Maintenance Agreement with JLL (R: 820-888). At the time plaintiff was working at the property, he was working for Knight under an additional agreement between JLL and Lime, whereby Lime subcontracted the labor/installation portion of their contract to Knight for the lighting retrofit project (see subcontract, R: 978-985). Defendant/respondent Lime had agreed pursuant to their contract with its client, JLL, to undertake that lighting retrofit/renovation project at the Bank of America offices which comprised the building located at 222 Broadway (R: 986-998) and subcontracted the labor portion of this obligation to Knight (subcontract, R: 978-985). The subcontract between Lime and Knight requires Knight to defend and indemnify, among others, Lime, and Lime's "clients" for claims arising from the work of Knight pursuant to the following clause at paragraph § IX E: INDEMNIFICATION. Subcontractor agrees to indemnify, defend, save, and hold harmless Lime, its parent company, subsidiaries, employees, agents, or clients, against all claims, liability, loss or expense caused or created by Subcontractor, its employees, or suppliers, whether or not through its or their negligence, arising from the Work performed hereunder. Subcontractor shall, at its own 5 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 (including death) to any person or persons, loss or damage to property of others caused by, arising out ot~ or in any way associated with the performance of the Work under this Subcontract. Subcontractor hereby agrees to indemnify, defend, save and hold harmless Lime, its parent company and subsidiaries, any prime or general contractor performing work on the Premises with whom Lime has directly or indirectly contracted to provide the Work, Customer and any owner of the Premises, for all costs and expenses (including reasonable attorney's fees and expenses) incurred by Lime in defending against or releasing any lien placed, or threatened to be placed, on the Premises by any subcontractor, supplier, materialman or staffing company of Subcontractor providing labor, in connection with all or any part of the Work for which Lime has provided payment to Subcontractor (R: 983). It is significant that this paragraph sets forth different obligations on the part of Knight to entities referenced as Lime's "clients" in the first part of the provision dealing with contractual indemnification for bodily injury and property damage claims arising from the project, and Lime's "Customer" in the second part of the provision dealing with mechanics' lien indemnity. Knight's counsel argues that JLL is not an indemnitee of Knight in this action because the contract defines "customer" as Bank of America, however, this is not with regard to that part of the indemnity obligations relevant to this claim. Knight's counsel, is conflating the term "Lime's clients" with the word "Customer", even though the paragraph referenced above does not use them synonymously nor with regard to the same 6 indemnity obligations. The word "client" is not defined in the contract to identify a specific entity and is a description. "Customer," on the other hand, is used in the lien indemnity portion of the above paragraph where the provision more narrowly defines those entitled to mechanics lien protection, the Bank tenant, and the property owner. The indemnification clause pursuant to which JLL seeks indemnification is contained in the first sentence in this paragraph, wherein Lime's "clients", not necessarily with an ownership or occupancy interest, (a broader term left undefined in the agreement) identifies a class of entities who would all have an interest in being indemnified for the negligent acts of Knight. This class of entities is understandably larger than that with ownership interests as are referenced in the lien portion of the provision. Defendant/ Respondent JLL contracted with Lime for the latter to do the lighting retrofit project, JLL is Lime's client and Knight's indemnitee herein. It is irrelevant that JLL is not identified by name because the class of entities described as "Lime's clients" is specifically referenced (as are other general classes, including Lime's parent companies, subsidiaries, employees and agents, none of which are identified by name in the agreement). There is no rule of contract construction that precludes the use of general classes of entities to set forth terms of a contract, and this contract contains no provision limiting the described entities to the contracting parties named on the first page. 7 The Appellate Division affirmed the Trial Court's determination that indemnification is appropriate as to JLL because the plaintiffs accident arose from Knight's work, and defendant/respondent JLL was not negligent as to the plaintiff, as will be demonstrated below with deposition testimony. Further, JLL was Lime's client, as noted above. The record also demonstrates that General Obligations Law § 5-322.1 was not violated because JLL's liability, if any, is vicarious only, which does not obviate indemnification. The language of this clause does not indicate that the defendants/respondents are entitled to indemnification for their sole negligence. This argument, therefore, is without merit. It IS also notable that contrary to Knight's counsel's contention, the Lime/JLL contract does not prohibit Lime from subcontracting any of its duties under the lighting upgrade agreement. The paragraphs cited by Knight's counsel do not state that these obligations were non-delegable (R: 987). Further, the Lime/JLL contract for lighting implementation expressly contemplates that Lime may subcontract out certain aspects of Lime's obligations. At § 5.3, it reads, "Owner and Client reserve the right to approve all lists of subcontractors proposed to be solicited for the provision of services and all subcontractors recommended for award" (R: 988). Further, § 13.2 allows the client and architect free and 8 unrestricted access to "service contractors, subcontractors or vendor's work" (R: 995). Significantly, § V A of the Lime/Knight contract expressly imputes to Knight safety obligations, wherein it states, "The subcontractor (i.e. Knight) shall establish and implement a safety program in compliance with OSHA guidelines for construction" (R: 980). Additionally, since it is manifestly obvious that Lime did contract the labor portion of its contractual obligations, which were underway at the time of plaintiff's accident, it simply defies reason to conclude that Lime could not subcontract out its obligations. Additionally, questions of fact remain as to whether defendants/respondents should be held liable under Labor Law§ 240(1) and/or§ 241(6). B: Relevant Indemnification Clause Annexed hereto at R: 978-985 is the subcontract between Lime and Knight for the lighting renovation project at 222 Broadway, NY, NY. Therein, Knight is obligated to defend and indemnify JLL herein, as JLL was Lime's client for the project. At paragraph IX( e) (R: 983) thereof, the subcontract reads as follows: Subcontractor agrees to indemnify, defend, save and hold harmless Lime, its parent company, subsidiaries, employees, agents, or clients against all claims, liability, loss or expense caused or created by subcontractor, its employees or suppliers, whether or not through its or their negligence, arising from the work performed hereunder. Subcontractor shall, at its own 9 expense, defend any and all actions, pay all attorneys' fees and all costs and other expenses arising from all loss, liability claims, suits or demands of every kind on account of injury (including death) to any person or persons, loss or damage to property of others caused by, arising out of, or in any way associated with the performance of the work under this contract. (R: 983) This clause does not violate General Obligations Law § 5-322.1 because it does not contemplate that Knight defend and indemnify the defendants/respondents for their sole negligence and, more significantly, because there is no evidence that JLL was negligent as to the plaintiff. The record, in fact, is bereft of any evidence that any of the defendants were negligent as to plaintiff. Rather, Knight alone, as outlined below, was negligent here. Additionally, the negligence and Labor Law§ 200 causes of action were discontinued by plaintiffs counsel as to defendants. The clause has a broad scope, contemplating all claims which merely arise from or are in any way associated with Knight's contractual work, whether Knight was or was not negligent. This contract clause also specifically references JLL as an intended beneficiary since it was Lime's client with which Lime contracted for the lighting renovation project. As noted above, Bank of America is defined in the contract as the "customer", not the client. The paragraph in which the indemnification clause is found references the term "customer" with regard to different obligations of Knight specific to property ownership interests, while the 10 conclusion that JLL is a member of the class of entities referred to as "clients" comes about as a result of JLL retaining the services and contracting with Lime for this work. As such, Lime's "clients" included JLL, and JLL is therefore, an explicitly intended indemnitee as the Appellate Division properly affirmed. In addition to the referenced contracts, the testimony of the various parties, as outlined below, also confirms in evidentiary form the above-outlined facts. C: Party Testimony 1: Testimony of Plaintiff Justin Nazario Mr. Nazario testified on January 7, 2013 (transcript at R: 222-418) and on June 14,2013 (transcript at R: 1254-1349). He was an apprentice electrician in the employ of Knight Electrical as of October 30, 2010, the date of the alleged accident, and on that date was working at the Bank of America premises located at 222 Broadway, NY, NY (R: 229-230). He was supervised in this employment exclusively by Rumelo DeLeon, a Knight employee (i.e., service manager) (plaintiffs EBT, R: 235; and transcript of Mr. DeLeon, R: 594, 602, 603, 630 and 632). On the morning of plaintiffs accident, Mr. DeLeon told the plaintiff that he would be part of the demolition process for the lighting renovation project at 222 Broadway. This involved removing fixtures that would be replaced with upgraded 11 fixtures (R: 236). Mr. Nazario did not speak with anyone other than Mr. DeLeon, his Knight supervisor, regarding the work that day (R: 282). Mr. DeLeon was "in charge" of this demolition work (R: 238). When Mr. Nazario and his coworkers arrived at the designated floor to work on the fixtures, Mr. DeLeon directed the Knight workers to different locations (R: 285-286). Plaintiff saw only Knight personnel on the floor (R: 305). Further, Mr. DeLeon, per Mr. Nazario, made an announcement that work could start. Mr. Nazario specifically testified as follows: "Yes, after we grabbed the ladders and we were assigned to go to where we had ... We were assigned to go on that floor, but there was an announcement that was like an okay to say that we were all right to work" (R: 286). Mr. Nazario testified that that announcement was made by Mr. DeLeon (R: 285-286). Prior to the accident the plaintiff had worked on two other fixtures and was involved with his third fixture when the accident allegedly occurred (R: 252-253). To accomplish the work for the fixtures, Mr. Nazario was using an A-frame ladder about 6 feet tall; he did not know whose ladder it was and only saw Knight personnel carrying ladders to the work location (R: 245-246). However, Mr. DeLeon, the Knight service manager on the job, definitively testified that the ladder used by plaintiff (and all the other Knight electricians) was owned and supplied by Knight (DeLeon transcript, R: 609). Mr. Nazario testified that when 12 the accident occurred, he had tested the wires which energized that particular fixture and determined that they had no power (R: 261-262). He was not wearing gloves (R: 265). The accident allegedly occurred when he had grabbed two wires for the fixture and was pulling them down from the ceiling (R: 267). He further testified that after he had pulled them down about one and a half inches, he got an electrical shock ("then the power just suddenly came on") and he thereupon fell backwards (R: 267, 272). Mr. Nazario did not know where the circuit breakers for his area of work were located (R: 288). His understanding is that a mechanic or supervisor would be required to tum the power off pursuant to Union rules, OSHA requirements and "Common Safety Rules" (R: 290). 2: Testimony of Rumelo DeLeon on Behalf of Knight The deposition transcript of Rumelo DeLeon is encompassed in the record on appeal at R: 576-732. As of the date of his deposition, Mr. DeLeon had been employed by Knight for 20 years and had the title of service manager (R: 583). He had held the position for nine years. In this position, he supervised all the lighting technicians, helpers and mechanics (R: 586). His duties more generally entailed "anything that needs to be done to get the job done" (R: 587). Further, he had responsibility for safety of workers on the job and he administered safety courses 13 which included the issue of electrical shock (R: 588). On October 30, 2010, Mr. DeLeon was the Knight Electrical service manager involved in the lighting renovation project at 222 Broadway (R: 19). He described the 222 Broadway job as a "retrofit" job in which one would remove the ballast and light bulb in each fixture and then replace them with upgraded products (R: 595). He described the procedure for carrying out the work. First, one would tum off the power and "make sure it's dead." Then, one would "remove the cover, remove the ballast, install new ballast, put cover plate back on, put new bulbs in, put the cover on, tum the power on" (R: 596). The ballast supplies the electricity to the plugs to light up the lamp and it also steps down the voltage to the fixture (R: 599). Mr. DeLeon further testified that Knight was doing this lighting renovation project for Lime (R: 601). He (Mr. DeLeon) was "the top guy for Knight" and was at the 222 Broadway job on a daily basis as the service manager (R: 602). Mr. DeLeon further testified that ladders used by the workers at the 222 job were provided by Knight (R: 609). Mr. DeLeon further described the layout of the premises and the project work. Generally, power ran between the drop ceiling and structural floor. It was supplied via BX cable with wires extending from the BX cable to the individual fixtures (R: 613). The BX cable houses two to three wires 14 in a flexible metal casing (R: 613-614). In order to do the retrofitting at 222 Broadway the wires had to be cut (R: 615 and 621). Mr. DeLeon testified that his work at the project included turning off the power (R: 629). Further, he was "just supervising, making sure everything you know was good" (R: 630). He specifically would tell the workers where to go and what to work on (R: 632). Mr. DeLeon further testified as to the power supply configuration in this regard. Each individual floor had a central electrical circuit box which controlled the electricity to the fixtures. This was contained in electrical closets with circuit breaker panels. This closet is locked and Mr. DeLeon had keys to some of the closets but not all (R: 632). When he needed a key for an electrical closet, he would obtain it from the Knight "in house" building electricians (per Service Contractor Agreement) (R: 632-633). These individuals would give him the keys and then he or that Knight electrician would open the closet to shut the breakers so the fixtures had no power (R: 633-635). Mr. DeLeon testified that it was his job to go into the panel and flip all the switches off (R: 638). Beyond being contracted specifically for the retrofit job, Mr. DeLeon testified that Knight was the "house electrician" for 222 Broadway, and in this regard had two electricians in the building (R: 633). The head house electrician was Joe Savasta, and the other was Mike Mavarutis (R: 634 ). These individuals 15 maintained the keys to the electrical closets on each floor and would give Mr. DeLeon the keys or they themselves would open the closets when needed (R: 634). On the day of plaintiffs accident, Mr. DeLeon had to radio to the house electrician to get the keys for the electrical closet (R: 677-678). The purpose of going into the electrical closet was to "de-energize the fixtures" (R: 635). It was Mr. DeLeon's job to go into the panel and "kill the electricity", as the retrofit job could not be accomplished if electricity was going to the fixtures (R: 635). Mr. DeLeon did not perform a lockout/tagout procedure on the door or the panel in question which would have let someone know that the circuits therein should not be turned on (R: 639). The lockout/tagout procedure entails turning off a circuit breaker, putting on and locking a lock on the breaker and tagging it with his name and phone number (R: 591-592). Mr. DeLeon testified that on the date of plaintiffs accident, he turned the power off between 8:30 and 9:00 a.m. (R: 646). "After I shut the breaker off, I'm walking to the location where everybody was working and he was on the floor" (R: 644). Plaintiff testified that his alleged accident happened "around 9:00a.m." Mr. DeLeon testified that despite his effort to shut the power to the floor, the power was actually on when the plaintiff was working on the retrofitting job (R: 653). However, he did not know how it was turned on (R: 654). Mr. DeLeon 16 further testified that when he and the Knight workers arrived at the floor some of them simply turned off the light switches (i.e., not the circuit breakers) and started working on the fixtures while Mr. DeLeon was waiting for the Knight house electrician to bring the key for the electrical closet (R: 672 and 678). He did not tell his men to not work while he waited for the key to the closet to be supplied by the Knight "house" electricians (R: 678-679 and R: 694). Mr. DeLeon further verified that by the time someone from Knight (i.e. the "house electricians") arrived to give Mr. DeLeon the keys for the electrical closets, the men were already working on the fixtures, having simply turned off the individual light switches to do so (R: 703). Thus, although Mr. DeLeon had not yet shut the circuit breakers, he let his workers undertake their duties after simply turning off the local light switches contrary to what he had described as the proper procedure. 3: Testimony of Robert Bicocchi on Behalf of JLL/222 Robert Bicocchi testified on behalf of defendants/respondents JLL and 222 on January 18, 2013. JLL is the property manager for the building at 222 Broadway (R: 427). 222 was the owner of the building and Bank of America was the tenant at the location, occupying all but one of the floors (R: 435). The building is a commercial office building with 33 stories, 27 of which are office 17 space (R: 429). In October 2010, a lighting renovation project was underway at 222 Broadway (R: 431). Mr. Bicocchi never observed any of the work for the lighting renovation project being done (R: 448), nor were there any other JLL or 222 personnel present at the building during the hours that this electrical work by Knight was done (i.e., the work was done at night and on weekends) (R: 448-449). Neither JLL nor 222 directed, controlled or supervised the plaintiff's work. Mr. Bicocchi identified the contract between Knight and JLL regarding electrical maintenance services at the building (R: 820-887). Pursuant thereto, Knight provided regular day-to-day electrical maintenance services and oversight of all electrical contracting work. Mr. Bicocchi further testified that Knight was also subcontracted by Lime to perform the installation of ballast and bulbs (i.e., the lighting renovation project) (R: 457). Mr. Bicocchi confirmed that Knight "wore two hats in the building" in that pursuant to these two contracts, they were the building maintenance electricians and were also the subcontractors who did the lighting renovation project (R: 457). JLL never supplied any equipment to the electricians who were working on the lighting job (R: 461 ). Mr. Bicocchi also identified the lighting renovation contract between Lime and JLL pursuant to which JLL retained Lime for the 18 renovations at the subject building (R: 464, and contract at R: 820). Mr. Bicocchi concurred with Mr. De Leon that there are electrical closets on every floor with switches or circuit breakers to tum off the power (R: 480). The closets were locked and the keys were kept with the Knight "house" electrician (R: 481-482 and484). 4: Testimony of Joseph Potyak on behalf of Lime Mr. Potyak, who testified on behalf of Lime, was the senior project manager for the lighting renovation project at 222 Broadway (R: 519, 521). He described his duties as approving labor invoices and processing materials and purchase orders (R: 521 ). He identified the subcontract between Lime and Knight for the lighting renovation project (R: 523-524 ). He further testified that the electrical work on the lighting renovation project at 222 Broadway was done by Knight (R: 529). None of this electrical work was done by Lime personnel (R: 530). Mr. Potyak further testified that Knight was responsible for site safety (R: 544-545); Lime required Knight to comply with OSHA safety guidelines of construction (R: 548). This testimony is consistent with the contract obligations outlined above (R: 980). Mr. Potyak also identified the "purchase order" between JLL and Lime pursuant to which JLL hired Lime for the lighting retrofit project at 222 Broadway (R: 549-550). 19 Mr. Potyak identified Bank of America as the tenant at the project. All of the lighting renovation work was done at night and on weekends (R; 552). He further testified that Knight had the task of gaining access to the electrical closets; also, if there were a need to implement a lockout/tag out procedure this would have been Knight's responsibility (R: 557). DISCUSSION The above-outlined evidence establishes that plaintiff's accident occurred as a result of the means and methods of Knight's work at the premises. Further, JLL (as well as the other direct defendants) was not negligent as to plaintiff because Knight alone directed, supervised, and controlled the plaintiff's work activities and controlled the power supply to the area where plaintiff was working. These responsibilities derived from both Knight's contract with Lime to be the electrical subcontractor on the lighting renovation project and their contract with JLL as the electrical maintenance service contractor at the premises. As outlined above, Mr. DeLeon testified that he relied upon the Knight "house" electricians, Joe Savasta and Mike Mavarutis, to either give him the keys for the electrical closets and/or to tum off the power on the floors where Knight personnel were working. The accident occurred when Mr. Nazario was apparently given the go-ahead order by 20 his Knight supervisor to start work when, in fact, it appears that the power supply had not been turned off. JLL personnel did not have any involvement in any of these specific activities, nor with any of the renovation work generally; it did not direct, control or supervise the plaintiff's work in any way. Also, JLL, which contracted with Lime for the lighting renovation project, was Lime's client. Since JLL has demonstrated that it was free of negligence, and did not direct, supervise and/or control the plaintiff's work, and plaintiff's accident arose from the lighting renovation project being performed by Knight, Knight owes this defendant/respondent defense and indemnification with regard to this action pursuant to the indemnification clause in the Lime/Knight contract. Additionally, the plaintiff's motion for summary judgment on the Labor Law causes of action should be denied because of issues of fact. LEGAL ARGUMENT POINT 1: A VALID AND ENFORCEABLE INDEMNIFICATION CLAUSE REQUIRES THIRD-PARTY DEFENDANT/APPELLANT KNIGHT TO DEFEND AND INDEMNIFY DEFENDANT/RESPONDENT JLL BECAUSE PLAINTIFF'S CLAIM AROSE FROM KNIGHT'S WORK AT 222 BROADWAY, THERE IS NO EVIDENCE THAT THOSE ENTITIES WERE NEGLIGENT, AND THE CLAUSE DOES NOT VIOLATE GENERAL OBLIGATIONS LAW§ 5-322.1 The evidence outlined above demonstrates that plaintiff's accident occurred when he was in the course of his employment with Knight while Knight was 21 performing a lighting renovation project at 222 Broadway, NY, NY, pursuant to its subcontract with Lime; that Mr. Nazario was supervised, directed and controlled in this work solely by Knight personnel; that JLL personnel did not supervise, direct and/or control plaintiff's work and was not otherwise negligent. The Knight/Lime contract requires Knight to defend and indemnify JLL, as Lime's client, under these circumstances. The accident occurred when Knight's project supervisor, Rumelo DeLeon, allowed the Knight electricians to work on the light fixtures before he turned off the power to the floor where they were working. The evidence also demonstrates that the Knight "house" electricians, Mr. Savasta and Mr. Mavarutis, were an integral part of the process by which the electrical breakers would be shut off, in that they controlled and supplied the keys, and were instrumental in the delay in doing so on the date of loss. Additionally, they would, on occasion, unlock the electrical closets themselves. Knight argues that the relevant clause in the subcontract between Lime and Knight violates § 5-322.1 because it allegedly requires Knight to defend and indemnify defendants/respondents for their own negligence. That clause, found at R: 983 in the record, mandates indemnification to Lime and its clients (as well as several general categories of indemnitees) for all claims "caused or created by subcontractor (i.e. Knight), its employees or suppliers, whether or not through its 22 or their negligence, ansmg from the work performed thereunder." The plain language of this clause confirms that it does not mandate indemnification for a claim caused by the negligence of either JLL or Lime. Rather, it is invoked for claims which arise from any of the work undertaken by Knight, whether or not Knight was negligent. Knight's counsel's interpretation notwithstanding, case law additionally establishes that the clause is not violative of General Obligations Law § 5-322.1 because there is no evidence of negligence on the part of defendant/respondent JLL (or Lime), and their liability herein can only be vicarious pursuant to Labor Law§§ 240(1) (and/or 241(6) in the event this Court reinstates that claim). In fact, plaintiffs counsel has previously voluntarily discontinued the Labor Law § 200 (i.e. negligence) cause of action, as well as the common law negligence cause of action as to the defendants/respondents and the record is bereft of any evidence which purportedly imputes negligence to JLL or any of the direct defendants. In Brown v. Two Exchange Plaza, et al., 76 N.Y.2d 172, 556 N.E.2d 430, 556 N.Y.S.2d 991 (Ct. Appeals, 1990), the Court of Appeals addressed the relevance of an indemnification clause, where the potential indemnitor, A&M Wallboard, claimed the clause was violative of General Obligations Law§ 5-322.1 because Fuller, the proposed indemnitee, had been found liable under Labor Law§ 23 240( 1 ). The Court of Appeals declined to validate this argument and upheld A&M's duty to defend and indemnify Fuller. It observed that liability under § 240( 1) is not predicated on fault. Rather, it is imputed to the owner or contractor by statute and attaches, irrespective of whether due care was exercised, without reference to principles of negligence. The Court further noted that there was no finding of negligence against Fuller, and "without a finding of negligence on the part of Fuller, General Obligations Law 5-322.1 's provision against indemnifying a contractor for its own negligence is inapplicable." Likewise, here, there is no evidence of negligence on the part of JLL and/or 222. The Brown, Court supra also referenced its own holding in Quevedo v. City of NY, 56 N.Y.2d 150, 436 N.E.2d 1253 (Ct. Appeals, 1982). There, in scrutinizing an indemnification clause for possible 5-322.1 violations, the Court noted that "such a clause is unenforceable under that statute only to the extent that the clause provides indemnification for liability for damages caused by the indemnitee's sole negligence." Further, the Court noted that although the clause in question required indemnification for the sole negligence of the indemnitee, it also required indemnification for cases of joint fault and "such an allocation of responsibility is not proscribed and the statutory bar need not invalidate the agreement in toto." Since there was no finding that the plaintiffs accident was 24 "caused by or result( ed) from the sole negligence of the defendant City, there was no basis to deny enforcement the clause" (id). Here, as noted above, there is no evidence that JLL was negligent. In Wamett v. A.J. Pegno Constr. Corp., 1 A.D.3d 207, 767 N.Y.S.2d 107 (A.D. 1 Dept., 2003), the Court held that the relevant indemnification clause which required the defendant, Grace, to indemnify defendant A.J. Pegno for the plaintiffs claim was enforceable. This was because the claim arose from Grace's work; indemnification would be mandated irrespective of Grace's fault and there was no evidence that plaintiffs accident was attributable to negligence on the part of defendant A.J. Pegno. Therefore, A.J. Pegno was properly awarded summary judgment on its claim for contractual indemnification against Grace. Likewise, in Colozzo v. National Ctr. Foundation, Inc., 30 A.D.3d 251, 817 N.Y.S.2d 256 (A.D. 1 Dept., 2006), the Appellate Division, First Department, affirmed the Trial Court's grant of summary judgment on a construction manager's claim for contractual indemnification against its subcontractor. In so holding, it noted "although on its face the indemnity provision relied upon by Tishman runs afoul of General Obligations Law § 5-322.1, Tishman may nonetheless enforce it since the evidence established the plaintiffs injuries were not attributable to negligence on its part and that its liability was vicarious and purely statutory." 25 Tishman had demonstrated that it did not exercise supervision or control over the specific work being performed by plaintiff at the time of his accident and it had neither actual nor constructive notice of the allegedly unsafe condition. Similarly, in Zarem v. City of NY, 6 A.D.3d 276, 774 N.Y.S.2d 695 (A.D. 1 Dept., 2004) plaintiff had been injured when he tripped and fell on some ice on a sidewalk defect adjacent to a bus shelter. The area was maintained by Shelter Express pursuant to a contract whereby it agreed to indemnify Infinity Outdoor for liability arising from the former's performance of its work under the agreement, "whether by negligence or otherwise." Questions of fact existed as to whether any negligence on the part of Shelter Express caused plaintiffs injury. However, there was no evidence that plaintiffs accident was attributable to negligence on Infinity's part, and the indemnity clause, therefore, was enforceable so as to require indemnification of Infinity Outdoor. In Fresco v. 157 E. 72nd St., et al., 2 A.D.3d 326, 769 N.Y.S.2d 536 (A.D. 1 Dept., 2003), the Court found the record to be devoid of any evidence of fault on the part of the general contractor and that plaintiff implicitly admitted as much by consenting to dismissal of his cause of action for Labor Law § 200. The general contractor's liability under Labor Law§ 241(6) was vicarious only and, therefore, the general contractor was not being indemnified for its own negligence, in 26 violation of General Obligations Law § 5-322.1. It was entitled to full contractual indemnification from the plaintiffs employer. In Centennial Contractors Enterprises v. East NY Renovation, et al., 79 A.D.3d 690, 913 N.Y.S.2d 274 (A.D. 2 Dept., 2010), the plaintiff sought to recover damages for breach of contract and contractual indemnification pursuant to its contract with defendants after it was found liable on a Labor Law § 240( 1) cause of action brought in an underlying action by an injured plaintiff In analyzing the contract, the Appellate Division noted that a party is entitled to contractual indemnification when the intention to indemnify is clearly implied from the language and purposes of the entire agreement and the surrounding circumstances. It further held that plaintiffs duty to supervise the work of plaintiff in the underlying action and ensure compliance with safety regulations did not amount to supervision and control of the work site such that plaintiff would be liable for the negligence of the contractor who performs day to day operations. Because plaintiff was free of negligence, the indemnification provisions were enforceable. See also Hoelle v. NY Equities Co., et al., 258 A.D.2d 253, 684 N.Y.S.2d 539 (A.D. 1 Dept., 1999), where the Court held that the contractor's general duty to supervise the work and ensure compliance with safety regulations did not amount to supervision and control of the worksite such that the supervising entity 27 would be liable for the negligence of the contractor who performed the day to day operations. Contractual indemnification, therefore, was appropriate to the contractor. Here, the relevant indemnification clause in the Lime/Knight contract imputes to Knight the duty to indemnify Lime's clients for claims arising from Knight's contract work, whether or not Knight is negligent. That JLL was Lime's client is established by the fact that JLL contracted with Lime for the lighting retrofit job at 222 Broadway. That Bank of America was identified as the customer in this contract does not undermine this position. In fact, the paragraph which contains the indemnification clauses imputes different obligations on the part of Knight to the "customer" (specifically defined as Bank of America) than to Lime's clients, a general class of entities not defined in the contract. Ownership interests referenced in that part of the agreement dealing with mechanics liens on the property is separate from the indemnity for negligence portions of the indemnification paragraph. As such the "clients" consist of the entities who retained and benefit from Lime's obligations under the contract, while the Owner and identified customer (Bank of America) are those entities who would have an interest in an issue involving mechanics liens. "Clients" could be owners as well as simply the party that retained Lime, but identifying the customer or owner for 28 mechanics lien purposes does not exclude that other entities within the purview of the term "clients" are not intended to be referenced in that part of the indemnity provision dealing with indemnification for bodily injury and property damage. Additionally, JLL was not negligent and General Obligations Law § 5-322.1 is not violated pursuant to case law outlined above. It is, therefore, respectfully requested that this Court affirm the holding of the Appellate Division that Knight owes JLL contractual indemnification. POINT II: DEFENDANT/RESPONDENT JLL IS A THIRD-PARTY BENEFICIARY UNDER THE CONTRACT BETWEEN LIME AND KNIGHT AND, THEREFORE, IS ENTITLED TO INDEMNIFICATION BY KNIGHT PURSUANT TO THE TERMS OF THAT CONTRACT There is no issue with the fact that JLL as building manager hired Lime to perform energy saving upgrades to the property at the behest of the tenant of that property Bank of America. And no issue that as part of that project Lime hired Knight to perform the labor for that job. Knight's procedures were faulty resulting in the injury to their employee, and it is proper for Knight to bear that loss. In order to establish one's status as an intended third-party beneficiary under a contract, a party must establish: 1) the existence of a valid and binding contract between other parties; 2) that the contract was intended for the third-party beneficiary's benefit; and 3) that the benefit to (them) is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a 29 duty. Mendel v. Henry Phipps Plaza W., Inc., 6 N.Y.3d 783, 811 N.Y.S.2d 294 App., 2006). In Beasock v. Canisius College, 126 A.D.3d 1403, 5 N.Y.S.2d 777 (A.D. 4 Dept., 20 15), Canisius College, a named defendant in a Labor Law action, commenced a third-party action against Active Workforce asserting inter alia a cause of action for contractual indemnification. Canisius moved for summary judgment on that cause of action and Active moved to dismiss it, arguing that there was an issue of fact on the issue of whether Canisius was an intended beneficiary because the contract merely refers to "the owner", rather than referring to Canisius by name. The Court found that contention to be without merit and that Canisius was entitled to indemnification was proper. Likewise, in Finch Pruyn & Co., Inc. v. M. Wilson Control Svcs., Inc., 239 A.D.2d 814, 658 N.Y.S.2d 496 (A.D. 3 Dept., 1997), the Court held that the identity of a third-party beneficiary need not be specifically set forth in a contract. In Villalba v. Robo Breaking Co., 2015 WL 6507837 (E.D.N.Y., 2015), the Court addressed a claim for contractual indemnification asserted by defendant Aecom against Skanska pursuant to the latter's contract with third-party defendant Amtrak. The relevant clause in that contract required Skanska to indemnify "Amtrak (and) its ... agents ... from and against any and all claims ... " The Court 30 found that Aecom was entitled to indemnification because the indemnification clause in the Skanska/ Amtrak contract specifically identified the intended beneficiaries as including agents of Amtrak. Further, the Amtrak/ Aecom contract identified Aecom as Amtrak's agent when performing safety responsibilities. Thus, it was an intended beneficiary of the contract because plaintiffs were suing Aecom under New York Labor Law for failure to perform its safety responsibilities. Thus, indemnification was appropriate. In Encore v. Lake Grove Homeowners Assoc., Inc. v. Cash & Associates, P.C., Ill A.D.3d 881, 976 N.Y.S.2d 143 (A.D. 2 Dept., 2013), the Court held that the identity of a third-party beneficiary need not be set forth in the contract or, for that matter, even be known as of the time of the execution. Here, the record reflects the existence of a valid and binding contract between Lime and Knight. It also demonstrates that JLL was a client of Lime because JLL contracted with Lime for the latter to undertake the lighting renovation project at issue. The contract specifically references Lime's clients as Knight's indemnitees and, therefore, the contract was intended to benefit JLL. Knight's counsel argues that JLL cannot be considered an indemnitee because the Lime/Knight contract defines "Customer" as Bank of America. However, the contract does not use the words "client" and "customer" synonymously. In fact, in 31 the same paragraph of the contract that requires Knight to indemnify Lime's "clients", the contract outlines different duties owed by Knight to "Customer" and owner as those terms are identified in the agreement. Additionally, indemnification of JLL is an immediate benefit of the contract, not incidental thereto. Thus, the three prong test articulated by the Court of Appeals is met. Further, it is irrelevant that JLL was not referenced by name because it falls within a general class of intended beneficiaries (i.e. Lime's clients). Thus, Knight's obligation to indemnify JLL should be affirmed by this forum. POINT III: THE APPELLATE DIVISION ERRED IN GRANTING SUMMARY JUDGMENT TO PLAINTIFF ON THE§ 240(1) CAUSE OF ACTION BECAUSE ABSENT EVIDENCE THAT THE LADDER WAS DEFECTIVE OR WHETHER SAFETY DEVICES WOULD HAVE PREVENTED PLAINTIFF'S FALL, THERE ARE ISSUES OF FACT AS TO WHETHER DEFENDANT VIOLATED LABOR LAW§ 240(1) AND WHETHER ANY SUCH VIOLATION WAS A PROXIMATE CAUSE OF PLAINTIFF'S ACCIDENT Defendant/respondent JLL hereby adopts and incorporates herein by reference in their entirety the arguments and case law presented by Knight's counsel regarding this point of law. Those arguments are not repeated herein for the sake of brevity. CONCLUSION Plaintiff has submitted no evidence on the record that the ladder from which he fell was defective and/or that other safety devices would have prevented his fall. 32 Therefore, there is an issue of fact as to whether Labor Law § 240(1) was violated and that such violation was the proximate cause of plaintiffs accident. Summary judgment on this issue is, therefore, not appropriate. JLL is entitled to contractual indemnification from Knight because it was referenced by use of the term "clients" and is an intended third-party beneficiary under the Lime/Knight subcontract for the lighting renovation project. JLL contracted with Lime for the latter to carry out the lighting renovation project and, therefore, was Lime's client. The subcontract specifically identifies Lime's clients as indemnitees for claims that arise from Knight's work under the contract. The accident occurred while plaintiff, a Knight employee, was carrying out its contractual work; therefore, the claim arose from Knight's work under the contract. Additionally, there is no negligence attributable to JLL (in fact, the common law negligence and Labor Law § 200 causes of action have been discontinued with prejudice). Thus, there is no violation of General Obligations Law § 5-322.1 because Knight is neither requested, nor required to indemnify JLL for the latter's own negligence. WHEREFORE, it 1s respectfully requested that this forum affirm the Appellate Division order which grants summary judgment to JLL on its claim for contractual indemnification against Knight; deny plaintiff's motion for summary 33 judgment under Labor Law § 241 cause of action, and grant such other and further relief as it deems just and proper. Dated: August 26, 2016 Respectfully Submitted, LAWRENCE, WORDEN, RAINIS & BARD, P.C. Attorneys for Defendants/Respondents 222 BROADWAY, LLC and JONES LANG LASALLE AMERICAS, INC. 225 Broad Hollow Road, Suite 1 05E Melville NY 11747 ( 631) 694-003 3 34 Certification of Compliance The foregoing brief was prepared on a computer. A proportionally spaced typeface was used as follows: Name of Typeface: Times New Roman Point Size: 14 Line Spacing: Double The total of words in the brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citation, proof of service, certification of compliance or any authorized addendum containing statutes, rules and regulations, etc. is 7,684. 35 CORPORATE DISCLOSURE STATEMENT Respondent 222 Broadway, LLC, by its attorneys and pursuant to Rule SOO.l(f), states that it is a foreign limited liability company organized under the laws of the state of Delaware, dissolved as of January 2016, and is a wholly owned subsidiary of Merrill Lynch & Co., Inc. Merrill Lynch & Co., Inc. is a direct subsidiary of Bank of America Corporation which is a publicly traded company (NYSE, BAC) and that no other corporation holds 10% or more of its shares. CORPORATE DISCLOSURE STATEMENT Respondent JONES LANG LASALLE AMERICAS, Inc. by its attorneys and pursuant to Rule 500.1(±) states that it is a foreign business corporation incorporated in the state of Maryland, and is a wholly owned subsidiary of Jones Lang LaSalle Incorporated, a publicly traded company (NYSE, JLL) and that no other corporation holds 10% or more of its shares.