Robert Gerrish, Respondent,v.56 Leonard LLC, et al., Appellants, et al., Defendant.BriefN.Y.February 15, 2018SHAUB, AHMUTY, ClTRIN & SPRATT, LLP ATTORNEYS AT LAW 1983 MARCUS AVENUE LAKE SUCCESS, NEW YORK 11042-1056 (516) 488-3300 Facsimile: (516) 488-2324 info@sacslaw.com 77 Water Street, Suite 702 New York, New York 10005 (212) 599-8200 Facsimile (212) 850-5545 50 Main Street, Suite 1000 White Plains, New York 10606 (914) 948-5666 Facsimile: (914) 682-7787 Christopher Simone csimone@sacslaw.com Gerard S. Rath grath@sacslaw.com October 18, 2017 Hon. John P. Asiello Clerk of the Court New York State Court of Appeals 20 Eagle Street Albany, NY 12207 Gerrish v. 56 Leonard, LLC, et al.. APL-2017-00149 Dear Mr. Asiello: We represent the amicus curiae Real Estate Board of New York (hereinafter REBNY). Introduction Amicus curiae REBNY submits this letter brief in support of the appeal to this Court by defendants 56 Leonard LLC (hereinafter “56 Leonard”) and Lend Lease (US) Construction LMB, Inc. (hereinafter “Lend Lease”) upon leave of the Appellate Division, First Department pursuant to CPLR 5713 from a non-final Decision and Order of that court entered February 16, 2017 that (a) reversed an order of the Supreme Court, New York County (Barbara Jaffe, J.), {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 2 entered April 28, 2015 that had granted their motion pursuant to CPLR 3211 to dismiss plaintiffs Labor Law § 241(6) claim against them and (b) denied their motion. Interest Of The Amicus Curiae REBNY was formed in 1896 as the New York State’s first real estate trade association. It works on behalf of the mutual interests of its members by promoting public and industry policies. The organization frequently speaks before government bodies with the primary goals of expanding New York’s economy, encouraging the development and renovation of commercial and residential property, enhancing the city’s appeal to investors and residents and facilitating property management. REBNY’s membership consists of more than 17,000 commercial, residential, and institutional property owners, builders, managers, investors, brokers, and salespeople; banks, financial service companies, utilities, attorneys, architects, and contractors; and other associations, organizations, institutions, corporations, co-partnerships, and individuals professionally interested and engaged in business allied to New York City real estate. {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 3 Issues Addressed By The Amicus Curiae The instant appeal, among other things, examines the scope of the duty of a property owner and general contractor to provide a safe workplace pursuant to Labor Law § 241(6). The salient facts are undisputed. Plaintiff was allegedly injured while fabricating rebar at a site that was seven miles away from the construction site owned by 56 Leonard and managed by Lend Lease. In short, neither 56 Leonard nor Lend Lease owned the site or supervised or controlled the work at the site where plaintiff was injured. Lend Lease and Collavino Structures, LLC (hereinafter “Collavino”), the superstructure concrete contractor, entered into a Trade Contract in which a “Temporary Facilities” clause provided that “[a]ll temporary Project site facilities * * * shall be furnished by [Collavino].” The “Project” site was defined unambiguously in the Trade Contract as 56 Leonard Street in the Borough of Manhattan (R. 265). The Trade Contract also provided that Collavino “agrees to place its Temporary Facilities in locations designated by [56 Leonard] or [Lend Lease]” (R. 287). Collavino subsequently entered into a sub-subcontract with plaintiffs employer, Navillus Tile, Inc. (hereafter “Navillus”) (R: 76) and a temporary {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 4 license with Harlem River Yard Ventures, Inc. and HRY Holdings, LLC, to utilize property they owned in the Bronx where Navillus could perform its work (hereinafter the “Bronx Yard”) (R. 241). The Bronx Yard is where plaintiffs accident allegedly occurred. The temporary license for the Bronx Yard provided that Collavino “and/or its subcontractors, employees, agents, and representatives (the ‘Grantee Parties’) to perform Work, as hereinafter defined, on the Property” (R. 241). The “Work” was defined as “steel fabrication (cutting and bending)” that would be “forwarded to a construction site in Manhattan” (R. 242). Notwithstanding that the “Project” was defined unambiguously in the Trade Contract (R. 265), the Appellate Division found that it was speculative to conclude that the Temporary Facilities clause was limited to facilities only located at 56 Leonard Street, but that the Temporary Facilities clause applied to off-site facilities, such as the Bronx Yard. See Gerrish v. 56 Leonard LLC. 147 A.D.3d 511, 514 (1st Dep’t 2017). In finding that the Temporary Facilities clause applied to the Bronx Yard, the Appellate Division concluded that the language in the Trade Contract that Collavino “agrees to place its Temporary Facilities in locations designated by [56 Leonard] or [Lend Lease]” (R. 287) {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 5 provided a “nexus between the leasing of the Bronx Yard and defendants 56 Leonard and Lend Lease” to impose liability under Labor Law § 241(6) against them. Gerrish at 513. REBNY contends that the Appellate Division erred in concluding that the Trade Contract between Lend Lease and Collavino provided a nexus to impose liability on Appellants for an alleged violation of Labor Law § 241(6) that occurred on property that 56 Leonard did not own and where Lend Lease did not supervise or control the work site. The Appellate Division’s holding greatly expands the legislatively intended, legal and practical duty of landowners and general contractors under Labor Law § 241(6). This in turn will have a detrimental effect on the real estate, construction and insurance industries by expanding their liability to an uncontrollable, limitless degree and driving up the costs of construction and insurance in New York to the state’s detriment. Accordingly, the Appellate Division’s decision should be reversed, and the Supreme Court’s decision dismissing plaintiffs complaint should be reinstated. {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 6 Argument The Appellate Division’s Decision Impermissibly Extending The Duty Of Real Property Owners To Provide A Safe Workplace Under Labor Law § 241(6) To A Premises Over Which They Have No Interest Or Control Is Unmanageable And Will Have Negative Statewide Implications A. Owner’s Duty Under Labor Law § 241(6) Labor Law § 241(6) imposes a nondelegable duty of reasonable care upon owners and contractors and their agents “to provide reasonable and adequate protection and safety to the persons employed therein.” Ross v. Curtis-Palmer Hvdro-Elec. Co., 81 N.Y.2d 494 (1993).1 The statute’s history manifests the understandable legislative intent to place the “ultimate responsibility for safety practices at building construction jobs where such responsibility actually belongs, on the owner and general contractor.” (1969 N.Y. Legis Ann. at 407ÿ108). This Court has observed that “[liability under the Labor Law as an owner, however, turns in every case on sometimes fine The statute provides in pertinent part: All areas in which construction, excavation or demolition work is being performed shall be so constructed, shored, equipped, guarded, arranged, operated and conducted as to provide reasonable and adequate protection and safety to the persons employed therein or lawfully frequenting such places. The commissioner may make rules to carry into effect the provisions of this subdivision, and the owners and contractors and their agents for such work * * * shall comply therewith. {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 7 distinctions relating to ownership of the premises and control of the injury- producing work.” Guryev v. Tomchinskv. 20 N.Y.3d 194, 201 (2012). B. Appellants Had No Nexus To The Bronx Yard In determining whether an out-of-possession owner is a proper Labor Law defendant, the Court has held that “some nexus between the owner and the worker, whether by a lease agreement or grant of an easement, or other property interest” must exist. Abbatiello v. Lancaster Studio Assoc., 3 N.Y.3d 46, 51 (2004). Here, however, it is undisputed that the Appellants did not own the Bronx Yard where plaintiffs accident allegedly occurred. Nonetheless, the Appellate Division bestowed an ownership interest in the yard upon 56 Leonard by virtue of the Trade Contract between Lend Lease and Collavino. Notably, by this agreement Collavino was required to pay the monthly license fee and nowhere in the temporary license agreement is 56 Leonard, Lend Lease or the construction site mentioned (R. 241-242). The Appellate Division concluded that the Trade Contract provision that Collavino agreed “to place its Temporary Facilities in locations designated by [56 Leonard] or [Lend {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 8 Lease]” created a nexus between the lease of the Bronx Yard and Appellants. Gerrish. 147 A.D.3d at 513. Labor Law liability against an owner and general contractor, however, legally, logically and practically should not be based on a provision in a Trade Contract between two outside contractors that the owner or general contractor could designate locations for temporary facilities. 56 Leonard never designated the Bronx Yard as a temporary facility for purposes of its agreement with Collavino; rather Collavino and Navillus did for purposes of their arrangement. There was no nexus created by that contract provision simply because the owner or general contractor could designate a location for a temporary facility. Here, under well settled authorities the Appellants could not acquire any property interest in the Bronx Yard by the provision in a different contract about designating locations for temporary facilities. By finding otherwise, however, the Appellate Division has effectively expanded Labor Law liability based on an outside relationship that the Appellants had no control over. {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 9 c. riaintiff s Employer Navillus Had A Closer Nexus To The Bronx Yard Than Appellants In Flores v. ERC Holding LLC. 87 A.D.3d 419 (1st Dep’t 2011) and Adams v. Pfizer. Inc.. 293 A.D.2d 291 (1st Dep’t 2002), the Appellate Division dismissed the respective plaintiffs’ Labor Law claims on the ground that the accidents occurred at their employer’s facilities, not at a construction site. The Flores court reasoned that (Flores at 420): Perfonning construction work for purposes of Labor Law § 240(1) (see Joblon v. Solow, 91 N.Y.2d 457, 465, 672 N.Y.S.2d 286, 695 N.E.2d 237 [1998] [material alteration to the premises]) and working at a construction site for purposes of Labor Law § 241(6) (see Mosher v. State of New York, 80 N.Y.2d 286, 590 N.Y.S.2d 53, 604 N.E.2d 115 [1992] [repaving project]) are distinguished from fabricating and transporting materials to be used in connection with ongoing work at a construction site. Dispositive is that at the time of his injury, plaintiff was engaged in the fabrication and loading of steel at his employer’s Bronx facility, not in perfonning construction work at the Queens site (Jock v. Fieri, 80 N.Y.2d 965, 967, 590 N.Y.S.2d 878, 605 N.E.2d 365 [1992] [fabrication not involving any construction activity at the time of injury]; Dakar v. Holland Ladder & Mfg. Co., 79 A.D.3d 1631, 914 N.Y.S.2d 817 [2010] [worker engaged in normal manufacturing process at employer’s facility]; see also Pirog v. 5433 Preston Cl, LLC, 78 A.D.3d 676, 910 N.Y.S.2d 167 [2010] [stockpiling pipes at storage facility was neither construction work nor work performed in a construction area]; cf. Nagel v. Metzger, 103 A.D.2d 1, 8, 478 N.Y.S.2d 737 [1984] [hoisting and land clearing constitute construction work under Labor Law § 241(6)]). {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 10 The Appellate Division concluded that “[ajpplying the Labor Law to fabrication performed and loading of steel beams onto a truck for transport some 12 miles away at a facility that is independently owned and operated would be an untoward extension of the protection afforded by the Legislature” Flores at 421. In this case, however, the same tribunal aimed to distinguish Flores and Adams on the ground that both plaintiffs were injured while working at their employers’ facilities. Gerrish, 147 A.D.3d at 513. As noted above, the Appellate Division here found that the Trade Contract between Lend Lease and Collavino provided a “closer nexus between the leasing of the Bronx Yard and defendants 56 Leonard and Lend Lease” such that they would be responsible for any violations of the Labor Law at that away location. Gerrish, 147 A.D.3d at 513. No such nexus whatsoever existed, however, as Collavino entered into the license agreement with the owners of the Bronx Yard in February 2013 (R. 241) and then subcontracted with plaintiffs employer Navillus in July 2013 (R. 77). It is, furthermore, undisputed that neither 56 Leonard nor Lend Lease {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 11 were involved with the licensing of the Bronx Yard or the hiring of Navillus. As such, plaintiffs employer Navillus had a closer nexus to the Bronx Yard than either 56 Leonard or Lend Lease because it was hired by and dealt only with Collovino, the license holder of the Bronx Yard. Therefore, neither Flores nor Adams were distinguishable. In finding otherwise, however, the Appellate Division turned sound, well settled Labor Law jurisprudence on its head in place of a new policy expanding the statute’s scope to any facility with any connection to Collavino. The significance of doing so is obvious as now premises owners will be liable for off-site facilities they neither control nor even know about. As the dissenting jurist poignantly noted, “[sjuch an expansion of liability is not justified by the terms of the contract, the statutory scheme of that statute, or the facts of his case.” Gerrish, 147 A.D.3d at 516. D. Appellants Had No Duty Or Means To Keep The Bronx Yard Safe The history of Labor Law § 241 clearly manifests the legislative intent to place the “ultimate responsibility for safety practices at building construction jobs where such responsibility actually belongs, on the owner and general contractor.” (1969 N.Y. Legis Ann. at 407ÿ408). As observed in a related {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 12 context, the reason for this rule derives from the notion that workers “are scarcely in a position to protect themselves from accident.” Koenig v. Patrick Constr. Corporation. 298 N.Y. 313 (1948). Generally, however, “it remains for the courts to determine the fundamental question whether, as a matter of policy, the alleged negligence should result in liability.” Eaves Brooks Costume Company, Inc, v. Y.B.H. Realty Corp., 76 N.Y.2d 220, 226 (1990). In that regard, it is (Strauss v. Belle Realty Company (65 N.Y.2d 399, 402-403 [1985]): the responsibility of courts, in fixing the orbit of duty, “to limit the legal consequences of wrongs to a controllable degree” (Tobin v. Grossman, 24 N.Y.2d 609, 619; see also, Howard v. Lecher, 42 N.Y.2d 109), and to protect against crushing exposure to liability (see. Pulka v. Edelman, 40 N.Y.2d 781, supra: Ultramares Corp. v. Touche. 255 N.Y. 170). “In fixing the bounds of that duty, not only logic and science, but policy play an important role” (De Angelis v. Lutheran Med. Center. 58 N.Y.2d 1053, 1055; see also, Becker v. Schwartz, 46 N.Y.2d 401, 408). The courts’ definition of an orbit of duty based on public policy may at times result in the exclusion of some who might otherwise have recovered for losses or injuries if traditional tort principles had been applied. * * * Here, imposing liability Appellants manifestly expands the “orbit of duty” to an uncontrollable degree, running afoul of this Court’s governing jurisprudence. Although 56 Leonard had zero connection to the Bronx Yard, {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 13 the instant decision now exposes it to Labor Law liability to countless workers frequenting the site. This was not the Legislature’s intention when enacting the Labor Law. Not only did Appellants have no duty to keep the yard safe, even if they wanted to, they lacked any means to do so. Furthermore, even though this Court has observed that the need to set controllable limits on duty “may at times result in the exclusion of some who might otherwise have recovered”, this concern is absent here. Rather, plaintiff had available to him the proper Labor Law defendants - the Bronx Yard owners - but for whatever reason neglected to pursue them. Regardless, that is no basis to foist upon Appellants the duty to keep the Bronx Yard safe and then expose them to liability when they fail to fulfill this impossible, judicially crafted obligation. E. Expanding An Owner’s Liability Over A Work Site It Neither Controls Nor Has A Property Interest In Will Dramatically Increase Construction Costs The Appellate Division’s decision requires that an owner now be responsible for an accident that occurs on premises that it neither has a property interest in nor controls. In addition to the above reasons undermining this new rule, this decision now creates additional, unknown and indeed {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 14 unlimited risk that owners cannot possibly protect themselves against with any manageable means. Among other things, the insurance premiums charged in an effort to counter the now limitless, unquantifiable risks and scope of liability would doubtless increase beyond any reasonable amount. New York’s general liability insurance rates on construction projects are already among the highest in the nation due in significant part to Labor Law §§ 240 and 241. No other state retains such an arcane provision in its statutes. As a result, general liability insurance in New York is ten times higher than it is in other states and comprises approximately 10% of total construction costs.2 The decision at issue will at the very least drive up the costs of construction projects in New York, impacting the ability to build much-needed infrastructure and affordable housing projects. 2 Chris Lorsung, Mitigating the Impact of the NY Labor Law - Claim Management and Risk Control Techniques. Linkedln (September 13, 2017), https://www.linkedin.com/pulse/mitigating-impact-nv-labor-law- claim-management-risk-chris-lorsung. {00990310.1} Gerrish v. 56 Leonard, LLC, et al. APL-2017-00149 Page 15 Conclusion For the foregoing reasons, the Appellate Division Decision and Order appealed from should be reversed. Shaub, & Spratt, LLP Christopher Simone Gerard S. Rath Shaub, Ahmuty, Citrin & Spratt, LLP 1983 Marcus Avenue Lake Success, NY 11042 (516) 488-3300 Attorneys for Amicus Curiae REBNY {00990310.1} NEW YORK STATE COURT OF APPEALS CERTIFICATE OF COMPLIANCE Gerrish v. 56 Leonard. LLC. APL-2017-00149 I hereby certify pursuant to 22 NYCRR Part 500.1(j) that the foregoing submission was prepared on a computer using 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, certificate of compliance, corporate disclosure statement, questions presented, statement of related cases, or any authorized addendum containing statutes, rules, regulations, etc., is 2,677 words. Dated: Lake Success October 18, 2017 Christopher Simone Shaub, Ahmuty, Citrin & Spratt, LLP 1983 Marcus Avenue Lake Success, NY 11042 (516) 488-3300 Attorneys for Amicus Curiae REBNY 00941715.1 NEW YORK STATE COURT OF APPEALS RULE 500.1(F) DISCLOSURE STATEMENT Gerrish v, 56 Leonard, LLC APL-2017-0014 Proposed amicus curiae Real Estate Board of New York has no parents or subsidiaries, but has the following affiliates: The REBNY Foundation, Inc. Taxpayers For An Affordable New York, Inc. Putting New Yorkers To Work, Inc. Real Estate Board Political Action Committee Taxpayers For An Affordable New York PAC Jobs For New York, Inc.
