Case Title: Severino Cunha v. City of New York

Citation: 

Docket Number: 

State: new-york

Court: New York Appellate Court

Date: 2009-06-09T00:00:00Z

Document:
- 1 -
=================================================================
This opinion is uncorrected and subject to revision before
publication in the New York Reports.
-----------------------------------------------------------------
No. 91  
Severino Cunha et al.,
            Plaintiffs, 
        v.
City of New York,
            Defendant.
------------------------------
City of New York, 
          Third-Party Respondent,
        v. 
Haks Engineers, P.C., 
          Third-Party Appellant.
Michael A. Heran, for third-party appellant.
Joel M. Simon, for third-party respondent.
PIGOTT, J.:
Plaintiff was injured while working on a roadway
excavation in Brooklyn.  The City of New York had hired
plaintiff's employer, JLJ Enterprises, Inc., as the prime
contractor for the work and Haks Engineers, P.C. to perform
engineering inspection services in connection with the project.
- 2 -
No. 091
- 2 -
The contract between the City and Haks contained certain
indemnification provisions.
On May 14, 2002, City employees, as well as inspectors
from Verizon and Con Ed, who were present on the job site, had
determined that because a trench had telephone and cable lines
running through it, it could no longer be cleared by machinery. 
As a result, plaintiff was ordered by JLJ to go into the trench
to dig by hand.  Because the trench was not protected by any
shoring or sheeting, it collapsed, causing injury to plaintiff.
On November 15, 2002, plaintiff and his wife commenced
a personal injury action against the City, alleging violations of
Labor Law §§ 200, 240 and/or 241.  In turn, the City commenced a
third-party action against Haks seeking to recover on theories of
contractual and common-law indemnification.
The City moved for summary judgment dismissing
plaintiff's Labor Law § 200 claim as well as for judgment on its
third-party claim for indemnification against Haks.  That motion
was denied.  Thereafter, further discovery was conducted and a
trial date was scheduled.
Four days before trial, the City renewed its motion for
summary judgment by order to show cause.  By an order, dated
April 3, 2006, Supreme Court granted in part the City's motion,
dismissing the Labor Law § 200 claim.  
On the date trial was to commence on plaintiff's
- 3 -
No. 091
1  The Labor Law § 240 claim was previously withdrawn.
- 3 -
remaining Labor Law § 241 (6) cause of action1, the parties
indicated that a settlement agreement had been reached.  The
agreement provided that plaintiff was to receive $1.2 million, of
which the City was to pay $800,000 and Haks was to pay $400,000. 
The City conceded a violation of Labor Law § 241 (6) premised on
a violation of Industrial Code Rule 23.4 et seq. to wit:  The
shoring and trench where the accident occurred was greater than
five feet and the trench collapsed causing injury to plaintiff.  
Despite the settlement agreement, the City and Haks
disputed the issue of liability and apportionment between them
and the case proceeded to trial on the third-party action.  At
the end of the trial, the jury was asked to answer three
questions on the verdict sheet, namely (1) "Was the defendant
[Haks] negligent?", if so, (2) "Was the negligence of defendant
[Haks] a substantial factor in bringing about the accident?", and
(3) "What is the percentage of fault of defendant [Haks]?"  The
City objected to the third question, arguing that the jury should
not be asked to apportion liability. 
The jury found Haks negligent, that its negligence was
a substantial factor in bringing about the accident, but that it
was only 40% at fault for plaintiff's accident.  The jury was not
asked to, and did not, say where the other 60% of the fault lay.
After the jury was discharged, the City moved for a
verdict to be directed against Haks in total of 100% based on the
- 4 -
No. 091
- 4 -
contract indemnification clauses.  The City argued that because
it was only vicariously liable and had no active negligence, it
was entitled to a directed verdict on indemnity.  Supreme Court
denied the motion.  The City appealed.
The Appellate Division reversed on the law and remitted
the matter to Supreme Court for an entry of an amended judgment
conditionally in favor of the City and against Haks in the amount
of 100% of the damages recovered by plaintiffs from the City (45
AD3d 624).  As relevant to this appeal, the court held that
because the City was only vicariously liable for violating the
provisions of the Labor Law, it was entitled to full common-law
indemnification from Haks, the party actually responsible for the
incident (id. at 626).  Thus, the court held that it was error
for the jury to be instructed to allocate fault (id.).  It
concluded that "[s]ince the jury found [Haks] was negligent, and
that finding has not been appealed, the judgment must be reversed
and an amended judgment must be entered awarding [the City] full
common-law indemnification against [Haks] for the amount of its
settlement with [the City]" (id.).
The same panel denied Haks' motion to reargue or for
leave to appeal to this Court.  We granted leave to appeal and
now affirm.
This Court has recognized that an owner held strictly
liable under the Labor Law is entitled to "full indemnification
from the party wholly at fault" (Chapel v Mitchell, 84 NY2d 345,
- 5 -
No. 091
- 5 -
347 [1994]).  While the duty imposed by § 241 may not be
delegated, the burden may be shifted to the party actually
responsible for the accident, either by way of a claim for
apportionment of damages, or by contractual language requiring
indemnification (see Allen v Cloutier Const. Corp., 44 NY2d 290,
301 [1978]).
We disagree with Haks that common-law indemnity does
not lie because the City was never held to be vicariously liable
to plaintiff by a judgment of the court.  The fact that the City
voluntarily elected to concede liability on the Labor Law § 241
(6) claim should not preclude an indemnification claim. 
Assuming, as Haks contends, that the City had the burden of
proving its own vicarious liability as an element of its third-
party claim against Haks, the City produced sufficient evidence
to meet that burden.  And assuming that Haks was entitled to a
jury ruling on the issue of whether the City was vicariously
liable to plaintiff, it waived that right by not asking that the
issue be submitted to the jury.
Further, it is well settled that a party may settle and
then seek indemnification from the party responsible for the
wrongdoing as long as the settling party shows that it may not be
held liable in any degree (see Rosado v Proctor & Schwartz, Inc.,
66 NY2d 21 [1985]).  Here, the issue of the City's active
negligence was already determined by the order of the Supreme
Court dated April 3, 2006, which dismissed plaintiff's Labor Law
- 6 -
No. 091
- 6 -
§ 200 claim against the City.  Moreover, during trial, Haks
conceded that the City's active negligence was not at issue; it
neither objected to nor disagreed with the Court's position that
the City did not have any negligence and that its only
responsibility was pursuant to Labor Law § 241 (6).
 Haks also raises the issue of the potential liability
of other parties and relies on our recent decision in Frank v
Meadowlakes Dev. Corp. (6 NY3d 687 [2006]) for the proposition
that the City is entitled to only partial indemnification from
Haks.  In Frank, we held that CPLR article 16 limited the amount
that can be recovered in indemnity when a tortfeasor's liability
is 50% or less.  In that case, the injured plaintiff sued the
owner of the job-site, Meadowlakes, and the general contractor,
DJH Enterprises, Inc. ("DJH").  Meadowlakes thereafter brought a
third-party action for indemnification against plaintiff's
employer, Home Insulations and Supply, Inc. ("Home").  Since the
claim arose before the 1996 amendment to Workers Compensation Law
sec. 11, Home was not immune from third-party liability.  After a
trial, the jury apportioned fault in the amount of 10% to
plaintiff, 10% to Home and 80% to DJH.  The court also directed a
verdict against Meadowlakes and DJH based upon a violation of
Labor Law § 240 (1).  Plaintiff settled with Meadowlakes for $1.4
million and with DJH for $300,000.
Meadowlakes moved for common-law indemnification
against Home for 100% of its settlement liability.  Home appealed
- 7 -
No. 091
- 7 -
arguing, as relevant to this appeal, that because it was found
only 10% at fault, it should be liable to Meadowlakes for only
its proportionate share of negligence.  We agreed, finding that
Meadowlakes was not entitled to 100% recovery.  In doing so, we
held that the savings provision of CPLR 1602 (2) (iv) applied and
that recovery from Home, as a party found 10% liable, was limited
to its proportionate share with respect to noneconomic damages. 
This case differs from Frank, however, in that no
Article 16 issue exists inasmuch as no other tortfeasor could be
found liable for plaintiff's injuries.  Haks argues that the jury
must have found another entity liable as they apportioned only
40% fault to Haks.  This argument is flawed.  
A likely interpretation of the jury's verdict is that
the jury allocated culpability to plaintiff's employer, JLJ - but
JLJ's fault was irrelevant and should not have been before the
jury.  Plaintiff did not sustain a grave injury and thus, his
employer was not subject to being part of the action (see Workers
Compensation Law sec. 11; CPLR 1601 [1]).  To the extent the jury
may have considered plaintiff himself at fault, his negligence
must be excluded because he, like JLJ, cannot be an indemnitor
(see Frank, 6 NY3d at 693).  It is unlikely that the jury
allocated active fault to the City; to the extent the verdict is
unclear on that issue, the burden was on Haks to clarify it, by
proposing an appropriate question to the jury.
Moreover, no apportionment for any other third-party
- 8 -
No. 091
- 8 -
was requested by Haks at any time during the proceedings.  No
evidence was submitted at trial that any other entity was
negligent, nor could have any other entity been found negligent
based upon the instructions provided to the jury, the verdict
sheet, or the charge provided to the jury.  Consequently, once
Haks was found to be negligent--and since Haks was the only
possible negligent party to the lawsuit--the City was entitled to
100% indemnification from Haks.
Because we find that the City prevails on its common-
law indemnification cause of action against Haks, we need not
address its contractual indemnification claim.
Accordingly, the order of the Appellate Division should
be affirmed, with costs.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order affirmed, with costs.  Opinion by Judge Pigott.  Chief
Judge Lippman and Judges Ciparick, Graffeo, Read, Smith and Jones
concur.
Decided June 9, 2009