Tag: New York

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New York Court holds that Indian Sovereign Immunity does not Extend to For-Profit Corporation
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Maritime Law Does Not Preempt State Safety Laws When The State Laws Do Not Unduly Interfere With Maritime Law
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Violation of NY Lien Law Provision Does Not Discharge Surety’s Obligation Under Performance Bond
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Court Imposes Strict Liability Under NYC Excavation Ordinance
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Violation of Building Permit Requirement Not a Basis for Criminal Liability Under NY Executive Law
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Objects Falling From Ground Level Can Trigger Liability Under NY Scaffold Law
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Subcontractor Not Prejudiced When Contractor Stipulates to Liability
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No Recovery For an Injury Sustained at a Trailer Where Work Was Not Performed
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Subcontractor Defendant Permitted to Amend its Answer to Plead Lack of Privity
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Question of Insurance Company Estoppel Certified to State Court

New York Court holds that Indian Sovereign Immunity does not Extend to For-Profit Corporation

Sue/perior Concrete & Paving, Inc. v. Lewiston Golf Course Corp., — N.Y.S.2d—, 2013 WL 2674470 (N.Y. App. Div. June 14, 2013)

In Sue/perior Concrete, the Appellate Division, Fourth Department, clarifies how closely a corporation must be tied to an Indian tribe to be entitled to tribal sovereign immunity.

Defendant, Lewiston Golf Course Corporation, was an Indian tribe-affiliated entity formed under the laws of the Seneca Nation of Indians.  Lewiston hired the plaintiffs, Sue/perior Concrete & Paving, Inc. to construct a golf course that would increase revenue for an adjoining casino.  The casino was owned by Lewiston’s parent company, Seneca Niagara Falls Gaming Corporation.  Seneca Niagara Falls Gaming Corporation was in turn owned by another corporation, which itself was in turn owned by the Seneca Nation.  Thus, the Seneca Nation was Lewiston’s ultimate owner, but the Nation was three steps removed from construction of the golf course.  The construction project took over a year longer than estimated, and upon completion Sue/perior sued Lewiston for $4.1 million for extra work performed as well as delay-related damages.  Lewiston moved to dismiss on the grounds that they were entitled to the Seneca Nation’s sovereign immunity.

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Maritime Law Does Not Preempt State Safety Laws When The State Laws Do Not Unduly Interfere With Maritime Law

Durando v. City of New York, 963 N.Y.S.2d 670 (N.Y. App. Div. 2013)

In this case, the New York Appellate Division, Second Department, addressed the interaction of New York state construction law and federal maritime law in the context of a construction worker’s personal injury suit, and held that local regulations will not be preempted when they do not unduly interfere with a fundamental characteristic of maritime law or the free flow of maritime commerce.

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Violation of NY Lien Law Provision Does Not Discharge Surety’s Obligation Under Performance Bond

Mount Vernon City School Dist. v. Nova Cas. Co., 19 N.Y.3d 28 (N.Y. Ct. App. 2012)

On April 3, 2012, the New York Court of Appeals held that a compensated surety cannot rely on a violation of Article 3-A of the Lien law to discharge its obligations under a performance bond.  The Mount Vernon City School District (“Plaintiff”) hired a contractor who obtained a performance bond in Plaintiff’s name from Nova Casualty Company (“Nova”), a compensated surety, securing his obligation under the contract.  After he defaulted and Nova refused to pay additional funds to complete the project, Plaintiff sued Nova for breach of contract.  Nova moved for summary judgment claiming that Plaintiff violated Article 3-A of New York Lien Law when, per the contractor’s request, Plaintiff remitted $214,000 of his fee to the Department of Labor (“DOL”) thereby discharging Nova’s duty to perform.

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Court Imposes Strict Liability Under NYC Excavation Ordinance

Yenem Corp. v. 281 Broadway Holdings, 18 N.Y.3d 481 (N.Y. 2012)

On February 14, 2012 the New York Court of Appeals held that former Administrative Code of the City of New York § 27-1031(b)(1), a municipal ordinance (“the Ordinance”), triggers strict liability for defendants who cause damage to adjoining property through excavation work.

In Yenem Corp., Defendants purchased a lot adjacent to a building located at 287 Broadway and began a construction project requiring an excavation eighteen feet below street level.  As a result, 287 Broadway shifted out of plumb; eventually, the Department of Buildings deemed the building unsafe for occupancy.  The plaintiffs, the owner and a tenant of 287 Broadway, sued for damages resulting from the excavation and moved for summary judgment under the Ordinance, which states that “when an excavation is carried to a depth of more than ten feet below the legally established curb level the person who causes such excavation shall at all times and at his or her own expense, preserve and protect from injury adjoining structures”.

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Violation of Building Permit Requirement Not a Basis for Criminal Liability Under NY Executive Law

People of the State of New York v. Grimditch, 936 N.Y.S.2d 527 (Sup. Ct. Essex Co. 2012).

In a case of first impression, the Court in People v. Grimditch held that a contractor cannot be held liable under New York Executive Law § 382(2) solely for building without a permit.  The Defendant contractor had been constructing a boathouse on Lake Placid when the town building code enforcement officer issued a stop work order for failure to obtain a building permit under the state building code.  When Defendant contractor disobeyed the order by continuing construction, he was indicted by the Essex County District Attorney’s Office for violating Executive Law § 382(2), which provides that failure to follow an “order to remedy any condition found to exist in, on, or about any building” or knowingly violating an order by a local government regarding the “standards for construction, maintenance, or fire protection” will result in fines or imprisonment.  The Court held that the indictment was defective because building without a permit did not amount to a condition existing “in, on, or about” the building and therefore was not a violation of the express language of the statute.  The Court also held that the requirement of a building permit was not a “standard of construction or maintenance.”

Objects Falling From Ground Level Can Trigger Liability Under NY Scaffold Law

Wilinski v. 334 East 92ND Housing Dev. Fund Corp. et. al., 18 N.Y.3d 1, 935 N.Y.S.2d 551 (N.Y. 2011)

The New York Court of Appeals held that New York Labor Law § 240(1) could apply to injuries caused by a falling object whose base stands at the same level as the injured worker.  The Plaintiff was a construction worker who, while in the process of demolishing walls in a vacant building, was injured when two ten-foot poles which rose out of the floor on which he was working fell on him.  The Court clarified its prior holding in Misseritti v. Mark IV Constr. Co., 86 N.Y.2d 35, 657 N.E.2d 1318 (NY 1995), by stating that Labor Law § 240(1), a scaffold law, could be invoked even if the injury was caused by an object on ground level.  In so doing, the Court explained that in order to state a claim under the statute, the plaintiff has to prove both that the injury was caused by the effect of gravity and that use of the protective equipment listed in the statute could have prevented the injury from occurring.  In this case, though the Court determined that the injuries caused by the poles falling were caused by the effect of gravity, summary judgment in favor of the plaintiff worker was precluded because an issue of fact remained as to whether the equipment prescribed by the statute could have prevented the injury from occurring.

In addition, Plaintiff brought a claim under 12 NYCRR 23-6.3(b)(3), a regulation promulgated under New York Labor Law § 241(6), which provides that “walls, chimneys and other parts of any building or other structure shall not be left unguarded in such condition that such parts may fall, collapse or be weakened by wind pressure or vibration.”  The Court found that Defendant could be liable despite the fact that neither wind pressure nor vibration contributed to the poles falling.  The Court reasoned that the wind pressure and vibration clause only attached to the words “be weakened” and not to the clauses “fall” and “collapse.”

Subcontractor Not Prejudiced When Contractor Stipulates to Liability

By:  Bonita Gutierrez, Anthony Badaracco, K&L Gates, New York

Zawadzki v. 903 E. 51st Street, LLC, 80 A.D.3d 606, 914 N.Y.S.2d 272 (N.Y. App. Div. 2011)

In this case, the injured plaintiff, subcontractor’s employee, sued the owner and general contractor of a construction contract in Brooklyn.  The owner filed a third-party complaint against the subcontractor, which filed cross-claims against the contractor for contribution and indemnification.  The contractor filed a fourth-party complaint against the subcontractor, seeking indemnification.  The Appellate Division, Second Department, denied the subcontractor’s motion to dismiss or sever the fourth-party indemnification complaint, brought on the ground that the subcontractor would be prejudiced by the contractor’s stipulation of liability, to which the subcontractor did not consent.  The court found that the subcontractor was not prejudiced, because even though the contractor admitted liability, the subcontractor still could assert a defense to the contractor’s indemnification claim on the ground that the contractor was actively negligent and therefore not entitled to indemnification.

No Recovery For an Injury Sustained at a Trailer Where Work Was Not Performed

Lynch v. 99 Washington, LLC, 80 A.D.3d 977, 915 N.Y.S.2d 353 (N.Y. App. Div. 3d Dep’t 2011)

In Lynch, the plaintiff injured his knee when stepping out of a trailer on a job site onto a free-standing stairwell that was allegedly misaligned with the trailer.  He sued under New York Labor Law and advanced common law negligence theories.  The Appellate Division, Third Department, held that the defendant’s motion for summary judgment should have been granted on all claims, reasoning that because the plaintiff was not performing construction work when the injury occurred, recovery was not available under a statute providing a cause of action for work-related injuries.

Subcontractor Defendant Permitted to Amend its Answer to Plead Lack of Privity

Logan-Baldwin v. L.S.M. Gen. Contractors, Inc., 914 N.Y.S.2d 617 (N.Y. Sup. Ct. 2011)

In this case, the homeowner plaintiffs sued the contractor, subcontractors, and their principals alleging breach of contract and fraudulent inducement, arising out of a renovation project in their historic Rochester home.  A subcontractor moved for summary judgment, alleging lack of privity with the plaintiffs, who defended on the ground that the subcontractor failed to plead lack of privity in its answer, thereby waiving that defense.  The Supreme Court granted the defendant’s motion, finding that privity is an essential element of a breach of contract claim and allowing the defendant to amend its answer to add the defense of privity.  The court emphasized that this was a matter of judicial discretion, and the defense appeared to have merit, the general rule being that an owner has no privity with a subcontractor.  Here, the court found no clear language to the contrary.
 

Question of Insurance Company Estoppel Certified to State Court

10 Ellicott Square Court Corp. v. Mountain Valley Indemnity Co., 2010 WL 5295420 (2d Cir. Dec. 28, 2010)

In this case, the plaintiffs were, respectively, the owner and construction manager of a commercial building project in Buffalo.  They contracted with a third firm for interior demolition in the building; the construction agreement required the demolition company to secure insurance to cover legal liability resulting from the demolition project.  The company secured a primary policy and an umbrella policy from the defendant, which issued a certificate of insurance naming the plaintiffs as additional insureds.  The primary policy specifically required the underlying construction agreement to be “executed” for any injury to be covered by the policy, but before the agreement was signed, a worker was injured and sued.  The defendant declined coverage, arguing that the construction agreement had not been executed in time.
 

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