Out-Of-Possession Property Owners Cannot Contract Around Liability Under Labor Law §240(1) Through Notice Provisions In A Lease
July, 2008
In Christopher Sanatass, et. al. v. Consolidated Investing Company, Inc. et. al., 10 N.Y.3d 333 (N.Y. 2008), a divided New York Court of Appeals held that an out-of-possession property owner was liable for a violation of Labor Law §240(1) that proximately caused an injury to a worker, even though the tenant violated its lease by contracting for the work without notifying the owner.
Defendant C2 Media, LLC (“C2 Media”) leased the 11th floor of a commercial building in Manhattan from Defendant Consolidated Investing Company (“Consolidated”), the owner of the building. According to the lease between C2 Media and Consolidated, C2 Media could not make changes to the property without the owner’s prior written consent. A rider to the lease also provided that “[a]ll renovations, decorations, additions, installations, improvements and/or alterations of any kind or nature in the Demised Premises . . . shall require the prior written consent of Landlord.”
In January, 2000, C2 Media hired a contractor to install a commercial air conditioning unit in its leased space. In direct violation of its lease, C2 Media did not notify Consolidated about the work and did not obtain the written consent of Consolidated prior to the performance of the work. Plaintiff Christopher Sanatass, a mechanic employed by the air-conditioning contractor, was directed to install the air conditioning ducts and the air conditioning unit. When Plaintiff attempted to affix the 2,500 pound air conditioning unit to the 10 foot high ceiling, the manual material lift collapsed and dropped the unit on top of Plaintiff, causing physical injury.
Plaintiff commenced a lawsuit against Consolidated and other parties for his injuries, alleging violations of Labor Law §240(1) and §241(6). Consolidated brought a third-party action against C2 Media, seeking contribution and indemnification pursuant to the terms of the lease. Consolidated filed a motion for summary judgment claiming that it was not liable for Plaintiff’s injuries under Labor Law §240(1) because the air conditioning installation was performed without its consent and in violation of the lease. The motion court granted Consolidated’s motion and dismissed the Complaint. The Appellate Division, First Department, affirmed the decision of the motion court and the Plaintiff appealed to the New York Court of Appeals.
While there is established case law setting forth an out-of-possession owner’s liability under Labor Law § 240(1), this is the first case that dealt with an out-of-possession owner who retained the power to provide protection to workers through provisions in a lease.
Labor Law §240(1), commonly referred to as the “scaffold law,” imposes a nondelegable duty on property owners to furnish adequate protection to workers, regardless of the absence of control, supervision or direction of the work. This statute applies to all owners, regardless of whether the property was leased out and controlled by another entity or whether the owner had the means to protect the worker. It is legally irrelevant to an owner’s liability under Labor Law §240(1) whether the owner contracted for the work or benefited from it. The legislative history of the Labor Law reveals that this statute places the “ultimate responsibility for safety practices at building construction jobs where such responsibility actually belongs, on the owner and general contractor,” rather than on the workers themselves. Accordingly, Labor Law §240(1) exists solely for the benefit of workers and will be construed by courts as liberally as possible to accomplish that purpose.
Under that guidance, the Court of Appeals in Sanatass held that Consolidated, an out-of-possession owner, was liable under Labor Law § 240(1) even though it had taken every precaution possible to ensure the safety of workers at its property. In reaching this holding, the Court of Appeals distinguished the case of Abbatiello v. Lancaster Studio Assoc., 3 NY3d 46 (2004) relied upon by Consolidated and the lower courts. In Abbatiello, the plaintiff, a cable repair technician, was injured when he fell from a broken ladder while working on the exterior of the defendant’s building. The Abbatiello Court found that a nexus between the worker and the owner was lacking because the plaintiff was working on the property pursuant to section 228 of the Public Service Law, which establishes mandatory access for cable repair workers. As the plaintiff would have been a trespasser upon the owner’s property if not for the Public Service Law, the Court held that the plaintiff was not entitled to the protections of the Labor Law since he was not an “employee” for the purposes of §240(1).
The Sanatass Court refused to accept Consolidated’s argument that it had an insufficient nexus with Plaintiff, holding that C2 Media’s breach of the notice provision in the lease did not sever the nexus between Consolidated and Plaintiff. The Court refused to import a notice requirement into the Labor Law or, conversely, to create a lack-of-notice exception to owner liability, as an owner will be held strictly liable under §240(1) even if the owner lacked “any ability” to ensure compliance with the statute.
Judge Smith dissented from this holding, stating that the majority’s decision treats the owner “as an insurer” since the tenant’s breach of the lease prevented Consolidated’s ability to provide a safe workplace. However, the majority refused to allow owners to contract around liability under §240(1) through a lease provision, stating that such a holding “would eviscerate the strict liability protection afforded by the Labor Law.”
Learning Point
The decision in Sanatass increases the already heavy burden that Labor Law §240(1) places on New York property owners by establishing a precedent that an owner will be liable under the statute even if the owner does everything in its power to comply with the law.
Back to New York CM Report of Recent Decisions (2008v2) 2008 Volume 2 Table of Contents
