Jury Finding Of “Substantial Negligence” Against General Contractor Nullifies Subcontractor’s Contractual Duty To Indemnify
April, 2010
In Armento v. Broadway Mall Properties, Inc., 2010 N.Y. App. Div. LEXIS 12577 (2d Dep’t 2010), the Appellate Court further clarified the effect of a contractor’s own negligence upon its right to contractual indemnification from its own subcontractor. This lawsuit stems from a claim by a worker who was injured at a construction site at a Long Island mall, when he fell through an opening in a floor which was covered only by an unsecured piece of plywood. Id. at 2. Under its agreement with the property owner, general contractor Lehrer McGovern Bovis, Inc. (“Bovis”) was responsible for “maintaining and supervising all safety precautions and programs in connection with the performance of the Contract.” Id. The parties did not dispute that the unsecured floor opening “which caused the accident was created when a demolition subcontractor, the defendant Garito Contracting, Inc. [“Garito”], removed a garbage chute as part of the demolition process.” Id.
After Plaintiffs were awarded summary judgment against Bovis and others on the issue of liability under Labor Law Section 240(1), a trial was held on Defendants’ various cross-claims. Id. at 2-3. At trial, Garito testified that it was not contractually responsible for providing temporary protection for unsafe floor openings during the demolition process and that, in fact, it was Bovis’ responsibility to inspect and secure any such openings. Id. At the close of evidence, the trial court denied Bovis’ motion for a directed verdict on its cross-claim for contractual indemnification against Garito, and the jury found that “Bovis was negligent, and that its negligence was a substantial factor in causing the accident.” Id. at 4. The jury also found that Garito was negligent, but that its negligence “was not a substantial factor in causing the accident,” mainly because Garito was not contractually obligated to provide temporary protection at the construction site. Id. Bovis appealed, claiming that its motion for a directed verdict on its contractual indemnification claim should have been granted. The Appellate Court disagreed.
On appeal, Bovis argued that its motion should have been granted because “the subject accident arose out of Garito’s demolition work.” Id. The Court disagreed, noting first that, under N.Y. General Obligations Law Section 5-322.1, any indemnification agreement in a construction contract which purports to indemnify a party for its own negligence is void and unenforceable. Id. Therefore, to the extent the negligence of an indemnitee under such an agreement contributed to the claimed injury, that indemnitee -- here Bovis -- is not entitled to indemnification from its subcontractor. Id.
The Court concluded that the jury’s finding of negligence against Bovis was not against the weight of the evidence, and, furthermore, that “there was a rational process” by which the jury could have concluded that Bovis’ negligence was a “substantial factor” in causing plaintiff’s accident. Id. at 5. Based on this determination, the Court held that the underlying accident was caused solely by Bovis’ negligence, “thus voiding the parties’ indemnification agreement.” Accordingly, it was held that the trial court properly denied Bovis’ motion for a directed verdict against its subcontractor, Garito.
As an additional consideration, the Court did not credit Bovis’ argument that, by its contract with Garito, it was entitled to additional insured status under Garito’s own insurance policy. The Court reached this conclusion based upon the fact that “the subject insurance policy did not require Garito’s insurer to indemnify Bovis for liability arising out of Bovis’ performance of its own work.” Id. at 6.
Learning Point
In the construction context, if a subcontract requires a subcontractor to indemnify the contractor for the contractor’s negligence, which is a substantial factor in causing another person’s injuries/damages, that indemnification provision is void.
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