BDG Gotham Residential, LLC v. Western Waterproofing Company, Inc.

Background

The case concerns a construction accident at a new mixed-use building. BDG Gotham Residential, LLC was the property owner, and ZDG, LLC was the construction manager. Western Waterproofing Company, Inc. was a subcontractor retained to install the building’s facade. On June 25, 2018, an overloaded mini-crane operated by Western personnel toppled from the fourth-floor slab and fell inside the closed construction site, seriously injuring two ironworkers. The New York City Department of Buildings issued a stop-work order.

The plaintiffs alleged that the accident caused 185 consecutive calendar days of construction delay, increased project-completion costs, and delayed BDG’s ability to generate income from the building. They sued Western for breach of contract, negligence, and gross negligence, seeking compensatory and punitive damages. They also sued Western’s surety for breach of a performance bond.

After discovery, the parties moved for partial summary judgment. In a September 30, 2024 ruling, the court granted both motions in part. It dismissed the ordinary-negligence claim as duplicative of the contract claim and granted summary judgment for Western on the gross-negligence claim. The court concluded that the plaintiffs could not recover punitive damages because they had not pleaded, argued, or offered evidence that the accident was part of a pattern of similar conduct directed at the public.

Motion to Certify an Immediate Appeal

The plaintiffs moved under 28 U.S.C. § 1292(b) to certify the punitive-damages ruling for an interlocutory appeal, meaning an appeal before final judgment. They proposed asking whether New York law permits punitive damages when a defendant’s safety violations expose the public to a substantial risk of death or injury, even if no pattern of similar conduct is evident.

Section 1292(b) requires the moving party to show three things: a controlling question of law, a substantial ground for difference of opinion about that question, and that an immediate appeal may materially advance the end of the litigation. The court explained that these requirements are all necessary and that such appeals are strongly disfavored because federal courts generally wait until final judgment before appellate review.

Analysis

The court concluded that the plaintiffs satisfied the first requirement, although the issue was close. The proposed appeal could affect the amount and method of proving damages at trial. The court also noted that the appeal would concern whether the plaintiffs could present evidence to a jury and seek punitive damages, rather than deciding that they were already entitled to those damages.

The plaintiffs failed to satisfy the second requirement. The court found that they had not identified conflicting authority and that courts had consistently applied the New York Court of Appeals’ decision in Rocanova v. Equitable Life Assurance Society to require a pattern of similar conduct directed at the public. The court found no authority establishing an exception to that requirement for safety violations at a construction site.

The plaintiffs also failed to satisfy the third requirement. The case was more than four years old and ready for trial. An immediate appeal could delay the trial rather than advance the litigation. A successful appeal would expand the potential trial issues and damages, while an unsuccessful appeal would delay the case without changing its outcome. The possibility that an appeal might affect settlement discussions was not enough to justify an exception to the general rule against piecemeal appeals.

Disposition

The court denied the plaintiffs’ motion to certify the punitive-damages ruling for an interlocutory appeal and directed the Clerk of Court to close the motion at Docket 223.