Kiss v. Clinton Green North, LLC

Background

Tibor Kiss alleged that Clinton Green North, LLC, Dermot Clinton Green, LLC, AvalonBay Communities, Inc., and Judy Painting Corp. violated New York labor laws and committed common-law negligence. Clinton Green North, LLC filed an amended third-party complaint seeking common-law indemnification and contribution from Judy Painting Corp. and Z&Z Services, Inc., as well as contractual indemnification from Judy Painting. Judy Painting filed seven cross-claims against Z&Z Services seeking common-law and contractual indemnification and contribution and alleging breach of contract.

Z&Z Services moved for summary judgment, which is a ruling issued when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law. The court stated that the Workers’ Compensation Board had determined that Z&Z Services was Kiss’s employer. Zoltan Mihalyi and Zsolt Jeges were equal shareholders of Z&Z Services and Judy Painting in September 2017. The companies had not signed a subcontract agreement for Z&Z Services to paint unit 10A on September 11, 2017. They signed the agreement several months later but dated it September 11, 2017. Mihalyi signed for Judy Painting, and Jeges signed for Z&Z Services. The agreement included insurance and indemnification provisions.

Common-Law Indemnification and Contribution

Under the New York workers’ compensation law discussed by the court, an employer generally is protected from third-party indemnification or contribution claims for an employee’s on-the-job injury unless the employee suffered a statutory “grave injury.” The statute defines grave injury through specific conditions, including death, permanent and total loss of use or amputation of certain limbs, paraplegia or quadriplegia, total and permanent blindness or deafness, permanent severe facial disfigurement, and an acquired brain injury caused by external physical force resulting in permanent total disability.

The court granted Z&Z Services summary judgment on the common-law indemnification and contribution claims brought by Clinton Green North and Judy Painting. It held that the evidence did not support a finding that Kiss’s fall caused a grave injury as defined by New York workers’ compensation law.

Judy Painting’s Contractual Cross-Claims

Judy Painting also sought contractual indemnification and contribution from Z&Z Services under the subcontract agreement. It alleged that Z&Z Services breached the agreement by refusing to indemnify Judy Painting and by failing to obtain insurance. The court explained that the workers’ compensation exclusivity rule does not bar indemnification or contribution claims based on a written contract entered into before the accident.

Z&Z Services argued that the subcontract agreement was invalid for these purposes because it was signed after the accident. The court stated that an agreement executed after an accident can apply retroactively only if the parties made the agreement as of a date before the accident and intended it to apply as of that earlier date. Jeges testified that no agreement between Z&Z Services and Judy Painting was in effect in September 2017 and that the parties signed the subcontract later because they were told to do so. The court found that, even viewing the facts in Judy Painting’s favor, no reasonable juror could find that the parties agreed before September 12, 2017, that Z&Z Services would indemnify Judy Painting.

Judy Painting argued that Z&Z Services showed an intent to be bound by continuing to perform painting and other subcontracting work for two months after the accident and before signing the agreement. The court rejected that argument, finding that continued work did not show intent to accept the agreement’s specific and unrelated terms. The court therefore granted Z&Z Services summary judgment on Judy Painting’s contractual cross-claims.

Disposition

Judge Schofield granted Z&Z Services’ motion for summary judgment with respect to Clinton Green North’s and Judy Painting’s common-law indemnification and contribution claims and with respect to Judy Painting’s contractual cross-claims. The Clerk of Court was directed to close the motion at Docket Number 178. This opinion addresses those third-party and cross-claims.