Lewis v. Shawmut Woodworking & Supply, Inc.

Background

Mirtill Lewis fell from a ladder while working at a construction site. He and Elvira Lewis sued Lendlease, the contractor managing the construction, and The New York and Presbyterian Hospital (NYP), the owner of the premises, asserting claims under New York Labor Law, New York City rules, negligence, and loss of consortium.

Lendlease brought a third-party action against X-Cell Insulation Corporation, Mr. Lewis’s employer and a Lendlease subcontractor. Lendlease asserted claims for contractual indemnification, common-law indemnification, and breach of contract. NYP also asserted claims against Lendlease and X-Cell, including contribution and common-law indemnification, and claims against Lendlease for contractual indemnification and insurance coverage.

The parties’ contracts contained indemnification and insurance provisions. X-Cell’s subcontract required it to obtain specified liability insurance naming Lendlease and NYP as additional insureds. It also required X-Cell, to the extent allowed by law, to defend and indemnify Lendlease and NYP for bodily injuries connected to X-Cell’s work, except injuries caused by the sole negligence of an indemnified party. The agreement between Lendlease and NYP required Lendlease to defend and indemnify NYP for injuries connected to the work to the extent caused by negligent acts or omissions of Lendlease, a subcontractor, or related workers. It also addressed expenses connected to violations of laws and regulations.

Lendlease moved for summary judgment—judgment without a trial when the evidence shows no genuine dispute requiring a trial—on its contractual indemnification claim against X-Cell. X-Cell moved for summary judgment dismissing Lendlease’s common-law indemnification and breach-of-contract claims. NYP moved for summary judgment granting it a conditional order for contractual indemnification from Lendlease.

Contractual indemnification

The court had previously found a triable issue about whether Lendlease and NYP could be liable under New York Labor Law § 240(1), which imposes duties concerning safe ladders and other protections. But it had also granted summary judgment to Lendlease and NYP on the negligence claims because the record did not show that either party actually supervised or controlled the work that caused the fall or had notice of an unsafe condition.

Under New York law, a party generally cannot obtain contractual indemnification for its own negligence. The court concluded that the previous finding that Lendlease and NYP were not negligent meant that their potential liability under Labor Law § 240(1) did not bar contractual indemnification. Because the injury arose from X-Cell’s work and the subcontract provided for indemnification, the court held that Lendlease was entitled to contractual indemnification from X-Cell for amounts exceeding the coverage offered by X-Cell’s insurers.

The court also granted NYP’s motion for a conditional order for contractual indemnification. The order covered expenses arising from Lendlease’s violation of Labor Law § 240(1), negligence by X-Cell or someone employed by X-Cell, and NYP’s violation of Labor Law § 240(1) to the extent that violation resulted from negligence by X-Cell or someone employed by X-Cell. The court stated that it would consider supplemental briefing on any additional contractual indemnification sought by NYP.

Common-law indemnification and contribution

X-Cell argued that New York Workers’ Compensation Law § 11 barred common-law indemnification and contribution because Mr. Lewis had not suffered a “grave injury.” That statute permits an employer to be required to contribute or indemnify a third party for an employee’s injury only when competent medical evidence establishes a narrowly defined grave injury, including permanent and total loss of use of an arm, leg, hand, or foot.

The court granted X-Cell summary judgment on Lendlease’s common-law indemnification claim. Lendlease identified no competent medical evidence showing that Mr. Lewis suffered a permanent and total loss of use of his foot. Although he broke both ankles and experienced pain, he could drive using his right foot for the gas and brake pedals. The court therefore concluded that no jury could find the required grave injury on this record, and Lendlease was not entitled to common-law indemnification.

Breach of contract

X-Cell argued that it was entitled to summary judgment on Lendlease’s claim that X-Cell breached the subcontract’s insurance requirement. The undisputed evidence showed that X-Cell purchased the required insurance, and Lendlease acknowledged that X-Cell’s insurers were defending and indemnifying it up to the policy limits.

The court granted X-Cell summary judgment on the breach-of-contract claim. It explained that X-Cell’s purchase of the required insurance did not necessarily eliminate Lendlease’s separate contractual indemnification claim for amounts beyond the policy limits, but that issue did not defeat summary judgment on the claim alleging failure to procure insurance.

Disposition

Lendlease’s motion was granted in part and denied in part: Lendlease received contractual indemnification from X-Cell beyond the coverage offered by X-Cell’s insurers, but did not receive common-law indemnification to the extent it sought it. X-Cell’s motion for summary judgment on Lendlease’s claims was granted, and the third-party claims against X-Cell for common-law indemnification and contribution and for breach of contract were dismissed. NYP’s motion for a conditional order for contractual indemnification was granted to the extent described in the opinion.