DEFENDANT ARGUED THE INSURANCE COMPANY WHICH REPRESENTED THE PROPERTY OWNER AND THE GENERAL CONTRACTOR IN THIS CONSTRUCTION ACCIDENT CASE UNFAIRLY APPORTIONED THE PAYMENT OF THE SETTLEMENT BETWEEN THEM SUCH THAT THE NON-NEGLIGENT, VICARIOUSLY LIABLE PARTY PAID $2 MILLION, AND THE NEGLIGENT PARTY PAID $200,000; AFTER INDEMNIFYING THE PROPERTY OWNER IN THE AMOUNT OF $2 MILLION DEFENDANT SOUGHT TO BE INDEMNIFIED BY THE NEGLIGENT PARTY; THE ATTEMPT WAS REJECTED UNDER BOTH CONTRACTUAL AND COMMON LAW INDEMNIFICATION THEORIES (THIRD DEPT).

PDF Friendly VersionPrint Friendly Version

The Third Department, over a concurrence, determined Lamela & Sons, Inc. (Lamela), the employer of plaintiffs James and Robert Lamela, was required to indemnify the property owner, Satin, for Satin’s portion of the $3.2 million settlement in this construction accident case. The settlement agreement required payment of $2,199,999 by Satin and Verticon, the general contractor. Lamela paid Satin $2 million in satisfaction of its contractual indemnity obligation to Satin. The insurance company which represented both Verticon and Satin apportioned a larger portion of the settlement to Satin, which was not negligent but was vicariously liable, and a lesser portion to Verticon, which was negligent. Lamela argued that a larger portion of the settlement should have been apportioned to the negligent party, Verticon. Lamela’s indemnity obligation to Satin, therefore, should have been less. On that basis, Lamela sought indemnity from Verticon. Lamela’s argument was rejected:

Verticon submitted the construction contract … between Verticon and Lamela, which provides for indemnity flowing from Lamela to Verticon, specifically stating, “To the fullest extent permitted by law, [Lamela] shall indemnify, defend and save harmless [Verticon] . . . against any and all suits [or] actions . . . arising from the use or operation by [Lamela] of construction equipment, tools, scaffolding or facilities furnished to [Lamela] to perform the [w]ork.” The provision, as expected, does not provide for indemnification flowing the other way, from Verticon to Lamela, as is being sought by Lamela. Thus, as “the subject of indemnification [is] clearly contemplated and expressly addressed by [Lamela and Verticon] in their contract, . . . there [can] only be a one-way obligation to indemnify by [Lamela] as the indemnitor, and any reciprocal obligation is extinguished” … . * * *

… .[C]ommon-law indemnity is not the appropriate relief here because Lamela is not responsible by operation of law … ; rather, its payment to Satin was based solely upon a voluntarily assumed obligation that it undertook by virtue of the contract. There has been no case cited that permits common-law indemnity under this scenario. Although we are mindful that Lamela’s motivation for seeking common-law indemnity stems from its concern that the settlement was unfairly apportioned, to attempt to remedy this by way of common-law indemnity is unavailing. Lamela v Verticon, Ltd., 2020 NY Slip Op 04214, Third Dept 7-23-20