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Criteria for Common-Law Indemnification Explained

In upholding Supreme Court’s determination that a cause of action for common-law indemnification should not be dismissed, the Third Department explained:

Common-law indemnification …is a quasi-contract claim in which a  contract is implied in law in order to avoid unjust enrichment, accomplished  by  shifting a  loss by  “placing the obligation where  in equity it belongs” …..   Common-law  indemnification avoids  unfairness  and  unjust  enrichment  by  “recogniz[ing]  that [a] person  who,  in whole  or in part, has discharged a duty which is owed  by  him  but  which  as between  himself and  another should have been discharged by  the other, is entitled to indemnity” …  It “requires a showing that [the] plaintiff and [the] defendant[] owed a duty to third parties, and that [the] plaintiff discharged the duty which, as between [the] plaintiff and [the] defendant[], should have been discharged by [the] defendant[]” … .Murray Bresky Consultants, Ltd v New York Compensation Manager’s Inc, 515591, 3rd Dept, 5-9-13

 

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“Unconscionable Contract” Elements Explained

In finding the arbitration clause in a contract valid, the Third Department explained the criteria for an “unconscionable” contract as follows:

As to the crux of petitioner’s appeal – that the contracts at issue are unconscionable and/or constitute contracts of adhesion – “an unconscionable contract [is] defined as one which is so grossly unreasonable as to be unenforcible because  of an absence  of meaningful choice on  the part of one  . . . part[y] together with contract terms which are unreasonably favorable to the other” …   Unconscionability, in turn, has two  elements. Substantive unconscionability “appear[s] in the content of the contract per se” and may include, by way of example, “inflated prices, unfair termination clauses,  unfair  limitations on consequential damages  and  improper disclaimers of warranty”… .Procedural unconscionability, on the other hand, entails “an examination of the contract formation process and the alleged lack of meaningful choice” ….  In this regard, “[t]he focus is on such matters as the size and commercial  setting of the transaction, whether deceptive or high- pressured tactics were  employed,  the use of fine print in the contract, the experience and education of the party claiming unconscionability, and whether  there  was  disparity  in  bargaining power” … . Matter of Conifer Realty …, 515560, 3rd Dept, 5-9-13

 

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In-Court Stipulation Enforceable Even Though Party Not Represented by Counsel​ 

The Third Department upheld an in-court stipulation concerning a mortgage foreclosure action that was entered without counsel:

Open court stipulations of settlement are highly favored, binding on  the parties and  strictly enforced, and generally will not be  cast aside absent a showing  of “fraud, collusion, mistake or accident” … .The fact that a party was not represented by counsel when entering into a  stipulation, while certainly relevant, is not sufficient  in  itself to  invalidate  a  stipulation,  particularly where the party was advised to retain counsel and chose not to … Liquori v Liquori, 515502, 3rd Dept, 5-9-13

 

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Absence of Privity Precluded Application of Collateral Estoppel Doctrine 

The Third Department, in reversing Supreme Court, determined the absence of privity precluded the application of the doctrine of collateral estoppel.  Northrop owned a gas station which was a designated spill site (gasoline). The Department of Environmental Conservation spent about $125,000 cleaning it up. Northrop sought payment for the clean-up from its insurance carrier (the defendant here). In a prior declaratory judgment proceeding Supreme Court determined the policy did not cover petroleum contamination. Then the state, the plaintiff here, started an action against the defendant insurance company under Navigation Law 190 seeking reimbursement of the clean-up expenses.  Supreme Court dismissed the complaint as barred by the doctrine of collateral estoppel (the prior declaratory judgment finding the insurance policy did not cover the clean-up expense).  In reversing, finding collateral estoppel should not have been invoked because Northrop and the state were not in privity, the Third Department wrote:

Plaintiff is the entity that has undertaken the cleanup and now seeks reimbursement for monies expended. Thus, plaintiff has a right of indemnification against Northport to recoup these costs …, establishing an indemnitor-indemnitee relationship. Plaintiff’s right of indemnification,  however, is independent of Northport’s contractual right to have its insurance carrier, defendant, cover these costs under the terms of the liability insurance  policy. Moreover, Navigation Law § 190 authorizes plaintiff to commence a direct action against defendant, and this right is independent of plaintiff’s right of indemnification against Northport. Given that plaintiff’s rights are not conditioned upon and do not derive from Northport’s, the existence of an indemnitor-indemnitee relationship between Northport and plaintiff does not establish privity between these parties.  State of New York v Zurich American Insurance Company, 514916, 3rd Dept, 5-9-13

 

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Backhoe Bucket Not “Falling Object” Within Meaning of Labor Law 240 (1)

Plaintiff was severely injured when a backhoe bucket that had been suspended over him came down and crushed him.  With respect to the Labor Law 240 (1) cause of action, the issue was whether the backhoe bucket was a “falling object” within the meaning of the statute. In affirming Supreme Court’s determination that the backhoe bucket was not a falling object, the Third Department wrote:

 …[L]iability does not extend to “harm . . . caused by an inadequate, malfunctioning or defectively designed  scaffold, stay or hoist” unless the injury itself was  caused by  “the application of the force of gravity to an  object or person” … .  Viewing the facts in the light most favorable to plaintiffs, the accident occurred as a result of … jostling the controls, causing the backhoe’s properly functioning hydraulic system to lower the bucket. Thus, the evidence  submitted  by  plaintiffs, if accepted  as true, would establish that “the backhoe  bucket  crushed  plaintiff[] . . . not because  of gravity, but  because  of its mechanical  operation by  an allegedly negligent co-worker” ….   Under these circumstances, Supreme Court properly dismissed plaintiffs’ section 240 (1) claim because there was no falling object – “the harm [did not] flow[] directly from the application of the force of gravity to [an] object” …, but from the usual and ordinary dangers of a construction site … .  Mohamed v City of Watervliet, 515473, 3rd Dept 5-9-13

 

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Question of Fact Raised About Whether Injury Incurred by State Trooper; Paramedic when Removing Injured Person from Crashed Car Was Covered “Occurrence” Under Trooper; Paramedic’s Supplementary Uninsured-Underinsured Motorist Policy

Plaintiff, a state trooper, licensed registered nurse and paramedic, was injured helping to remove an injured person (Williams) from a car struck by Prindle’s car. Plaintiff sued Prindle and the action was settled for the policy limit. Then plaintiff sought to recover under his own supplementary uninsured-underinsured motorist policy (hereinafter SUM) (the defendant in this case).  The defendant insurance company denied coverage, claiming plaintiff was not injured in an automobile accident.  In affirming Supreme Court’s finding that the insurance company was not entitled to summary judgment dismissing the action because the policy language allowed the interpretation plaintiff’s injury was related to the “use” of Pringle’s vehicle, the Third Department wrote:

“[SUM] coverage policies, such as the one at issue herein, apply only when an insured’s injuries are [proximately] ’caused by an accident arising out of [the underinsured] motor vehicle’s ownership, maintenance or use'”….  Under the circumstances here, Supreme Court properly concluded that defendant failed to meet  its threshold burden of demonstrating  that plaintiff’s injury was not caused by the use of Prindle’s underinsured vehicle. We reject defendant’s narrow interpretation of the SUM policy’s provision requiring  that  the  insured’s  injuries be directly caused by an accident that arose out of the use of a vehicle and defendant’s related assertion that the accident complained of here occurred only at the time of plaintiff’s injury. Construing the language of the policy liberally and resolving any ambiguity in favor of the insured …, defendant’s interpretation is contrary to the plain meaning thereof.  Kesnick v New York Central Mutual Fire Insurance Company, 514901, 3rd Dept, 5-9-13

TRAFFIC ACCIDENTS

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Wrong Incident-Address in Notice of Claim (Not Intended to Mislead and Not Resulting in Prejudice to Defendant) Can Be Corrected​

In this slip and fall case, the First Department determined the wrong address in the notice of claim, under the facts, was not intended to mislead and did not prejudice the defendant:

In this trip and fall action, plaintiff’s notice of claim listed the wrong street address… in describing the location of her fall on a sidewalk, adjacent to Central Park, and across the street from that address. However, plaintiff also annexed a photograph to the notice of claim which depicted the intersection …, which is nearly four blocks south of the incorrect address provided in the notice of claim, and the written description of the location in the notice was consistent with the area depicted in the photograph. Moreover, at the statutory hearing held six weeks after the notice was served, and three and a half months after the accident, plaintiff explicitly … identified the location in the photograph as also shown. We also note that less than five months after the hearing, plaintiff served the summons and complaint, providing the proper street address. Under these circumstances, we find that the mistake in the notice was not made in bad faith, nor was it intended to mislead or confuse the City, and hence, it should have been disregarded or plaintiff should have been allowed to correct the notice pursuant to GML § 50-e(6)… . Green v City of New York, 2013 NY Slip Op 03382, 1st Dept, 5-9-13

SLIP AND FALL

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Notice Element of Lead-Paint Injury Cause of Action Explained

In affirming the denial of summary judgment in a lead-paint injury case, the Third Department explained the “notice” elements as follows:

With respect to notice, “[i]t is well settled that in order for a landlord to be held liable for injuries resulting from a defective condition upon the premises, the plaintiff must establish that the landlord had actual or constructive notice of the condition for such a period of time  that, in the exercise of reasonable  care, it should  have been corrected” …. In this context, constructive notice may  be demonstrated by a showing “that the landlord (1) retained a right of entry to the premises and  assumed  a duty to make  repairs, (2) knew  that the apartment was constructed at a time before lead-based interior paint was banned, (3) was aware that paint was peeling on the premises, (4) knew of the hazards of lead-based paint to young children and (5) knew that a young child lived in the apartment” … . Derr v Fleming, 515399, 3rd Dept, 5-9-13

 

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Review Criteria for Actions by Zoning Boards of Appeal

In upholding Supreme Court’s annulment of the village Zoning Board of Appeal’s denial of petitioner’s application for a site capacity variance, the Second Department described the review criteria as follows:

Generally, local zoning boards have broad discretion in deciding applications… . “Courts may set aside a zoning board determination only where the record reveals that the board acted illegally or arbitrarily, or abused its discretion, or that it merely succumbed to generalized community pressure” …. “[A] determination will not be deemed rational if it rests entirely on subjective considerations, such as general community opposition, and lacks an objective factual basis” …. “Conclusory findings of fact are insufficient to support a determination by a zoning board of appeals, which is required to clearly set forth how and in what manner the granting of the variance would be improper” … .  Matter of Luburic v Zoning Bd of Appeals of Vil of Irvington, 2013 NY Slip Op 03333, 2nd Dept, 5-8-13

 

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Statute of Frauds Precluded Real Property-Related Action; Equitable Part Performance Doctrine Not Applicable

The Second Department determined the statute of frauds barred the real-property-related action and, since the action was brought “at law,” the equitable “part performance” doctrine could not be applied:

Here, the County established, prima facie, that there is no extant writing subscribed by the County or its agent referencing an alleged oral agreement involving real property, as described by the plaintiff (see General Obligations Law § 5-703[3];…). In opposition, the plaintiff failed to raise a triable issue of fact. “Part performance by the party seeking to enforce [a] contract [for the sale of real property] may be sufficient in some circumstances to overcome the statute of frauds, but only in an action for specific performance” (…see General Obligations Law § 5-703[4];…). Since, here, the action is pleaded as one at law, and seeks only money damages, without any specific prayer for equitable relief, the plaintiff cannot rely on the doctrine of part performance to defeat the statute of frauds defense …. Accordingly, the Supreme Court should have granted the County’s motion for summary judgment dismissing the complaint, based on the statute of frauds. Zito v County of Suffolk, 2013 NY Slip Op 03324, 2nd Dept, 5-8-13

 

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