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HERE SLIPPERY PLASTIC SHEETING WAS USED TO PROTECT AN ESCALATOR DURING A PAINTING PROJECT; PLAINTIFF, A PAINTER, SLIPPED AND FELL WHEN HE STEPPED ONTO THE PLASTIC; THE PLASTIC SHOULD BE VIEWED AS A “FOREIGN SUBSTANCE,” LIKE ICE OR GREASE, WITHIN THE MEANING OF THE INDUSTRIAL CODE; IN ADDITION, THE PLASTIC SHOULD NOT BE VIEWED AS “INTEGRAL TO THE JOB” WITHIN THE MEANING OF THE INDUSTRIAL CODE BECAUSE THERE WERE SAFER ALTERNATIVES (CT APP).

The Court of Appeals, reversing the Appellate Division, in a full-fledged opinion by Judge Rivera, with a three-judge concurring opinion by Judge Garcia, determined the plastic sheeting placed on an escalator during painting was a “foreign substance” within the meaning the Industrial Code and the sheeting was not “integral to the work” within the meaning of the Industrial Code. Plaintiff was therefore entitled to summary judgment on the Labor Law 241(6) cause of action. Plaintiff was required to stand on the plastic while painting. He slipped and fell as he stepped onto the sheeting. There was testimony that drop cloths or wood panels would be safer alternative coverings:

As to whether the covering’s properties are the type encompassed within the affirmative mandate of 12 NYCRR 23-1.7 (d), because that section specifically lists ice, snow, water and grease, the catchall reference to “other foreign substance” includes those substances that share a quality common to the enumerated items. The listed items are, by their nature, types of material that are slippery when in contact with an area where someone walks, seeks passage, or stands, and, when the substance is present, would make it difficult if not impossible to use the work area safely, necessitating one of the affirmative mitigating measures set forth in section 23-1.7 (d) as a means to provide safe footing. The plastic covering used here similarly made [plaintiff’s] work area slippery upon contact, with the result that [plaintiff] could not traverse the plastic-covered escalator without risking a fall. * * *

… [T]he use of some cover was integral to [plaintiff’s] assignment to paint around the escalator. But that does not mean that any cover used—even one that was inherently slippery—was necessarily “integral,” particularly where a safer alternative would have accomplished the same goal. The plastic covering that was placed on the escalator was not integral to the paint job because it made [plaintiff’s] work area slippery, creating one of the hazards that the cover was intended to avoid. … Defendant was in a position to avoid this danger because … there were alternative coverings—drop cloths and wood panels—that were familiar, previously-used options that would have achieved the goal of protecting the worker from injuries caused by a slipping hazard and also protected the escalator from possible damage. Bazdaric v Almah Partners LLC, 2024 NY Slip Op 00847, CtApp 2-20-24

Practice Point: A prohibited “foreign substance” within the meaning of the Industrial Code can include slippery plastic sheeting (here used as a drop cloth during a painting project). Therefore requiring workers to stand or walk on slippery plastic sheeting can be a violation of the Industrial Code, triggering Labor Law 241(6) liability.

Practice Point: Because there were safer alternatives, the slippery plastic covering was not “integral to the job” within the meaning of the Industrial Code.

 

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PLAINTIFF BOOK-PRINTER REPUDIATED ITS BOOK-PRINTING CONTRACT WITH DEFENDANT WHEN IT SOLD ITS PRINTING OPERATION TO A THIRD PARTY (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, in a full-fledged opinion by Justice Oing, determined plaintiff (EPAC) had repudiated its book-printing contract with defendant (Wiley) when it sold its printing operation to non-party LS-1. Therefore Wiley was entitled to summary judgment on EPAC’s breach of contract action:

“A repudiation can be either ‘a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach’ or ‘a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach'” … . Put another way, “a party repudiates a contract ‘where that party, before the time of performance arrives, puts it out of his power to keep his contract'” … . “Besides giving the nonrepudiating party an immediate right to sue for damages for total breach, a repudiation discharges the nonrepudiating party’s obligations to render performance in the future” … . Thus, if there were a repudiation, the rest of the case falls away, and Wiley would be entitled to summary judgment dismissing the complaint. EPAC Tech., Inc. v John Wiley & Sons, Inc., 2024 NY Slip Op 00933, First Dept 2-20-24

Practice Point: Here the requirements for “repudiation” of a contract are described in some detail.

 

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THE FACT THAT PLAINTIFF SLIPPED AND FELL DOWN A PERMANENT CONCRETE STAIRWAY DID NOT REMOVE THE INCIDENT FROM THE REACH OF LABOR LAW 240(1); PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff was entitled to summary judgment on his Labor Law 240(1) cause of action. Plaintiff was ordered to carry a 200 pound mold up a concrete stairway. He slipped on concrete debris and fell down the stairs. The fact that the concrete stairway was a permanent structure (as opposed to a scaffold or ladder, for example) did not remove it from the reach of Labor Law 240(1):

Contrary to defendants’ contention, the fact that the staircase on which plaintiff fell was constructed as a permanent structure does not remove it from the reach of Labor Law § 240(1) .. . Because plaintiff’s foreman instructed him to work on an elevated work platform—namely, the stairway—defendants were required to provide plaintiff with an adequate safety device to carry the staircase mold up the stairs. Defendants failed to do so, and the absence of a safety device was a proximate cause of plaintiff’s injuries. At the time of his fall, plaintiff was following his foreman’s instructions to manually carry the mold up the stairs, and thus, he was not the sole proximate cause of the accident … . DaSilva v Toll GC LLC, 2024 NY Slip Op 00862, First Dept 2-20-24

Practice Point: Labor Law 240(1) can apply to a fall from a permanent concrete stairway. The statute does not apply exclusively to temporary structures like scaffolds, for example.

 

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ALTHOUGH THE SPECIFIC CONTRACT WAS NOT IDENTIFIED IN THE COMPLAINT, THE NATURE OF THE BREACH OF CONTRACT CLAIM WAS SUFFICIENTLY ALLEGED BY REFERENCE TO THE NYC ADMINISTRATIVE CODE AND NYC DEPARTMENT OF TRANSPORTATION PERMITS (FIRST DEPT).

The First Department, reversing Supreme Court, determined the breach of contract cause of action was sufficiently alleged. Although the complaint did not specifically identify the breached contract, the reference to the relevant provisions of the NYC Administrative Code and the NYC Department of Transportation (DOT) permits gave sufficient notice of the nature of the claim:

… [P]laintiffs alleged that Con Edison failed to ensure payment of prevailing wages by codefendant … as required by the permits issued by the City Department of Transportation (DOT), in that it breached agreements required to be made, pursuant to Administrative Code of City of NY § 19-142, prior to obtaining such permits. Administrative Code § 19-142 required Con Edison “to agree that . . . the prevailing scale of union wages shall be the prevailing wage for similar titles as established by the fiscal officer pursuant to section [220] of the labor law, paid to those so employed,” and provides that “[n]o permit shall be issued until such agreement shall have been entered into with the” DOT. As required by the Administrative Code, the DOT permits issued to Con Edison stated that the permittee was required, “before such permit may be issued, to agree . . . that the prevailing scale of union wages shall be the prevailing wage for similar titles” established pursuant to Labor Law § 220 … …

… [T]he fact that the breach of contract cause of action in the complaint does not specifically identify the relevant contract but instead refers to “the promises required to be made pursuant to New York City Administrative Code § 19-142 prior to obtaining such permits,” does not require dismissal. Despite the non-specificity, the complaint “give[s] sufficient notice of the nature of the claim” by referencing Administrative Code § 19-142 and the DOT permits … . Ross v No Parking Today, Inc., 2024 NY Slip Op 00880, First Dept 2-20-24

Practice Point: Here the failure to identify the specific contract which was breached did not require dismissal of the breach of contract cause of action because the nature of the action was sufficiently alleged by reference to the applicable NYC Administrative Code provision and NYC Department of Transportation permits.

 

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FOLLOWING THE RE-ELECTION OF VENEZUELAN PRESIDENT NICOLAS MADURO, THE VENEZUELAN NATIONAL ASSEMBLY NAMED JUAN GUAIDO INTERIM PRESIDENT AND DECLARED THE EXCHANGE OF UNSECURED FOR SECURED NOTES OFFERED BY THE VENEZUELAN STATE-OWNED OIL COMPANY UNAUTHORIZED; VENEZUELAN LAW CONTROLS THE VALIDITY OF THE NOTES UNDER THE UCC, NEW YORK LAW CONTROLS ALL OTHER ASPECTS OF THE TRANSACTION (CT APP). ​

The Court of Appeals, in a comprehensive full-fledged opinion by Judge Troutman, answering questions posed by the Second Circuit, determined the extent to which the exchange of unsecured for secured notes offered to shareholders by the Venezuela’s state-owned oil company was controlled by the New York Uniform Commercial Code (UCC). The court concluded the validity of the notes under the UCC is governed by Venezuelan law and New York law governs the transaction in all other aspects. The opinion is far too detailed and complex to fairly summarize here. At the heart of the dispute is the 2018 re-election of Nicolas Maduro as President of Venezuela and the declaration by the Venezuelan National Assembly naming Juan Guaido as interim President, followed by the National Assembly’s declaration that the exchange of unsecured for secured notes was unauthorized:

In 2016, Venezuela’s state-owned oil company offered a bond swap through which its noteholders could exchange unsecured notes due in 2017 for new, secured notes due in 2020. The United States Court of Appeals for the Second Circuit certified three questions to this Court concerning the extent to which New York law governs this transaction. … [W]e answer that Venezuelan law governs the validity of the notes under Uniform Commercial Code § 8-110 (a) (1), which encompasses within its scope plaintiffs’ arguments concerning whether the issuance of the notes was duly authorized by the Venezuelan National Assembly under the Venezuelan Constitution—i.e., whether there is a defect in the notes occasioned by the application of a constitutional provision bearing on the procedure through which the notes were issued. … New York law governs the transaction in all other respects, including the consequences if a security was “issued with a defect going to its validity” (UCC 8-202 [b] [1]-[2]). * * *

Plaintiffs are three related entities. Petróleos de Venezuela, S.A. (PDVSA) is an oil and gas company wholly owned by the Venezuelan government (Venezuelan Const art 303 [“the State shall retain all shares of” PDVSA]). PDVSA Petróleo S.A. (Petróleo) is incorporated in Venezuela and is a wholly owned subsidiary of PDVSA. PDV Holding, Inc. (PDVH), also a wholly owned subsidiary of PDVSA, is incorporated in Delaware and has its principal place of business in Houston, Texas. PDVH wholly owns CITGO Holding, Inc., which is the sole owner of CITGO Petroleum Corporation, a refiner and marketer of petroleum products in the United States. Nonparties CITGO Holding and CITGO Petroleum Corporation are both incorporated in Delaware with a principal place of business in Houston. Petróleos de Venezuela S.A. v MUFG Union Bank, N.A., 2024 NY Slip Op 00851, CtApp 2-20-24

Practice Point: Nicolas Maduro was re-elected President of Venezuela. Juan Guaido was subsequently named interim President of Venezuela by the Venezuelan National Assembly. The question at the heart of this dispute is whether actions taken by President Maduro (issuance of notes offered by the Venezuelan state-owned oil company) are valid in the face of a subsequent declaration by the Venezuelan National Assembly that the issuance of the notes was not authorized.

 

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A RETROCESSIONAL INSURER WHICH PAID OUT A SETTLEMENT ON BEHALF OF THE INSURED IN THE UNDERLYING LABOR LAW 240(1) LADDER-FALL CASE, IS ENTITLED TO BRING A LEGAL MALPRACTICE ACTION AGAINST THE LAWYERS FOR THE INSURED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kapnick, determined a retrocessional insurer (the reinsurer of a reinsurer) can maintain a legal malpractice claim against lawyers representing the insured in an underlying Labor Law 240(1) (ladder-fall) personal injury action. Plaintiff retrocessional insurer, having paid out on a settlement on behalf of the insured has standing to assert a claim for legal malpractice under a theory of equitable subrogation. (The opinion is too complex to fairly summarize here):

In New York, “[w]e recognize at once the fairness of the proposition that an insurer who has been compelled by his contract to pay to or in behalf of the insured claims for damages ought to be reimbursed by the party whose fault has caused such damages and the principle of subrogation ought to be liberally applied for the protection of those who are its natural beneficiaries” … . “As an equitable doctrine in the context of insurance, an insurance carrier, upon payment of a loss becomes subrogated to the rights and remedies of its assured to proceed against a party primarily liable without the necessity of any formal assignment or stipulation” … . Under the same equitable principles, “an insurer which has been compelled under its policy to pay a loss, ought in fairness to be reimbursed by the party which caused the loss” … . * * *

Where a reinsurer, or retrocessionaire, has paid a claim on behalf of an insured, equitable principles demand that the reinsurer be entitled to equitable subrogation on behalf of the insured. Having pleaded that it was contractually obligated to, and did, pay the majority of the [property owner/general contractor’s] settlement amount in the underlying personal injury action, and that it brings the instant action for legal malpractice as subrogee [of the property owner/general contractor], plaintiff can proceed with this action under the theory of equitable subrogation. Century Prop. & Cas. Ins. Corp. v McManus & Richter, 2024 NY Slip Op 00799, First Dept 2-15-24

Practice Point: Here the retrocessional insurer paid out a settlement on behalf of the insured in an underlying personal injury action. The retrocessional insurer was entitled to bring a legal malpractice action against the lawyers for the insured.

 

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FOR PURPOSES OF THE RELATION-BACK DOCTRINE, A LANDLORD AND A TENANT ARE NOT “UNITED IN INTEREST” (FIRST DEPT).

The First Department, reversing Supreme Court, determined the landlord-tenant relationship between the insured and the defendant building owner, Marion, did not constitute a “unity of interest” such that a negligence action against Marion could be commenced after the statute of limitations had run:

There are three conditions that must be satisfied for a claim asserted against a subsequent defendant such as Marion to relate back to claims asserted against another defendant: (1) both claims must arise out of the same conduct, occurrence, or transaction; (2) the new party must be “united in interest” with the original defendant, and by reason of that relationship can be charged with such notice of the institution of the lawsuit such that he will not be prejudiced in maintaining his defense on the merits; and (3) the new party knew or should have known that, but for a mistake by the plaintiff as to the identity of the proper parties, the action would have been brought against him as well … . * * *

… [A] landlord-tenant relationship, standing alone, does not give rise to vicarious liability or otherwise create unity of interest, which, as the Court of Appeals has recently reaffirmed, requires a situation in which the parties “stand or fall together and the judgment against one will similarly affect the other” … . Kingstone Ins. Co. v Marion Pharm. Inc., 2024 NY Slip Op 00805, First Dept 2-15-24

Practice Point: A landlord and a tenant are not united in interest for purposes of the relation-back doctrine and will not support adding a landlord to a complaint after the statute of limitations has run.

 

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THE ATTEMPT TO CORRECT A SENTENCING MISTAKE IN THE DEFENDANT’S ABSENCE VIOLATED DEFENDANT’S CONSTITUTIONAL AND STATUTORY RIGHT TO BE PRESENT (FIRST DEPT). ​

The First Department, vacating defendant’s sentence, determined the attempt to correct a mistake in the term of postrelease supervision in defendant’s absence violated defendant’s constitutional and statutory rights:

As the People concede, defendant’s constitutional and statutory rights to be present at sentencing were violated when the court resentenced defendant in his absence to correct a mistake in the term of postrelease supervision imposed (see CPL 380.40[1] …). Accordingly, the sentence is vacated and the matter is remanded for resentencing with defendant present. On remand, the court shall also address the discrepancy between the five-year term of postrelease supervision imposed on the weapon possession count at the original sentencing and the three-year term of postrelease supervision count reflected in the amended sentence and commitment sheet … . People v McCallum, 2024 NY Slip Op 00816, First Dept 2-15-24

Practice Point: Here the attempt to correct a mistake in the period of postrelease supervision in the defendant’s absence required vacation of the sentence.

 

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CLAIMANT DEMONSTRATED SHE CONTRACTED COVID AT THE WORKPLACE AND WAS ENTITLED TO WORKERS’ COMPENSATION BENEFITS (THIRD DEPT).

The Third Department noted that contracting COVID-19 at the workplace entitled claimant to Worders’ Compensation benefits:

… [S]ubstantial evidence supports the Board’s determination that claimant sustained a work-related injury by contracting COVID-19 in the course of her employment due to specific exposure to COVID-19 in the workplace … . Further, the Board correctly employed the presumption provided by Workers’ Compensation Law § 21 (1), “that an accident that occurs in the course of employment also arises out of that employment” … . Claimant’s treating pulmonary and critical care physician testified that, assuming the facts as claimant and the lay witness testified, which the Board credited, there was a “strong probability” that claimant contracted COVID-19 in the workplace, and the carrier did not submit contrary testimony negating a causal relationship … . Although the medical providers could not offer a conclusive medical opinion as to where claimant contracted COVID-19 so as to establish a causal connection between her contraction of COVID-19 and her employment, the testimony credited by the Board combined with the statutory presumption sufficiently established that she contracted COVID-19 at work from a coworker, and the medical providers’ testimony established that her injuries were the result of, and arose out of, contracting COVID-1 … . Matter of Leonard v David’s Bridal, Inc., 2024 NY Slip Op 00837, Third Dept 2-15-24

Practice Point: This decision demonstrates it is possible to prove COVID was contracted at the workplace entitling the worker to Workers’ Compensation benefits.

 

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A RESTAURANT PROPERTY-INSURANCE POLICY WHICH COVERS “DIRECT PHYSICAL LOSS OR DAMAGE” DOES NOT COVER THE LOSS OF BUSINESS CAUSED BY COVID-19 (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Halligan, determined the cessation of in-person dining services because of COVID-19 did not constitute “direct physical loss or damage” within the meaning of plaintiff’s property insurance policy:

We do not take lightly the severe economic losses incurred by restaurants and other businesses serving the public as a result of the COVID-19 pandemic. But our task is to faithfully interpret the terms of the insurance policy before us, not to “rewrite the language of the polic[y] at issue” to reach a result with “equitable appeal” … . The coverage provisions relied upon by [plaintiff] CRO [Consolidated Restaurant Operations] only cover economic losses to the extent they are caused by “direct physical loss or damage” to insured property. We conclude that the business interruption caused by the actual presence of the coronavirus on the premises of CRO’s insured property, as alleged in the complaint, is insufficient to trigger such coverage. Consolidated Rest. Operations, Inc. v Westport Ins. Corp., 2024 NY Slip Op 00795, CtApp 2-15-24

Practice Point: Property insurance covering “direct physical loss or damage” does not cover a restaurant’s loss of business caused by COVID-19.

 

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