Agency – New York Appellate Digest

THE CONTRACTOR THAT HIRED THE SUBCONTRACTOR FOR WHICH THE INJURED PLAINTIFF WORKED WAS THE CONDOMINIUM DEFENDANTS’ STATUTORY AGENT AND THEREFORE CAN BE HELD LIABLE IN THIS LABOR LAW 240(1) ACTION (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined defendant Chelsea, the contractor that hired the subcontractor, Prince, for which the injured plaintiff worked, was the statutory agent of the condominium defendants in this Labor Law 240(1) case. Therefore the action against Chelsea should not have been dismissed:

Supreme Court improperly dismissed Chelsea from this action on the ground that it is not the condo defendants’ statutory agent for purposes of Labor Law § 240(1) liability. Chelsea was the only contractor that the condo defendants retained to perform their window-washing project, and Chelsea cannot escape liability under Labor Law § 240(1) because it delegated the work by subcontracting it to Prince, plaintiff’s employer … . Chelsea’s authority to supervise and control the work is also demonstrated by its subcontracting the work to Prince, and whether Chelsea actually supervised plaintiff’s work is irrelevant … . Barreto v Board of Mgrs. of 545 W. 110th St. Condominium, 2025 NY Slip Op 00185, First Dept 1-14-25

Practice Point: Liability under Labor Law 240(1) extends to the statutory agent of the property owner, here the contractor that hired the subcontractor for which the injured plaintiff worked.

January 14, 2025

Administrative Law, Agency, Human Rights Law, Landlord-Tenant, Municipal Law

PURSUANT TO THE NEW YORK CITY HUMAN RIGHTS LAW, PROPERTY OWNERS (LANDLORDS) MAY BE HELD VICARIOUSLY LIABLE FOR THE DISCRIMINATORY CONDUCT OF THEIR AGENTS IN DEALING WITH PROSPECTIVE TENANTS (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kennedy, determined the owners of housing accommodations may be vicariously liable (pursuant to the NYC Human Rights Law) for discrimination by their agents who deal with prospective tenants. Here plaintiff is an indigent person with AIDS. The complaint alleges he was denied housing by defendant, who acted as an agent for defendant property owners:

… [A]bsent vicarious liability, landlords would evade liability under the City HRL except when they directly interact with a prospective tenant. This is neither the mandate of the statute, nor supported by the legislative intent behind § 8-107 of the City HRL … .

The text of the City HRL also supports the imposition of vicarious liability upon landlords. Specifically, the key statutory remedy in the City HRL for housing discrimination is to approve the rental and to provide housing (see Administrative Code § 8-120[a][7]). Moreover, §§ 8-122 and 8-502 permit a tenant allegedly aggrieved by discriminatory practices to seek injunctive relief. In the absence of vicarious liability against owners, who have title to the prospective property, these remedies would be unavailable and rendered meaningless … . Newson v Vivaldi Real Estate LTD., 2025 NY Slip Op 00052, First Dept 1-7-25

Practice Point: Pursuant to the NYC Human Rights Law, landlords may be vicariously liable for the discriminatory conduct of their agents in dealing with prospective tenants.

January 7, 2025

Agency, Attorneys, Contract Law

ABSENT SELF-INTEREST OR SELF-DEALING, AN ATTORNEY CAN NOT BE LIABLE TO A THIRD PERSON FOR INDUCING THE CLIENT TO BREACH A CONTRACT WITH THAT THIRD PERSON (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that the attorney’s (Treco’s) inducing his client (Reynolds) to breach a contract with a third person is not actionable:

“[I]nasmuch as the relationship created between an attorney and his [or her] client is that of principal and agent, an attorney is not liable for inducing his [or her] principal to breach a contract with a third person, at least where he [or she] is acting on behalf of his [or her] principal within the scope of his [or her] authority” … . “Absent a showing of fraud or collusion, or of a malicious or tortious act, an attorney is not liable to third parties for purported injuries caused by services performed on behalf of a client or advice offered to that client” … . Here, the Treco defendants demonstrated, prima facie, that Treco was acting on Reynolds’s behalf and within the scope of Treco’s authority as Reynolds’s attorney … . In opposition, the plaintiffs failed to raise a triable issue of fact. The evidence cited by the plaintiffs did not support a finding that Treco’s acts in representing Reynolds were motivated by any self-interest or self-dealing or that the acts personally benefitted Treco … . Kugel v Reynolds, 2024 NY Slip Op 03173, Second Dept 6-12-24

Practice Point: Absent self-interest or self-dealing, and attorney is not liable to a third person for inducing a client to breach a contract with that third person.

June 12, 2024

Agency, Employment Law, Negligence

PLAINTIFF ALLEGED THE DRIVER WORKING FOR A LIVERY CAB COMPANY (CURB) AND THE NEW YORK CITY TRANSIT AUTHORITY (NYCTA) DROPPED HIM OFF NEAR A HOLE IN THE ROAD WHICH CAUSED HIM TO FALL; THE RESPONDEAT SUPERIOR (AGENCY) CAUSE OF ACTION SURVIVED; BUT THE COMPLAINT DID NOT SUPPORT THE NEGLIGENT HIRING, RETENTION AND SUPERVISION CAUSE OF ACTION (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the complaint did not state a cause of action for negligent hiring, retention and supervision. Plaintiff alleged the driver of car which provided a service to the New York City Transit Authority (NYCTA) through a livery cab company called Curb was negligent in dropping plaintiff off near a hole in the road. Although the negligence action against the NYCTA and Curb survived under an agency (respondeat superior) theory, there were no factual allegations in the complaint which supported the negligent hiring, retention and supervision cause of action:

“An employer can be held liable under theories of negligent hiring, retention, and supervision where it is shown that the employer knew or should have known of the employee’s propensity for the conduct which caused the injury” … . “[A] necessary element of such causes of action is that the employer knew or should have known of the employee’s propensity for the conduct which caused the injury” … . Although such causes of action need not be pleaded with specificity … , the complaint must contain more than bare legal conclusions unsupported by factual allegations … . Here, the complaint did not allege that Curb or the NYCTA knew or should have known of the driver’s propensity for the conduct which caused the injury, nor contain any factual allegations to support such an inference. The bare legal conclusions were insufficient to state a cause of action alleging negligent hiring, training, and retention … . Bailey v City of New York, 2024 NY Slip Op 03156, Second Dept 6-12-24

Practice Point: Conclusory, as opposed to fact-based, allegations of negligent hiring, retention and supervision will not survive a pre-discovery motion to dismiss.

June 12, 2024

Agency, Contract Law, Negligence, Real Estate

A MANAGING AGENT IS NOT LIABLE FOR INJURY CAUSED BY A DANGEROUS CONDITION ON THE MANAGED PROPERTY UNLESS THE MANAGING AGENT EXERCISES COMPLETE AND EXCLUSIVE CONTROL OVER THE OPERATION OF THE PROPERTY (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the property managing agent did not exercise complete and exclusive control of the operation of the property and therefore could not be held liable for plaintiff’s trip and fall over a stub-up pipe protruding from a step:

Supreme Court should have granted that branch of the defendants’ motion which was for summary judgment dismissing the complaint insofar as asserted against CBRE [the managing agent] on the ground that CBRE does not own, operate, or control the premises. “Where, as here, a managing agent is accused of nonfeasance which causes injury to a third party, it is subject to liability only where it has complete and exclusive control of the management and operation of the property in question” … . “A managing agent is not in complete and exclusive control of the premises where the owner has reserved to itself a certain amount of control in the written agreement” … .

Here, CBRE established, prima facie, that it was a managing agent of the premises and that the management agreement was not so comprehensive and exclusive as to displace the duty of the owner of the premises to maintain the premises safely … . Quezada v CBRE, Inc., 2024 NY Slip Op 01829, Second Dept 4-3-24

Practice Point: A managing agent is not liable for injury caused by a dangerous condition on the managed property unless the agent exercises complete and exclusive control over the operation of the property.

April 3, 2024

Agency, Arbitration, Contract Law, Negligence

THE PLAINTIFF IN THIS WRONGFUL DEATH ACTION AGAINST DEFENDANT NURSING HOME IS THE DECEDENT’S DAUGHTER AND HAD SIGNED THE ADMISSION AGREEMENT AS THE “RESPONSIBLE PARTY;” THE LANGUAGE OF THE AGREEMENT DID NOT CREATE AN AGENCY RELATIONSHIP BETWEEN PLAINTIFF AND HER MOTHER; THE ARBITRATION CLAUSE IN THE ADMISSION AGREEMENT COULD NOT, THEREFORE, BE ENFORCED BY THE NURSING HOME (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant nursing home’s (the Facility’s) motion to compel arbitration of the wrongful death action should not have been granted. The admission agreement had been signed by plaintiff, not the decedent (the resident of the nursing home). The admission agreement referred to plaintiff as the “responsible party” who was “primarily responsible to assist the [decedent] to meet … her obligations under [the agreement].” But there was no indication the decedent agreed to have plaintiff act on her behalf:

“Essential to the creation of apparent authority are words or conduct of the principal, communicated to a third party, that give rise to the appearance and belief that the agent possesses authority to enter into a transaction. The agent cannot by [her or] his own acts imbue [herself or] himself with apparent authority. Rather, the existence of apparent authority depends upon a factual showing that the third party relied upon the misrepresentation of the agent because of some misleading conduct on the part of the principal — not the agent. Moreover, a third party with whom the agent deals may rely on an appearance of authority only to the extent that such reliance is reasonable” … .

… [T]he Facility failed to demonstrate that it reasonably relied upon any word or action of the decedent to conclude that the plaintiff had the apparent authority to enter into the agreement or to bind the decedent to arbitration on the decedent’s behalf … . To the extent that the Facility contends that it reasonably relied upon the plaintiff’s own acts, this contention is also without merit, as an agent cannot “by [her] own acts imbue [her]self with apparent authority” … . … [T]he plaintiff’s status as the decedent’s daughter did not give rise to an agency relationship … . Lisi v New York Ctr. for Rehabilitation & Nursing, 2024 NY Slip Op 01171, Second Dept 3-6-24

Practice Point: Here decedent’s daughter signed the nursing-home admission agreement as the “responsible party.” Because there was no indication decedent agreed to have her daughter act on her behalf, the nursing home could not claim the daughter had the “apparent authority” to bind decedent to the agreement. Therefore the nursing home could not enforce the arbitration clause in the wrongful death action.

March 6, 2024

Agency, Labor Law-Construction Law

ONLY CONTRACTORS AND OWNERS AND THEIR AGENTS CAN BE LIABLE UNDER LABOR LAW 240(1) AND 241(6); HERE DEFENDANT DEMONSTRATED IT WAS NOT AN AGENT FOR ANY POTENTIALLY LIABLE PARTY BECAUSE IT EXERCISED NO SUPERVISORY CONTROL OVER THE WORKSITE (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the Labor Law 240(1) and 241(6) causes of action against one defendant (G Buddy) should have been dismissed because G Buddy had no control or supervisory duties at the worksite:

The express terms of Labor Law §§ 240 and 241(6) provide that “the nondelegable duties imposed by those statutes apply only to ‘contractors and owners and their agents'” … . “To hold a defendant liable as an agent of the general contractor or the owner for violations of Labor Law §§ 240(1) and 241(6), there must be a showing that it had the authority to supervise and control the work that brought about the injury” … . Here, G Buddy established, prima facie, that it was not an agent of either the Board or the contractor at the time of the plaintiff’s accident by submitting evidence demonstrating that G Buddy had no control over or supervisory responsibilities on the worksite … . Hossain v Condominium Bd. of Grand Professional Bldg., 2023 NY Slip Op 06128, Second Dept 11-29-23

Practice Point: In order to hold a party liable under Labor Law 240(1) or 241(6) as an agent of a contractor or owner, the party must have exercised supervisory control over the worksite.

November 29, 2023

Agency, Contract Law, Insurance Law, Negligence

PLAINTIFF’S HUSBAND, THE INSURED, WAS DRIVING WHEN PLAINTIFF WAS SERIOUSLY INJURED IN A TRAFFIC ACCIDENT; PLAINTIFF MAY BE ABLE TO SHOW HER HUSBAND HAD REQUESTED COVERAGE ON HER BEHALF AND, BECAUSE THE INSURER (ALLEGEDLY) NEGLIGENTLY FAILED TO PROVIDE THE COVERAGE, THE INSURER IS OBLIGATED TO COVER HER LOSS, DESPITE HER STATUS AS A NONCLIENT (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined that the injured plaintiff might be able to show her husband (the insured) requested supplemental spousal liability (SSL) coverage on her behalf and that she was harmed by the insurer’s failure to provide it, despite her status as a nonclient. Plaintiff’s husband was driving and plaintiff was a passenger when she was seriously injured in a traffic accident:

“An insurance agent ordinarily does not owe a duty of care to a nonclient; however, where an agent’s negligence results in an insured being without coverage, the agent may be liable for damages sustained by an injured third party if the third party was the intended beneficiary of the insurance contract and ‘the bond between [the agent and the third party is] so close as to be the functional equivalent of contractual privity’ . . . The functional equivalent of privity may be found . . . where the defendants are aware that their representations are ‘to be used for a particular purpose,’ there was ‘reliance by a known party or parties in furtherance of that purpose’ and there is ‘some conduct by the defendants linking them to the party or parties and evincing [the] defendant[s’] understanding of their reliance’ ” … .

“[A] third party may sue as a beneficiary on a contract made for [its] benefit. However, an intent to benefit the third party must be shown, and, absent such intent, the third party is merely an incidental beneficiary with no right to enforce the particular contracts” … . Thus, “[p]arties asserting third-party beneficiary rights under a contract must establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for [their] benefit and (3) that the benefit to [them] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [them] if the benefit is lost” … . Smith v NGM Ins. Co., 2023 NY Slip Op 05815, Fourth Dept 11-17-23

Practice Point: An insurer may be liable for negligently failing to provide requested coverage for a nonclient. Here, the insured, plaintiff’s husband, allegedly requested supplemental spousal liability (SSL) coverage on behalf of his wife, the injured plaintiff. The insurer, which allegedly failed to provide the requested coverage, may be liable for her loss.

November 17, 2023

Agency, Labor Law-Construction Law, Negligence

THE DEFENDANT WHICH RENTED OUT THE AERIAL LIFT WHICH MALFUNCTIONED WAS NOT AN AGENT OF THE OWNER OR CONTRACTOR AND EXERCISED NO CONTROL OVER THE WORK, THEREFORE THE LABOR LAW CAUSES OF ACTION SHOULD HAVE BEEN DISMISSED; THE NEGLIGENCE CAUSE OF ACTION, HOWEVER, PROPERLY SURVIVED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined that the Labor Law causes of action could not be brough against the defendant (Ahern) which rented out the aerial lift which malfunctioned. Ahern was not an agent of the owner or contractor and exercised no control over the work, so the Labor Law causes of action did not apply. However Ahern could be liable under a negligence theory:

… [O]nly contractors and owners and their agents can be held liable for Labor Law violations … . To be an “agent” of an owner or contractor, a party must have the ability to supervise and control the worksite and/or plaintiff’s work … . Here, plaintiff does not dispute that Ahern was neither an owner nor contractor within the meaning of the statute. The complaint only alleges that Ahern owned and maintained the aerial lift, not that Ahern exercised any supervision or control over the worksite … .

Plaintiff’s complaint, however, sufficiently pleaded a cause of action for negligence against Ahern. Plaintiff alleges that the aerial lift owned by Ahern malfunctioned, causing plaintiff’s coworker to spray plaintiff with the power washer. … [E]ven if plaintiff’s coworker proximately caused plaintiff’s injury, Ahern is not absolved of liability as “there may be more than one proximate cause of an injury” … . Kull v Ahern Rentals, Inc., 2023 NY Slip Op 04721, First Dept 9-26-23

Practice Point: Here the company which rented out the aerial lift which malfunctioned was not an agent of the owner or contractor and exercised no control over the work. Therefore the Labor Law was not triggered. However, the company may be liable under a straight negligence theory.

September 26, 2023

Agency, Labor Law-Construction Law

PLAINTIFF IN THIS LADDER-FALL CASE DID NOT DEMONSTRATE THE BUILDING MANAGEMENT COMPANY WAS ACTING AS THE OWNER’S AGENT OR THAT IT HAD SUPERVISORY AUTHORITY OVER THE WORK; THEREFORE SUMMARY JUDGMENT AS AGAINST THE MANAGEMENT COMPANY ON THE LABOR LAW 240(1) CAUSE OF ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined summary judgment in this ladder-fall case should not have been granted as against the building manager (Madison) as opposed to the building owner. Plaintiff did not demonstrate Madison was acting as the owner’s agent or that it had supervisory authority over the work. The court noted that the assumption-of-the-risk affirmative defense applies to sports activities, not Labor Law causes of action:

Labor Law § 240(1) imposes liability only on contractors, owners, or their agents. “An agency relationship for purposes of section 240(1) arises only when work is delegated to a third party who obtains the authority to supervise and control the job. Where responsibility for the activity surrounding an injury was not delegated to the third party, there is no agency liability under the statute” … . Here, the plaintiff failed to demonstrate, prima facie, either that Madison was the managing agent for the building or that Madison supervised or controlled any of the work being performed in the building … . Depass v Mercer Sq., LLC, 2023 NY Slip Op 04363, Second Dept 8-23-23

Practice Point: In order to hold the building management company liable in this ladder-fall Labor Law 240(1) action, the plaintiff was required to demonstrate the management company was acting as the owner’s agent and had supervisory control over the work. Plaintiff failed to do so.

August 23, 2023