State of New York
Supreme Court : County of Monroe

This opinion is uncorrected and is subject to revision in the official Reports

ANDREW V. SIRACUSE, J.

Although there are many different parties in this case, and many appearances of a more than formal nature, the issues in the present motions are dealt with primarily in the papers of Rainaldi Real Estate Management, the Westage Board of Managers, and the Agostinelli plaintiffs, who set out virtually all the arguments on which the various other plaintiffs rely.

This case arises from a destructive fire in a condominium community, Westage at the Harbor, which was allegedly set off by the negligence of an unlicensed plumber, Michael Stein.

Mr. Stein was working on interior plumbing at his sister's residence. This was not the first time that his brotherly assistance had led to damage at Westage. David Griffo, the community's site manager, testified at EBT that after Stein first caused problems he told Michelle Stein, the plumber's sister, that she would need to make sure that all plumbers she brought on site were licensed. In her deposition Michelle Stein denies this. Griffo further deposed that he had no later contact with Michael and discovered that he had returned to do more work only after the fire.

One of Griffo's duties was turning off water to buildings where plumbing work was being done. (The Westage units did not have individual water shutoffs.) Michael Stein deposed that Griffo either telephoned or shouted through the door to ask if he was ready and to advise him that the water was off. He does not indicate, though, that Griffo knew that it was Stein he was talking to; Griffo might have assumed that he was talking to a different plumber.

Since this is a condominium community, the condominium documents spell out who is responsible for what; and at Westage, not surprisingly, individual owners are charged with the maintenance of their own units. The plaintiffs, therefore, do not seek damages for a failure to maintain the premises. Their theory is that Griffo improperly allowed Stein to work on the unit, thus endangering the unit owners. This supposed negligence is then imputed to the board and to the management firm, Rainaldi, under a theory of respondeat superior.

There are certainly substantial factual issues that need to be resolved before the plaintiffs can succeed under this theory, but at the moment they are beside the point. The motions here raise different issues. Rainaldi Real Estate Management, the firm hired by the Westage board to maintain the property, argues it cannot be not liable in any case, because Mr. Griffo was Westage's employee, not their own. In the alternative, it says that it is entitled to contractual indemnification from the unit owners. Westage, for its part, says the board is immunized from suit because of a provision in the management agreement, and that the agreement also requires that unit owners' insurance bar subrogation actions. For this reason, the board argues, the various insurance companies involved here cannot maintain their suits.

All of these arguments are wrong. There is a clear issue of fact as to Griffo's relationship with Rainaldi. He was nominally the board's employee, but the plaintiffs show a letter-amendment to the agreement between the board and Rainaldi that gave Rainaldi the power to supervise and to fire Griffo and similar board employees. Although Griffo was paid by Westage, this in itself does not settle the issue; employment for purposes of respondeat superior liability arises from the authority to control (see generally, 53 NY Jur 2d, Employee Relations, § 331). The power to discharge is sufficient control over a person to give rise to an issue of fact on this question. At this point the motion must be denied.

The plaintiffs are also correct in arguing against indemnification for Rainaldi. Respondeat superior is not a form of vicarious liability; the employer is directly responsible for the acts of the employee. Thus, Rainaldi would itself be liable if Griffo is found to be its employee and if the damage is ascribed to negligence on his part. This is the only way in which it would be liable. Rainaldi could not be indemnified for any negligent acts by Mr. Griffo without violating the General Obligations Law's ban on such agreements. Its motions are therefore denied.

Westage's motions are also denied. There is clear immunizing language in the management agreement with respect to the members of the board; but there is nothing with respect to the board itself. All the arguments raised by defendant Westage--especially the need to protect those who serve without pay as board members--explains why members should have no individual liability. But this is a moot point. The plaintiffs have not sued the board members; the complaint is against the board as a body. Nothing in the documents bars such a lawsuit.

Finally, the insurance companies correctly argue that if unit owners failed to buy policies that bar subrogation the board's remedy is against the unit owners--not the insurance companies. The insurers were not parties to the condominium agreement, and thus that document cannot cut off any of their rights.

The board relies on a number of recent cases that address a related but different issue: what rights an insurer has if the lease or other agreement bars the insured's right of subrogation. In these cases it is clear that the insurer's rights will also be affected, because a subrogee stands in the insurer's shoes. If the insured cannot pursue a subrogation claim the insurer can have no wider rights.

In the present agreements, however, the subrogation rights of the unit owners themselves are not limited. They were only required to have non-subrogation clauses in any insurance policies they purchased. This is a different situation, and the insurers must prevail. If any party has to pay for this failure it would be the unit owners, who are the ones who had the contractual obligation to obtain this kind of coverage and who failed to do so.

The motions are all denied, without costs or disbursements. Mr. Leone, who represents the Agostinelli plaintiffs, may prepare the order.

DATED: Rochester, New York

October 14, 2003

Andrew V. Siracuse, J.S.C.

This opinion is not available for publication in any official or unofficial reports, except the New York Law Journal, without the approval of the State Reporter or the Committee on Opinions (22 NYCRR 7300.1)

Design © 1997 Michael Steinberg. No copyright subsists in the decision texts, which are government documents.

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