State of New York
Supreme Court : County of Monroe

- against -

Index No. 1997/8332

- against -
Lancet Arch, Inc.
Third-party Defendants.
________________________________

ANDREW V. SIRACUSE, J.

Plaintiff Thomas Keys, an employee of third-party defendant Lancet Arch, was injured when the brakes failed on a "concrete buggy," a vehicle he was operating during renovations at Rochester's Midtown Plaza garage. He sued Admar Supply, the corporation that leased the vehicle to Lancet Arch, and a related company, DiMarco Constructors. From EBT testimony it appears that DiMarco had no connection with the Midtown work and was related to Admar only through common ownership, and plaintiff's counsel has stated that he will be discontinuing the action as against DiMarco. Before he did so, however, Admar and DiMarco sued Lancet Arch, asserting an indemnification claim. Lancet Arch has moved to dismiss the third-party complaint, and the court hereby grants that motion.¹

As this case was commenced in 1997, it falls under the general repeal of the Dole v Dow doctrine effected by the 1996 amendments to the Workers' Compensation Law. The relevant portion of section 11 of that law now reads:

An employer shall not be liable for contribution or indemnity to any third person based upon liability for injuries sustained by an employee acting within the scope of his or her employment for such employer unless such third person proves through competent medical evidence that such employee has sustained a "grave injury"...

The section goes on to describe "grave injury," but it is not contended by any party that Mr. Keys's injuries fall into that category. It should be noted that "indemnity" and "contribution" are so defined in the section to exclude agreements entered into prior to the accident "by which the employer had expressly agreed to contribution or indemnification of the claimant or parson asserting the cause of action for the type of loss suffered."

Thus, while common law indemnification or contribution claims are no longer permitted for most employment accidents, explicit contracts of indemnification and contribution remain enforceable. Since the action at hand clearly falls within the general factual situation contemplated by the amendments, Lancet Arch is only liable if it contractually assumed the obligation of contribution or indemnification. The only contract involved is the lease agreement between Admar and Lancet Arch. The two clauses that concern the parties are: "any personal injury or damage to the property of others will be the sole responsibility of the lessee" and "Lessor shall not be responsible for any injury or damage, including consequential damage, resulting from equipment failure or defect." Admar argues that these require Lancet Arch to indemnify it.

The court cannot interpret these to be indemnification clauses at all. They are, instead, contractual provisions that keep Lancet Arch as lessee from suing Admar when Lancet Arch is made liable. If the buggy had damaged part of the Midtown Plaza garage, for example, or had collided with a patron's car, Midtown Holdings or the car owner would have had a cause of action against Lancet Arch. The clauses cited from the lease agreement would then prohibit Lancet Arch from seeking to pass some of that liability back to Admar.

In the present case, however, Admar is being sued by a person not party to the contract, who alleges that Admar improperly serviced the vehicle and that this negligence caused his injuries. Admar's interpretation of the lease clauses would result in Lancet Arch's being obligated to compensate Admar for its own negligence, an arrangement that violates General Obligations Law §5-322.1.

In a reply submission Admar's counsel has argued that proof submitted in connection with its summary judgment motion shows that "Lancet Arch was aware of the condition of the power buggy used by the plaintiff when he was injured." Under these facts, she argues, Admar would not be liable for its own negligence, but for Lancet Arch's.

This argument misses the point. Admar appears at this point to have had the obligation to repair the buggy when notified of a defect. If it failed to make repairs, made them in a negligent manner, or failed to warn Lancet Arch of the consequences of using the buggy until it could be repaired, then it would be negligent and answerable under the right facts to Mr. Keys. If, as Admar's counsel suggests, Lancet Arch was advised by Admar of the danger of using the buggy until it was repaired, but continued to direct its employees to use it, then Admar would not find itself liable to plaintiffs at all; it would have established that its conduct was not negligent. The sole party at fault would then be Mr. Keys's employer, and he would be limited to his remedies under the Workers' Compensation Law. There would be no liability to pass on to Lancet Arch.

This is not a case of vicarious liability under the Labor Law; Admar is not an owner, general contractor, or agent liable under sections 200 or 241 (6), and DiMarco, even if it were so involved, has not been shown to have contracted with Lancet Arch. Quite aside from the inapplicability of the contractual language used, this is not an indemnification case at all, as indemnification requires that one party be answerable for the actual tortfeasor's conduct. Nor can the language be construed as to permit a contribution claim, as difficult as such a claim is likely to be under these facts; a reading of the clauses as a whole leaves no doubt that the contract never contemplated shared responsibility.

Questions arising from the General Obligations Law aside, the third-party action fails because the language used by the parties cannot be considered an "express agreement" to indemnify or provide contribution. It is not simply a question of the absence of words such as "indemnification"; the clauses make good sense, and are enforceable, when they are interpreted to bar actions by Lancet Arch against Admar. They fail on both counts if they are construed to permit actions by Admar against Lancet Arch. The third-party complaint is therefore dismissed, without costs or disbursements. Counsel for Lancet Arch may prepare the order.

DATED: Rochester, New York

August 30, 2000

Andrew V. Siracuse, J.S.C.

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

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