Contractual Indemnification: Winters v. Uniland Devpt. Corp., et al. (N.Y. Sup. Ct., Erie Co.)
June 21, 2017
In Winters, plaintiff was allegedly electrocuted in the course of performing electrical work at a project to renovate an office in Amherst, New York. Plaintiff commenced suit against the owner, Uniland, asserting claims for negligence and violations of Labor Law sections 200, 240(1), and 241(6). The owner then commenced a third-party action against plaintiff’s employer, J&N Services, asserting claims for common law indemnification and contribution, contractual indemnification, and breach of contract/failure to procure insurance. Prior to motion practice, plaintiff withdrew his Labor Law section 240 claim, leaving only claims for common law negligence and for violations of Labor Law sections 200 and 241(6).
Uniland moved for summary judgment against plaintiff seeking dismissal of all causes of action. Uniland also moved for summary judgment on its claims against J&N for defense and indemnification. These claims relied upon an indemnification provision contained in a “purchase order” between Uniland and J&N that was issued and signed after the accident and after the work was complete. In opposition to the motion, J&N argued it was immunized from third-party liability for common-law indemnification or contribution because plaintiff did not sustain a grave injury. J&N further argued that Uniland’s contractual indemnification claim must fail because there was no written contract signed prior to the loss; i.e., because contractual indemnification is only permitted where there is a written contract entered into prior to the accident expressly agreeing to indemnify for the type of loss sustained, and because an indemnification agreement cannot apply retroactively to injuries sustained by an employee in an accident that occurred prior to execution of the agreement unless that agreement specifically states it is to be applied retroactively (which the purchase order in this case did not). Notwithstanding the fact that the purchase order post-dated the accident and work at issue, Uniland argued that J&N was its longtime partner and that the typical pattern and practice of conduct between Uniland and J&N (which predated the accident) was for J&N to provide Uniland with information concerning the job cost and a list of the work that was already completed, and for Uniland to then prepare a purchase order and provide it to J&N so that J&N could be paid. Uniland argued that this pattern and practice established the parties intended to be bound and evidenced a valid and enforceable contractual indemnification claim.
On March 21, 2017, the Supreme Court, Erie County, dismissed all of plaintiff’s causes of action against Uniland, ruling that plaintiff was injured performing the very work he was hired to perform, that the facts did not support a claim that he was injured because of a defective condition on the premises, and that the claimed violations of Labor Law section 241(6) regulations were either not specific enough or that the cited regulations were inapplicable to the facts of the case. The Court also denied Uniland’s motion against J&N, finding the evidence was undisputed that there was no signed contract between Uniland until several weeks after the accident and that Uniland failed to provide “persuasive authority” for the proposition that the “custom and practice” of the parties can create an enforceable contract with explicit terms for defense and indemnification. The Court also ruled that the dismissal of the primary action rendered the third-party action moot.