Hsu v Millennium Partners, LLC

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Hsu v Millennium Partners, LLC 2012 NY Slip Op 30685(U) March 19, 2012 Supreme Court, New York County Docket Number: 114338/2010 Judge: Judith J. Gische Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 312112012 [* 1] 1 L PRRT IO, . . I ' v8. MlllENNlUM PARTNERS U C SEQUENCE NUMBER :002 FILED MAR 20,2012 NEW YORK .COUNTY CLERK'S OFFICE [* 2] DECIWN AND ORDER Index No.: 1I433810 seq. No.: 002 Michael K. Hsu, PlaintifF (81, Mlllennium Pahers, LLC, Millennium Managed, Inc., Millennium BPC Development, LLC, MIllsnnlurn Partners Management, LLC, The Board of Manapm of Millennium Point and The Ritz-Carkon Hotel Company, LLC, Defendant (a). - I _ - --X Millennium Partners, LLC, Mlllannlum Managed, Inc., MIHennlum BPC Development, LLC, Millennium Partners Management, LLC, The Board of Managers of Millennium Point and The Rib-Cadton Hotel Company, LLC, Thlrd Party Plalntlfk, -again& T.P. Index No.: 590390-11 FILED MAR 20 -2012 Orion Mechanical Systems, Inca NEW YORK Third Party Defendant. COUNTY CLERKS OFICE Recitation, as requlmd by CPLR 3 2219 [a] of the papers mnsldered In the review of this (the@ rnotion(s): Papars Numbed Orion nlrn (3212) (sop back) w/MEM affirm, MKM affld, exhs . . . . . . 1,2 Millennium opp wISBC affirm, exhs . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Orion repty w/M ¬M affirm .................................. 4 ._ ___ ~ ~ Upon the fomgoing papers, the decision and order of the court is 8s follows: GIWHE.. I: This Is a pensonal injury action by Mlchad Hsu ( Hsull). Issue was joined by -Page 1 of 10- [* 3] defendants Millennium Partners, LLC, Millennium Manawri, Inc., Millennium BPC Development, LLC, Millennium Partner8 Management, LLC, The Board d Managers of Mlllennlum Polnt and The Rk-Carlton Hotel Company, LLC ("Milhnnium7, all of which are jointly represented. MilknnIum has commenced a third party action against Orkrn Mechanical Systems, Inc. ("Orlon~ Odon has answered. Orion now brings thk preand nota of issue motlon for summary judgment i ita favor dismissing the third party n complaint against i (CPLR 5 3212; Brill v. CitV of New yo^ , 2NY3d 848 [2004]). The t motion is opposed only by the third party plaintiffa. Hsu has taken no position on the motlon, though duly served. Facts The followlng facts am taken f o Heru'a mmplalnt: rm Hsu was the resident of apartment 21A located at 10 West Street, New York, New York 10004 ("apartment"). He austalned personal injuries as a m u l t of mold, fungus and allergen contamlnants In hls apartment afkr a pipe In his HVAC unlt froze and burst. Hsu claims that he natifled Mlllennlurn about a faulty latch on his bedroom window but that Millennium failed to make the needed repairs. Hsu claims that whlle he w88 away in January 2006 and during inclement weather, the latch on the window malfunctioned causing the wlndow to fly open. Slnce it was very cold, the pipe in his bedroom HVAC froze and later burst open, causing a water Incursion Into hls apartment. Hau also alleges that although Millennlum undertook rernedlal measures after Ute pipe burst, the stepsthey took w8re Ineffect'Ne. Hsu contends he later had a second leak In hls apartment "due to a datacthre replacement pipe" Installed by Orion and undertaken by Millennium as a remedial -Page 2 of 10- [* 4] measure. This second leak was slow and developed on or around November 2007. That leak went undetected for approximately five (5) daya, allowing the growth of mold, fungus and other allergens in his apartment. He dalms those contaminants caused injuries to his internal organs, and respiratory, iieurologicaland gastrointestinal aptems and that he k3 stlll suffering from those and other allmants. In Mlllsnnhm'acomplaint against Orion and in Orion's opposition to Millennium, certain other facts are set forth: Following the January 2000 burst pipe incident, defendants' Regional Director of ResMences sent Hsu a letter dated August 8,2006. In that letter, defendant's regional dlmtor stated the followlng: "Recently management was notiffed by your Insurance carrier that they would not be nrlrnbursing the expense incurred as a resutt of the water bak and subsequent flood emergency from the burst pipe within your unit As you are aware, management discovered that a window In your unlt was open which creatBd freezing conditions within your unlt. As the heating valve was also shut off lnsMe your unit, this resulted in the broken pipe and subsequent damages to other lacations in the building ..." In the Fall, defendants' RasMence Uabon sent the reaidential unit owners at 10 West Street a notice about "preventative maintenance for ACMeating Units within your home." The notice, dated October 4,2006 ("sewleenotice7, states that the condomlnlum board *rewmmends" each m e r have his or her W A C unit serviced 90 ensum that [the units] m a l n in proper working order." The service notice identifies Orion as "omoption" to perform such service. A "Preventatbe Maintenance and Senrlce Agreement" ("senrlcaagreement") was attached to the senrice notice. The -Page 3 of 10- [* 5] setvice agreement was prepared by Orion. The service agreement outlinea the scope of the work, frequency of senrice and prlce structure. The sewvice notice also provldes that; Yhis agreement is between the residential unit owner and Orion Mechanical Systems. All payments wlll be made directly to Orion. Them are other options available for preventative maintenance servim. The Condominium Board, ResMential Board and the Management Company can accept no liability for service provided or consequentlal damage." The rest of the aervloe notice reminds the unit owner of the consequences of not properly maintaining his or her untt properly and cautlons that "failure to maintain the unit can result In damage and w t l y repairs which would be the rasponslbllity of the unit owner..." After receiving a senrice estimate, and by agreement dated September 28,2007, Hsu hired Orion to replace his HVAC unit at a cost o $5,650.00 plus tax. The work was f schedulud to be performed while Hsu was away. According to the awom of afffdavit of Mlchael K Maturn, Orion's owner, the first step, installationof new isolation valves, took place on November 1,2007. When Hsu returned to his apartment on November 11, 2007, he discovered a mter leak that had c a u d hi8 floor to buckle and other damage. Upon belng nodfled of thb condltlon, Orion immediately sent a technlclan to flx the unit, but the technician was turned away. Hsu than filed a claim with Orion's insurance provlder sometlme in November 2007 and Orlon's Insurance provider settled Hsu's dalm by paying Hsu the sum of $120,000.00. In exaanger, Hsu signed a release discharging Onon from: any and all clalms, actions, demands, rfghts, damages, costs, loss of service, expens-, and compensaffon wha-ver, which the undersigned now h a h a v e or -Page 4 of 10- [* 6] 1 which may hereinafter a m 8 on account of in or any way gr4wlng out of any and all known, unknown, foreseen or unforseen bodily and personal injuries and property damage and the consequences thereof resuMng or to result from the accident/ incident, casuatty or event which occurred on tha 11'" dBv of N o w b er In the Yam 2epz a or near 10 West St. Apt 21A, New York, New t York 10004. (emphasis in original) The 3"' party action by Millennium against Orion is for " m m o n law indemnity and/or contribution" (Vt cause of actlon) and "judgment ovef for the whole of any judgment or verdict against Millennium (2" cause of action). Arguments Orion and Millennium have very different views about what may have mused the mold condition that Hsu claims exlsts In hi8 apartment. Millennium denies that the mold, fungus and allergens later discovered were proximately caustd by Is failure to t repair the allegedly defective window htch In or about January 2006. Aceording to Millennium, it Is the second leak, caused by Orlon and discovered by Hau in Novsmbr 2007, that is the sole proxlmats cause of the moldy conditions. Thus, Mlllannlurnstate8 that it was not negligent, but if the Juryfinds It b liable to plaintiff, then Orion must indemnffy it far 100% of any damages awarded. Millennium wntends thls motion for summary judgment is prematum because there ha8 been no discovery. Mlllennlurn argues that, given Heru's clalms of extensive physical injurles, Orion may have entered Into thls settlement agrwment wfth Hsu in bad faith. Millennlum arguw it is not the "owner" ofthe premises (Le. apartment 21A) but merely the managing agent, therefore, It is fiat vicariously liable f6r negligent ads by -Paga 5 of 10- [* 7] Orion. Orion argues that it k entttled to summary judgment dismissing Millennium's complaint against it because Hsu has released Orion and therefore,the provisions of GO1 15-108 apply. Orion pofnts out that sin= them is no contractual agresmant between itself and Millennium, Millennium cannot maintain a direct action for contractual indemnkatlan against it. When a cause of action for lndsmnificatlon Is asserted, there must be a contract e q m l y provldlng for lndamnrticathn or an impllsd right of indemnification. Since there Is no contract between Orion and Millennlum, Millennlum's clafm can only be for impllsd or "common l a d indemnification. Under principles of m m o n law Indamnfication, "onewho has been compelled to pay for the wrong of anather [is permitted]to recover from the wrongdoer the damages it paM to the injured party" (P'Ambrcwio v. CLtv of New Yo&, 55 N.Y.2d 454,480,450 [1982]; 17 VISa Fee t & s o w a v. Tewchers Ins. and & n u b h s ' n of Amedm, 259 A.D.2d 75 [ I dDept I 19WI). "mhepradlcate of common-law indemnity Is vimrious liabiltty without actual fault on the part of the proposed indemnttee. , wn coneequentiy, "a party who has itself actually participatedto some degtee in the wrongdolng cannot receive the benefit o the f doctine" w a r d s P . & H e 9Una Co,, Inc. v. Waamtnn GrouD intern.. Inc., 59 A.D.3d 31 1, 312 [lmt ZOOS] Internal cltatlons omitted). Dept. "[T]ha predicate of common-law Indemntty Is vicarious llability wtthovt actual fault on the part of the proposed fndernnhee. . ." consequently, "a party who has it#A actually participated to 80me degree In the wrongdoing cannot m i v e the beneft of the -Page 8 of 10- [* 8] doctrine"w a r d s Plumbha & He\ 50 ntem. In . A.D.3d 311,312 [lmt20091 Internaf M o n s omitted). Gtven the facts of this -88, Dept Millennlurn does not qualrfy for common law indemnification. This i8 not a situation where Millsnnlum could be found legally responsible though not actually negligent, 1.9. vicariously liable because It did not hire Orlon or have the typical kind of relationship that would laad to Vlcarbusly liabilty (compere G u m 8n v. Haven P Peve1o-t b Ho- Fund Go,. InG., 68 N.Y.2d 559 [198rl). Although Millennlum argues that the sob, proximate cause of Hsu's damage8 I8 Orion's negligence, this is a friable fssue of fact Typically, I a Jurydecides a party Is f not liable, then no damages are awarded. On the other hand, if the jury finds that codefendants are liable to the plalntlff, Artlcle 14 of the CPLR applies, allowing Ywo or more persons who are subject to liability for damages for the same personal Injury, r injury to property o wrongful death"to "clalm contribution among them. , ." CPLR Q 1401, however, culls out an exception for skuations falling under GOL Q 15-108 where, a8 here, a defendant has settled with the plaintifF. GOL § 15508 [a] provides that when a rslaase or a covenant not to BUO or not to enforce a judgment is given to one of two or more persons "liable or claimed to ba liable in tort for the same 1nfury"or same wrongful death, the release or covenant does not the dkcharge any of the other tort ¬esaorsfrom liabiltty for the injury or wrongful death unleas its terms expressly so provide, "but It reduces the claim of the releasor against the other tortfeasors to the extent of any amount stipulated by the release or the covenant, or in the amount d the conslderation pald for it, of In the amount of the released tortfeasor's equitable aham of the damages under artlcle fourteen of the civil -Page 7 of 70- [* 9] practice law and rules, whichever Is the greatesL" GOL Q 15-508 [b] further provides that the "release be ghren In good fatth by the Injured pamon"and if it Is, then the tortfeasor Is released from liabilrty to any other person for contrlbutlon under Article 14 of the CPLR and, conversely, the released tortfeeasor cannot seek canttibution from the others (GOL 5 15-508 [b] and [cl). Thus, nalther contribution nor common law IndemnMcation b available to Millennium. At trial, Mlllennlum, as the non-settling party, will have the burden of sstablf8hlng Orion's fault for purposes of apportlonment w a n 1 v, McLeU, 541 F3d 158 [CA. 2 (NY) 2008D. There are specific jury instructions for that sltuation (PJI 2:275A Liability Over- Apportlonment of Fault-Effect of Release- Before Trial). The instructionsallow the jury to consider the nature and extent of the r e l e a d tortleasor's hult, though It Is no longer -or never was- a party to the action and then apportion the damages awarded ~ l s o o lv. New York Qtv T l a r - ,53 A.D.2d 391 [la 19761). Dept The payment made by the ssttllng t o m s o r Is applied (offset) against the amount of the verdict awarded against the non-settling defendant jWhalen v. Kawasaki Motors Corn., 92 N.Y.2d 288 [1908]). Another argument advanced by Mlllennlum i that GOL Q 15-7 08 [bJ imposes a s requirement that the relaasa be made In "gaod faith." Millennium seeks discovery to determlna whether the release was entered into in good fatth. Millennium argues that it has the tight to challenge the release and if It can prove bad falth, then the releaas i8 Ineffective(we Grenow Y. Ga[ratt Corn., 578 F.Supp. 890 [SDN.Y. 19831). The requlrement of good faith is to insure that "the InJuradparty will not collusively release one wrongdoer for a small amount in return for the promhe of that -Page 8 of 10- [* 10] wrongdoer to cooperate improperly with the injured person in an attempt to extract from the remaining wrongdoers mom than the equitable share of damages attdbutabla to them" Friend v. O M ,724 Mlsc.2d 151, 153 [Sup C . Sullivan Co. 19841; also t, ek v. Galapan Corn., 78 A.D.2d 134 [2"dDept 19801: T o m v. State, 67 A.D.2d 814 1 ' Dapt. 19791). 4 Assuming, without decidlng, that Mllbnnhm has standing to challenge to the release,the only allegation made by Millennium that R may have been the product of bad faith, is that the $120,000 settlement is too low. The settlement wa8 achieved by the Insurance company and Hsu, after Hau hiwitend legal action and thoro am no facts that Hsu colluded wfth Orion or even that the "low" settlement will prejudice Millennium in any way. The settlement amount does not cry out as being an unusually low amount and Mlllanniurn has failed to rafsa a triable Issue of fact that It is. Orion has met its burden of making a pdma hade showing of entttlement to Judgmentas a matter of law, tendering sufflci@nt evidence to eliminate any material iasues of fact from the caw (wlnecrrad v. New Y ~ r k Urn, Mid. CV,, 64 N.Y.2d 851, 853 ['l085]). Orion ha3 established that MIllannlum's third-party actlon for contribution and judgment over is statutorily barred by GOL 5 15-108 [b] m m8 v. New Yo& q& Tmnsrt Allthorily, 9 A.D.3d 308 [I" 20041). Orion has alao pmved that the Dept settlement and release absolves Orion from any possible Iiabilrty to plaintiff or Millennium. In opposition, Millennium has not demonstrated the existence of a triable Issue of fact (Alvarez v. Proagect H ~ g., 08 N.Y.2d 320,324[IQW]; g zu&ennan v. c& d,Jew York, 40 N.Y.2d 557 [IgSO]; w aov. Fils& 35 AD3d 184 [1* Dept 2006j). t l a Hsu's claim against Millennlurn mmalns to be tried. At trial, Millennium may defend the -Page 9 of 10- [* 11] . i caw upon the grounds that blame should be placed wholly or partially on the settling defendants and It will be given the opportunity to prove facts that raqulre the Juryto apportlon damages b e e n tt and Orion W h v. C h w Motors Corn., 93 A.D.2d r C 934 [ Dept. lB83n. The 3d party action cannot proceed and must be dismissed. 3 ' Therefore, Orlon's motlon for summary Judgmentis granted dlsrnfsslng ths third party complaint. ConcluaIon It ia hereby ORDERED Orion's motion for sumrnaryfudgmant is granted for the masons that stated; and it is further ORDERED that the clerk shall enter judgment In favor o 3d party defendant Orion f Mechanical Systems, Inc. against 3 party defendants Mlllsnnium Partners, LLC, ' Mlllennlum Managed, Inc., Mlllennlum BPC Development, LLC, Millennium Partners Management, LLC, The Board of Managers of Mlllannlum Point and The Ritr-Cartton Hotel Company, LLC, dlsmlsslng the 3 party complaint; and it i further ' s ORDERED any relief not spaclfIcally addressed Is hereby denied; and It I that further ORDERED constitutes the declsion and order of the court. thia Dated: MAR 20 New York, New York March 19,2012 % Hon. Jud' -Page I O of IO- . Glsehe, JSC

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