Sigismondi v J.T. Magen Constr. Co., Inc.

[*1] Sigismondi v J.T. Magen Constr. Co., Inc. 2010 NY Slip Op 52125(U) [29 Misc 3d 1232(A)] Decided on December 8, 2010 Supreme Court, Richmond County McMahon, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 8, 2010
Supreme Court, Richmond County

Gary Sigismondi, Plaintiff,

against

J.T. Magen Construction Company, Inc., FLOORCOM, INC., EXCEPTIONAL FLOORING, INC., MILLWRIGHT WOODWORK AND INSTALLERS, INC., MARTIN THOMAS CONTRACTING CORP., PARK AVENUE, L.P., and RUDIN MANAGEMENT CO., INC.,



102557/2005

Judith N. McMahon, J.

This action was commenced on August 31, 2005, for the injuries sustained after the plaintiff, Gary Sigismondi, tripped and fell over a portion of rolled-up carpet on October 18, 2004. The accident occurred at defendant 345 Park Avenue's premises [hereinafter "345 Park"]. Defendant Rudin Management is the managing agent of the property for 345 Park. It is undisputed that at the time of the accident defendant Deutsche Bank (co-defendant 345 Park's tenant in the building) was renovating several floors of their office space. In connection with the renovations Deutsche Bank hired defendant J.T. Magen Construction Company, Inc., [hereinafter "JT Magen"] as the general contractor for the project. JT Magen then subcontracted with defendant Floorcom, Inc., [hereinafter "Floorcom"] to install carpeting. Floorcom thereafter subcontracted with defendant Exceptional Flooring, Inc., [hereinafter "Exceptional"] to perform the carpet installation, as a union company.

Trial commenced and a verdict was reached on October 15, 2009, in favor of the plaintiff. The jury apportioned fault against defendant JT Magen, in the amount of 28%, and against defendant Exceptional Flooring in the amount of 72%. All other parties were found to be without liability. Presently, several defendants are each moving for reimbursement of their respective attorneys fees and disbursements, pursuant to, inter alia, contractual indemnification [*2]clauses. Initially the Court notes that the contention that these motions are untimely, is unfounded.This Court directed the parties to move for the requested relief by motion following the trial and the motions are therefore timely.

Defendants/Second-Third Party Plaintiffs 345 Park/Rudin Management's

Motion [019]

It is undisputed that tenant, Deutsche Bank, entered into a contract, dated December 8, 2003, with general contractor JT Magen, to perform the renovations on their location at defendant 345 Park/Rudin Management's premises. In connection with the renovations, defendant JT Magen also entered into an indemnity agreement on February 17, 2004, with the owner and managing agent, 345 Park/Rudin. The indemnity agreement provides, in part,

For good and valuable consideration, and in consideration of Owner and Rudin granting Contractor named below permission to perform work at the Property, Contractor, named below, for itself and those working on its behalf, covenants and agrees to defend, protect, indemnify and hold harmless Owner, Rudin and each of their respective employees, agents, officers, directors, members, partners, and invitees (Owner, Rudin and the aforementioned other parties, not including Contractor or those working on Contractor's behalf, are collectively hereinafter know as the "Indemnitees") from and against each and every claim, demand or cause of action against any or all of the Indemnitees with respect to any and all liability, judgment, cost, expense (including, but not limited to, reasonable attorneys' fees), damage or loss in connection therewith on account of any bodily and/or personal injury or death or property damage caused by, arising out of, or in any way incidental to or in connection with the performance of any or all work to be performed by, or on behalf of, the Contractor.

Defendant JT Magen thereafter entered into a purchase order agreement with co-defendant Floorcom for installation of the flooring. That agreement provides, in part,

To the fullest extent provided by Law, Subcontractor will indemnify and hold harmless, J.T. Magen & Company, Inc. and Owner, their officers, directors, agents and employees from and against any and all claims, suits, liens, judgments, damages, losses and expenses including reasonable legal fees and costs, arising in whole or in part and in any manner from the acts, omissions, breach or default of Subcontractor, its officers, directors, agents, employees and subcontractors, in connection with the performance of any work by Subcontractor pursuant to this Purchase Order and/or a related Proceed Order. Subcontractor will defend and bear all costs of defending any actions or proceedings brought against J.T. Magen & Company, Inc. and/or Owner, their officers, directors, agents and employees, arising in whole or in part out of any such acts, omissions, breach or default.

Defendant 345 Park/Rudin contends that pursuant to the Indemnity Agreement with JT Magen and the Purchase Order Agreement, as third party beneficiary, with Floorcom, it is entitled to reimbursement of its attorneys fees and disbursements expended in this action. Defendants JT Magen, Floorcom and Exception Flooring, in opposition, have all requested a hearing to determine the reasonableness of the amount of fees requested by 345 Park/Rudin Management.

It is well settled that "[a] contract that provides for indemnification will be enforced as long as the intent to assume such a role is sufficiently clear and unambiguous' (Bradley v. Earl B. Feiden, Inc., 8 NY3d 265, 274-75 [2007]). Here, the indemnity agreement between 345 [*3]Park/Rudin is very clear and unambiguous. It provides that JT Magen must indemnify the Owner for any and all claims arising out of the work done by it on the premises; including reasonable attorneys fees, disbursements and any subcontractors negligence. As a result, the motion by defendant 345 Park/Rudin requesting attorneys fees and other expenses, pursuant to contract with JT Magen, is hereby granted.

Defendants JT Magen, Floorcom and Exceptional Flooring's contention that 345 Park/Rudin's attorneys fees warrant a hearing is justified. Defendant 345 Park/Rudin's attorneys fees were estimated to this court at $121,116.47. Defendant JT Magen's are estimated (by Floorcom because they were not totaled by JT Magen) at $84,621.23; and defendant Deutsche Bank's attorneys fees are estimated at $35,957.60. As represented by the parties, a settlement of this issue is being discussed in an attempt to resolve it without a hearing. However, at this juncture, the Court will order a hearing be scheduled, on this limited issue, no later than 60 days after the date of this Decision and Order by a JHO/Special Referee. If the dispute is not resolved prior to the date set by the JHO/Special Referee for the hearing, the hearing is to commence as scheduled. No adjournments of the matter are permitted by any party.

Although upon practical application of this Decision and Order the issue becomes moot it is important to note that this Court finds that 345 Park/Rudin is also entitled to reimbursement from Floorcom as a third-party beneficiary. In order to establish rights as an intended third-party beneficiary, the contractual non-party must establish "(1) the existence of a valid and binding contract between [the] other parties, (2) that the contract was intended for [its] benefit and (3) that the benefit to [it] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate him if the benefit is lost" (Cal. Pub. Emples. Ret. Sys. v. Shearman & Sterling, 95 NY2d 427, 434-435 [2000]).

Here, there is a valid and binding contract/purchase order agreement between JT Magen and Floorcom to perform the work at the premises. In addition, the purchase order agreement, more specifically, the indemnification provision provides that Floorcom will "indemnify and hold harmless, JT Magen & Company, Inc. and Owner" (emphasis added). Defendant Floorcom, in opposition, contends that the failure of JT Magen to define "owner" in the Purchase Order Agreement is fatal to its claim to pass on liability and the third-party beneficiary argument by 345 Park/Rudin. This Court finds that argument unavailing. The cases cited by defendant Floorcom are clearly distinguishable from the instant case where the owner of the premises was, as testified to at trial and all throughout the lengthy litigation involved in this case, co-defendant 345 Park/Rudin. There is now, and never has been, as evidenced by this Courts intimate familiarity with the case and the lack of an objection at any time, any ambiguity that 345 Park/Rudin is the owner of the premises at issue. Lastly, the indemnification provision of the contract is clear that the contracting parties, JT Magen and Floorcom, understood that compensation to the Owner would be required if the provision was activated. As a result, the portion of 345 Park/Rudin's motion which requested relief as a third-party beneficiary to the purchase order agreement between JT Magen and Floorcom is hereby granted.

Defendant JT Magen's Motions [020 and 022]

Defendant, general contractor, JT Magen was found 28% liable for plaintiff's injuries pursuant to the jury verdict rendered on October 15, 2009. At this juncture, JT Magen seeks reimbursement for any attorneys fees/expenses which it must pay co-defendants 345 Park/Rudin [*4]and Deutsche Bank and also, for reimbursement of its attorneys fees and expenses spent in defense of this action. JT Magen seeks reimbursement from defendant Floorcom pursuant to the Purchase Order Agreement entered into between the parties which provides as previously indicated, that Subcontractor, Floorcom, will indemnify Contractor, JT Magen, for all claims which includes reasonable attorneys fees. The Court notes that JT Magen acknowledges its responsibility to pay 28% of the fees (as the jury apportioned its liability at that amount) and "merely seeks recovery of those fees commensurate with the percentage of liability for which is was found free from responsibility"[FN1]

As previously indicated "[a] contract that provides for indemnification will be enforced as long as the intent to assume such a role is sufficiently clear and unambiguous' (Bradley v. Earl B. Feiden, Inc., 8 NY3d 265, 274-75 [2007]). Further, with respect to general contractors, the Court of Appeals has found, "that the statute does permit a partially negligent general contractor to seek contractual indemnification from its subcontractor so long as the indemnification provision does not purport to indemnify the general contractor for its own negligence" (Brooks v. Judlau Contracting, Inc., 11 NY3d 204, 207 [2008]). Here, JT Magen, the general contractor was found 28% negligent, pursuant to the jury verdict, and is seeking contractual indemnification by Floorcom for: (1) reimbursement of any attorneys fees/disbursements it must pay to co-defendants 345 Park/Rudin and Deutsche Bank; and (2) any attorneys fees/disbursements it spent which are beyond its 28% liability.

This Court finds that the indemnity provision of the Purchase Order Agreement was activated when Floorcom's subcontractor, Exceptional Flooring, was found 72% liable. The provision specifically provided that Floorcom was to indemnify JT Magen for "all expenses including reasonable legal fees and costs, arising in whole or in part and in any manner from the acts, omissions, breach or default of the Subcontractor, its officers, . . . and subcontractors". And further, that "Subcontractor will defend and bear all costs of defending any actions or proceedings brought against JT Magen & Company, Inc., and/or Owner, their officers, directors, agents and employees, arising in whole or in part out of any such acts".

Herein, this Court has found JT Magen responsible for the reasonable attorneys fees and disbursements of co-defendant and owner 345 Park/Rudin, and for co-defendant and tenant, Deutsche Bank. As a result of the purchase order agreement between JT Magen and Floorcom, those fees paid to the owner and tenant by JT Magen shall be reimbursed by defendant Floorcom[FN2]. Floorcom is also responsible for the reasonable attorneys fees and disbursements spent by JT Magen only above the 28% liability apportioned by the jury. As a result, the motion by JT Magen (020) seeking: (1) reimbursement of any fees and expenses owed by JT Magen & Company to 345 Park Avenue LP and Rudin Management and any other indemnitee, and (b) reimbursement of those fees and expenses incurred by JT Magen Construction Company in the defense of the subject action, and the motion (022) seeking: (1) reimbursement of any fees and expenses owed by JT Magen & Company to Deutsche Bank, are both hereby granted. [*5]

III.Second-Third Party Defendant Deutsche Bank's Motion [021]

Deutsche Bank, as defendant 345 Park/Rudin's tenant, contracted with defendant JT Magen on December 8, 2003, for renovations of its premises. Pursuant to the contract, the indemnification portion provides

Each party shall indemnify and hold harmless the other party, its affiliates, directors, officers, employees and agents (collectively, the "indemnified party") against and from any and all suits, actions, proceedings at law or in equity, claims (groundless or otherwise), liabilities, losses, damages, judgments, payments, deficiencies, settlements, penalties, fines, fees, economic losses, costs and expenses, including legal fees and disbursements of counsel selected by the indemnified party, whether incurred in a third party action or in an action brought by the indemnified party against the indemnifying party to enforce its rights under this Section 22 (collectively "Liability")(including death) to any person or damage to the property (tangible or intangible) or interest of any person, firm or corporation to the extent that such injury or damage shall have been occasioned by, shall have resulted from or shall in any way be attributed to the willful or negligent acts or omissions of the indemnifying party, its affiliates, officers, directors, employees or agents in any way related to this agreement or the performance of the indemnifying party's obligations under this agreement, provided that the indemnifying party shall not be responsible for Liabilities resulting directly from the gross negligence or willful misconduct of the indemnified party.

As was previously noted, "[a] contract that provides for indemnification will be enforced as long as the intent to assume such a role is sufficiently clear and unambiguous' (Bradley v. Earl B. Feiden, Inc., 8 NY3d 265, 274-75 [2007]). The contract between Deutsche Bank and JT Magen specifically provided for indemnification by JT Magen, including all reasonable attorneys fee and disbursements. The contract is sufficiently clear and unambiguous and will be enforced as such. Therefore, Deutsche Bank's motion (021) for "[a]n order granting Second Third-Party Defendant, Deutsche Bank's motion to recover attorneys fees and other expenses from defendant, JT Magen Construction Company, Inc., pursuant to a written contract between the parties" is hereby granted.

IV.Defendant Floorcom's Motion [Motion 023]

Defendant Floorcom's motion first opposes those of co-defendants 345 Park/Rudin, JT Magen and Deutsche Bank requesting reimbursement; secondly, requests a hearing on the reasonableness of the attorneys fees by defendant 345 Park/Rudin as allegedly excessive; and lastly, requests that any fees owed by it shall be paid, pursuant to common-law indemnification, by its subcontractor and co-defendant, Exceptional Flooring.

This Court herein has denied the portion of the motion which opposes reimbursement by defendants 345 Park/Rudin, JT Magen and Deutsche Bank. The Court granted the portion of Floorcom's motion which requested a hearing as to the reasonableness of the attorneys fees and disbursements requested by defendant 345 Park/Rudin.

With respect to the portion of Floorcom's motion seeking common-law indemnification from their subcontractor, defendant Exceptional Flooring, the motion is hereby granted.

On the merits, the principle of common law, or implied indemnification, permits one who has been compelled to pay for the wrong of another to recover from the wrongdoer the damages it paid to the injured party. The party seeking indemnification 'must have delegated exclusive [*6]responsibility for the duties giving rise to the loss to the party from whom indemnification is sought,' and must not have committed actual wrongdoing itself (Baron v. Grant, 48 AD3d 608, 609 [2d Dept., 2008]).

This Court, in deciding several post-trial motions from the bench following completion of the trial, granted JT Magen's indemnification motion as against Floorcom and Floorcom, not being found liable, was granted contractual indemnification against Exceptional[FN3]. As a result, any liabilities owned by Floorcom, pursuant to their contract with JT Magen, shall be reimbursed by defendant Exceptional pursuant to this Court's post trial decision (Bradley v. Earl B. Feiden, Inc., 8 NY3d 265, 274 [2007]; Baron v. Grant, 48 AD3d at 609). In defendant Floorcom's current request for common-law indemnification, here, the jury found no negligence on the part of Floorcom and found its subcontractor Exceptional Flooring 72% liable. Consequently, Exceptional Flooring is the actual wrongdoer and Floorcom is entitled to seek indemnification for the fees and expenses it is now required to pay to co-defendants. As deduced at trial, Exceptional Flooring had exclusive responsibility to install the carpeting which was found to have caused the plaintiff's injuries. Pursuant to the jury verdict, Floorcom was free from any liability, as a result, Floorcom is entitled to seek common-law indemnification for the fees it is required to pay. Therefore, the portion of Floorcom's motion which seeks reimbursement, by common-law indemnification, for the fees it is required to pay to co-defendants 345 Park/Rudin, JT Magen and Deutsche Bank, from Exceptional Flooring is hereby granted.

V.Defendant Exceptional Flooring's Motion [Motion 024]

Defendant Exceptional Flooring's motion requests that all previous applications be denied and for a hearing as to the reasonableness of fees requested by 345 Park/Rudin. All this relief has been previously address, and pursuant to this Decision and Order the motion is denied, in part, and granted with respect to the request for a hearing.

Accordingly, it is

ORDERED that motion 019 by defendant/second third party plaintiff 345 Park Avenue, L.P. and Rudin Management, Co., Inc. is hereby granted with respect to reimbursement of its attorneys fees and disbursements by defendant J.T. Magen Construction Company, and it is further

ORDERED that the reasonableness of defendant 345 Park Avenue L.P. and Rudin Management, Co, Inc.'s requested attorneys fees and disbursements is hereby refereed to a Judicial Hearing Officer/Special Referee for a hearing no later than 60 days after the date of this Decision and Order, and it is further

ORDERED that the motion 020 by defendant J.T. Magen Construction Company, Inc., is hereby granted, and it is further

ORDERED that the motion 021 by Second-Third party defendant Deutsche Bank is [*7]hereby granted, and it is further

ORDERED that the motion 022 by defendant J.T. Magen Construction Company, Inc. is hereby granted, and it is further,

ORDERED that the motion 023 by defendant/third-party plaintiff Floorcom is hereby granted only with respect to seeking common-law indemnification against Exceptional Flooring and its request for a hearing, and it is further

ORDERED that the motion 024 by defendant Exceptional Flooring is hereby denied, and it is further,

ORDERED that any and all other requests for relief by any party are hereby denied, and it is further,

ORDERED that the Clerk enter judgment accordingly.

Dated: December 8, 2010E N T E R, Footnotes

Footnote 1:Defendant JT Magen's Affirmation in Opposition to Cross-Motion by Exceptional Flooring, Inc.

Footnote 2:The Court notes that Floorcom's motion for indemnification from its subcontractor Exceptional Flooring will be discussed later in this decision.

Footnote 3:This Court stated "As to Mr. Kaye's record dealing with indemnification, the indemnification is decided as follows: The indemnification between JT Magen and Floorcom flows to Floorcom, Floorcom being found not culpable in this particular action, and based on its contract with Exceptional, it flows to Exceptional, and that's it".