Port Parties, LTD v Merchandise Mart Props., Inc.

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Port Parties, LTD v Merchandise Mart Props., Inc. 2011 NY Slip Op 32880(U) September 30, 2011 Supreme Court, New York County Docket Number: 113117/2010 Judge: Paul Wooten 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. ANNEDON 1013112011 [* 1] SUPREME COURT OF THE: STATE OF NEW YORF PRESENT: - NEW YORK COUNTY PqRT HON. PAUL W,OOTE,N 7 Justlce PQRT PARTIES, LTD., Plaintiff, I3 11712010 I (YDEX NO. -ag 3 inst- 002 MOTIQW SEQ. NO. I 1 MERCHANDISE MbRT PROPE?itlPS, INC. and THE UNCONVENTION OENTER, FILED pefendants. OCT 3 1 2011 nd crwsmoticm The fallQwin$ pepers numbered were read on this moth by Unaorwrifign Center to dismiqs #he complalnt puwu Port Patties for summary jud$mlent pursuant to CPLR 3212 Notice gf Motlqnl Order tp $how $ a w e rinq Affldavlts - -Affldavlts - , E Exhibits ( M m o ) Reply Affidavlts - Exhibits (Memo) CrossPMotiou: W Yes n NO I Defendant Merchandise Mart PrQperties, lnc. ( Merchgndjse Mad ) moves, pursuant to CPLR 321 I(a)(l), (5) and ( 7 ) , tp diqnliss the complaint asserkd agaiqst it ih its entirety, with prejudice. Rlgintiff Port Parties, Ltd. ( plaintiff ) cross-move?, pwrswaht to CPLR 3212, for declaring that Merchandise Mart defend and indemnify it in an summat y judgment: (I) underlying personal injury action; (2) granting it summary judgment an its third cause of action fqr breach of contract; and (3) ordering an immediate inquest to detdrrnine the extent of its damages caused by Merchandise Mart s failure to indemnify it ie the upderlying personal injury action. THe Un-conventidn Center (Center) cross-moves, pursuant to CPLR 3211(a)(l), (5) anc. ( 7 ) ,to dismiss the complaint asserted as against it in its entirety, with prejudke. BACKGROUND In the complaint, plaintiff is seeking a judgment dealaring that Merchandise Mart is [* 2] obligated to defend and indemnify it in an underlying personal injury action entitled Helen Bubul v Port Properties, Ltd., The Un-convention Center, Merchandise Mart Properties, Inc., and Vornado Realty Trust, Inc., index no.: 103407/07, currently pending in the Supreme Court, New York County, based on contractual indemnification, commqn-law indemqification, cpntribution and breaqh of contract, as well a3 seekiqg common-law indemnification and contribution as against Center (Motion exhibit A). In February of 2004, Merchandise Mart entered into a license agreement with Center to utilize certgin sections of Pier 94 at the New York City Pgssenger Ship Terminal to conduct a cmsurner/trade show (Motiop exhibit B). At the tinw thqt the agreement wgs emcuted, Center had been granted permission by the City of New York to improve certain Sections of Pier 94 for trade and public shows. (Id.). The license agreement provided, in pertinent park, the following: [Center] shall provide during tl ie operetiflcJ hour5 07 the Event: ilir conditioning, heating, permanent overhead tighting and clean restropm faGiIities. [Mer ndise Mart] shall pcqvide, at [Merchandise Mgrtl s exp , by direct contract with such providers of,services 3r1dmaterials as [ceniqt] shall designate and not qthenuise, the, followiq: * * * -I (d) General Cleaning andjanitorial skrvices with respect to the Authorized Space ... .I The licensing agreement also required Merchandise Mart tb procure a general liability insurance policy naming plaintiff, among gthers, as an additional insured (Motion exhibit B). Certificates of Insurance were issued to Merchandise Mart indicating that plaintiff was an additional insured on the insurqnce pdicy (Motion exhibit E). The court notes that no copy of an insurance policy to this effect has been provided with this motion. The license agreement also contained the following indemnification provision: - [Merchandise Mart] shall indemnify, defend and hold harmless [Center] and the Additional Insured named in Part A, Paragraph 6 of this Agreement, and their respective-officers, emplqyees and representatives (collectively, t h e !Indemnities ) from and Page 2 pf 12 [* 3] against all claims, demands, liabilities, damages, costs, losses and expenses (including attorneys fees) arising from or related to any personal injury or death (whether they be employees of [Center] or [Mgrchandise Mart] or a third party), and any loss of Qrdamage to property caused by, arising from Qr in cpnnection with (a) the use or occupanay of the Authorized $pace by [Merchandise Mart], or any other person gr entity using or occupying the c Authori2ed Spdce with [Merchandise Martl s consent, (b) the use and o ~ c u p q ~ ofyany other portion of the Un-Convention Center of Pier 94 by [Merchandise Mart], or any other person or eritity ushg w c h portisn (s) of ths Un-Convention Center of Pier 94 with it+agn$ent, or (c) any aqt qr omission of [Merchandise Mgrt], its officers, members, employbes, agents, guests, inyitees, reprqsefltatives, contractors, exhibitors, custornys and other persons who are doing business with [Merchbdise Mak] or who are at the Pier 94 andlor the Authorized Spade, with [Merchandise Martl s consent. (Motion, Ex. E.). On March 13, 2004, Helen Bybul ( Bubul ), the plaintiff in the underlying personal injury I action, Bllegedly slipped and fell1 on a puddle of water on the flow of the ladies restropm at Pier I t 94. Plaintiff failed to answer Bubul s complaint, and a default judgment was entered against it Plaintiff moved to vacate the default judgment, and the matter was sent to a Special Referee to hear and report orl the issue of service of process on plaintiff. The Special Referee found that service was proper, and recommended that the default judgment not be vacated. This determiwtion was appealed by plaintiff, but the Special Referee s determination was , upheld by the Appellate Division on April 14, 201 1 (83 ADgd 517 [ l s t Dept 201 11). No appeal has been takeb frqm this deqi sion. Plaintiff instituted the present action on October 6, 201 0. Merchandise Mart conteqds that it does not have a contractual duty to defend or indemnify plgintiff in the underlying personal injury action because the indemnification provision appearing in the licensing agreement is void, as a matter of law, because it attempts to indemnify plaintiff for its own negligence. Further, Merctlandisg Mart argues that plaintiff is precluded from assertirrg claims for common-law indemnification and contribution because as a result of the default judgment entered against it, plaintiff is deemed to have admitted 100% liability in the underlying personal injury action. Lastly, Merchandise Mart avers that plaintiff s breach of contract claims must be dismissed because it took all reasonable steps to procure the Page3bf 12 [* 4] I required insurance. The Court notes that Merchandise Mart never claims that it did, in fact, acquire the requisite insurance. In its cross-motion, Center qdopts the arguments posited by Merchandise Mart in the main motion, and further asserts that plaintiff would be unable to establish sufficient notice of a I ' dmgerous oqhditioq that wquld render Center or Merchandise Matt liable ,tg Fubul, since I plgintiff was the pqrty reSponsible for maintaining the restrooms and Bubul Slipped on a puddle of wdter. Richard Troy DUrst (Durst), the vice-president and Show director for Merchandise Mart fsr the traqe.shd\ry at which BUbul r/a$ qllegedly injured, was dqposed in this matter and l h I 1 I I ne1 for the trad8 show, plaintiff provided all maintenance and janitorial pers I including bathroom matrgns who re rssponsible for cleaning the bathrogm$ (burst EBT, at 49-51, 68-89, 71-72, 104-106), Plaintiff billed Merchandise Mart for these bathroom matron servkes (Motiqn exhibit 0). In its cross-motion, blaintiff maintain9 that the indernnifi provision in tHe licensing I hot void and Ilmenfdr 616, becaush it is cgqplb an insuranqe piocurement I reQver,accQrdingto ntiff, the type of mainte bat it performed, in cleaning restrooms, is nQtthe type of rnqintenance contemplated by the General ObligatiQns Law ("GOL"). Plaintiff also contends that its cause of action for breach of oontract should not be dismissed because Merchandise Mart has failed to provide evidence that it acquired the general cQmmercialliability inswranoe mandated by the license agreement that would name plaintiff as an additional insyred. In opposition to plaintiff's cross-motion, Merchandise Mart argues that the type of maintenance services plaintiff provided are included within GOL and, as such, the contractual indemnification provision is void. Merchandise Mart also contends that plaintiff is not entitled to ~ ~ maintain its cause-of action f w breach ,of cantract because it faileil to-perform its contractual Page4of 12 [* 5] obligations, to wit, maintaining a clean bathroom. In opposition to Center s cross-motion, and in further support of its own motion, plaintiff again argues that the maintenance services it provided are not within the contemplation of I GQL, and it further cantends thaf Cepter s cross-motion should be denied because Center has defaulted in not answeripg the covplaint. DISCUSSION CPLR 321 I(a) states that: I [a] party may m w e for judgment dismissing one or more causes ilinst him on the groupd thot:(l) a defense is ass YO P entary evidence; or * * * the Cayse of action may not be maintained because of itratiQn and awwd, collateral estoppel, discharge in kyyptcy, it$Aqcy Olr gther disability< t of ng Party, ne, or statute of ment, release, res judicata, statutb of frauds; or * * + I (7) the pleading falls to state a caus e of action ... . 4s qtqteql in Lqdenbyrg Thalmgnn & Co., Iqc. v Tim + Amuserver)t$, Inc. (275 AD2d 243, he eourt sl task is-to Ldqterrrrine only wtl accepting them as true and adcording /$ m* r the fasts as-qlleged, ff every possible favorable ihference, fit within any cagnizable legal theory (Lean v Martinez, 84 NY2d 83, 87-88 [1994]). Didmissal pursuant t9 CPLR 721 1 (a) (I)warranted only if the documentary evidence is Submitted conclusively establishes a defense to the asserted claims as 8 matter of law (id. at 88). J To defeat 9 pre-answer motion to dismiss pursuant to CPLR 321 1, the opposing party need only assert facts of qrl evidentiary nature which fit within any cognizable legal theory (see Bonvie 8, Co. Fashions, Inc. v Bankers Trust Co., 262 AD2d 188 [ I s t Dept 19991). Further, if any question of fact exists with respect to the meaning and intent of the contract in question, based on the documentary evidence supplied to the motion court, a dismissal pursuant to I . I CPLR-3211is precluded (see Khayyam v Doyle, 231 AD2d 475 [Ist Dept-19961). Page5of 12 [* 6] Center s cross-motion to dismiss the complaint as asserted against it is granted. The Court is unpersuaded by plaintiffs argument that Center s motion is untimely because Center has failed to answer the complaint. CPLR 321 1(f) exteqds the time to plead until 10 days after I notice of entry of the order determining the pre-answer motion to dismiss made pursuant to CPLR 321 1(a). Since Center s motion is a pre-answet motion to dismiss, it could not make that motion had it previously respgrrded. Further, plaintiff hgs failed to assert any argument in OppQsition to Center s motion except to say that discovety has yet to take place. However, as will be discussed below, plaintiffs default cqnstitutes an admission of full liability for Bubul s injuries avd, Since thb only causes of action asserted against Center are for common4qw indemnification arrd contribution, no basis &xist$ to hold Center liable for plaintiff s own negligence. AS a consequence of the foregoing, Center s cross-motion to dismiss the complaint asserted as against it is granted. The proponent of a summary judgment motion must make a prima faiib showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issue3 of fact f r m the case (Santiago v Filsfein, 35 AD3d 184, 185-186 [Ist Dept 200,6] [intkrnal quotation marks and citatim omitted]). The burden then shifts to the motion s opponent to present evidentiary fqcts in admissible form sufficient to raige a genuine, triable issue of fact (Mazurek v Metropolitan Museum of Art, 27 AD3d 227, 228 [ l s t Dept 20061; see Zuckerman v City of New York, 49 NY2d 557, 662 [1980]). If there is any doubt as to the existence of a triable fact, the motion for summary judgment must be denied (see Rotuba Extruders, Inc. v Ceppos, 46 NY2d 223, 231 [1978]. That branch of Metchandise Mart s mOtion seeking to dismiss plaintiff s causes of action asserted as against it for contractual and common-law defense, indemnification and/or contribution is granted. .. . GOL sectian 5.323, Agreements exempting building service or maintenance. Page 6 of 12 [* 7] contractors from liability for negligence void and unenforceable, states: Every covenant, agreement or understanding in or in conneation with or collateral to any contract or agreement affecting real property made or entered into, whereby or whereunder a contractor exempts himself from liability far hjurigs to person or property caused by or resulting from the negligence of such contr-aotor, his agent, Servants or employe&., ds a result of work performed or services rendered in connectipn with the Construction, maintenance and repair of real prgperty or its appurtenances, shall be deemed to be void a$ agaihst public polioy and wholly unenforceable. Although plaintiff argues that the maintenance $ervices that it provided are not covered by GOL,the Court disagrees. Not only have such services been determined to be covered by GOL (see Hughey v RHM-88, L LC, 77 AD3d 520 [lst Oept 2010]), but all of the cases cited by plaintiff a$ presumptive support for its contention (Colnaghi, U.S.A., Ltd. v Jewelers Protection Services, Lid., 81 NY2d 821 [1993]; Florence v Merchants Central Alarm Company, Inc., 51 NY2d 793 [ I 9801) concern burglar alarms, not building maintenance. The main thrust of plaintiffs argument with respect to the indemnification provision lies in its inferprbtqtion of the decision in Sabfamaria v 7125 PGrk Avenue Cor,. (238 AD2d 259, I 260 [ l s t Dept 199?]), which stdted: . I [ilndemnification agreements, when coupled with a provision bllocating the risk of liability to a third party through the use of insutanGe, are valid and enforceable and do not violate General Qbligations Law [sections], which invalidgte agreements exempting the promisee from liability for damages for injuries resulting from the promisee s own negligence. However, in Santamaria, the same provision providing for broad contractual indemnification also included the statement of limitation that the indemnificatiov was to be in addition to all other required insurance and indemnifications (Id. at 259). In this fashion, that indemnification provision was saved from violating GOL in the same manner that similar provisions that include the phrase to the fullest extent permitted by law, have been held to pass SQC,muster, in that the indemnification is thereby limited to permissible standards (see Page 7 of 12 [* 8] Brooks v Judlau Contracting, Inc., 11 NY3d 204 [2008]; Balladgres v Southgate Owners Corp., 40 AD3d 667 [2d Dept 20071). In the instant case, the contractual indemnification provision did not include a requirement that Merchandise Mart acquire insurance; the insurance requirement appeared elsewhere in the agreement and, therefore, cannot be construed as a limitation on Merchandise Mart s ihdemnification of plaintiff for plaintiff s own negligence. As the Court stated in Cavanaugh v 4518 Assooiatw (9 ADSd 14 [Is1 Dept 2004]), which distinguished and criticized the Santamaria case, Santamakia blurred the Clear distinction between insurhnce procurement provisions and indemnifiaation clauses. [A] contract to procure insurance is clearly distinct from and treated differently [frdm] an agreement to indemnify (Id. at 20 [internal quotation marks and citation ornittckd]). [Tlhe existence of insurance would not save an indemnification clause otherwise unenforceable under [GOL]. The proviso that the section shall nQt qffect the validity of any insurqnce contract . . . merely insures that the contr;actor will not lose insurance coverage I simply because the insurance coverage may extend to liihility sought tg be imposed under an unenforceable agreement (Quevedo v city of, yew York, 5$ NY2d 150, 156 [1982]). The Court also notes that plaintiff attempts to bolster its position by citing to an earlier decision of this Court, Williams v Jeffrey Management Co., 29 Misc 3d 1214A, 2010 NY Slip Op 51827[U] [Sup Ct, NY County 20101, which plaintiff characterizes as a situation in which an insurance procurement provision saved a broad indemnification clause. However, as indicated in that decision, the indemnification provision specifically exempted any loss or damages resulting from or growing out of any act or omission of the promisee and, hence, falls squarely within the acceptable limitation provisions noted above (Id. at 5). In addition, the Court notes that this case involved a contract to maintain premises free of water, rubbish and so forth, . . . similar to the .instant matter wherein plaintiff wasto maintain and keep clean the restrooms. Page 8 of 12 I [* 9] As a quence of the foregoing, th Court finds that the contractual rovision requiring Merchandise Mart to defend and indemnify plaintiff is void 3nd unenforceable, pursuant to the provisions of GOL, and, therefore, plaintiff is not entitled to contractual indemnificatioe or defense costs. Further, plaintiff is not entitled to common-law defense, indemnificatipn pr contribution. In the case at bar, by its own default, which was affirmed by the Appellate Division, plaintiff has qdrnitted to liability for Bubul s injuries and, therefore, would not be entitled to any indemnification or defense from Merchandise Mart, [D]efaqlters are deemgd tp have qdmitted all factual allegations Gontained in the complaint and all reasbnable inferences that flow from them (Woodsdn v Mendon Leasing Corp., 100 NY2d 62, 71 [2003]; see Taylor v Brook Towers LCC, 73 AD3d 535 [Ist Dept 20101; AI Fayed v Bar&, 39 AD3d 371 [ l s t Dept 20071). It is well settled that the right of common-law indemnification belongs to parties determined to be vicariously lidble without proof of any negligence or active fault Qn their part. .., [wherea party is held liable at least partially becahse Of its ldivrl negligerrce, contribution against other Culpable tOrlfeaslorslis the only available remedy (Siege/ v lyeh Plan Exoel f e d l t y Trust, Inc., 84 AD3d 1702, 1703 [4th Dept 261 11 [internal citOtibns amitted]; Glasser v M. Fortunoff of Westbury Corp,, 71 NY2d 643 [I 9881; Braze// v Wells Fargo Home hodgage, Inc., 42 AP3d 409 [ l s t Dept 20071). Since the default judgment entered against Port Parlies acts as a determination of liability with respect to Bubul s injuries, Port Parties has b w n found at least partially liable and, hence, may not seek indemnification from Merchandise Mart. In addition, and contrary to Merchandise Mart s and CentQr s contentions, whereas a default judgment in the underlying personal injury actio0 does not affect Port Parties ability to seek indemnification or cqntribution from other responsible parties (see Brodeur v Hayes, 18 AD3d 979 [3d Dept 2005]), in order to sustain a third-party cause of action for contribution, a third-party plaintiff is required to show that the third-party defendant owed it a duty of Page 9 of 12 [* 10] reasonable care independent of its contractual obligations, or that a duty was owed to the plaintiffs as injured parties and that a breach of that duty contributed to the alleged injuries (Siege/ v New Plan Excel Realty Trust, lnc., 84 AD3d at 1703 [interml (y,mtation marks and citgtion omitted]). Viewing tho allegatioqs in the complaint in a light most fawrable t9 Port Panies, Port l ed tq state a muse of action for contribution. The dnly allegation appearing in the complqivt regardirlg contl i6ption states: If the Plaintiff in the Bubul Action hereby sustained The exact sgme allegations are asserted a$ 9gdinSt Center, and these allggations fail to state a aause of action for contribution. Based on the fqegping, the p chahclise Matt3 motion seeking to diSmiss 9s of aCtiw fQr qoptractual 1 rhmon-lqw ihdemnification lis I I liff q>motibndeekirlg a declaration that e of action, aqd the pd. I defendants ar$ required to defend and indemnify it is denied. However, that branch of Merchand ise Mart s motion seeking to dismiss the cause of aGtion for breach of contract for failing to obtain general liability insurance naming plaintiff as an additional i k u r e d is denied, and that portion of plaintiff s motion seeking summary judgment on its first cause of actioh for a declaration that Merchandisb Mart failed to name it as an additional I insured is granted. Merchandise Mart consistently states that it used its best efforts to obtain the mandated insurance, but it never says that it actually acquired such insurance. The only evidence of . . .. _. Merchandise Mart s alleged compliance .with this cgfltrg$&al provision is its inclusion of Page 10 of 12 [* 11] Certificates pf Insprance as part pf its motion papers. However, Certificates of Insurance are not evidence of the acquisition of insurance, but are gnly evidence of an entity's intent to prQvidecoverage, and, therefore, by implication, Merchandise Mart has admitted its breach in this respect (see Moleon v Kreiqler Borg Florman General Construction Co., 30d AD2d 337 [ l s t I 1 Dept 20031). CONCLUSION Based on the foregsing, it is hareby ORDERED that the branch of defendant Merchandiqe Mart Prgpertie$, Irlc.'S motion n for common-law'and contractud I $ granted and those cause l it is further, OR61ER'ED that the branch of defendant Merchandise Mart Properties, Inc's motion 1 seeking to disrniss the cause of action for breach of contract and declwgtbry judgment asserted t is denied: and it is furt lhc+is direded to ORDERED that tvlerchandise Mart Prb \ ' I s.order with natice cogplziint withiq 20 days further, ORDERED that defendant f he 'Un-Cwvention Center, Inc.'s crdss-motion to dismiss the complaint asserted as against it is grqntbd and the cQrqBlaint is dismissed 3s against said defendant, with msts and disbursements to said defendant as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment acdordingly in favar of saia defendant; and it is further, ORDERED that the action is severed and continued as against the remaining defendant; and it is further, r - - . . - ORDERED thg\ the branch_-of_plaintiff's cro - . . r P ~ I 7 - Page11 of 12 on seeking surrrnary judgment as . . " _ " " ~ [* 12] against Merchandise Mart Properties, Inc. on its cause of action for breach of contract is granted, but is in all other respects denied; and it is further, ORDERED that the remaining parties are directed to appear for a status collference in Part 7,60 Centre Street, Room 34lon December 14, 201 1 at 11 A.M. This aonstitutes the Decisidn and Order of the Court. Dated: Paul Woofen NEW YCNK COUNTY CLERK'SOFFICE u FINAL DISPOSITION m appropriqte: u DO.NOT POST Check one: Check If , ... J.S.C. NON-FINAL DIsPOSITION , - . .. . . . . . . . . . .. . - Page 12 of 12

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