Bausenwein v Welsh
Annotate this CaseDecided on August 25, 2016
Supreme Court, Erie County
John H. Bausenwein, III, Plaintiff
against
Thomas J. Welsh, Individually and d/b/a TJW CUSTOM HOMES, INC. TJW CUSTOM HOMES, INC. 299 Main Street, EA, Inc. Individually and d/b/a TJW Custom Homes, Defendants. THOMAS J. WELSH, individually and d/b/a TJW CUSTOM HOMES, INC. TJW CUSTOM HOMES, INC. 299 Main Street EA, Inc., individually and d/b/a TJW Custom Homes Third-Party Plaintiffs TIMOTHY ALLISON Third-Party Defendant.
11733/2010
HOGAN WILLIG
JOHN B. LICATA, ESQUIRE, of counsel
Attorney for Plaintiff, John H. Bausenwein, III
BURGIO, KITA & CURVIN
STEVEN P. CURVIN, ESQUIRE, of counsel
Attorney for Defendant/Third-Party Defendant, Timothy Allison
BARCLAY & DAMON, LLP
VINCENT G. SACCOMANDO, ESQUIRE, of counsel
Attorney for Defendants/Third-Party Plaintiffs,
Thomas J. Welsh, Individually and d/b/a TJW Custom Homes, Inc., TJW Custom Homes, Inc., and 299 Main Street, EA, Inc. and d/b/a TJW Custom Homes
John F. O'Donnell, J.
Plaintiff, John Bausenwein III, brought suit against Timothy Allison (hereinafter, Allison) and Thomas J. Welsh, individually and d/b/a TJW Custom Homes, Inc., TJW Custom Homes, Inc. 299 Main St. EA, Inc., individually and d/b/a TJW Custom Homes (hereinafter, 299 Main) for injuries sustained at a construction site. Plaintiff claimed he was injured while working for non-party Maxxr Construction building a single family home for Allison.
There is no dispute that Allison retained 299 Main as a construction manager pursuant to a written contract, executed December 23, 2009, which designates Allison as the general contractor.
In answering Bausenwein's complaint, 299 Main brought a cross-claim against Allison for contractual and common-law indemnification. Allison brought a similar cross-claim against 299 Main, seeking contribution and indemnification.
Thereafter, both defendants, 299 Main and Allison, moved for summary judgment against Bausenwein and 299 Main moved for summary judgment on its cross-claim against Allison. The resulting decision of the trial court was appealed by both Bausenwein and 299 Main. On appeal (126 AD3d 1446), the Fourth Department held the trial court had properly granted Allison's motion for summary judgment dismissing the amended complaint against him (Labor Law §240(1) and §241(6)) because of the exemption from Labor Law liability for owners of one and two family dwellings who do not supervise or control the work, and also upheld the dismissal of the Labor Law §200 and common-law negligence claims against Allison, noting that Allison did not direct or control Bausenwein's work. This discharged plaintiff's complaint against Allison in its entirety.
Noting that questions remained concerning the ability of 299 Main to control the plaintiff's work and yet finding it had been established as a matter of law that 299 Main did not actually control the work that resulted in plaintiff's injury, the Appellate Division affirmed the denial of summary judgment to 299 Main on Bausenwein's Labor Law §240(1) and 241(6) claims and then modified the lower court's holding and dismissed the Labor Law §200 and common-law negligence claims against 299 Main.
Finally, the appellate court affirmed the decision denying defendant 299 Main's request for summary judgment on the contractual and common law indemnification cross claims brought against Allison.
Following the appellate court's decision, 299 Main, still facing Labor Law claims, filed a third-party action against Allison seeking contractual and common law indemnification. This was done at Allison's insistence and in lieu of allowing the existing cross-claim from the primary action to convert into a third-party action. Allison secured time to file an amended answer and, as relevant to this matter, included in his amended answer a second affirmative defense claiming that provisions in the construction contract prevent third-party plaintiff from claiming contractual indemnification due to 299 Main's own negligence, and counterclaimed for (1) breach of contract and (2) equitable recoupment. 299 Main, now brings this motion for summary judgment (CPLR 3212) asking the court to dismiss Allison's second affirmative defense and both counterclaims.
The counterclaims filed by Allison were not timely. Those should have been completed [*2]earlier or been itemized in the stipulation of the parties concerning the general extension of time to amend which, as written, included only affirmative defenses. That general extension, originally confirmed in correspondence between counsel, ended in the summer of 2015 when successor counsel took over for 299 Main and demanded the amended answer. That answer was promptly served and included not only the affirmative defenses anticipated by counsel's stipulation (CPLR 2014) but also two counterclaims.
Affirmative defenses (CPLR 3018(b)) and counterclaims (CPLR 3019) are indeed two separate animals and counsel's letters are very specific as to their agreement, which permits an unlimited extension only for the filing of an amended answer with affirmative defenses. Counterclaims are not discussed.
In those counterclaims, Allison alleges breach of the agreement between the parties and, in seeking equitable recoupment, asserts other claims concerning misrepresentations by 299 Main. Both are styled to assert and seek damages. The court has been offered no convincing authority to now allow Allison, who insisted that a new action be filed by his one-time co-defendant, to distinguish and reformulate his counterclaims into something else. 299 Main's motion, therefore, is granted to the extent that both counterclaims of third-party defendant Allison are dismissed.
Following the decision of the Fourth Department, the only remaining viable claims were the claims of the injured party, Bausenwein, against 299 Main under Labor Law §§240(1) and 241(6) and 299 Main's cross-claim seeking contractual and common law indemnification from Allison, which indemnification claim was later sued as this third party action.
While this motion was pending, plaintiff resolved the primary action against defendant 299 Main. Plaintiff's action against Allison had already been dismissed as noted above.
The only issue still extant is Allison's asserted affirmative defense alleging that 299 Main cannot claim contractual indemnification under the existing contract, in part, because of the construction manager's negligence in misrepresenting his qualifications, selection of subcontractors, and failure to be present on site.
Negligence, under the terms of the contract between these parties creates an exception to any possible contractual indemnification.
" The General Contractor (Allison) will indemnify and hold the Construction Manager (299 Main) harmless from and against all third party claims, damages, losses and expenses, including reasonable attorney's fees, arising out of or resulting from Construction Manager's activities (except for negligence) for the construction of the Home." (Contract, December 23, 2009)Negligence being not a thing but a relation, it appears to be an ambiguity in the contract that the negligence referred to need not run to or towards any specific person or entity. The contract having been drafted by 299 Main's principal Thomas Welsh ("and about 80 attorneys" (EBT of Welsh, 5/25/2011 p. 136)) that ambiguity is construed against him. 67 Wall St. Co. v. Franklin Natl. Bank, 37 NY2d 245.
Though it is the law of the case that 299 Main was not negligent as and towards Bausenwein, Allison is correct in noting that there is not an identity of the issues between the Labor Law §200 and common law negligence claims of Bausenwein (against 299 Main) and these claims of Allison concerning negligent misrepresentation respecting, inter alia, subcontractor selection, qualifications and supervision as articulated in the second affirmative [*3]defense. Moreover, even if Allison's current position were deemed inconsistent with their position while earlier allied with 299 Main as co-defendants, they would not be prevented from asserting inconsistent defenses. (CPLR 3014).
Third-party plaintiff's request for summary judgment dismissing Allison's second affirmative defense is denied. Questions of fact remain as to whether 299 Main was negligent as alleged.
Submit order in accordance with this memorandum.
JOHN F. O'DONNELL
DATED: August 25, 2016
Supreme Court Justice
John B. Licata
Attorney at Law
295 Main Street, Room 350
Buffalo, New York 14203
Steven P. Curvin
Attorney at Law
2150 Main Place Tower
350 Main Street
Buffalo, New York 14202
Vincent G. Saccomando
Attorney at Law
200 Delaware Avenue, Suite 1200
Buffalo, New York 14202
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