Court Finds That Contract Provision Requiring Indemnity for Claims “Arising Out Of” the Work is Triggered Where Third-Party Defendant Returns to Work Site to Resolve a Contract Dispute

In a decision dated November 24, 2020, the Honorable Frederick D.R. Sampson of Queens County Supreme Court awarded our clients Urban Foundation (“Urban”) summary judgment dismissing the plaintiff’s Labor Law §§200 and 241(6) claims against it, and our clients 33 Bond GC LLC (“Bond GC”), 33 Bond St. LLC (“Bond LLC”) and TF Cornerstone (“Cornerstone”) summary judgment dismissing the plaintiff’s Labor Law §200 claim against them. The plaintiff’s only surviving claim was his Labor Law §241(6) claim against 33 Bond GC, Bond LLC, and Cornerstone.  The Court also granted our motion for summary judgment on their behalf against the third-party defendant, Gramercy Group, Inc. (“Gramercy”), for contractual indemnification.  As part of a construction project, 33 Bond GC hired Gramercy to demolish a parking garage.  The contract required Gramercy to leave behind a certain amount of debris.  Gramercy finished its demolition work, but 33 Bond GC and Gramercy disputed whether Gramercy had left the correct amount of debris at the site.  On the day of the accident, representatives of 33 Bond GC and Gramercy went to the site to resolve the dispute.  The plaintiff’s accident occurred when, while walking the site, he was struck by an excavator operated by Urban.  The contractual indemnity provision in 33 Bond GC’s contract with Gramercy required it to indemnify the third-party plaintiffs for all claims which “arise out of” or are “connected with . . . the performance of the work.”  Gramercy contended that because it had finished its demolition work the accident did not arise out of its work.  We argued that Gramercy’s interpretation of the indemnity provision was overly narrow, and that under controlling New York law, its indemnity obligation was triggered because at the time of the accident the plaintiff was employed by Gramercy and he was performing work for Gramercy that 33 Bond GC had hired it to perform.  Therefore, the plaintiff’s accident “arose out of” and was “connected with” the performance of Gramercy’s work, thereby triggering its indemnity obligation.  The trial court agreed and granted 33 Bond GC, Bond LLC and Cornerstone summary judgment on their third-party claims against Gramercy for contractual indemnification.   

Joseph Cianciulli v. Urban Foundation/Engineering, LLC, et al., Index No. 707630/2020 (Queens Co. Sup. Ct. Nov. 24, 2020)  

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This post was written by Sander Rothchild