Opinion
600100/07.
Decided May 29, 2010.
Tarter Krinsky Drogan LLP, New York, New York, (Aaron Abraham), for Plaintiff.
17th 10th Associates, LLC, The Related Companies, L.P., Taconic Investment Partners LLC, Plaza Construction Corp. Urban Foundation/Engineering, LLC] Lester Schwab Katz Dwyer LLP, New York, New York, (Seth Weinstein), for Defendants.
Moretrench American Corp. Cartafalsa, Slattery, New York, New York, (Louis A. Carotenuto).
Bedroc Contracting, LLC, Law Offices of Michael E. Pressman, New York, New York, (Eric Fenyes).
Langan Engineering Environmental Services, Inc. Sedgwick, Detert, Moran Arnold, LLP, New York, New York, Gilbert Lee).
Plaintiff 437 West 16th Street, LLC moves, pursuant to CPLR 3212, for partial summary judgment holding defendants 17th and 10th Associates, LLC and The Related Companies, L.P. (together, 17th 10th) liable for the damage to plaintiff's building, including reasonable attorney's fees.
17th 10th cross-moves, pursuant to CPLR 3124 and 3126, to dismiss the complaint as against them for plaintiff's alleged failure to comply with court-ordered discovery demands or, in the alternative, to compel plaintiff to provide a supplemental bill of particulars and to compel the production of plaintiff's principal, Carol Kleinberg, or, in the alternative, to stay the action pending resolution of 17th 10th s declaratory judgment action against Seneca Insurance Company, or, in the alternative, to allow 17th 10th to amend its answer.
Defendant Moretrench American Corp., one of the subcontractors of 17th 10th, cross-moves, pursuant to CPLR 3124 and 3126, to dismiss the complaint as against it for plaintiff's alleged failure to comply with court-ordered discovery or, in the alternative, pursuant to CPLR 3025, for leave to amend its answer to assert cross claims against 17th 10th.
Defendant Bedroc Contracting, LLC, another subcontractor, moves, pursuant to CPLR 3124 and 3126, to dismiss the complaint as against it for plaintiff's alleged failure to comply with court-ordered discovery or, in the alternative, pursuant to CPLR 3025, granting it leave to amend its answer to assert cross claims against 17th 10th.
A full recitation of the underlying facts of this lawsuit appears in the affidavits in support of the above-referenced motions, and need not be reiterated here for the purpose of disposition of these motions. Briefly, plaintiff is the owner of a building located in the New York County. On or about 2004, 17th 10th began construction of a large residential development project on the adjacent property. Prior to the commencement of the actual construction, plaintiff and 17th 10th entered into a Zoning Lot Development Agreement (ZLDA), dated January 3, 2006, by which 17th 10th agreed, among other things, to the following:
"Developer [17th 10th] hereby agrees to indemnify and hold Owner [plaintiff] harmless against any claims, loss, cost or expense, including reasonable attorney's fees and disbursements, which Owner may suffer by reason of Developer's performance of the Construction Easements Work or the construction of the New Buildings (collectively, "Developer Work"). Prior to commencing any Developer Work, Developer shall (i) obtain (and during the performance thereof maintain) an insurance policy covering the foregoing contraction indemnity with a limit of not less than $10,000,000 naming [plaintiff] as an additional insured, and (ii) provide to [plaintiff] a certificate evidencing such insurance. Any damage to [plaintiff]'s Property arising out of or with respect to [17th 10th]'s Work ("Developer Damage") . . . shall be repaired, . . . at Developer's sole cost and expense, . . . it being understood and agreed that such damage may be covered by Developer's insurance. . . ."
Motion, Ex. A, Art. IV, section 4.2.B.
According to the complaint, during the course of the construction, plaintiff's building was severely damaged by: (1) vibrations caused by 17th 10th s contractors during demolition work; (2) the undermining of the foundation of plaintiff's building during the underpinning, dewatering and excavation activities of 17th 10th; (3) 17th 10th s driving of mechanical pins through the southern wall of plaintiff's building; and (4) 17th 10th s causing the deck to plaintiff's building to rot because of its driving of mechanical pins through said wall.
In its opposition, 17th 10th asserts, among other things, that plaintiff is not entitled to summary judgment for the following reasons: (1) the indemnification clause of ZLDA only applies to indemnification arising out of third-party claims, not intra-party indemnification; (2) the affidavit by Sharon Lobo (Lobo), an architect, submitted in support of plaintiff's motion, should be disregarded because Lobo does not qualify as an expert with respect to the subject matter and, in addition, her opinion is conclusory; and (3) the affidavit of Paul Kleinberg (Kleinberg), submitted in support of plaintiff's motion, is based on layperson testimony that is riddled with hearsay. 17th 10th also raised several arguments regarding the timeliness of plaintiff's summary judgment motion because discovery is not complete; however, at oral argument on April 7, 2010, discovery was stayed until resolution of the instant motions.
In support of the defendants' cross motions to dismiss the complaint based on plaintiff's alleged failure to comply with court-ordered discovery requests, the defendants have provided four discovery orders, dated December 18, 2008, February 5, 2009, February 19, 2009, and May 7, 2009, respectively; none of which orders provides for sanctions or penalties (Cross motion, Exs. K, L, M, and N.)It is defendants' contention that plaintiff provided them with masses of papers, but that those papers were not assembled in an easily-identifiable order. Plaintiff asserts that the documents were provided in the exact order and fashion in which plaintiff maintains them, which is all that plaintiff is required to do.
Lastly, the parties seek to amend their answers to assert additional defenses and claims, alleging that to allow them to do so would not result in any prejudice to any other party.
"The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case [internal quotation marks and citation omitted]." Santiago v Filstein , 35 AD3d 184 , 185-186 (1st Dept 2006). The burden then shifts to the motion's opponent to "present evidentiary facts in admissible form sufficient to raise a genuine, triable issue of fact." Mazurek v Metropolitan Museum of Art , 27 AD3d 227 , 228 (1st Dept 2006); see Zuckerman v City of New York, 49 NY2d 557, 562 (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 v Ceppos, 46 NY2d 223, 231 (1978).
7th 10th initially argues that plaintiff's motion should be rejected out-of-hand because, allegedly, plaintiff has failed to comply with 22 NYCRR 202.70, Rule 19-a, which requires that a party must follow each statement of material fact with an evidentiary citation. 17th 10th asserts that plaintiff's motion is deficient in that respect. However, plaintiff has served a supplemental statement of material facts with specific citations to the supporting evidence, and the Kleinberg affidavit submitted in support of plaintiff's motion specifically refers to the accompanying exhibits. Hence, there has been compliance with Rule 19-a.
The primary argument presented by the parties relates to the interpretation of the indemnity clause as it appears in the ZLDA. Plaintiff contends that the indemnification provision of the ZLDA is clear and unambiguous, and that any suggestion that the ZLDA did not contemplate defendant indemnifying plaintiff for intra-party damages is at odds with the plain language of the agreement, and to hold otherwise would render the remaining portions of the provision meaningless. Further, plaintiff asserts that the ZLDA provision is not in violation of the General Obligation Law (GOL) § 5-322.1, because the indemnification provision under scrutiny does not attempt to indemnify plaintiff against its own acts of negligence. In response 17th 10th argues that the agreement is not unmistakably clear, and that it violates GOL § 5-332.1, in that the ZLDA provision does not differentiate between the negligence of plaintiff and defendant.
Questions regarding the interpretation of the terms of a contract provision are questions of law to be decided by the court. Van Wagner Advertising Corp. v S M Enterprises, 67 NY2d 186 (1986).
"It is well settled that a contract is to be construed in accordance with the parties' intent, which is generally discerned from the four corners of the document itself. Consequently, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms' [citation omitted]."
MDR Capital Partners LP v Presstek, Inc. , 12 NY3d 640 , 645 (2009).
Here, the indemnification provision of the ZLDA "was an enforceable writing, containing sufficient detail and signed by the party to be charged. Even if this agreement purported to indemnify [plaintiff] for [its] own negligence, it would be enforceable under General Obligations Law § 5-322.1 because [it] was in fact not negligent . . . [internal citation omitted]." Picchione v Sweet Construction Corp. , 60 AD3d 510 , 513 (1st Dept 2009).
17th 10th rests its argument against the indemnification provision allowing for indemnification of intra-party claims on Hooper Associates, Ltd. v AGS Computers, Inc. ( 74 NY2d 487, 491-492), in which the Court, interpreting an indemnification provision of a contract, stated:
"Words in a contract are to be construed to achieve the apparent purpose of the parties. Although the words might seem to admit of a larger sense, yet they should be restrained to the particular occasion and to the particular object which the parties had in view.' This is particularly true with indemnity contracts. When a party is under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed. The promise should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding facts and circumstances."
Applying Hooper, the indemnification provision of the ZLDA, unlike the clause under scrutiny in the Hooper case, incorporates any damages suffered by plaintiff caused by the acts of 17th 10th, and/or its agents.
"[T]he first sentence of the subject clause cannot reasonably be interpreted as limited to third-party claims, particularly in view of the second portion of that clause, which clearly pertains to [17th 10th s method of indemnifying plaintiff for 17th 10th's negligence]." Sagittarius Broadcasting Corp. v Evergreen Media Corp., 243 AD2d 325, 326 (1st Dept 1997). Any other reading of the provision would be contrary to its clear terms.
In addition, the indemnification provision also provides that 17th 10th will indemnify plaintiff for reasonable attorney's fees, and, as discussed above, those fees are not limited to defending against or prosecuting claims brought against third parties. Hooper Associates, Ltd. v AGS Computers, Inc., 71 NY2d 487, supra. Had the parties desired to limit the indemnification provision only to claims against third parties, they could have so specified in the agreement. This is especially true "where . . . the instrument was negotiated between sophisticated, counseled . . . people negotiating at arm's length [internal quotation marks and citations omitted]." TAG 380, LLC v ComMet 380, Inc. , 10 NY3d 507 , 513 (2008); Logiudice v Logiudice , 67 AD3d 544 (1st Dept 2009); Etzion v Etzion , 62 AD3d 646 (2d Dept 2009).
Also unpersuasive is the argument that plaintiff's motion for partial summary judgment on liability is premature because discovery is not yet complete.
It is clear that the indemnification provision of the ZLDA includes 17th 10th s obligation to indemnify plaintiff for intra-party claims, including reasonable attorney's fees. However, this presupposes that plaintiff has met its initial burden of evidencing a prima facie entitlement to judgment.
According to all of the defendants, plaintiff has failed to meet this burden because the bases for its position rest with affidavits of Lobo and Kleinberg, who, defendants assert, are incapable of providing such evidentiary support. Defendants argue that Lobo, as a licensed architect, is incapable of providing expert testimony regarding the underpinning of structures. I disagree.
Pursuant to the Administrative Code of the City of New York (Administrative Code) § 27-724, which concerns the underpinning of structures,
"[t]he details of underpinning, cofferdams, caissons, bracing, or other constructions required for the support of adjacent properties or buildings shall be shown on the plans or prepared in the form of shop or detail drawings and shall be approved by the architect or engineer who prepared the plans [emphasis added]."
Further, "[s]ection 27-129 (a) of the Administrative Code of the City of New York states, in part, that, in order to maintain the exterior walls and appurtenances of a building, examinations shall be periodically conducted thereof by, or under the supervision of, a licensed architect or licensed professional engineer. In addition, Education Law § 7301 authorizes an architect to render services requiring the application of art, science and aesthetics of design and construction of buildings, including designs, construction documents, construction management and the administration of construction contracts [emphasis added]."
Edgewater Apartments, Inc. v Flynn, 216 AD2d 53, 54 (1st Dept 1995).
Moreover, Lobo states that she bases her opinions on personal visits to the site, personal inspection of the building, and documents produced by defendants. Certainly based on this, Lobo is qualified to give an expert opinion on structural underpinning. ( Adams v Genie Industries, Inc. , 53 AD3d 415 (1st Dept 2008), Edgewater Apartments, Inc. v Flynn, 216 AD2d 53, supra.)
With respect to the Kleinberg affidavit, defendants contend that it contains opinions that may only be proffered by an expert, which Kleinberg admittedly is not, and includes hearsay reports which the court may not consider. The Kleinberg affidavit represents a sworn statement by a layperson of a factual nature, not expert opinion. Kleinberg is the owner of the building, and as such, visited the building every day, attended meetings with 17th 10th, and received records regarding meetings with contractors and consultants. Kleinberg, as a layperson, testified as to his personal observation of cracks in the walls of the building, rotten wood, and the shaking of the structure. It is a general rule of law that when matters are within the observation and experience of ordinary persons, expert testimony is unnecessary. Meiselman v Crown Heights Hospital, 285 NY 389 (1941); Wright v State of New York, 31 AD2d 421 (4th Dept 1969); Mosher v State of New York, 191 Misc 804 (Ct Cl 1948), affd 275 App Div 891 (4th Dept 1949).
In addition, several of the records, which defendants claim are hearsay, are asserted by Kleinberg to be business records, which are admissible pursuant to CPLR 4518 ( see Buckley v J.A. Jones/GMO , 38 AD3d 461 [1st Dept 2007]), are reports prepared for 17th 10th by its own agents, which constitute admissible admissions of a party opponent ( Satra Ltd. v Coca-Cola Co., 252 AD2d 389 [1st Dept 1998]), or are public records issued by the Department of Buildings.
Based on the foregoing, both the Lobo and Kleinberg affidavits are admissible evidence in support of plaintiff's motion for partial summary judgment. Consequently, plaintiff has met its burden of establishing a prima facie entitlement to judgment on liability. Defendants' argument that their expert disagrees with Lobo and opines that the excavation work did not cause any damage to the building does not prevent a grant of plaintiff's motion. Proof of the indemnitor's negligence is not a prerequisite to summary judgment on the issue of the applicability of an indemnification provision. Urbina v 26 Court Street Associates, LLC, 46 AD3d 268 (1st Dept 2007); Keena v Gucci Shops, Inc., 300 AD2d 82 (1st Dept 2002).
Turning to the motions to dismiss the complaint based on plaintiff's alleged failure to comply with discovery orders.
CPLR 3126 provides that "the court may make such orders with regard to the failure or refusal as are just," which may include precluding the disobedient party from supporting or opposing claims or from producing evidence in motions or at trial. (e.g., Jaffe v Hubbard, 299 AD2d 395, 396 (2d Dept 2002).
Here, none of the discovery orders, themselves, provided for any sanctions against a party who failed to comply with discovery demands. Further, the argument is, not that plaintiff has failed to comply, but that plaintiff has overburdened defendants by providing too much material, much of which defendants claim may be non-responsive, although defendants claim that plaintiff has failed to produce its construction costs summary. At oral argument, plaintiff asserted that the documents were provided to defendants in the exact manner in which they were kept as plaintiff's business records, and defendants have provided no evidence to rebut this assertion. Consequently, it cannot be concluded that plaintiff has failed to fulfill its discovery obligations.
With respect to the construction costs summary, that document relates to issue of damages, which is not yet ripe and so is not relevant to here. Accordingly, that portion of defendants' motions seeking dismissal of complaint, based on plaintiff's alleged violations of discovery orders, is denied.
Similarly, that portion of defendants' motions seeking to amend their answers is denied.
The defendants have failed to provide any evidentiary proof in support of their motions ( American Theatre for the Performing Arts, Inc. v Consolidated Credit Corp. , 45 AD3d 506, 506 (1st Dept 2007). Non-Linear Trading Co. v Braddis Associates, Inc., 243 AD2d 107 [1st Dept 1998]). The underlying facts for the proposed amendments have been available since the start of the litigation, yet the parties have provided no excuses as to why those defenses and claims were not previously stated ( Konrad v 136 East 64th Street Corp., 246 AD2d 324 [1st Dept 1998]).
Finally, the request to stay the instant proceeding pending the outcome of 17th 10th's suit against its insurer is denied; since this declaratory judgment action has no bearing on the outcome of the instant litigation.
Accordingly, it is hereby
ORDERED that plaintiff's motion for partial summary judgment is granted as follows:
Defendants 17th and 10th Associates, LLC and The Related Companies, L.P. are liable to plaintiff for vibration-related, underpinning-related and foundation-related damage to plaintiff's building, as well as for masonry and roof damage to plaintiff's building, and the issue of the amount of a judgment to be entered remains to be determined; and it is further
ORDERED that defendants 17th and 10th Associates, LLC's, The Related Companies, L.P.'s, Moretrench American Corp.'s and Bedroc Contracting, LLC's cross motions are all denied; and it is further
ORDERED that the remainder of the action shall continue.