Board of Mgrs. of Manhattan Place Condominium v  616 First Ave., LLC  2019 NY Slip Op 30216(U) January 25, 2019  Supreme Court, New York County Docket Number: 652240/17
Judge: Frank P. Nervo is an excellent primer on the law of contribution and indemnity.  In this property construction setting, there is none available.

“The underlying action herein concerns a building (the building) which is owned by the plaintiff Manhattan Place Condominium (the condominium), and located at 630 First Avenue in the County, City and State of New York. See notice of motion, exhibit A (complaint), if 12. The co-plaintiff Board of Managers of Manhattan Place Condominium (the board) is the condominium’s board of managers. Id., if 1. The underlying complaint alleges that the building suffered structural damage as a result of negligent excavation and dewatering work that was performed on the adjacent property in 2014. Id., if 11. It also”alleges that defendant Peterson Geotechnical Construction LLC (Peterson) was the dewatering subcontractor retained by the condominium’s general contractors, defendants JDS Construction Group LLC and JDS Development LLC {together, JDS). Id., iii! 26-27. Peterson’s third-party complaint alleges that Moretrench designed the dewatering system that Peterson used in its work on the building. Id.; exhibit B (third-party complaint),  11-13. The original complaint does not mention Moretrench at all, however; and instead alleges that co-defendant RA Consultants, LLC (RA Consultants) designed the dewatering system. Id., exhibit A (complaint), if 25. ”

“First, Moretrench argues that “Peterson cannot assert a claim for common-law indemnification … because it is being sued for active negligence, not for vicarious liability.” See notice of motion Kauffman affirmation, 16-19. To support its argument, Moretrench cites the decision of the Appellate Division, First Department, in Chatham Towers, Inc. v Castle Restoration & Constr., Inc. (151 AD3d 419 [I st Dept 2017]), which held that:

“Common-law indemnification may be pursued by parties who have been held vicariously liable for the party that actually caused the negligence that injured the plaintiff. Here, however, there is no common-law indemnification claim because [plaintiff] sought recovery from [defendant/third-party plaintiff] because of the latter’s alleged wrongdoing-. breach of contract-and not vicariously because of any negligence on the part of [third-party defendant].”  151 AD3d at 420 (internal citations omitted). In response, Peterson cites the First Department’s holding in 17 Vista Fee Assoc. v Teachers Ins. & Annuity Assn. of Am. (259 AD2d 75 [1st Dept 1999]) that:

“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. In the classic case, implied indemnity
permits one held vicariously liable solely on account of the negligence of another
to shift the entire burden of the loss to the actual wrongdoer.
“Implied indemnification has permitted a vicariously liable building owner and
contractor to shift all liability to a subcontractor whose negligence actually caused
the loss. However, “a party who has itself actually participated to some degree in
the wrongdoing cannot receive the benefit of the doctrine [of indemnification].”
Thus, to be entitled to indemnification, the owner or contractor seeking indemnity
must have delegated exclusive responsibility for the duties giving rise to the loss
to the party from whom indemnification is sought.”  259 AD2d at 80 (internal citations omitted). Peterson then argues that “in the instant case …  Moretrench was solely responsible for the design of the dewatering system … [and] plaintiffs seek damages allegedly due, in part, to the improper design of the dewatering system.” See mem of law in opposition, at 4. Moretrench replies that the 17 Vista Fee Assoc. holding is factually inapposite, however, because: 1) paragraph 25 of the underlying complaint alleges that RA Consultants designed the dewatering system that as used at the building; 2) the underlyingcomplaint “never mentions Moretrench or alleges that Peterson designed the dewatering system”; and 3) paragraph 27 of the underlying complaint alleges that Peterson “performed the dewatering and related work” in a negligent fashion. See reply mem, at 3-5. After reviewing the underlying complaint, the court agrees that it contains no allegations whatsoever regarding Moretrench, or that the exclusive responsibility for designing the dewatering system had been delegated to Peterson. Thus, the court also agrees that Peterson does not stand in the same shoes as the defendant/third-party plaintiff in 17 Vista Fee Assoc., because the underlying complaint alleges that Peterson “actually participated to some degree in the wrongdoing” by itself performing
negligent dewatering work. As a result, the court rejects Peterson’s first opposition argument
and concludes that New York law does not permit Peterson to avail itself of the doctrine of
implied indemnification. Consequently, so much of Peterson’s third-party claim as alleges
“indemnification” is not legally viable.

Next, Moretrench argues that, because “plaintiffs are seeking purely economic loss
damages against Peterson … Peterson’s contribution claim against Moretrench should be
dismissed.” See notice of motion Kauffman affirmation, 20-21. In its reply papers,
Moretrench noted the First Department’s decision in Children’s Corner Learning Ctr. v A.
Miranda Contr. Corp. (64 AD3d 18 [lst Dept 2009]) holding that “[w]here … the underlying
claim seeks purely economic damages, a claim for common-law contribution is not available,”
because “it is well established that purely economic loss resulting from a breach of contract does
not constitute injury to property.” 64 AD3d at 323 (internal citations and quotation marks
omitted). Moretrench’smotion had noted that so much of Peterson’s third-party claim as alleges
contribution is defective because the underlying complaint had only alleged that plaintiffs  sustained “economic losses,”

 

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

 

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.