St. Paul Travelers v Adco Elec. Corp. (2008 NY Slip Op 51662(U))

St. Paul Travelers v Adco Elec. Corp.

2008 NY Slip Op 51662(U) [20 Misc 3d 1129(A)]

Decided on July 30, 2008

Supreme Court, New York County

Edmead, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Defendant Adco Electrical Corp. ("defendant") moves for an order pursuant to CPLR 3212, granting summary judgment dismissing the complaint of plaintiff St. Paul Travelers, as subrogee of Henegan Construction ("plaintiff").

Plaintiff cross moves for an order pursuant to CPLR 3212 (1) granting plaintiff summary judgment as against defendant in the amount of $137,358.00, plus interest thereon, computed from June 10, 2003; or alternatively (2) entering judgment on liability in favor of plaintiff as against defendant, and directing that a hearing shall be conducted to determine the amount of the judgment to be awarded to plaintiff, and additionally (3) judgment for attorneys fees to be awarded to plaintiff as against defendant as called for by the applicable subcontract.

The Complaint asserts two causes of action. The first cause of action is for negligence . The second cause of action is for breach of contract. Plaintiff's Bill of Particulars details the second cause of action as follows: (1) damage to property; and (2) pursuant to the subcontractor indemnification agreement, defendant was to indemnify and hold harmless plaintiff's subrogor for damages arising from the performance of defendant's work.

As to the specific damage, the Bill of Particulars states "A new transformer, scheduled for installation by defendant Adco Electrical, was damaged when copper connectors/channeling were removed from the unit" (¶ 4). At the time of the damage the transformer was on the M1 level which is between the fourth and fifth floor; it is a mechanical floor.

The subcontract entered into between plaintiff's subrogor Henegan and defendant (the "Subcontract") provides in pertinent part as follows:

Gerald Pugliese ("Pugliese") is a general foreman for Adco and has been so for eleven years. For two years prior to that, he was a foreman (p. 6). Adco's project of replacing transformers began in the early part of 2003 and ended October or November 2003 (p. 10). He became aware of the damage when it was getting close to the time to install the transformer; it was noticed that a couple of bars were missing (p. 15). The person who discovered the damage was not an Adco employee (p. 16).

Adco accepted delivery for the transformer. A different company, Alco Rigging, placed the transformer on the M1 level (p. 16).Henegan and the Deutsche Bank made the decision to store the transformer on the M1 level (p. 17). That decision was made at a meeting at which Pugliese was present (p. 18). When the transformer was taken to the M1 level, it had to be taken apart in pieces and rigged up a shaft. Adco did this work. Pugliese was present when the subject transformer was taken apart. On the M1 level, the transformer was reassembled (p. 20). There was a period of three to four months between the transformer being moved up to M1 and the realization of the damage (p. 21). Adco and the rigging company were responsible for the disassembling and reassembling work of the transformers (p. 23). The subject transformer was partially disassembled prior to being rigged up to the M1 level by Adco and the rigging company [*3](p. 50). The disassembly took place on the loading dock (p. 52).

This action for property damage arises out of an incident that allegedly occurred at some time between May 9, 2003 and June 5, 2003 (at which time the vandalism was discovered), whereby plaintiff claims that a transformer purchased from the defendant was vandalized while being stored at the M1 level and awaiting installation at the Deutsche Bank building located at 60 Wall Street, New York, New York (the "Deutsche Bank"). The transformer was being stored on a locked floor access to which access was controlled by Deutsche Bank. It had not yet been installed when vandals opened the case and removed a number of parts.

Henegan Construction ("Henegan") was the general contractor retained by Deutsche Bank to renovate the premises. Henegan retained defendant as an electrical subcontractor hired to install a transformer that had been purchased by Henegan directly from Olsun Electric Corporation (presumably the manufacturer). Defendant's Subcontract contained a standard indemnification provision indemnifying Henegan for any damage "arising out of or resulting from the performance of subcontractor's work." The provision covered damage to property "other than the work itself."

Defendant had no responsibility for security under its contract as Deutsche Bank employees or subcontractors handled this function. Also, there has never been anyone arrested or even suspected of the vandalism to the transformers, and the Deutsche Bank security logs and cameras provided no substantial leads. Deutsche Bank made a claim against Henegan under their contract. And Henegan's insurance carrier, plaintiff, paid the claim and now seeks recovery from defendant under right of subrogation. It is unclear whether Deutsche Bank was paid as an additional insured under Henegan's policy or pursuant to an indemnification agreement.

The mere fact that an accident occurs does not mean that a defendant is liable unless the plaintiff can show how the defendant's breach of some duty caused or contributed to the incident that allegedly caused plaintiff's injuries. As there is no proof whatsoever, in admissible form, that plaintiff's injuries were caused as a result of any action or inaction on the part of any employees or agents of defendant, defendant is entitled to summary judgment as a matter of law.

In this case, defendant had no ability to control the area where the incident is alleged to have taken place. Furthermore, security for the area was the responsibility of the building owner Deutsche Bank. Defendant's contractual responsibilities were merely to rig and install a transformer that was purchased by Henegan from the manufacturer. Consequently, defendant owed no duty to plaintiff to secure the area where the incident occurred.

Further, plaintiff cannot show an act or omission of defendant that was a proximate cause of the alleged damages. Clearly the action of an unknown third party in vandalizing the transformer, and not any action of defendant is the proximate cause of these damages. Thus, even if defendant were otherwise found negligent, the chain of liability has been broken.

Plaintiff concedes that no determination of negligence can be made, based upon available information. However, defendant's moving papers are silent with regard to the allegations contained in plaintiff's second cause of action, which arises from the provisions of a Subcontract entered into between plaintiff's subrogor Henegan and defendant. Plaintiff is entitled to the entry of judgment based upon the second cause of action in plaintiff's complaint. [*4]

The Subcontract clearly provides that Adco was responsible to indemnify plaintiff's subrogor for all property damages. The intent is clear and is coupled with an insurance clause that reiterates the point. Defendant failed to indemnify Henegan, which was forced to seek recovery under its own insurance policy, though by the terms of the Subcontract, plaintiff's subrogor should have been reimbursed by defendant or defendant's insurance.

The Subcontract contains a provision that includes indemnification for attorneys fees. Consequently, plaintiff seeks an additional judgment beyond the amount of property damages sustained by Henegan.

Plaintiff as a subrogating carrier has stepped into the shoes of its insured and, as such, is entitled to seek indemnification from third parties who would otherwise be liable to reimburse its insured.

Plaintiff admits in paragraph 4 of its cross motion that the cause of action based upon negligence cannot be sustained and proceeds solely on the theory of breach of contract. Plaintiff's assertion that the Subcontract provides that defendant indemnify the plaintiff for all property damage is in error. The indemnification provision does not, in fact, apply because plaintiff has not set forth and the record does not contain any evidence that the damages allegedly sustained by the plaintiff arose out of or resulted from the performance of defendant's work as specified in the indemnification provision. Defendant was to rig and install the transformer which had been purchased by the plaintiff directly from the manufacturer. However, the damage did not occur during rigging or installation, but while it was being stored. It is undisputed that the transformer was damaged by vandalism and that defendant had no duty to provide security. The transformer in question was owned by Deutsche Bank, stored in a building owned by Deutsche Bank and under the protection of a security company hired by Deutsche Bank while waiting for Consolidated Edison to turn off the power so it could be installed. Clearly, the cause of the damage was the willful act of a third party and/or negligent security at the premises, neither of which arises out of the performance of defendant's work of rigging or installing the transformer.

Furthermore, the indemnification provision specifically excludes any damage to the work itself. Thus, to the extent that the court finds the mere presence of the transformer at the building would bring this case within the scope of the indemnification provision (which contention is specifically denied), the indemnification provision should be found inapplicable as it would constitute damage only to the work itself.

The defendant provides no legal support for the position that the subject loss did not arise from the defendant's performance of its work under the Subcontract, but only from an act of vandalism. The defense does not deny that it received delivery of the transformer, performed the rigging for the transformer or arranged for the rigging, that it was responsible for connecting and installing the transformer, as well as disassembly and assembly of the transformer. Consequently, contrary to the defense's arguments, the damage to the transformer resulted from the defendant's performance of its work under the Subcontract and the damages sustained are not the defendant's work itself. [*5]

Also, the opposition papers are silent with regard to the insurance provisions of the Subcontract that required defendant to provide coverage to the plaintiff and the building owner, Deutsche Bank. Thus, the defendant ignores a second breach of contract claim.

It is well settled that where a defendant is the proponent of a motion for summary judgment, the defendant must establish that the "cause of action . . . has no merit" (CPLR § 3212[b]), sufficient to warrant the court as a matter of law to direct judgment in his or her favor (Bush v St. Claire's Hosp., 82 NY2d 738, 739 [1993]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Wright v National Amusements, Inc., 2003 NY Slip Op. 51390(U) [Sup Ct New York County, Oct. 21, 2003]). This standard requires that the proponent of a motion for summary judgment make a prima facie showing of entitlement to judgment as a matter of law, by advancing sufficient "evidentiary proof in admissible form" to demonstrate the absence of any material issues of fact (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; Silverman v Perlbinder, 307 AD2d 230, 762 NYS2d 386 [1st Dept 2003]; Thomas v Holzberg, 300 AD2d 10, 11, 751 NYS2d 433, 434 [1st Dept 2002] [defendant not entitled to summary judgment where he failed to produce admissible evidence demonstrating that no triable issue of fact exists as to whether plaintiff would have been successful in the underlying negligence action]). Thus, the motion must be supported "by affidavit [from a person having knowledge of the facts], by a copy of the pleadings and by other available proof, such as depositions" (CPLR § 3212[b]). A party can prove a prima facie entitlement to summary judgment through the affirmation of its attorney based upon documentary evidence (Zuckerman, supra ; Prudential Securities Inc. v Rovello, 262 AD2d 172[1st Dept 1999]).

Alternatively, to defeat a motion for summary judgment, the opposing party must show facts sufficient to require a trial of any issue of fact (CPLR §3212[b]). Thus, where the proponent of the motion makes a prima facie showing of entitlement to summary judgment, the burden shifts to the party opposing the motion to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action, or to tender an acceptable excuse for his or her failure to do so (Vermette v Kenworth Truck Co., 68 NY2d 714, 717 [1986]; Zuckerman v City of New York, supra , 49 NY2d at 560, 562; Forrest v Jewish Guild for the Blind, 309 AD2d 546, 765 NYS2d 326 [1st Dept 2003]). Like the proponent of the motion, the party opposing the motion must set forth evidentiary proof in admissible form in support of his or her claim that material triable issues of fact exist (Zuckerman, supra at 562). Opponent "must assemble and lay bare [its] affirmative proof to demonstrate that genuine issues of fact exist" and "the issue must be shown to be real, not feigned since a sham or frivolous issue will not preclude summary relief" (Kornfeld v NRX Technologies, Inc., 93 AD2d 772 [1st Dept 1983], affd, 62 NY2d 686 [1984]).

Plaintiff concedes that no determination of negligence can be made, based upon available information, as against the defendant. Therefore the motion of defendant Adco Electrical Corp. for an order pursuant to CPLR 3212, granting summary judgment dismissing the complaint of plaintiff St. Paul Travelers, as subrogee of Henegan is granted to the extent that plaintiff's first cause of action is dismissed. [*6]

With respect to the indemnification provision in the Subcontract, "It is a court's task to enforce a clear and complete written agreement according to the plain meaning of its terms, without looking to extrinsic evidence to create ambiguities not present on the face of the document" (150 Broadway NY Assoc., L.P. v Bodner, 14 AD3d 1, 6 [2004]). "A contract is ambiguous if the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings'" (Feldman v National Westminster Bank, 303 AD2d 271 [2003], lv denied 100 NY2d 505 [2003]). However, mere assertion by a party that contract language means something other than what is clear when read in conjunction with the whole contract is not enough to create an ambiguity sufficient to raise a triable issue of fact (Ruttenberg v Davidge Data Sys. Corp., 215 AD2d 191, 193 [1995]).

Plaintiff cannot establish that the damage to property occurred or arose out of or resulting from the performance of Adco's work. Although it cannot be said without equivocation that the damage did not occur during the disassembly on the dock by Adco and the rigging company, plaintiff has never argued or suggested that the loss occurred at that juncture. It is conceded by all that it is completely unknown when the damage occurred and/or by whom. It would be total speculation for a jury to even consider the possibility of where, when and by whom the damage occurred.

The analysis and conclusion of plaintiff herein - that because the defense took delivery, and performed disassembly on the loading dock that the damage to the transformer resulted from the defendant's performance of its work under the Subcontract - is equally faulty and speculative. Unsupported, conclusory statements such as this are insufficient as a matter of law to create a triable issue of fact ( Maiorano v Price Chopper Operating Co., Inc., 221 AD2d 698, 699 [3d Dept 1995] ["Mere conclusions based upon surmise, conjecture, speculation or assertions are without probative value" in opposing a motion for summary judgment]; see also Black v Loomis, 236 AD2d 338 [1st Dept 1997] ).

As such, the indemnification clause in the Subcontract has not triggered in favor of plaintiff as against defendant.

To the degree plaintiff argues that the breach of contract cause of action included a breach of the requirement to provide coverage to plaintiff and the building owner, this purported aspect of the second cause of action is not articulated in either the Complaint or the Bill of Particulars.

ORDERED that the application of defendant Adco Electrical Corp., for an order pursuant to CPLR 3212, granting summary judgment dismissing the complaint of plaintiff St. Paul Travelers, as subrogee of Henegan Construction, is granted and the Clerk of the Court is directed to enter judgment accordingly; and it is further

ORDERED that the application of plaintiff St Paul Travelers, for an order pursuant to CPLR 3212 (1) granting plaintiff summary judgment as against defendant in the amount of $137,358.00, plus interest thereon, computed from June 10, 2003; or alternatively (2) entering judgment on liability in favor of plaintiff as against defendant, and directing that a hearing shall be conducted to determine the amount of the judgment to be awarded to plaintiff, and additionally (3) judgment for attorneys fees to be awarded to plaintiff as against defendant as [*7]called for by the applicable subcontract, is denied in its entirety; and it is further

ORDERED that counsel for defendant shall serve a copy of this order with notice of entry within twenty days of entry on counsel for plaintiff.