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ConstructionRisk.com Report
http://www.ConstructionRisk.com
Vol. 6, No. 1, Jan 04
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Inside This Issue:
-
*
No Liability under New York Labor Law for Project Owner and Lender where
Worker's
Injuries
Attributed Solely to His Own Fault
*
Multi-Million
Dollar Claim Invalidated by Court Due to Contractor’s Failure to Give
Timely Notice
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ARTICLE
#1
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No
Liability Under New York Labor Law for Project Owner and Lender where Worker's
Injuries Attributed Solely to his Own Fault
By:
J. Kent Holland, Esq.
The
strict liability imposed by Section 240 of the New Labor Law appears to
have been somewhat clarified in the decision of Rupert
Blake v. Neighborhood Housing Services of New York City, Inc.,
2003 NY Slip Opinion
19690, Court of Appeals (Dec. 2003). In
this case, the plaintiff was an individual that operated his own
contracting company. He was
working alone on a renovation job at a two-family house when the ladder
on which he was standing collapsed, resulting in the plaintiff breaking
his ankle.
The
plaintiff filed suit against Neighborhood Housing Services of New York
City (NHS), a not-for-profit lender, which had provided low-interest
financing to facilitate the project. NHS
had nothing to do with construction decisions or supervision.
Its role was limited to
dispatching a rehabilitation specialist to the premises to assess the
scope of the work and the amount of the loan. NHS prepared a work
estimate and gave the homeowner a list of contractors, from which she
chose plaintiff.
Plaintiff contended that NHS was strictly liable under New York
Labor Law, section 240(1) as a statutory agent under the section for
having failed to provide a proper workplace and mandated safety
equipment. At trail, a jury
found against the plaintiff on the facts presented.
The trial court denied plaintiff's motion to vacate the jury's
verdict and direct one in his favor. The Appellate Division affirmed,
stating that "a factual issue was posed as to whether plaintiff's
injury was caused by some inadequacy of the ladder or was solely
attributable to the manner in which plaintiff used the ladder" and
that there were no grounds to disturb the jury's factual determinations.
On appeal, the plaintiff argued Labor Law § 240 (1) is a strict (or
absolute) liability statute and that the court should have set aside the
jury's verdict.
The question for the court was whether a plaintiff who was
injured while using a ladder may prevail in a Labor Law § 240 (1)
action even when a jury finds that the ladder was so constructed and
operated as to give him proper protection and he was the sole cause of
his injury.
The court stated that in deciding the appeal, it is necessary to
address the concept of strict (or absolute) liability and the predicates
for its application under Labor Law § 240 (1). The court explained that
it has in numerous previous decisions “steadfastly held that
contributory negligence will not exonerate a defendant who has violated
the statute and proximately caused a plaintiff's injury.”
But the Court states that: “At no time, however, did the Court
or the Legislature ever suggest that a defendant should be treated as an
insurer after having furnished a safe workplace. The point of Labor Law
§ 240 (1) is to compel contractors and owners to comply with the law,
not to penalize them when they have done so.”
Plaintiff asserts, in essence, that despite the jury's findings
he is entitled to recover because Labor Law § 240 (1) provides for
strict (or absolute) liability. In addressing this contention, we note
that the words strict or absolute liability do not appear in Labor Law
§ 240 (1) or any of its predecessors. Indeed, it was the Court — and
not the Legislature — that began to use this terminology in 1923
(under an earlier version of the statute [see L 1921, ch 50]),
holding that employers had an "absolute duty" to furnish safe
scaffolding and would be liable when they failed to do so and injury
resulted.”
The
Court states that it has always stressed two points in applying the
doctrine of strict (or absolute) liability under section 240 (1) of the
Labor Law. “First, that liability is contingent on a statutory
violation and proximate cause…. [and] second, that when those elements
are established, contributory negligence cannot defeat the plaintiff's
claim.” It is imperative, therefore, to recognize that the phrase
"strict (or absolute) liability" in the Labor Law § 240 (1)
context is different from the use of the term elsewhere, says the Court.
Thus, says the Court, “an accident alone does not establish a
Labor Law § 240 (1) violation or causation.”
The court rejected the plaintiff’s argument that “he is
entitled to recover in the face of a record that shows no violation and
reveals that he was entirely responsible for his own injuries,”
concluding that to impose liability for a ladder injury even
though all the proper safety precautions were met would not further the
Legislature's purpose. The
court stated: “If liability were to attach even though the proper
safety devices were entirely sound and in place, the Legislature would
have simply said so, or made owners and contractors into insurers.
Instead, the Legislature has enacted no-fault workers' compensation to
address workplace injuries where, as here, the worker is entirely at
fault and there has been no Labor Law violation shown.”
An
additional reason the Court gave for rejecting the Plaintiff’s suit
and holding NHS could not be liable under the New York Labor Law was
that NHS was not itself a contractor
or project owner, or an agent of a project owner.
Authority would have had to be given to a NHS by the owner to
supervise or control the work in order for NHS to be deemed an agent for
purposes of Labor Law section 240 (1).
The court states: “Although defendant [NHS] here coordinated
home repair work, it did not involve itself with the details of how
individual contractors would perform their jobs. Instead, NHS acted as a
lender: it is a non-profit organization that provides low-interest
loans. The homeowner retained primary control over decisions on how the
renovation project would proceed. NHS did not supervise the contractor;
it never instructed workers on how to undertake repairs, and it took
only a de minimis role in ensuring that the contractor would complete
the financed repairs.
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=======================================
Multi-Million
Dollar Claim Invalidated by Court Due to Contractor’s Failure to Give
Timely Notice
By:
Katz &
Stone, L.L.P.
Construction Newsletter
November/December 2003
Most construction contracts contain language obligating the
contractor to submit claims for extras or changes to the owner or
higher-tier contractors within a certain period of time after it incurs
increased costs or delay. In addition, many contracts also require the
contractor to notify the owner or higher-tier contractors of its
intention to ultimately make such claims within a certain period of time
after the event giving rise to the claims. As demonstrated by MCI
Constructors v. Spotsylvania County, 2003 Va. Cir. LEXIS 115
(Spotsylvania County Cir. Ct. 2003), it is critical for contractors to
understand the precise moment when the time period to take action on a
claim will begin to run. Adopting an unreasonable or unrealistic view of
the triggering event can have disastrous consequences.
In MCI Constructors, a contractor was engaged by
Spotsylvania
County
to construct a water treatment facility. As work progressed, disputes
arose between the county and the contractor, delays occurred and extra
work was required. During the course of this project, the contractor
submitted various change orders to the county for approval, several of
which were rejected. Months after the project was scheduled to be
completed, the contractor submitted a “Request for Equitable
Adjustment” to the County, requesting additional payment of more than
$9 million and an eight-month time extension for the changed and extra
work it performed. The County disputed 93 of the 106 claims asserted
within the Request on the grounds that, among other things, the
contractor failed to give timely notice of its intention to submit such
claims. In response, the contractor brought suit to recover on its
claims.
The trial court first examined the provisions relevant to the
timing of the contractor’s notice. The court found that the contract
between the County and the contractor provided that no claim for changed
or extra work could be made against the County unless it was notified of
the contractor’s intention to present such claim “within ten days of
the event, thing, or occurrence giving rise to the alleged claim.”
Similarly, state and local laws required the contractor to provide
written notice of its intention to file a claim within ten days of the
occurrence or beginning of the work upon which the claim was based.
The court next examined when the “event” or “occurrence”,
which triggered the contractor’s duty to notify the county of its
intention to present a claim for extra or changed work, happened. The
County argued that the contractor was required to notify the County even
before a dispute arose — in effect, simultaneously with its submission
of a proposed change order in response to a request or directive in the
field. The contractor took an opposite view, arguing that it was
entitled to wait until a full-fledged dispute had arisen, and it was
able to precisely determine the monetary impact of the extra or change,
before having to provide notice of its intention to submit a claim. The
court rejected both arguments, instead concluding that, as to each
claim, the triggering event for the notice requirement was the
contractor’s learning that its proposed change order, or other request
for adjustment of contract terms, was denied, disallowed, or
disapproved, in whole or in part, by the County. Applying such standard,
the court concluded that the contractor did not give the County timely
notice of its intent to submit all 93 disputed claims, and thus held
that those claims were barred.
Contractors should always be careful to comply with all notice
requirements in their contracts. In order to do so, contractors need to
have (1) a firm grasp on the time period(s) in which they must take
action to preserve their claim and (2) a good understanding of the point
of which those periods will begin to run.
_________
About
the Author:
Katz
& Stone is a nationally recognized law firm.
, with a practice emphasizing construction law and risk
management. For the balance
of the newsletter from which this article was first published, visit:
http://www.katzandstone.com/newsletters/dec2003.html.
For
more information contact: Gerald
Katz, Esq., Katz & Stone, 8230 Leesburg Pike
Suite
600
;
Vienna
,
VA
22182
; (703) 761-3000.
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ABOUT
THIS NEWSLETTER & A DISCLAIMER
This
newsletter Report is published and edited by J. Kent Holland, Jr.,
J.D., a construction lawyer and risk management consultant for
environmental and design professional liability. The Report is
independent of any insurance company, law firm, or other entity, and is
distributed with the understanding that ConstructionRisk.com, LLC, and
the editor and writers, are not hereby engaged in rendering legal
services or the practice of law. Further, the content and comments
in this newsletter are provided for educational purposes and for general
distribution only, and cannot apply to any single set of specific
circumstances. If you have a legal issue to which you believe this
newsletter relates, we urge you to consult your own legal counsel.
ConstructionRisk.com, LLC, and its writers and editors, expressly
disclaim any responsibility for damages arising from the use,
application, or reliance upon the information contained herein.
=====================================
Copyright
2004, ConstructionRisk.com, LLC
Publisher
& Editor: J. Kent Holland, Jr., Esq.
8596 Coral
Gables Lane
Vienna, VA
22182
703-623-1932
Kent@ConstructionRisk.com
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