Inside this Issue

A1 - Contract Clauses – Short Videos (2 minutes each) on Risk Allocation for Key Contract Clauses
A2 - Construction Manager may be liable to worker who fell through skylight
A3 - Equitable Indemnity Denied where Indemnitees could not prove they were not at fault

Article 1

Contract Clauses – Short Videos (2 minutes each) on Risk Allocation for Key Contract Clauses

If you haven’t visited my YouTube Channel to see short videos I have prepared discussing key issues in contracts, do it now!

Click on videos and see a list of about 80 videos I have done. Some are 20 minutes long. But most of them are quite short and address only a single contract clause.

This article is published in ConstructionRisk Report, Vol. 24, No. 5 (June 2022).

Article 2

Construction Manager may be liable to worker who fell through skylight

A worker was injured when he fell through a skylight opening in a roof on which he was working. He alleged common-law negligence and violation of the New York Scaffolding Act against the construction manager (CM) and project owner. Appellate court held, on the issue of violation of the labor law, CM was a “contractor” under the labor law where it had power to enforce safety standards and choose contractors to perform the work. Additionally, the CM may be vicariously liable as an agent of the property owner where it was the manager with ability to control the work. Summary judgment could not be granted to the plaintiff, however, because the Court found CM raised a triable fact whether it lacked authority to supervise and control the work.

Summary judgment was granted, however, against the project owner failing to provide adequate fall protection as required by the labor law, and that is what caused the injury. On the issue of common-law negligence, however, the court held CM established it didn’t exercise supervisory control over the manner or method of plaintiff’s work that caused the injury and it was therefore entitled to summary judgment on that count of the complaint. Tansley v. LCO Building LLL and Cityview Construction Management, LLC, 201 A.D.3d 1323 (N.Y. 2022).

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 24, No. 5 (June 2022).

Article 3

Equitable Indemnity Denied where Indemnitees could not prove they were not at fault

Owner of a tract of land (Wilevco) leased the land to a general merchandising store (Fred’s), and Wilevco then hired a contractor who constructed a new store. Five years after construction, a shopper fell on a curb in front of the main door to the store. This occurred because there was a several inch drop in the concrete at the curb. At trail, the judge granted summary judgment to the owner and the store against the construction contractor on the basis of equitable (“common-law”) indemnification on the theory that the accident was due to construction defect. This was reversed on appeal because the two Indemnitees failed to prove that they were without fault. Specifically, they owed a duty of care to the store invitee and failed to paint the curb yellow or otherwise warn the customer of the unsafe condition.

NOTE: The court provides an excellent definition of indemnification as follows: “Indemnity is that form of compensation in which a first party is liable to a second party to pay a second party for a loss or damage the second party incurs due to a third party.” Fountain v. Fred’s, Inc. and Wildevco, LLC, 871 S.E.2d 166 (South Carolina, 2022).

The shopper filed a premises liability suit against the landowner and the store owner asserting that they breached their duty to invitees by failing to maintain and inspect the premises and failing to discovery and make safe or warn of unreasonable risks. She sustained serious injuries as a result of her fall on the sidewalk curb. In defending against her claim the two defendants filed third-party claims against the contractor that constructed the sidewalk. Before trial, the case between the plaintiff and the defendants settled. Those defendants then continued with their litigation against the contractor for equitable indemnity to recover what they paid the plaintiff in the settlement.

At trial the court determined that the contractor had deviated from the plans and specifications in building the curb they way he did. Relying exclusively on construction defects case law, the court concluded that neither the property owner or store owner breached any duty to the customer regarding inspection and maintenance because the court found “the defects were such that could not reasonable have been discovered.”

In reversing the trial court, the appellate court held that construction defect law was not appropriate for determining the duties owed in this case. Instead, the court explained that the principle of equitable indemnification has long been recognized in the state, and that a key element to this indemnity is “the absence of fault by the party seeking equitable indemnification. A party is not entitled to equitable indemnification if any ‘negligence of his own has joined in causing the injury.”

In this case, the court stated that for the defendants to prove they were without fault and thus entitled to equitable indemnity, they would have been required to demonstrate that the breached no duty of care to the invitee. “To be entitled to equitable indemnity, … [they] were required to show not just that [Contractor’s] construction of the ramp was a proximate cause of the injuries but also that Respondent's failure to warn or remedy the unsafe condition was not a proximate cause.”

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