Augustin Paez v. 1610 Saint Nicholas Avenue, L.P. et al., 2014 NY Slip Op 421 (1st Dep’t 2014)

A decision previously reported in these pages was unanimously affirmed, on alternative grounds, resulting in a dismissal of contractual indemnification claims against the owner of a restaurant property where the plaintiff was injured. (See Newswire April 19, 2013, “Defendant/ Third-party Plaintiff’s default deemed admission of negligence fatal to third-party claim”.)

The court below had dismissed the claim finding that a reinstated default judgment against the defendant/ third-party plaintiff was effectively an admission of allegations of fault against it. Consequently, it could not maintain its contractual indemnification claim.

While five Justices of the Appellate Division, First Department, agreed with the lower court that “the issue of liability has been determined as a matter of law, and defendants may not ‘introduce evidence tending to defeat plaintiff’s cause of action,'” they noted that a claim for apportionment of fault against third parties is not precluded. In this case, however, the only third party claim was for contractual indemnification, a claim for contribution being barred against the third-party defendant (the plaintiff’s employer) since the alleged injury was not a grave injury under the Workers’ Compensation Law.

Nonetheless, the determinative issue for the appellate court was whether any of the numerous lease documents supported the contractual indemnification claim in the first place. The Appellate Division agreed with the arguments that defendant/ third-party plaintiff could not establish the claimed agreement, thus affirming on other grounds the dismissal of the third party action.