In Bigelow v. General Electric, (4th Dept., 2014), plaintiff brought an action against General Electric as a result of injuries claimed to be caused by a faulty air conditioning unit. The air conditioning unit was made by Carrier Corporation and ultimately sold under the General Electric brand. General Electric moved to dismiss plaintiff's complaint in the main action on the grounds that no issue of fact existed as to plaintiff Bigelow's claims that the air conditioning unit was defective. Carrier had refused to provide a defense and indemnification for General Electric, General Electric commenced a third-party action seeking common law indemnification from Carrier. General Electric also moved for summary judgment against Carrier for common law indemnification. Carrier cross moved for summary judgment dismissing the third-party complaint on the ground that there had been no determination that General Electric was liable for any injuries.

In a single decision, the Appellate Division granted General Electric's motion in the main action, concluding the air conditioning unit was not defective. The Court also granted Carrier's cross-motion to dismiss the third-party complaint concluding that General Electric was not entitled to common law indemnification from Carrier.

The issue in this case was whether General Electric, a downstream retailer, was entitled to recoup its costs in defending a products liability action. The Appellate Division found that common law right of indemnification encompasses the right to recover attorney's fees, costs and disbursements incurred in connection with defending the suit brought by an injured party. However, in the absence of fault on the part of the manufacturer for producing a defective product there is no implied right for indemnification for defense costs assumed by the downstream distributors. As such, General Electric was not entitled to reimbursement for its fees and costs as both General Electric and Carrier were innocent parties and there was no basis for shifting costs.

In Nick's Garage v. Liberty Mutual Fire Insurance Company, (4th Dept., 2014), plaintiff, as an assignee, commenced an action to recover payment for auto repairs performed on behalf of persons involved in accidents with defendant's insureds. Plaintiff asserted causes of action for quantum meruit and the violation of General Business Law §349 which prohibits defective business practices. Defendant moved to dismiss these causes of action on the ground that plaintiff lacks standing under Insurance Law §3420 because the assignors were strangers to the underlying insurance policy.

The Supreme Court denied defendant's motion. The Appellate Division, in affirming the Supreme Court's decision, stated that when a plaintiff is a stranger to an underlying insurance policy, Insurance Law §3420 . . . grants a right to sue the tort-feasor's insurer, only under limited circumstances. He or she must first obtain a judgment against the tort-feasor, serve the insurance company with a copy of the judgment and await payment for 30 days. Compliance with those requirements is a condition precedent to a direct action against the insurance company. That condition precedent, however, only applies when there is a direct action which seeks relief under the terms of the insurance policy or contract.

In the case at hand, the causes of action for quantum meruit and defective business practices do not seek relief under the terms of the insurance policy or contract. Rather, those causes of action raise distinct legal theories that are independent of the policy terms. Thus, the Appellate Division held that Insurance Law §3420 does not bar plaintiff's causes of action for quantum meruit and deceptive business practices against defendant.

In Krajnik v. Forbes Homes, Inc., et al, (4th Dept., 2014), plaintiff commenced a personal injury action against Forbes Homes as a general contractor and Birchfield Construction as the framing contractor for injuries he sustained when, while working for the window supplier, he went to do a final inspection on windows. While plaintiff was in the attic checking a window, he attempted to reach the window by using a makeshift ladder already in place and made with two boards, each 2x4, nailed across the vertical framing under the windows. Plaintiff fell between the attic floor joists to the floor of the foyer below and sustained injuries.

Birchfield moved for summary judgment dismissing the complaint and plaintiff cross moved for partial summary judgment on liability on Labor Law §240(1) claim against the framing contractor. Forbes moved for summary judgment on its crossclaim for contractual and common law indemnification against Birchfield.

The Appellate Division found that in the absence of any evidence that Birchfield exercised any authority or control over the work site or the injury-producing work the plaintiff was not afforded the protections of Labor Law §240(1) and §241(6) from Birchfield. That portion of plaintiff's complaint was dismissed. The Appellate Division also held that Forbes' motion seeking summary judgment on its crossclaims for contractual and common law indemnification or contribution against the framing contractor must be denied as there are issues of fact whether Birchfield was the party responsible for the placement of the makeshift ladder.

In Hauber-Melota v. Philadelphia Insurance Company, (4th Dept., 2014), plaintiff was a passenger in a vehicle operated by her co-employee Brenda Wilcox and owned by their employer when that vehicle was rear-ended by another vehicle owned and operated by another co-employee. All involved were in the course of their employment. Plaintiff commenced a personal injury action against the co-employee who rear-ended the vehicle she was traveling in but that action was dismissed on the ground that plaintiff's remedy against her co-employee was limited to recovery of workers' compensation benefits. Plaintiff subsequently commenced an action seeking supplemental underinsured or uninsured motorist benefits from the insurer of the vehicle owned by her employer. Defendants moved for summary judgment seeking dismissal of the complaint on the ground that the plaintiff's exclusive remedy was the recovery of workers' compensation benefits.

The Appellate Division held that the plaintiff may receive SUM benefits under her employer's SUM policy only if she is legally entitled to recover damages from the tort-feasor owner or operator. The prescribed SUM endorsement language at issue was held to be plain and unambiguous. As such, since plaintiff was only allowed to recover workers' compensation benefits against the offending party, plaintiff was not entitled to recover SUM benefits under the employer's policy.

Prepared by Katy M. Hedges