Lack of knowledge insufficient to insulate owner from liability under labor law §240

The New York Court of Appeals has recently held that a landlord is strictly liable under New York Labor Law § 240(1) for injuries to a worker, even though the injury- producing work was conducted without the landlord’s knowledge or consent, and in violation of the lease.  

 

In Sanatass v. Consolidated Investing, 10 N.Y.3d 333 (April 24, 2008), the court addressed the liability of an out-of-possession landlord, where the activity giving rise to   injury was performed without a landlord’s knowledge and in violation of the lease.  In Sanatass, defendant Consolidated Investing Company owned a commercial building located at 423 West 55th Street in Manhattan.  C2 Media, LLC occupied the 11th floor of the building under a lease assignment from the original tenant, Chroma Copy International.  C2 Media agreed to abide by the terms of Chroma’s lease, including a provision that the “[t]enant shall make no changes in or to the demised premises of any nature without Owner’s prior written consent.”  In addition, a rider to the lease stated that “[a]ll renovations, decorations, additions, installations, improvements and or alterations of any kind or nature in the Demised Premises … shall require the prior written consent of Landlord.”  The lease also contained an indemnification clause in favor of Consolidated and obligated the tenant to obtain comprehensive liability insurance coverage naming Consolidated as an additional insured.

 

In January 2000, plaintiff Christopher Sanatass, a mechanic employed by JM Haley Corporation, was directed to install a commercial air conditioning unit for C2 Media, which had hired JM Haley without notifying Consolidated.  While the plaintiff and a coworker hoisted the air conditioning unit about seven feet off the ground, one of the manual material lifts failed, causing the unit to fall on top of the plaintiff.

 

The plaintiff commenced suit against Consolidated and Chroma Copy International.  Consolidated filed a third-party action against C2 Media for contractual indemnification.  Consolidated then moved for summary judgment, arguing it should not be held liable since the work was performed without its knowledge and consent, and in clear violation of the lease.  The trial court granted the motion.  The First Department, with two justices dissenting, affirmed, reasoning that Consolidated was not liable “because the air conditioning installation was performed without its consent and in violation of the lease.” 38 AD3d 332 (1st Dep’t 2007).

 

The plaintiff appealed as of right to the Court of Appeals.  The court, with one justice dissenting, held that because the lack of any ability on an owner’s part to ensure compliance with Labor Law § 240(1) is legally irrelevant, Consolidated could not escape strict liability as an owner based on its lack of notice or control over the work ordered by its tenant.  In so holding, the majority distinguished its prior decision in Abbatiello v. Lancaster Studio Assoc., 3 N.Y.3d 46 (2004), wherein the court held that a cable technician who was injured after falling from a ladder was not an employee of the building owner for purposes of Labor Law § 240(1) because he was called to subject apartment building by a tenant without the knowledge or consent of the owner.  The majority reasoned that while the cable repair technician in Abbatiello was akin to a trespasser, the same could not be said for the plaintiff.  The majority further held that while C2 Media’s breach of the lease may have some bearing on Consolidated’s indemnification claim against C2 Media, the breach did not sever the nexus between Consolidated and the plaintiff. 

 

The dissent strongly disagreed with the majority, stating that the statutory goal of Labor Law §240 is not being met in such circumstances where the landlord could not have done anything to prevent the plaintiff’s accident.  The dissent further stated that the lease provision requiring Consolidated’s written consent would have enabled Consolidated to maintain authority and ensure that the workers were provided with adequate protection for the work being performed.  However, because C2 Media ignored the notification provision, Consolidated could not have prevented the accident. 

 
In sum, the Sanatass decision makes owners absolutely liable under Labor Law § 240 regardless of whether a tenant breaches its obligations under a lease agreement. Therefore, even if a sub-tenant hires a contractor to work in the portion of the building the tenant rented without notifying the owner of the building, the owner will still be strictly liable of a violation of Labor Law §240(1).

 

 

 

In light of the foregoing, it is very important for property owners in New York to require written notification and prior approval for any work to be done on their premises.  In addition, management companies should require notification from the tenant prior to allowing access to contractors and/or subcontractors into the premises.  The above will hopefully reduce the possibility of a tenant himself entering into a contract without the approval from the building owner.  The property owner must make sure that all tenants enter into written contracts that require the contractor to hold harmless, indemnify and procure insurance for the tenant as well as property owner. 

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