On April 1, 2021, Eugene Meyers, representing an architect and a general contractor, obtained a favorable appellate ruling dismissing a third-party complaint. The lower court dismissed 13 out of 15 third-party claims, sustaining two claims for contractual indemnification arising out of the failure by the third-party plaintiff landlord to complete work required by a lease. The New York Supreme Court, Appellate Division, First Department unanimously reversed the portion of the lower court decision sustaining the third-party claims for contractual indemnification.
The plaintiff in the main action, a restaurant tenant, alleged that its landlord failed to deliver the demised premises with a functional gas line and a watertight ceiling at the commencement of the lease. During the course of the tenant’s renovations, it discovered that the gas line leading to the premises was not functional and the premises’ ceiling had a leak. The restaurant tenant’s architect and contractor had executed indemnification agreements in favor of the landlord for losses arising out of the renovation work they performed at the premises. In the third-party complaint, the landlord asserted that the tenant’s architect and general contractor should indemnify the landlord because they prevented the landlord from delivering the premises with a working gas line and watertight ceiling.
The Appellate Division found that the liability asserted against the landlord in the main action arose prior to the start of the renovation work performed by the architect and the contractor and was, therefore, outside the scope of the indemnification agreements at issue. In addition, the Appellate Division found that the third-party claims were insufficient as a matter of law because the supporting allegations, if proven, would preclude liability on the part of the landlord in the main action and would leave no liability to indemnify. The Appellate Division directed the entry of judgment dismissing the third-party complaint.
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