Avis Budget Car Rental, LLC v. JD2 Environmental, Inc. et al
Filing
197
ORDER: For the reasons stated in the attached memorandum and order, the Court grants in part and denies in part Defendant/Third-Party Plaintiff Gemstar's 169 Motion in Limine and Defendant/Third-Party Plaintiff JD2's 174 Motion in Limine. The attached memorandum and order also sets forth limitations on the presentation of evidence at trial regarding the rulings made in the attached order and the issue of vicarious liability more generally. Counsel are reminded to heed those limitations. Ordered by Judge Pamela K. Chen on 8/11/2017. (Chivers, Jeffrey)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------------------------X
AVIS BUDGET CAR RENTAL, LLC,
Plaintiff,
- against JD2 ENVIRONMENTAL, INC., GEMSTAR
CONSTRUCTION CORPORATION, and
GEOTRACK, INC.,
Order re: Motions in Limine
Case No. 12-cv-5010 (PKC)
Defendants.
------------------------------------------------------X
JD2 ENVIRONMENTAL, INC.,
Third-Party Plaintiff,
- against PORT AUTHORITY OF NEW YORK AND
NEW JERSEY and GEOTRACK, INC.,
Third-Party Defendants.
------------------------------------------------------X
GEMSTAR CONSTRUCTION
CORPORATION,
Third-Party Plaintiff,
- against PORT AUTHORITY OF NEW YORK AND
NEW JERSEY and GEOTRACK, INC.,
Third-Party Defendants.
------------------------------------------------------X
PAMELA K. CHEN, United States District Judge:
In 2011, Plaintiff Avis Budget Car Rental, LLC (“Avis”) hired JD2 Environmental, Inc.
(“JD2”) to install an underground storage tank on property leased by Avis at the John F. Kennedy
International Airport (“JFK”). During excavation, a subcontractor for JD2, Gemstar Construction
Company (“Gemstar”), struck and damaged an underground sewage line running through the Avis
property, causing complaints about a sewage backup from other JFK tenants. After paying the
costs to repair and remediate the sewage line, Avis filed this action to recover those costs from
JD2 and Gemstar based on various theories of negligence, breach of contract, and indemnification.
(Dkt. 1.) After responding to Avis’s complaint, Gemstar and JD2 each served a third-party
complaint on the Port Authority of New York and New Jersey (“Port Authority”) and Geotrack,
Inc. (“Geotrack”), a company that had been hired by the Port Authority to identify and “mark out”
certain underground utilities at JFK. (Dkts. 12, 23.) According to JD2 and Gemstar, either the
Port Authority or Geotrack—or both—are responsible for any damages that Avis incurred as a
result of the sewage line rupture because those parties failed to accurately identify and mark out
the underground sewage line before Gemstar began excavation. (Dkt. 12 ¶¶ 20-27; Dkt. 23 ¶¶ 4158.)1 Geotrack, which filed for bankruptcy in 2012, has not appeared in this action, resulting in
entries of default against Geotrack in favor of Avis, JD2, and Gemstar.2
By order dated March 28, 2016, the Court ruled on motions for summary judgment by Avis
and JD2, and on a motion to dismiss by the Port Authority. (Dkt. 119; see also Dkt. 126 (Am.
Order (“SJ Order”)).)3 Although narrowing the scope of triable issues, that order did not dispose
of all claims against any party, and trial in this matter is scheduled to begin on August 14, 2017.
Before the Court are “motions in limine” by JD2 and Gemstar seeking a finding that the
Port Authority is vicariously liable for the alleged negligence of Geotrack in failing to identify and
1
After JD2 and Gemstar named Geotrack as a third-party defendant, Avis amended its
complaint to add Geotrack as a Defendant. (Dkt. 41.) Avis does not assert claims against the Port
Authority.
2
The Court has determined that judgment will not be entered against Geotrack until after
liability is determined and fault, if any, is apportioned at trial. See Lite-Up Corp. v. Sony Music
Entm’t, Inc., 1999 WL 436563, at *2-3 (S.D.N.Y. June 24, 1999) (citing Frow v. De La Vega, 82
U.S. 552, 554 (1872)).
3
The Court also denied as moot motions for summary judgment by JD2 and Gemstar
against the Port Authority for the reasons stated in that order. (SJ Order, Dkt. 126, at 38 n.38.)
2
accurately mark out the sewage pipe that Gemstar struck during excavation. As Avis rightly points
out in its opposition brief, these motions, although styled as “motions in limine,” are in effect
motions for summary judgment, filed long after the deadline for such motions, without complying
with the ordinary procedures for summary judgment practice. (Avis Opp’n, Dkt. 182, at 1.) Lest
there be any doubt, the Court does not condone JD2’s decision, revealed for the first time in the
parties’ joint pre-trial order (Dkt. 158 at 41), to seek a ruling on this central issue so close to the
start of trial. Nonetheless, in the interest of clarifying the triable issues before evidence is presented
to a jury, the Court is issuing this ruling on JD2’s and Gemstar’s motions.
For the reasons stated below, the Court holds that New York General Business Law § 763
imposes a nondelegable duty on utility operators—here, the Port Authority—to accurately and
with due care designate the location of their underground facilities upon receipt of a notification
effective under the one-call notification system established in Article 36 of the New York General
Business Law, N.Y. Gen. Bus. Law §§ 760-67. Accordingly, to the extent the Port Authority’s
contractor, Geotrack, failed to discharge the Port Authority’s mark-out duty under § 763, the Port
Authority is vicariously liable, as a matter of law, for any damages that proximately resulted from
that failure. The Court declines to hold, as a matter of law, that Geotrack’s performance of the
underground utility mark-out in this case was an “inherently dangerous activity”; thus, to the extent
that JD2 and Gemstar intend to pursue that theory of vicarious liability against the Port Authority,
they must establish the requisite facts at trial. JD2 and Gemstar will also be permitted to pursue
vicarious liability against the Port Authority on the basis of the Port Authority’s negligent
selection, instruction, or supervision of Geotrack and based on a theory of agency or employment
as between the Port Authority and Geotrack.
3
Finally, in light of these holdings and discussions with counsel in the final pre-trial
conference, the Court hereby imposes certain restrictions on the presentation of evidence
concerning the Port Authority’s vicarious liability in this action. Counsel are permitted to present
evidence and argument concerning the Port Authority’s alleged negligence in selecting,
instructing, and supervising Geotrack in connection with the project at issue in this action;
however, the evidence regarding selection will be subject to certain limitations as discussed herein.
Counsel are also permitted to present evidence and argument concerning whether Geotrack acted
as the Port Authority’s agent or employee in connection with the project at issue in this action.
Importantly, however, counsel are not permitted to inform the jury of the Court’s ruling of
vicarious liability under New York General Business Law § 763, nor may they argue to the jury
that the Port Authority was prohibited from delegating its duties to Geotrack because of the
requirements of § 763. With respect to the information and evidence that is excluded by this order,
the Court finds, under Federal Rule of Evidence 403, that the potential for prejudice and confusion
substantially outweighs any probative value of such evidence and argument to the jury’s
determination of the facts and liability in this action.
BACKGROUND4
Starting in or around 2008, Avis began to consider the installation of an underground
storage tank (the “Project”) on property that Avis leased at JFK Airport, which is owned by the
City of New York and operated by the Port Authority. (Avis 56.1, Dkt. 98-1, ¶ 1; Port Authority
Answer to Third-Party Compl., Dkt. 135, ¶ 8.)5 Avis hired Defendant JD2, an engineering
4
The Court assumes the parties’ familiarity with the factual background and procedural
history of this case. A more detailed summary is set forth in the Court’s summary judgment order.
(Dkt. 126.)
5
The Port Authority exercises broad authority over the operation of JFK Airport: It has
“all the power and authority to purchase, construct, lease and/or operate terminal transportation
4
consulting firm, to provide design and oversight services for the Project. (Pre-trial Order, Dkt.
158, at 38; Dkt. 98-23 (Services Agreement) at 3.) JD2 in turn hired a subcontractor, Gemstar, to
perform the excavation work on the Project. (Pre-trial Order, Dkt. 158, at 38 ¶ 5.)
On November 28, 2011, Gemstar gave notice of the upcoming excavation to Dig Safely
New York (“Dig Safely”), a not-for-profit company that administers a “one-call notification
system” for excavation and demolition projects in the State of New York.6 By statute, Dig Safely
was required to transmit the information in Gemstar’s excavation notice to “every member [of the
one-call notification system] that operates an underground facility in the area of the proposed
activity.” N.Y. Gen. Bus. Law § 761. In keeping with that obligation, Dig Safely transmitted
Gemstar’s excavation notice to the Port Authority, as the operator of an unspecified utility located
in the vicinity of Gemstar’s upcoming excavation. (Port Authority 56.1 Stmt., Dkt. 106 ¶ 138;
Dkt. 107-15.) According to the Port Authority, it then had “three days to mark out the utilities”
on the site in question. (Danko Dep., Dkt. 107-7, at 44:16-24.)7 In this instance, the Port Authority
contracted that responsibility to Geotrack, Inc., an independent contractor that the Port Authority
and other facilities of commerce includ[ing] the facility it operates at John F. Kennedy
International Airport, City of New York, County of Queens, State of New York, and to make
charges for the use thereof; and for any such purposes to hold, lease and/or operate real or personal
property in connection therewith.” (Port Authority 56.1 Stmt., Dkt. 106, ¶ 103.)
6
The requirements and specifications of a one-call notification system are set forth in
Article 36 of the New York General Business Law, N.Y. Gen. Bus. Law §§ 760-67, and
implementing regulations promulgated by the Public Service Commission, 22 N.Y.C.R.R. Part
753. Broadly, a “one-call notification system” is “an organization among whose purposes is
establishing and carrying out procedures and programs to protect underground facilities from
damage due to excavation and demolition including, but not limited to, receiving notices of intent
to perform excavation and demolition, and transmitting the notices to one or more of its member
operators of underground facilities in the specified area.” N.Y. Gen. Bus. Law § 760(8).
7
(See also Port Authority 56.1 Stmt., Dkt. 106, ¶ 107 (explaining that, “[b]ased on the
information provided by a contractor on the One Call notification, utility operators get notified
that construction will take place close to the utilities that they operate, which give[s] the operators
a chance to mark out their utilities”).)
5
had chosen for such work through a competitive request-for-proposal process. (Port Authority
Opp’n, Dkt. 181, at 5.)
On December 15 and 16, 2011, during excavation on the Project, Gemstar struck and
damaged an underground sewage line running through the Avis-leased property, causing
complaints about a sewage backup from other JFK tenants. (Pre-trial Order, Dkt. 158, at 38 ¶¶ 1525; SJ Order, Dkt. 126, at 6-7.) According to JD2 and Gemstar, the Port Authority and Geotrack
are responsible for any damages flowing from the sewage line rupture because those parties failed
to accurately identify and mark out the sewage line before Gemstar began excavation. (Dkt. 12 ¶¶
20-27; Dkt. 23 ¶¶ 41-58.) Avis and the Port Authority give a contrary explanation for the sewage
line damage, pinning the blame in part on negligence by JD2 and Gemstar. (See SJ Order, Dkt.
126, at 7-39.) As the Court explained in its summary judgment order, there are genuine issues of
material fact that preclude the Court from resolving the parties’ disputes over liability. (See SJ
Order, Dkt. 126.) Those genuine issues of fact will be resolved by a jury in the upcoming trial.
In advance of trial, however, JD2 and Gemstar have moved for a finding that the Port
Authority is vicariously liable for the alleged negligence of Geotrack in failing to identify and
accurately mark out the sewage pipe that Gemstar struck during excavation. As Avis rightly points
out in its opposition brief, these motions, although styled as “motions in limine,” are in effect
motions for partial summary judgment. (Avis Opp’n, Dkt. 182, at 1.)
LEGAL STANDARD
Summary judgment is proper where, construing the evidence in the light most favorable to
the non-movant, “there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Redd v. N.Y. Div. of Parole, 678 F.3d
166, 173-74 (2d Cir. 2012). In determining whether there are genuine disputes of material fact,
6
the court must “resolve all ambiguities and draw all permissible factual inferences in favor of the
party against whom summary judgment is sought.” Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir.
2003) (quotation omitted). “Summary judgment is appropriate only ‘[w]here the record taken as
a whole could not lead a rational trier of fact to find for the non-moving party.’” Donnelly v.
Greenburgh Cent. Sch. Dist. No. 7, 691 F.3d 134, 141 (2d Cir. 2012) (quoting Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
DISCUSSION
“The general rule” in New York is that “a party who retains an independent contractor, as
distinguished from a mere employee or servant, is not liable for the independent contractor’s
negligent acts.” Kleeman v. Rheingold, 81 N.Y.2d 270, 273 (1993); see also Bros. v. N.Y.S. Elec.
& Gas Corp., 11 N.Y.3d 251, 257-58 (2008). New York courts have also recognized numerous
exceptions to the general rule, however, “most of which are derived from various public policy
concerns.” Kleeman, 81 N.Y.2d at 274. “These exceptions . . . fall roughly into three basic
categories: negligence of the employer in selecting, instructing, or supervising the contractor;
employment for work that is especially or ‘inherently’ dangerous; and, finally, instances in which
the employer is under a specific nondelegable duty.” Kleeman, 81 N.Y.2d at 274 (internal citations
omitted). And, of course, a party may also be held liable for the negligence of a contractor under
the doctrine of respondeat superior, if, due to the “degree of control exercised by the purported
employer,” the contractor is deemed to be the party’s employee. McCann v. Varrick Grp., LLC,
84 A.D.3d 591, 591 (N.Y. App. Div. 2011) (quoting Bynog v. Cipriani Grp., Inc., 1 N.Y.3d 193,
198 (2003)).
In their motions in limine, JD2 and Gemstar argue that every one of these exceptions
applies to the Port Authority in this case. The Court addresses each exception in turn.
7
I.
Negligent Selection, Instruction, and Supervision
A party may be liable for the negligence of an independent contractor when the party itself
was negligent in the selection, instruction, or supervision of the contractor. See Kleeman, 81
N.Y.2d at 273. As the New York Court of Appeals has observed, “this category may not be a true
exception to the general rule [against vicarious liability], since it concerns the employer’s liability
for its own acts or omissions rather than its vicarious liability for the acts and omissions of the
contractor.” Id. at 273 n.1. To establish that the Port Authority was negligent in its selection,
instruction, or supervision of Geotrack, JD2 and Gemstar would need to establish each of the
elements of negligence, including breach and proximate cause, for the particular theory of
negligence they are pursuing. See Ehrens v. Lutheran Church, 385 F.3d 232, 235 (2d Cir. 2004).
Having reviewed the parties’ submissions, the Court easily finds that genuine issues of material
fact exist as to whether the Port Authority was negligent in its hiring, instructing, and supervising
Geotrack. (See Gemstar Br., Dkt. 171, at 7; Port Authority Opp’n, Dkt. 181, at 4-6; Avis Opp’n,
Dkt. 182 at 12-16.) Should JD2 and Gemstar wish to pursue this theory of liability against the Port
Authority, they will need to present it to the jury.
With regard to the Port Authority’s alleged negligent selection of Geotrack, as the Court
previously ruled at the final pre-trial conference, no post-incident evidence regarding Geotrack’s
deficient performance or the Port Authority’s knowledge thereof may be elicited or introduced at
trial. Furthermore, any pre-incident evidence regarding Geotrack’s deficient performance before
it was selected by the Port Authority for the Project is limited to the Port Authority’s knowledge
8
of such deficient performance, and, if any Port Authority witness denies such knowledge, JD2 and
Gemstar will not be permitted to introduce evidence to establish the deficient performance.8
II.
Inherently Dangerous Activity
New York “has long recognized” that a party is vicariously liable for the negligence of an
independent contractor where “the activity involved is ‘dangerous in spite of all reasonable care.’”
Chainani v. Bd. of Educ. of N.Y.C., 87 N.Y.2d 370, 381 (1995) (quoting Prosser & Keeton, Torts § 71
(5th ed. 1984)). “This exception applies when it appears both that ‘the work involves a risk of harm
inherent in the nature of the work itself [and] that the employer recognizes, or should recognize, that
risk in advance of the contract.’” Id. (quoting Rosenberg v. Equitable Life Assur. Socy., 79 N.Y.2d
663, 669 (1992)).9 In some cases, the question whether work is “inherently dangerous” can be
decided by a court as a matter of law. See, e.g., Klein v. Beta I LLC, 10 A.D.3d 509, 509 (2004);
Rosenberg, 79 N.Y.2d at 670. In most cases, however, “[w]hether the work is inherently dangerous
is . . . a question of fact to be determined by the jury.” Rosenberg, 79 N.Y.2d at 670.
The Court takes guidance from New York cases finding various kinds of activities
“inherently dangerous” or not “inherently dangerous,” with several decisions standing out as
particularly relevant. In Rosenberg v. Equitable Life Assurance Society, the Court of Appeals
stated:
[In their treatise,] Prosser and Keeton illustrate the [inherently dangerous
activity] exception with two illustrations. First, they consider the
employment of a trucker to haul goods. If the trucker drives at excessive
speed, he presents a danger to others, but the danger is not one that is
inherent in the nature of the contract work and there is no vicarious liability
8
To the extent the Court orally ruled at the final pre-trial conference that no evidence of
Geotrack’s pre-incident deficient performance would be admitted, this Order supersedes that oral
ruling.
9
See also Rosenberg, 79 N.Y.2d at 669 (“[B]efore the exception applies, it must appear
not only that the work involves a risk of harm inherent in the nature of the work itself, but also that
the employer recognizes, or should recognize, that risk in advance of the contract.”).
9
on the part of the employer for the trucker’s negligence. If an owner hires
an independent contractor to excavate an area next to a thoroughfare,
however, the work obviously presents inherent dangers to those who must
use the thoroughfare.
79 N.Y.2d 663, 669 (1992) (citing Prosser & Keeton, Torts § 71 (5th ed. 1984)).
Other decisions by New York courts demonstrate that the “inherent danger” of an activity
depends both on the nature of the activity and the setting in which the activity is performed.
Compare, e.g., Steel v. City of N.Y., 271 A.D.2d 435, 435-36 (N.Y. App. Div. 2000) (holding that
a cable company’s “laying of underground cable” under a street in Queens, New York, “is not
‘inherently dangerous’ work”), Marvin Briggs, Inc. v. N.Y. Pub. Library, 260 A.D. 218, 220 (N.Y.
App. Div. 1940) (holding that “the removal of a heavy boiler, through the instrumentality of [a]
crane, from [a] truck to [a New York City] sidewalk . . . was not inherently dangerous”), and
Rodriguez v. C.F. Lex Assocs., 235 A.D.2d 354, 354 (N.Y. App. Div. 1997) (holding that, absent
unusual circumstances, “[w]ashing a sidewalk . . . is not inherently dangerous work such as might
render a building owner liable for the negligence of an independent contractor”), with Tytell v.
Battery Beer Distrib., Inc., 202 A.D.2d 226, 226-27 (N.Y. App. Div. 1994) (holding that “[t]he
construction of a sidewalk bridge [in the Bronx] extending over an area frequented by pedestrians”
was an inherently dangerous activity), Wright v. Tudor City Twelfth Unit, 276 N.Y. 303, 307-08
(1938) (finding genuine issues of fact as to whether “placing mats on [the] sidewalk[] [on 42nd
Street in midtown Manhattan] and cleaning them with soap and water” was an inherently
dangerous activity), Christie v. Ranieri & Sons, 194 A.D.2d 453, 454-55 (N.Y. App. Div. 1993)
(finding genuine issues of fact as to whether “the demolition and removal of two existing garages”
on a residential property in the Bronx was inherently dangerous activity), and Hanley v. Cent. Sav.
Bank, 255 A.D. 542, 543 (N.Y. App. Div. 1938) (observing that “[d]emolition of a building in a
crowded section of a City should be considered as inherently dangerous”).
10
Here, JD2 argues that “marking out underground facilities (potentially fuel lines, electrical
cables/conduits, etc.) at the construction site of a fuel pump station at an airport . . . involve[s]
danger, not just to the person performing the mark out, but to the general public as a whole.” (JD2
Br., Dkt. 174, at ECF 11.)10 According to JD2, “[t]he dangers are numerous: gasoline, excavation,
electricity, propane, and other utilities, in close proximity to the Van Wyck Expressway and at an
airport frequented by untold thousands of people per day, every day . . . .” (Id.) Similarly, Gemstar
argues that “Geotrack was engaging in an inherently dangerous activity when it performed the
mark-out because of the risk of injury involved.” (Gemstar Br., Dkt. 171, at 6.)
The Court holds that JD2 and Gemstar have failed to establish, as a matter of law, that
Geotrack’s work on the Project was “inherently dangerous.” The Court finds that additional facts,
which are not clearly established in the record, could influence a factfinder’s assessment of the
“inherent danger” of Geotrack’s duties on the Project. For example, the record does not establish
the proximity of the excavation site to a public road or an airport terminal, or otherwise indicate
the number or type of people who may have been in the vicinity of the site during excavation. The
record also does not establish whether, at the time the Port Authority delegated its mark-out duties
to Geotrack, the Port Authority knew what types of utilities Geotrack may have been responsible
for marking out. If the facts at trial show, for example, that Geotrack was expected to mark out
the location of only a single sewage line—and not, for example, a high-voltage electrical line or a
gas line, as JD2 and Gemstar posit in their hypothetical parade of horribles (Gemstar Reply Br.,
Dkt. 189, at 8; JD2 Br., Dkt. 174, at ECF 11)—then the danger inherent in Geotrack’s duties would
be less severe than Gemstar and JD2 make it out to be. Other facts presented at trial may similarly
affect the fact-intensive inquiry of whether Geotrack was engaged in an “inherently dangerous”
10
Citations to “ECF” refer to the pagination applied by the Court’s CM/ECF system.
11
activity in the particular circumstances of this case. Accordingly, the Court declines to find the
Port Authority vicariously liable, as a matter of law, for Geotrack’s negligent acts based on the
allegedly “inherent danger” of Geotrack’s activities. That “question of fact [must] be determined
by the jury.” Rosenberg, 79 N.Y.2d at 670.
III.
Nondelegable Duty Imposed by Statute
New York courts, including the Court of Appeals, “ha[ve] repeatedly held that statutes and
regulations that address specific types of safety hazards create nondelegable duties of care.” USAA
Cas. Ins. Co. v. Permanent Mission of Rep. of Namibia, 681 F.3d 103, 110 (2d Cir. 2012) (citing
Ross v. Curtis-Palmer Hydro-Elec. Co., 81 N.Y.2d 494, 499-500 (1993) (holding that New York
Labor Law § 240(1) imposes a nondelegable duty on property owners and contractors)).11 A
statute or regulation “generally create[s] a nondelegable duty where it contains a ‘specific positive
command,’ but not where it merely incorporates ‘the ordinary tort duty of care,’ using terms like
‘adequate,’ ‘effective,’ or ‘suitable.’” Id. (quoting Morris v. Pavarini Constr., 9 N.Y.3d 47, 50
(2007)).
Several decisions by the New York Court of Appeals and the Second Circuit illustrate the
difference between a statute that imposes a “specific positive command” and one that “merely
incorporates the ordinary tort duty of care.” The most instructive for purposes of this case is Ross
v. Curtis-Palmer Hydro-Electric Co., in which the Court of Appeals determined whether certain
provisions of the New York Labor law created nondelegable duties on property owners that cannot
11
See also, e.g., Misicki v. Caradonna, 12 N.Y.3d 511, 520-21 (2009) (holding that New
York regulation governing the use of power equipment, 12 N.Y.C.R.R. 23-9.2(a), imposes a
nondelegable duty on property owners to “correct[] by necessary repairs” any power-operated
equipment on their premises “[u]pon . . . discovery [of] any structural defect or unsafe condition
in such equipment”); St. Louis v. Town of N. Elba, 16 N.Y.3d 411, 413-15 (2011) (holding that
New York regulation governing the safe use of power shovels and backhoes, 12 N.Y.C.R.R. 239.4(e), imposes a nondelegable duty on property owners to ensure certain safeguards are in place).
12
be delegated to contractors whose employees work on the property owners’ land. With respect to
Labor Law § 200(1), which establishes a general requirement that “all places to which [the Labor
Law] applies shall be constructed . . . [and] operated . . . so as to provide reasonable and adequate
protection . . . to all persons employed therein,” the Ross court held that Section 200(1) merely
“codifies landowners’ and general contractors’ common-law duty to maintain a safe workplace.”
81 N.Y.2d at 505.12 By contrast, the Ross court reaffirmed that Labor Law § 240(1), in mandating
that “[a]ll contractors and owners . . . who contract for . . . the erection, demolition, repairing,
altering, painting, cleaning, or pointing of a building . . . shall furnish or erect, or cause to be
furnished or erected . . . scaffolding, hoists, stays, . . . and other devices which shall be so
constructed, placed and operated as to give proper protection to [construction workers on the
premises],” imposes a specific, nondelegable duty. Ross, 81 N.Y.2d at 500.13
12
The full text of Section 200(1) states:
All places to which this chapter applies shall be so constructed, equipped,
arranged, operated and conducted as to provide reasonable and adequate
protection to the lives, health and safety of all persons employed therein or
lawfully frequenting such places. All machinery, equipment, and devices in
such places shall be so placed, operated, guarded, and lighted as to provide
reasonable and adequate protection to all such persons. The board may
make rules to carry into effect the provisions of this section.
N.Y. Labor Law § 200(1).
13
The full text of Section 240(1) states:
All contractors and owners and their agents, except owners of one and twofamily dwellings who contract for but do not direct or control the work, in
the erection, demolition, repairing, altering, painting, cleaning or pointing
of a building or structure shall furnish or erect, or cause to be furnished or
erected for the performance of such labor, scaffolding, hoists, stays, ladders,
slings, hangers, blocks, pulleys, braces, irons, ropes, and other devices
which shall be so constructed, placed and operated as to give proper
protection to a person so employed.
No liability pursuant to this subdivision for the failure to provide protection
to a person so employed shall be imposed on professional engineers as
provided for in article one hundred forty-five of the education law,
13
The Court also takes guidance from Misicki v. Caradonna, 12 N.Y.3d 511 (2009), in which
the Court of Appeals considered whether a provision of the New York Industrial Code created
nondelegable duties. The Misicki court examined 12 N.Y.C.R.R. § 23-9.2(a), which provides in
relevant part:
All power-operated equipment shall be maintained in good repair and in proper
operating condition at all times. Sufficient inspections of adequate frequency shall
be made of such equipment to insure such maintenance. Upon discovery, any
structural defect or unsafe condition in such equipment shall be corrected by
necessary repairs or replacement.
12 N.Y.3d at 519-21. In determining whether this provision created a nondelegable duty, the
Misicki court broke the provision down into three sentences, and examined each one separately.
With respect to the first two sentences, the court held that § 23-9.2(a)’s general requirements to
keep power-operated equipment “in good repair and in proper operating condition,” and the
requirement to make “[s]ufficient inspections” to insure proper maintenance, are “not specific
enough” to create nondelegable duties. Misicki, 12 N.Y.3d at 520-21. With respect to the third
sentence, however, the Misicki court reached the opposite conclusion, holding that “[t]his portion
of the regulation imposes an affirmative duty on employers to ‘correct[] by necessary repairs or
replacement’ ‘any structural defect or unsafe condition’ in equipment or machinery ‘[u]pon
discovery’ or actual notice of the structural defect or unsafe condition.” Id. at 521. The Misicki
court explained that the third sentence of § 23-9.2(a) “mandates a distinct standard of conduct,
architects as provided for in article one hundred forty-seven of such law or
landscape architects as provided for in article one hundred forty-eight of
such law who do not direct or control the work for activities other than
planning and design. This exception shall not diminish or extinguish any
liability of professional engineers or architects or landscape architects
arising under the common law or any other provision of law.
N.Y. Labor Law § 240.
14
rather than a general reiteration of common-law principles, and is precisely the type of ‘concrete
specification’ that Ross requires” to find a nondelegable duty. Id. (citing Ross, 81 N.Y.2d at 499500).
In this case, Gemstar and JD2 contend that New York General Business Law § 763 (“Duties
of operators”) imposed a nondelegable duty on the Port Authority, upon receipt of a one-call
notification, to identify and mark out the location of the sewage pipe that was struck in this case.
(See Gemstar Br., Dkt. 171, at 3.) Section 763 provides:
1. Every operator shall participate in a one-call notification system.
2. Upon receipt of the notification provided for by this article either
directly from the excavator or from the one-call notification system and
pursuant to the rules and regulations adopted by the public service
commission pursuant to section one hundred nineteen-b of the public
service law, an operator shall advise the excavator in a timely manner
of those of its underground facilities that will be affected by the
proposed excavation or demolition.
3. The operator shall accurately and with due care designate within a
reasonable period of time the location of its underground facilities in the
manner and during the time period set forth in the rules and regulations
adopted by the public service commission pursuant to section one
hundred nineteen-b of the public service law.
N.Y. Gen. Bus. Law § 763.
Gemstar and JD2 argue that Section 763 imposes a positive, nondelegable duty on the
“operator” of an underground facility to “‘accurately and with due care’ mark the location of its
utility.” (Gemstar Br., Dkt. 171, at 3.) In opposition, the Port Authority argues that Section 763(3),
by incorporating the ordinary standard of “due care,” is “not specific enough to impose a
nondelegable duty upon the Port Authority because it lacks any highly specific or precise
15
commands that imposes any additional duty other than the standard of care applicable to claims of
negligence.” (Port Authority Opp’n, Dkt. 181, at 11.)14
The Court finds that New York General Business Law § 763 imposes a nondelegable duty
on the “operator” of an underground facility to “designate the location of its facility” “accurately
and with due care” “[u]pon receipt of [a one-call] notification,” in the timeframe and manner
described more specifically in “the rules and regulations adopted by the public service commission
pursuant to [New York Public Service Law § 119-b].” N.Y. Gen. Bus. Law §§ 763(2)-(3).
Relying on guidance primarily from the Court of Appeals’ decisions in Ross and Misicki, the Court
finds that Sections 763(2) and 763(3) together give “concrete specification” that a specific person
(an “operator”) in response to a specific event (“receipt of [a one-call] notification”) is commanded
(“shall”) to perform a specific duty (“designate . . . the location of its underground facilities”). See
also USAA Cas. Ins. Co. v. Permanent Mission of Rep. of Namibia, 681 F.3d 103, 110-11 (2d Cir.
2012) (finding that regulation of the New York City Building Code creates a nondelegable duty
where it creates a “duty to, under specific circumstances, perform a specific task”). Section
763(3)’s further mandate that an operator must obey this command “with due care” merely
qualifies the specific command to which it applies—it does not eliminate the command, nor does
14
The Port Authority also argues that Section 763 cannot impose a nondelegable duty
because it “does not address a specific type of safety concern.” (Port Authority Opp’n, Dkt. 181,
at 11.) The Court disagrees. The clearly discernable purpose of Section 763, confirmed by the
legislative history of the Underground Facilities Law, is to protect underground facilities from
destruction or damage and address the safety risks that underground facilities pose to workers and
others in the vicinity of underground work, such as excavation, in proximity to an underground
facility. See Javino v. N.Y. State Dep’t of Envtl. Conserv., 2013 WL 1946211, at *7 (E.D.N.Y.
May 10, 2013); Laws of 1974 of the State of New York, ch. 818, § 1 (preamble to the Underground
Facilities Law) (“The legislature hereby finds and declares that there is a need to protect
underground facilities from destruction or damage, in order to prevent death or injury to workers
and the public, damage to private and public property or loss of essential services to the general
public . . . .”).
16
it convert the command into a generally applicable standard of care, as the Port Authority argues.
Indeed, similar qualifying language appears in statutes and regulations that New York courts have
found to create a nondelegable duty. See, e.g., Ross, 81 N.Y.2d at 499 (holding that Labor Law
§ 240(1) imposes a nondelegable duty to provide certain safety devices “as to give proper
protection” to affected workers (emphasis added)); Misicki, 12 N.Y.3d at 520-21 (holding that 12
N.Y.C.R.R. § 23-9.2(a) imposes a nondelegable duty to make “necessary repairs or replacement”
upon discovery of any unsafe condition (emphasis added)); Padilla v. Frances Schervier Hous.
Dev. Fund Corp., 303 A.D.2d 194, 196-97 (N.Y. App. Div. 2003) (holding that 12 N.Y.C.R.R. 239(2)(g) imposes a nondelegable duty, despite using the qualifying term “equivalent,” where “th[e]
section, as a whole, ‘mandat[es] compliance with concrete specifications’” (emphasis in original)
(quoting Ross, 81 N.Y.2d at 505)).15
There is one issue, however, that gives the Court some pause. In its surreply, the Port
Authority argued that “the Port Authority does not qualify as an operator” because it does not meet
15
Avis and the Port Authority contend that a contrary holding is dictated by the decisions
in Concord Village Owners, Inc. v. Trinity Communications Corp., 61 A.D.3d 410 (N.Y. App.
Div. 2009), and Brothers v. N.Y. State Electric and Gas Corp., 11 N.Y.3d 251 (2008). (See Avis
Br., Dkt. 182, at 6; Avis Surreply Br., Dkt. 190, at 3-4; Port Authority Opp’n, Dkt. 181, at 11-12.)
The Court finds both of those cases inapplicable. In Trinity, the Appellate Division considered
whether a company seeking to install an underground utility was liable for the negligent acts of an
independent contractor it hired to perform the installation; it did not consider whether the
“operator” of the underground utility damaged in that case (a gas pipe) could delegate its markout responsibilities to an independent contractor. 61 A.D.3d at 410-11. In Brothers, the Court of
Appeals considered whether a utility company undertook a nondelegable duty to comply with
federal and state safety regulations by obtaining a construction permit from the State that required
compliance with specified safety statutes. 11 N.Y.3d at 254-60. The Brothers court answered that
question by considering the policy implications of finding a nondelegable duty based on the utility
company’s receipt of a work permit from the State, not by examining the language of the statutes
and regulations that were allegedly violated in that case, see 11 N.Y.3d at 259-60, the latter of
which guides the Court’s decision here, see supra. As such, neither Trinity nor Brothers directly
or impliedly answered the question that drives the Court’s decision in this case—namely, whether
the mark-out duties imposed on operators by New York General Business Law § 763 are delegable
to a subcontractor.
17
the applicable statutory definition.16 (Port Authority Surreply Br., Dkt. 191, at 3.) This argument
is central to the issue of vicarious liability, of course, because New York General Business Law
§ 763 applies specifically and solely to “operators.”
N.Y. Gen. Bus. Law § 763(1)-(3).
Throughout their submissions in connection with the pending motions in limine, the parties all
seemed to assume that the Port Authority was the “operator” of the sewage line that Gemstar struck
during the excavation at JFK. (Gemstar Br., Dkt. 171, at 3; Port Authority Opp’n, Dkt. 181, at 912; Avis Br., Dkt. 182, at 9; JD2 Br., Dkt. 188, at ECF 6.) Indeed, the Port Authority itself seemed
to concede, in its opposition brief, that it was the “operator” of the sewage pipe in question. (See
generally Port Authority Opp’n, Dkt. 181 (appearing to concede that N.Y. Gen. Bus. Law § 763
applies to the Port Authority in this action, but arguing that the language of § 763 does not impose
a “specific positive command” giving rise to a nondelegable duty).)
Given the Port Authority’s belated argument that it did not qualify as an operator under
§ 763—raised for the first time in its surreply—the Court examined the summary judgment record
to determine whether the Port Authority’s status as an “operator” was established there. Upon that
review, the Court finds that the summary judgment record appears to establish, as a matter of law,
that the Port Authority was the “operator” of the sewage line in question.17 Accordingly, the Court
16
An “operator” is “a person who operates an underground facility or facilities to furnish
any of the following services or materials: electricity, gases, steam, liquid petroleum products,
telephone or telegraph communications, cable television, sewage removal, traffic control
systems, or water.” N.Y. Gen. Bus. Law § 760(6).
17
For example, the Port Authority did not dispute JD2’s assertion that “[t]he Port Authority
is one of the utility owners or operators that the One Call system notifies when an excavator is
performing work on Port Authority property.” (JD2 56.1 Stmt., Dkt. 109-1, ¶ 63; Port Authority
56.1 Stmt., Dkt. 106, ¶ 63.) The Port Authority also did not dispute that the one-call ticket created
for Gemstar’s November 28, 2011 call to Dig Safely indicated that the Port Authority was one of
the “member companies [that] were contacted to perform mark outs” in response to the one-call
notification. (JD2 56.1 Stmt., Dkt. 109-1, ¶¶ 64-65; Port Authority 56.1 Stmt., Dkt. 106, ¶¶ 6465; see also Dkt. 107-15 (November 28, 2011 one-call ticket).) The Port Authority further
conceded that it instructed Geotrack to perform a mark-out of the underground facilities located
18
declines to deny JD2’s and Gemstar’s motions on this ground, but, in light of the last-minute nature
of JD2’s and Gemstar’s motions in limine, the Court invites the Port Authority, if it has a good
faith basis on which to do so, to submit a motion for reconsideration of this order to the extent it
rests on the finding that the Port Authority is an “operator” within the meaning of § 763. If the
Port Authority intends to submit such a motion, it must do so by the end of the day on Monday,
August 14, 2017.
For the reasons stated above, the Court holds that New York General Business Law § 763
imposes a nondelegable duty on utility operators—here, the Port Authority—to accurately and
with due care designate the location of their underground facilities upon receipt of a one-call
notification within the meaning of § 763(2).
IV.
Respondeat Superior
A party may be held liable for the negligence of a contractor under the doctrine of
respondeat superior, if, due to the “degree of control exercised by the purported employer,” the
contractor is deemed to be the party’s employee as a matter of law. McCann v. Varrick Grp., LLC,
84 A.D.3d 591, 591 (N.Y. App. Div. 2011) (quoting Bynog v. Cipriani Grp., Inc., 1 N.Y.3d 193,
198 (2003)). To make this determination, the factfinder must consider “[a]ll aspects of the
arrangement . . . to determine whether the degree of control and direction reserved to the
[purported] employer establishes an employment relationship.” In re Villa Maria Institute of
Music (Ross), 54 N.Y.2d 691, 692 (1981). Having reviewed the parties’ submissions in connection
with the present motions in limine, the Court easily finds that JD2 and Gemstar have failed to
establish, as a matter of law, that Geotrack was an “employee” of the Port Authority. The Port
on the site that was the subject of the November 28, 2011 one-call notification. (JD2 56.1 Stmt.,
Dkt. 109-1, ¶¶ 68-69; Port Authority 56.1 Stmt., Dkt. 106, ¶¶ 68-69; see also Port Authority 56.1
Stmt., Dkt. 106, ¶¶ 117, 138-39.)
19
Authority’s ample evidence of the organizational and operational separateness between the Port
Authority and Geotrack (Port Authority Opp’n, Dkt. 181, at 6-9) is more than sufficient to create
a genuine issue of material fact on this question. As the Court ruled at the final pre-trial conference,
to the extent JD2 and Gemstar wish to further pursue this theory, they must do so at trial.
CONCLUSION
For the foregoing reasons, the Court grants in part and denies in part JD2’s and Gemstar’s
motions in limine. As explained in this Order, the Court holds that New York General Business
Law § 763 imposes a nondelegable duty on utility operators—here, the Port Authority—to
accurately and with due care designate the location of their underground facilities upon receipt of
a notification effective under the one-call notification system established in Article 36 of the New
York General Business Law, N.Y. Gen. Bus. Law §§ 760-67. Accordingly, to the extent the Port
Authority’s contractor, Geotrack, failed to discharge the Port Authority’s mark-out duty under
Section 763, the Port Authority is vicariously liable for any damages that proximately resulted
from that failure.
The Court declines to hold that Geotrack’s performance of the underground utility markout in this case was an “inherently dangerous activity,” and therefore denies JD2’s and Gemstar’s
motions to hold the Port Authority vicariously liable, as a matter of law, for the negligence of
Geotrack on that basis. Rather, JD2 and Gemstar will have to prove the requisite facts to establish
that Geotrack’s assigned activity was “inherently dangerous” and that the Port Authority should
be held vicariously liable for Geotrack’s negligence, if proved, on that basis. JD2 and Gemstar
will also be permitted, if they choose, to introduce evidence to support a claim of vicarious liability
based on the Port Authority’s negligent selection, instruction, or supervision of Gemstar, or based
on a theory of agency or employment.
20
Finally, the Court admonishes counsel to adhere strictly to the limitations this Court has
placed on the presentation of evidence and argument to the jury related to the Port Authority’s
vicarious liability in this action. Most importantly, counsel are not permitted to inform the jury of
the Court’s ruling on vicarious liability under New York General Business Law § 763, nor may
they argue to the jury that the Port Authority was prohibited from delegating its duties to Geotrack
because of the requirements of § 763. In addition, the only evidence that will be permitted with
respect to the Port Authority’s alleged negligent selection of Geotrack will be pre-incident
evidence relating to the Port Authority’s knowledge of Geotrack’s past deficient performance.
SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: August 11, 2017
Brooklyn, New York
21
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