Avis Budget Car Rental, LLC v. JD2 Environmental, Inc. et al

Filing 258

ORDER: For the reasons stated herein, the Court resolves the parties' various post-trial motions as follows: (1) Avis's motion to amend the judgment (Dkt. 225) is GRANTED and the Clerk of Court is directed to enter the Amended Judgment at tached to this Order; (2) Avis's motion for attorneys fees and costs (Dkt. 229) is GRANTED in part and DENIED in part, and JD2 is ordered to reimburse Avis for $826,915.47 in attorneys fees and $67,445.20 in litigation costs; (3) JD 2's motion for judgment as a matter of law against Gemstar for contractual indemnity (Dkt. 239) is DENIED; (5) JD2's and Gemstar's motions for judgment notwithstanding the verdict as to the Port Authority's vicarious liability for Geotrack's negligence (Dkt. 240, 244) are DENIED. Ordered by Judge Pamela K. Chen on 3/6/2018. (Hess, Alexandra)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------------x
AVIS BUDGET CAR RENTAL, INC.,
Plaintiff,
- against –

ORDER
12-CV-5010 (PKC)(ST)

JD2 ENVIRONMENTAL, INC., GEMSTAR
CONSTRUCTION CORP., and GEOTRACK, INC.,
Defendants.
----------------------------------------------------------------x
JD2 ENVIRONMENTAL, INC., and GEMSTAR
CONSTRUCTION CORP.,
Plaintiffs,
- against –
PORT AUTHORITY OF NEW YORK
AND NEW JERSEY and GEOTRACK, INC.,
Third-Party Defendants.
----------------------------------------------------------------x
PAMELA K. CHEN, United States District Judge:
Plaintiff Avis Budget Car Rental, LLC (“Avis”) hired JD2 Environmental, Inc. (“JD2”) to
install an underground storage tank (the “Project”) 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.) 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—were 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 ¶¶ 41-58.) 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.
After a two-week trial, a jury returned a verdict finding JD2 and Geotrack liable to Avis
for $1,392,646.93 based on Avis’s claims against JD2 for breach of warranty and negligence, and
Avis’s claim against Geotrack for negligence. (Dkt. 222 (Verdict Sheet).) The jury apportioned
65% of the fault to JD2 and 35% of the fault to Geotrack. (Id.) The following post-trial motions
are now before the Court: (i) Avis’s motion to amend the judgment (Dkt. 225); (ii) Avis’s motion
for attorney’s fees and costs (Dkt. 229); (iii) JD2’s motion for judgment as a matter of law against
Gemstar for contractual indemnity (Dkt. 239); (iv) JD2’s and Gemstar’s motions for judgment
notwithstanding the verdict as to the Port Authority’s vicarious liability for Geotrack’s negligence
(Dkt. 240, 244).
I.

Avis’s Motion to Amend the Judgment
On August 30, 2017, the Clerk of Court entered a judgment based on the jury’s verdict.

(Dkt. 224 (Judgment on Verdict).) The judgment stated that Avis was entitled to compensatory
damages in amount of $1,392,646.93, with JD2 responsible for 65% and Geotrack responsible for

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

35% of those damages. (Id.) In its motion, Avis asks the Court to amend the judgment in order to
(i) clarify that JD2 is jointly and severally liable for the entire amount of compensatory damages
awarded by the jury, and (ii) order the payment of an appropriate amount of pre-judgment and
post-judgment interest. (Dkt. 225.)
A. Joint and Several Liability
Under New York law, “a joint tortfeasor [may] be held liable for the entire judgment,
regardless of its share of culpability.” Rangolan v. Cty. of Nassau, 96 N.Y.2d 42, 46 (2001). The
only exception to joint and several liability in New York is contained in Article 16 of the NY Civil
Practice Law and Rules. NY CPLR §§ 1601 et seq. Article 16 only applies “in an action or claim
for personal injury” in which a defendant is apportioned less than 50% of the total fault relating to
“non-economic loss.” NY CPLR § 1601. Here, Avis seeks to recover damages for injury to
property. Accordingly, the exception to joint and several liability under New York law does not
apply, and JD2 and Geotrack are jointly and severally liable for the entire amount of Avis’s
damages. 2 Indeed, JD2 concedes that it is jointly and severally liable for the entire judgment.
(Dkt. 225 at 3-4.) The Amended Judgment reflects JD2’s and Geotrack’s joint and several liability
for the entire judgment amount of $1,392,646.93, including JD2’s right of contribution from
Geotrack in the event JD2 satisfies the judgment beyond its proportionate share of total fault. See
Nicholas v. Consol. Edison Co. of N.Y., 100 A.D.2d 957, 958 (N.Y. App. Div. 1984).

2

Moreover, the jury apportioned 65% fault to JD2. Thus, even if New York’s exception
to joint and several liability extended to property damage, JD2 would nonetheless be jointly and
severally liable for all of Avis’s damages in this case. Similarly, as JD2 concedes, JD2 would be
jointly and severally liable for the entire judgment under New Jersey law as well, because JD2’s
portion of fault exceeds the 60% threshold for joint and several liability under the applicable New
Jersey statute. (See Dkt. 225 at 3-4 (citing N.J. Stat. § 2A:15-5.3).)
3

B. Pre-judgment Interest
Avis asks the Court to compute pre-judgment interest based on New York’s 9% statutory
rate for pre-judgment interest. (Dkt. 225 at 1-4.) JD2 contends that the lower rate under New
Jersey statute should apply. (Dkt. 228 at 1.)
In a prior order, the Court determined that Avis’s claim against JD2 for breach of warranty
is governed by New Jersey law, whereas Avis’s claims against JD2 and Geotrack for negligence
are governed by New York law. See Avis Budget Car Rental, LLC v. JD2 Envt’l, Inc., 2017 WL
3671554, at *1-3 (E.D.N.Y. Aug. 23, 2017). In the verdict, the jury found in favor of Avis on all
three of these claims, i.e., the breach of warranty claim against JD2 and each of the separate
negligence claims against JD2 and Geotrack. (Dkt. 222.) Under New York choice of law rules,
which this Court must apply in this diversity action, “the allowance of prejudgment interest is
controlled by the law of [the state] whose law determined liability on the main claim.” Schwartz
v. Liberty Mut. Ins. Co., 539 F.3d 135, 147 (2d Cir. 2008) (alteration in original) (quoting Entron,
Inc. v. Affiliated FM Ins. Co., 749 F.2d 127, 131 (2d Cir. 1984)). For purposes of computing prejudgment interest, the Court construes the “main” claim to be the negligence claims against JD2
and Geotrack. Thus, New York law applies to the calculation of interest on the damages award in
this case.
JD2 contends that New Jersey law should determine the rate of pre-judgment interest
because the services contract between Avis and JD2 contained a choice-of-law clause selecting
New Jersey as the governing law. (Dkt. 228 at 1-2.) JD2 fails to explain, however, why the parties’
selection of New Jersey law in their contract would override the choice-of-law analysis that applies
to Avis’s negligence claim against both JD2 and Geotrack. (Id.) Although JD2 insinuates that
New Jersey’s lower rate of pre-judgment interest should be applied to prevent “forum shopping”

4

(id. at 2), the Court finds no such forum shopping here, where Avis merely seeks to apply the prejudgment interest rate of the state whose substantive law gives rise to Avis’s claim for negligence.
In addition, the Court finds no merit in JD2’s argument that Avis “waived” its right to seek the
New York pre-judgment interest rate by arguing that New Jersey law applies to the contract
between Avis and JD2. (Id. at 2.) Avis’s decision to enforce the choice-of-law provision in its
contract with JD2, and to its breach of contract claim against JD2, does not foreclose Avis from
also availing itself of the tort remedies to which it is entitled under New York law.
For these reasons, the Court holds that pre-judgment interest shall be computed based on
New York’s statutory rate of 9%. See NY CPLR § 5004. The parties agree that the period of time
over which such interest accrued was December 15, 2011 through August 24, 2017. (Dkt. 235 at
5; Dkt. 228 at 3.) Accordingly, the total pre-judgment interest that shall be included in the amended
judgment (“Amended Judgment”) is $715,973.14.
C. Post-judgment Interest
Although pre-judgment interest is calculated under state law, the federal rate of interest
under 28 U.S.C. § 1961 applies to the post-judgment interest accruing on the total judgment
amount. See Cappiello v. ICD Pubs., Inc., 720 F.3d 109, 112 (2d Cir. 2013). Accordingly, the
Amended Judgment orders payment of post-judgment interest pursuant to 28 U.S.C. § 1961.
II.

Avis’s Motion for Attorney’s Fees and Costs
JD2 performed design and oversight services on the Project pursuant to a written agreement

(the “Agreement”) with Avis. In this action, Avis asserted three claims against JD2 based on the
Agreement: (i) breach of contract, (ii) breach of warranty, and (iii) contractual indemnification.
The jury found in favor of JD2 on Avis’s claim for breach of contract, and the jury found in favor

5

of Avis on Avis’s claim for breach of warranty. (Dkt. 222.) 3 Avis now seeks to recover the
attorney’s fees and litigation costs it expended in this action pursuant to a fee-shifting provision in
the Agreement, which provides: “If suit is filed hereon, the prevailing party shall, in addition to
any other remedy, be entitled to reasonable attorneys’ fees and costs.” (Dkt. 231-1 at 4.)
As a threshold matter, the Court finds that Avis is a “prevailing party” within the meaning
of the fee-shifting provision of the Agreement. As part of the verdict, the jury found that JD2
breached its warranty to perform its obligations under the Agreement with the requisite degree of
skill and care. (Dkt. 222; Dkt. 231-1 at 4.) Indeed, JD2 does not dispute that Avis is a prevailing
party under the fee-shifting provision of the agreement. (See Dkts. 228, 243.) Instead, JD2 argues
that the Court should deny or reduce the amount of attorney’s fees and costs that Avis seeks to
recover as unreasonable. (See Dkt. 243.) Accordingly, the Court has reviewed the reasonableness
of Avis’s application under the governing legal standards.
A. Legal Standards
The fee-shifting provision in the Agreement entitles Avis to recover “reasonable”
attorney’s fees and costs incurred in this litigation. As the party seeking reimbursement for
attorney’s fees and costs, Avis “bears the burden of proving the reasonableness and necessity of
hours spent and rates charged.” Morin v. Nu-Way Plastering Inc., No. 03-CV-405, 2005 WL

3

Avis’s claim for contractual indemnification was not sent to the jury because the
resolution of that claim depended entirely on the outcome of Avis’s claim against JD2 for
negligence. The indemnification provision in question states that “[e]ach party agrees to
indemnify, hold harmless, and defend the other from and against all loss, cost and expense to the
extent arising out of any bodily injury and property damage caused by the negligence or intentional
misconduct or omissions of the indemnifying party, its agents, employees or subcontractors.”
(Dkt. 231-1 at 3.) Thus, to the extent the jury found JD2 liable in negligence for the property
damage of which Avis complains in this lawsuit, JD2 is liable to Avis for indemnification under
the Agreement to the same extent.
6

3470371, at *2 (E.D.N.Y. Dec. 19, 2005) (citing New York State Ass’n for Retarded Children, Inc.
v. Carey, 711 F.2d 1136 (2d Cir. 1983)).
In determining the reasonableness of an application for costs and fees, a district court
should seek to determine what “a reasonable, paying client would be willing to pay.” Arbor Hill
Concerned Citizens Neighborhood Ass’n v. Cty. of Albany & Albany Cty. Bd. of Elections, 522
F.3d 182, 184 (2d Cir. 2008). In making this assessment, the district court should consider, among
other things, the twelve Johnson factors:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3)
the skill required to perform the legal service properly; (4) the preclusion of other
employment by the attorney due to acceptance of the case; (5) the customary fee;
(6) whether the fee is fixed or contingent; (7) time limitations imposed by the client
or the circumstances; (8) the amount involved and the results obtained; (9) the
experience, reputation, and ability of the attorneys; (10) the “undesirability” of the
case; (11) the nature and length of the professional relationship with the client; and
(12) awards in similar cases.
Incredible Foods Grp., LLC v. Unifoods, S.A. De C.V., 14-CV-5207(KAM)(JO), 2016 WL
4179943, at *2 n.2 (E.D.N.Y. Aug. 5, 2016) (citing Johnson v. Ga. Highway Exp., Inc., 488 F.2d
714, 717-19 (5th Cir. 1971)). In addition, where, as here, the prevailing party has actually incurred
and paid attorney’s fees during the litigation, “the court will order the losing party to pay the
amounts incurred by the prevailing party as long as the amounts are not unreasonable.” Id. at *23 (citing F.H. Krear & Co. v. Nineteen Named Trustees, 810 F.2d 1250, 1263 (2d Cir. 1987)).
B. Avis’s Fee Application
In its application for costs and fees, Avis seeks reimbursement for $839,931.47 in legal
fees paid to its counsel in this action, Nixon Peabody LLP, and $67,445.20 in litigation costs. (Dkt.
246 ¶ 26.)

7

1. Attorney’s Fees
Avis seeks reimbursement for the $839,931.47 it paid in legal fees to its counsel, Nixon
Peabody LLP, for 2,486 hours of work by attorneys and paralegals over the course of this fiveyear litigation. In support of its fee application, Avis has submitted voluminous billing records
documenting the billable work performed by Nixon Peabody attorneys and paralegals. (Dkts. 230,
230-1, 246.) Avis also submitted a chart breaking down the hours worked and applicable billing
rate for each of the attorneys and paralegals whose work was billed to Avis in connection with this
litigation. (Dkt. 230 ¶ 50.)
JD2 contends that the attorney’s fees for which Avis seeks reimbursement were
unreasonable because of the billing rates charged by Nixon Peabody and the number of hours
billed. According to JD2, the billing rates for several Nixon Peabody paralegals and attorneys are
inflated and should be reduced for purposes of any fee award. (See Dkt. 243.) In addition, JD2
argues that the number of attorney and paralegal hours on various aspects of the litigation were
unreasonable and should not be credited for purposes of any fee award. (Id.) Finally, JD2 argues
that certain of Nixon Peabody’s billing entries are insufficiently detailed to support an award of
fees. (Id.) Based on these alleged deficiencies, JD2 asks the Court to apply lower hourly rates and
reduce the overall time expenditure “by at least 50%” in granting Avis’s motion for attorney’s
fees. (Id.)
Aside from taking a few pot-shots at a hand-picked group of time entries submitted by Avis
(see Dkt. 243 at ECF 13-15), JD2 has given the Court little guidance as to which of the attorney’s
fees that Avis incurred in this litigation were “unreasonable” for purposes of Avis’s fee application.
Indeed, JD2 acknowledges that it “does not set forth a line by line analysis of each time entry”
submitted by Avis “[f]or the sake of brevity and the preservation of resources.” (Id. at ECF 13.)

8

Instead, JD2 points to a few recent cases in this district in which attorney billing rates were lower
than those that Avis paid to Nixon Peabody in this case (see id. at ECF 9-10), and argues generally
that Nixon Peabody should have litigated this action using lower-cost legal personnel and fewer
hours (see id. at ECF 6-9, 12-13).
With respect to the reasonableness of the hourly rates that Avis paid in this litigation, the
Court finds that the hourly rates charged by Nixon Peabody were reasonable. At the top end,
Nixon Peabody charged $485 per hour for work performed by its lead trial counsel, Joseph J.
Ortego, who is the co-leader of Nixon Peabody’s Commercial Litigation practice, has practiced
law for more than 37 years, and has tried more than 100 cases to verdict in that time. (Dkts. 2301 ¶ 50, 230-2.) Similar rates, between $345 and $485, were charged for other Nixon Peabody
partners who worked on the litigation, each of whom had between 11 and 32 years of experience.
(Dkt. 230-1 ¶ 50.) Nixon Peabody charged lower rates, between $245 and $335, for work
performed by associate attorneys with between 1 and 15 years of experience. (Id.) Finally, for
paralegal work, Nixon Peabody charged between $180 and $275 for paralegals with experience
ranging from 5 to 26 years. (Id.) Based on its familiarity with the legal market in this district,
other applications for attorney’s fees in this district, and recent decisions issued by other judges in
this district, the Court finds the fees charged by Nixon Peabody are well within the reasonable
range in the relevant market. See, e.g., U.S. ex rel. Doe v. Acupath Labs., Inc., No. 10-CV-4819,
2015 WL 1293019, at *10 (E.D.N.Y. Mar. 19, 2015); Olympus Imaging Am., Inc. v. Reifschneider
S.A., No. 10-CV-4516 (ILG), 2011 WL 2490596 (E.D.N.Y. Jun. 22, 2011); Carco Grp., Inc. v.
Maconachy, No. 05-CV-6038 (ARL), 2011 WL 6012426, at *3 (E.D.N.Y. Dec. 1, 2011).
Furthermore, the fact that Avis in fact paid the requested hourly rates for the work performed in
this litigation is strongly indicative that the rates were reasonable. See Andrews v. City of New

9

York, 118 F. Supp. 3d 630, 639 (S.D.N.Y. 2015) (“[T]he amount actually paid to an attorney by
paying clients is strong evidence of a reasonable market rate.”). The empirical evidence of market
rates that Avis submitted in support of its application (Dkt. 246-2) further corroborates the Court’s
finding of reasonableness. JD2’s suggestion that the Court should place a hard cap of $400 per
hour for partner time, $250 for associate time, and $150 for paralegal time (Dkt. 243 at ECF 9-11)
is neither required by, nor consistent with, the prevailing rates in this district. In short, the Court
finds that the rates charged by Nixon Peabody were reasonable.
With respect to the reasonableness of the hours worked by Nixon Peabody personnel in
this litigation, the Court reviewed the time entries submitted by Nixon Peabody in support of its
fee application (Dkt. 230-1). 4 In particular, the Court has reviewed these entries in consideration
of JD2’s assertion that Avis “has proffered inadequate records, including insufficient descriptions
of the nature of the work done, such that the Court cannot reasonably be expected to decipher
whether Nixon Peabody’s work was justified or excessive, redundant, or otherwise unnecessary.”
(Dkt. 243 at ECF 13.) Based on this review, the Court makes the following reductions to Avis’s
fee award:

4

The Court cannot help but marvel at JD2’s decision to not submit a line-by-line challenge
to Avis’s time entries, yet expect the Court to conduct that same labor-intensive review to assess
the reasonableness of the hours worked by Nixon Peabody personnel.
10

Record
Citation 5
Pg. 31/244

Date

Name

Rate

1/7/13

J. Herman

$230

Pg. 50/244

6/4/13

K. Halpern

$250

Pg. 50/244

6/19/13

K. Halpern

$250

Pg. 92/244

2/25/14- T. Mealiffe
2/27/14

$345

Pg. 111/244

5/8/14

B. Widro

$245

Pg. 127/244

10/3/14

T. Mealiffe

$345

Pg. 133/244

12/8/14

C. Hampton

$340

Pg. 203/244

6/19/17

E. Goergen

$300

Pg. 204/244

6/20/17

E. Goergen

$300

5

Hours
Revised
Reason
Recorded Hours
1.40
.40
General background
on court procedures
not compensable.
4.90
2.00
General background
research on default
judgment practice not
compensable.
2.70
1.00
General background
research on proofs of
claim not
compensable.
11
4
Excessive time spent
on settlement
statement not integral
to pursuit of claims in
litigation.
3.00
1.00
Excessive time spent
on general
background research
re: obtaining
telephone records for
litigation.
2.50
0
Duplicative of prior
research re: joint and
several liability.
5.40
4.00
Excessive time spent
on general legal
research.
4.60
0
General background
research on federal
jurisdiction not
compensable.
5.30
0
Summary of
background facts and
court decisions in this

All citations in this table are to the Nixon Peabody time records submitted in support of
Avis’s fee application. (Dkt. 230-1.)
11

Record
Citation 5

Date

Name

Rate

Hours
Revised
Recorded Hours

Pg. 207/244

6/21/17

E. Goergen

$300

5.80

2.00

Pg. 211/244

9/15/17

J. Garcia

$300

7.00

3.00

Pg. 223/244

8/11/17

L. DesRos.

$300

4.90

0

Pg. 237/244

8/14/17

B. Widro

$245

2.50

0

Reason
very litigation not
compensable.
Excessive time spent
drafting summary of
Avis’s causes of
action for joint pretrial order.
Excessive time spent
researching general
legal doctrines.
General background
research on trial
procedure not
compensable.
Travel time not
compensable.

In total, the Court reduces Avis’s award of attorney’s fees by 43.6 hours, amounting to a
reduction of $13,016. Accounting for this reduction, the Court finds that Avis is entitled to
reimbursement of reasonable attorney’s fees in the amount of $826,915.47.
As a crosscheck, the Court has also considered the reasonableness of Avis’s $826,915.47
in attorney’s fees in light of the twelve Johnson factors. Johnson, 488 F.2d at 717-19. Under
those factors, the Court observes that this litigation has gone on for five years and has involved,
inter alia: (1) extensive third-party practice; (2) two years of document and deposition discovery,
discovery motions and conferences with the magistrate judge; (3) two rounds of summary
judgment motions; 6 (4) expert discovery and reports; and (5) a two-week jury trial. Although the
claims alleged were fairly straightforward claims of negligence and breach of contract, the various

6

As Avis rightly observed in its memoranda, JD2 initiated a second round of summary
judgment practice on the eve of trial by asking for summary judgment findings in the guise of a
motion in limine.
12

legal issues they raised, including a novel question of New York statutory law and difficult
questions of choice of law, made this a more complex case than the typical negligence or breachof-contract action. The results obtained by Nixon Peabody—a full recovery of all damages sought
by Avis—further reinforces the reasonableness of the work performed. In short, viewing the fee
award against the backdrop of the litigation as a whole, the Court finds nothing unreasonable about
the award of $826,915.47 for Nixon Peabody’s work on this litigation.
2. Litigation Costs
Avis also seeks reimbursement for $67,445.20 in litigation costs. (Dkt. 247 ¶ 5.) Avis has
supplied receipts and other documentation of these litigation costs, which Avis actually incurred
and paid during the course of this litigation. (Dkt. 230-1, 231-2, 247 ¶¶ 5-6.) JD2 does not
challenge any of the litigation costs that Avis seeks to recover. (Dkt. 243.) The Court has reviewed
these litigation costs and finds them reasonable in their entirety.
In summary, the Court grants Avis’s application for attorney’s fees and litigation costs in
the amounts of $826,915.47 and $67,445.20, respectively.
III.

JD2’s Motion for Judgment as a Matter of Law Against Gemstar
In its motion for judgment as a matter of law against Gemstar (Dkt. 239), JD2 seeks

indemnification from Gemstar for the 35% portion of Avis’s damages for which fault was
apportioned to Geotrack. JD2 also seeks indemnification from Gemstar for 35% of any attorney’s

13

fees and litigation costs that JD2 is required to pay under the fee-shifting provisions of its
agreement with Avis. (Id. at 8.)
JD2 seeks this indemnification under a provision of a subcontract between JD2 and
Geotrack that set the terms of Geotrack’s work on the JFK Project. The indemnification provision
states that Gemstar would:
save harmless and indemnify [JD2] against all loss, liability, damages and expense
caused by or in connection with the work of [Gemstar] hereunder. It is understood
that the intent of this provision is to absolve and protect [JD2] from any and all loss,
liability, damage, expense and injury of any kind whatsoever, to all persons,
whether employees or otherwise, and to all property caused by or connected with
the work of [Gemstar] hereunder.
(Dkt. 252-1 at 1.)
During a charge conference in the trial in this matter, the Court and counsel for JD2 and
Gemstar discussed the scope of this indemnification provision. (Tr. 2162-2163.) In the course of
that discussion, both parties’ counsel agreed that the property damage giving rise to this litigation
was caused “in connection with the work of [Gemstar]” under the subcontract. (See id.) Indeed,
as a result of that agreement between counsel for JD2 and counsel for Gemstar, the Court did not
submit to the jury the question of whether Avis’s damages fall within the scope of the
indemnification provision at issue. (Id.) Counsel for JD2 explicitly relied on counsel for
Gemstar’s stipulation to this fact in agreeing to not submit JD2’s claim for contractual
indemnification to the jury. (Id.) Based on that stipulation, the Court finds that JD2’s exposure

14

for Geotrack’s 35% portion of the damages award to Avis is within the scope of the
indemnification provision. 7
Gemstar, however, contends that JD2’s claim for contractual indemnification is barred by
New York General Obligation Law § 5-322.1, which provides, in relevant part:
A covenant, promise, agreement or understanding in, or in connection with or
collateral to a contract or agreement relative to the construction, alteration, repair
or maintenance of a building, structure, appurtenances and appliances including
moving, demolition and excavating connected therewith, purporting to indemnify
or hold harmless the promisee against liability for damage arising out of bodily
injury to persons or damage to property contributed to, caused by or resulting from
the negligence of the promisee, his agents or employees, or indemnitee, whether
such negligence be in whole or in part, is against public policy and is void and
unenforceable . . . .
N.Y. Gen. Oblig. Law § 5-322.1.
In Irti Brick & Concrete Corp. v. Aetna Cas. & Sur. Co., the New York Court of Appeals
ruled that Section 5-322.1 invalidates indemnification provisions that purport to indemnify general
contractors for their own negligence. 89 N.Y.2d 786, 793-94 (1997). The court in Irti Brick

7

Gemstar now seeks to walk back its stipulation, arguing that it stipulated only that
“Gemstar’s alleged negligence was within the scope of the indemnity provision.” (Dkt. 251 at 13
(emphasis in original).) But that interpretation of the record is untenable. The focus of the
discussion between the Court and counsel for JD2 and Gemstar was not whether New York’s antiindemnity provision barred JD2 from recovering for its own negligence—an issue that the parties
agreed the Court should decide post-trial—but rather, whether the indemnification provision in
JD2’s and Gemstar's contract was triggered simply by the damages being “in connection with”
Gemstar’s work under the contract, such that it was necessary for the jury to make such a finding
at trial. (Tr. 2159-60.) The discussion made clear that JD2’s indemnity claim against Gemstar
was designed such that, “if [JD2] [is] found liable and [has] to pay some money . . . that would be
the damage that [JD2] [would] want mitigated by another party.” (Tr. 2158.) Thus, the only
coherent interpretation of JD2’s and Gemstar’s stipulation concerning the scope of the
indemnification provision is the one pressed by JD2—namely, that damages incurred by JD2 due
to its joint and several liability for the acts of other parties (such as Geotrack) fall within the
indemnification provision, regardless of Gemstar’s negligence or lack thereof, because they arise
“in connection with” Gemstar’s work on the JFK Project. Gemstar must be held to this stipulation,
given the Court’s and JD2’s reliance on that stipulation in not sending JD2’s indemnification claim
to the jury. However, as discussed below, this stipulation ultimately must give way to New York’s
prohibition on such indemnification agreements.
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expressly ruled, among other things, that a general contractor cannot enforce an indemnification
provision in whole or in part when the indemnification provision purports to insulate the general
contractor for its own negligence. Id. Pursuant to the Court of Appeals decision in Irti Brick,
courts in New York have consistently held that indemnification provisions purporting to insulate
a general contractor from liability for its own negligence are unenforceable in their entirety, unless
the indemnification provision contains a clause limiting the subcontractor’s obligation to that
permitted by law or to the subcontractor’s own negligence. See, e.g., Rodriguez v. City of N.Y.,
13-CV-327(JG)(CLP), 2015 WL 4078618, at *1 (E.D.N.Y. July 6, 2015); Smith v. Nestle Purina
Petcare Co., 105 A.D.3d 1384, 1387 (N.Y. App. Div. 2013).
Given this authority, the Court finds that the indemnification provision that JD2 seeks to
enforce against Gemstar is unenforceable as a matter of New York law. By its clear and
unambiguous terms, the indemnification provision purports to entitle JD2 to indemnification from
Gemstar for JD2’s own negligence. Therefore, New York General Obligation Law § 5-322.1 and
related caselaw prohibit JD2 from enforcing the indemnification provision, even with respect to
the portion of Avis’s damages that the jury apportioned to Defendant Geotrack. Accordingly, the
Court denies JD2’s motion for judgment as a matter of law as to its claim for contractual
indemnification against Gemstar. 8
IV.

JD2’s and Gemstar’s Motions for Judgment Notwithstanding the Verdict
A. Background
Before trial, JD2 and Gemstar filed motions in limine seeking a ruling that the Port

Authority is vicariously liable for any apportionment of fault assigned to Defendant Geotrack. By

8

Having ruled that JD2 is barred from enforcing the indemnification provision, the Court
need not decide whether the indemnification provision, if valid, would entitle JD2 to recover from
Gemstar 35% of JD2’s obligation to Avis for its attorney’s fees in this action.
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order dated August 11, 2017, the Court denied JD2’s and Gemstar’s motion to find the Port
Authority vicariously liable for the negligent acts of Geotrack on the theory that the mark-out
services performed by Geotrack were an “inherently dangerous activity.” Avis Budget Car Rental,
LLC v. JD2 Envt’l, Inc., 2017 WL 3476044, at *4-5 (E.D.N.Y. Aug. 11, 2017). However, the
Court ruled that the Port Authority was vicariously liable for the negligent acts of Geotrack
because, as an “operator” of the sewer line that was struck in this case, the Port Authority had a
non-delegable duty under New York General Business Law § 763 to accurately and with due care
designate the location of its 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. Id. at *9. The Court also indicated, however, that it would vacate
its finding of vicariously liability if, within a specified time, the Port Authority could submit
evidence showing that it was not in fact the “operator” of the sewer line at issue in this case. Id.
at *8-9. The Port Authority thereafter filed a motion for reconsideration of the Court’s finding of
vicarious liability, with supporting testimony and documentation suggesting that the Port
Authority was not the “operator” of the sewer line in question and, therefore, did not have any
mark-out duties under Section 763 of the General Business Law. (Dkt. 202.) In response to the
Port Authority’s motion for reconsideration, the Court, on the eve of trial and in an abundance of
caution, granted the Port Authority’s motion for reconsideration and vacated the August 11, 2017
Order “to the extent it held as a matter of law that the Port Authority was the ‘operator’ of the
sewer line in question within the meaning of New York General Business Law § 763[,]” Avis
Budget Car Rental, LLC v. JD2 Envt’l, Inc., 2017 WL 3668767, at *1 (E.D.N.Y. Aug. 22, 2017),
to allow the parties to offer evidence at trial on this issue.

17

At trial, the jury was charged, in relevant part, with the following questions related to the
Port Authority’s vicarious liability for negligent acts by Geotrack: “[15: ] Do the utility locating
services (or ‘mark-outs’) assigned by the Port Authority to Geotrack constitute ‘inherently
dangerous work’? . . . [16: ] Was the Port Authority the operator of the underground sanitary line
that was damaged during the Avis JFK Project?” (Dkt. 222 at 6.) The jury answered “No” to both
of these questions, which amounted to a finding that the Port Authority is not vicariously liable for
the 35% of fault that the jury apportioned to Geotrack.

In their motions for judgment

notwithstanding the verdict, JD2 and Gemstar ask the Court in effect to overrule both of these
findings by the jury.
B. Legal Standard
The standard on a motion for judgment as a matter of law under Federal Rule of Civil
Procedure 50 is similar to the standard on a motion for summary judgment. This is Me v. Taylor,
157 F.3d 139, 142 (2d Cir. 1998) (“The same standard that applies to a pretrial motion for summary
judgment pursuant to Fed. R. Civ. P. 56 also applies to motions for judgment as a matter of law
during or after trial pursuant to Rule 50.”). Judgment as a matter of law is appropriate where “the
evidence is such that, without weighing the credibility of the witnesses or otherwise considering
the weight of the evidence, there can be but one conclusion as to the verdict that reasonable
[persons] could have reached.” Perry v. Metro. Suburban Bus. Auth., 390 F. Supp. 2d 251, 257
(E.D.N.Y. 2005). Where a jury has already returned a verdict, judgment as a matter of law is rarely
appropriate, and a “verdict should be directed in such instances only if the evidence in favor of the
movant is so overwhelming that the jury could rationally reach no other result.” Broadnax v. City
of New Haven, 415 F.3d 265, 270 (2d Cir. 2005) (quoting Granite Computer Leasing Corp. v.
Travelers Indem. Co., 894 F.2d 547, 551 (2d Cir. 1990)).

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C. Application
1. Inherently Dangerous Work
The Court can quickly dispose of the first ground on which JD2 and Gemstar move for
judgment as a matter of law. As the Court summarized in its August 11, 2017 order, in most cases,
“whether . . . work is inherently dangerous is . . . a question of fact to be determined by the jury.”
Avis, 2017 WL 3476044, at *4 (quoting Rosenberg v. Equitable Life Assur. Socy., 79 N.Y.2d 663,
669 (1992)). Indeed, the caselaw in New York illustrates that the question of whether work is
“inherently dangerous” is extremely fact intensive and depends on the entirety of the circumstances
that surround the work in question. See id. (collecting cases). In this case, the jury received
evidence concerning the location of the Project, the proximity of the Project site to roads and other
trafficked areas, the scope of excavation being performed, the various safety responsibilities shared
by participants in the Project, the types of underground utilities that ran under the dig site, and the
various risks associated with performing excavation in the area. Based on that evidence, the jury
determined that the mark-out work performed by Geotrack was not “inherently dangerous” within
the meaning of New York law. Neither JD2 nor Geotrack has pointed to any error in the Court’s
instructions to the jury on the question of “inherently dangerous work,” nor have they identified
any New York caselaw suggesting that the jury’s determination was incorrect as a matter of law.
Accordingly, the Court denies JD2’s and Gemstar’s request for a finding that Geotrack’s mark-out
duties were “inherently dangerous work” rendering the Port Authority vicariously liable.
2. Non-delegable Duty under N.Y. Gen. Bus. Law § 763
In the August 11, 2017 order, the Court held, as a matter of law, that an “operator” of an
underground utility has a non-delegable duty under New York General Business Law § 763 to
accurately and with due care designate the location of its underground facilities upon receipt of a

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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. Avis, 2017 WL 3476044, at *9.
None of the parties challenges this legal ruling in their pending motions. Rather, JD2 and Gemstar
argue that, contrary to the jury’s finding, the Port Authority was the “operator” of the sewer line
in question within the meaning of Section 763 and, therefore, is vicariously liable for the negligent
acts of Geotrack in performing its mark-out of the sewer line. (Dkts. 240, 244.) Avis and the Port
Authority both oppose JD2’s and Gemstar’s motions.
The jury was instructed as follows concerning the meaning of an “operator” under Section
763 of the General Business Law:
You have heard the parties argue about whether the Port Authority is the operator
of the underground sanitary line that was damaged during the Avis JFK project. An
operator is a person or entity that 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.
(Dkt. 221 (Jury Instructions).) In its verdict, the jury found that the Port Authority was not
the operator of the sewer line in question. (Dkt. 222.)
As a threshold matter, the Court notes that its consideration of JD2’s and Gemstar’s
motions for judgment notwithstanding the verdict is limited to “the evidence that was actually
admitted at trial, not the earlier summary judgment records” or the new records that JD2 has
attached to its post-trial motion. Rothstein v. Carriere, 373 F.3d 275, 284 (2d Cir. 2004); see also
LNC Investments, Inc. v. First Fidelity Bank, 126 F. Supp. 2d 778, 785 (S.D.N.Y. 2001) (“[I]t is
inherent in the standards which govern the granting or denial of a Rule 50(b) . . . motion that the
motion must be determined on the basis of the evidence the trial judge admitted and the jury
considered.”).

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In consideration of the evidence admitted at trial, the Court finds that a rational jury could
have found, as the jury here found, that JD2 and Gemstar did not carry their burden to establish
that the Port Authority was the “operator” of the sewer line in question. Indeed, there are numerous
evidentiary grounds on which the jury might have made that determination. 9 For example, none
of the witnesses who testified at trial had personal knowledge of whether the Port Authority owned,
monitored, or maintained the sewer line in question, and neither JD2 nor Gemstar adduced any
documentary evidence to that effect. In the absence of such evidence, the jury was within its
discretion to find that JD2 and Gemstar had simply failed to satisfy their burden of proof as to
whether the Port Authority operated the sewer line. 10 In addition, the jury was also permitted to
credit the testimony of Port Authority engineer Christopher Ragnauth, who testified, based on
personal knowledge, that the Port Authority does not have a responsibility to maintain the sewer
lines running through JFK. (Tr. 2061-2062.)
To be sure, some of the evidence adduced at trial suggested that the Port Authority was the
operator of the sewer line in question. Evidence at trial showed that the Port Authority was listed
as the operator of the sewer line on One-Call notification records, the Port Authority in fact

9

JD2 contends that the Port Authority “admitted” in its summary judgment papers that it
was the operator of the sewer line in question. However, even assuming that JD2 has construed
those supposed “admissions” correctly, they are not binding at this phase of the litigation. See
Fed. R. Civ. P. 56(g) (granting the district court discretion, when it denies a motion for summary
judgment, to “enter an order stating any material fact . . . that is not genuinely in dispute and
treating the fact as establish in the [remainder of the] case”); see also Pahuta v. Massey-Ferguson,
Inc., 170 F.3d 125, 130 (2d Cir. 1999) (“The district court’s judgment on the verdict after a full
trial on the merits [ ] supersedes the earlier summary judgment proceedings.”).
10

For example, JD2’s and Gemstar’s experts, Brian Streb and Robert O’Connor, purported
to provide testimony concerning whether the Port Authority owned or operated the sewer line. Yet
neither expert had personal knowledge of that subject, nor did they identify a competent factual
basis on which to infer that the Port Authority operated the sewer line. (Tr. 1878, 1907-1921,
2028.)
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received a One-Call notification in regard to the sewer line, the Port Authority hired Geotrack to
mark out the underground sewer line, and the Port Authority generally performs mark-outs only
for the utilities that it owns and operates. (Tr. 1539, 1585, 1489-1490, 1188-1189.) As JD2 and
Gemstar argue, this evidence is all consistent with the notion that the Port Authority was the
operator of the sewer line in question. (Dkt. 240-2 at ECF 12-20; Dkt. 244 at 9-13.) Given this
evidence, the jury may very well have been within its discretion to find that the Port Authority was
the operator of the sewer. However, given the absence of any witness with personal knowledge of
whether the Port Authority was the operator of the sewer line, as well as the contrary evidence, the
Court cannot find, as a matter of law, that “the evidence in favor of the movant is so overwhelming
that the jury could rationally reach no other result.” Broadnax, 415 F.3d at 270.
Finally, the Court addresses JD2’s cursory request for a new trial pursuant to Federal Rule
of Civil Procedure 59. (Dkt. 240-2 at ECF 2 (“Alternatively, this Court should order a new trial
on the issue [of the Port Authority’s vicarious liability].”).) Although it requests a new trial as an
“alternative” form of relief, JD2 fails to state the grounds on which a new trial should be granted.
“[A] court considering a Rule 59 motion for a new trial must bear in mind that the court should
only grant such a motion when the jury’s verdict is egregious.” DLC Mgmt. Corp. v. Town of
Hyde Park, 163 F.3d 124, 134 (2d Cir.1998) (citation omitted). “The general grounds for a new
trial are that (1) the verdict is against the clear weight of the evidence; (2) the trial court was not
fair; (3) substantial errors occurred in the admission or rejection of evidence or the giving or refusal
of instructions to the jury; or (4) damages are excessive.” Newton v. City of New York, 171 F.
Supp. 3d 156, 164 (S.D.N.Y. 2016). Here, although JD2 requested a new trial on the issue of the
Port Authority’s vicarious liability as an “alternative” remedy (Dkt. 240-2 at ECF 2), JD2 has not
identified the specific grounds on which a new trial should be granted. Indeed, considering the

22

trial proceedings and the verdict as a whole, the Court finds no such ground. Thus, JD2’s
perfunctory motion for a new trial is denied.
CONCLUSION
For the foregoing reasons, the Court resolves the parties’ various post-trial motions as
follows: (1) Avis’s motion to amend the judgment (Dkt. 225) is GRANTED and the Clerk of
Court is directed to enter the Amended Judgment attached to this Order; (2) Avis’s motion for
attorney’s fees and costs (Dkt. 229) is GRANTED in part and DENIED in part, and JD2 is ordered
to reimburse Avis for $826,915.47 in attorney’s fees and $67,445.20 in litigation costs; (3) JD2’s
motion for judgment as a matter of law against Gemstar for contractual indemnity (Dkt. 239) is
DENIED; (5) JD2’s and Gemstar’s motions for judgment notwithstanding the verdict as to the
Port Authority’s vicarious liability for Geotrack’s negligence (Dkt. 240, 244) are DENIED.

SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: Brooklyn, New York
March 6, 2018

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