NY Supreme Court Strikes Contractor Liability Limitation Provision

Many contractors and subcontractors go about their work feeling protected from claims for damages because their agreements contain certain exclusions. Some of these agreements will even have language stating ‘Not responsible for [X, Y, and Z]’.

But the ruling handed down February 14, 2012 by the Supreme Court, Nassau County serves as a reminder that contractual indemnity provisions are more of a privilege than a right, and are not subject to enforcement automatically.

“The law is settled that a party seeking contractual indemnification must prove itself free of negligence in order to enforce the indemnity clause.” Cibellis Constr., Inc., v. Hamilton Owners, Inc.This effectively places an affirmative burden on the party seeking the enforcement of this protection to prove that no negligence on their part exists. The proving of any negative event can be challenging however, like proving the Loch Ness monster does not exist.

Ultimately this line of logic is what caused the ruling to come down against this contractor, as the court declined enforcement of its contractual indemnity protection. As the underlying project facts of this matter relate to damages to the underground electrical service caused during excavation of a driveway, it was found to be evidence of negligence on the contractor’s part for failure to call the “one-call” notification system to verify the precise locations of the underground facilities.

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John Caravella, construction attorneyThe author, John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: [email protected] or (631) 608-1346.

This is a general information article and should not be construed as legal advice or a legal opinion.  Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.

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