On December 11, 2012, in a four-to-two decision, the New York State Court of Appeals upheld the dismissal of a plaintiff's personal injury action against a high-rise luxury condominium, the condominium's board of managers and the board's managing agent. Guryev v. Tomchinsky, 2012 NY Slip Op 8443, is a significant precedent for condominium associations and an important milestone in the court's ongoing interpretation of the New York Labor Law, which imposes absolute liability on property owners, general contractors and their agents for failing to provide safe working conditions for construction workers. Although a property owner's liability under the Labor Law is determined by the nature of the ownership interest, the courts have also required a nexus between the property owner and the injured worker.

The Labor Law, particularly sections 200, 240(1) and 241(6), has been instrumental in allowing construction workers to recover damages, above and beyond the benefits available through the workers’ compensation system, for personal injuries sustained while performing construction and renovation work. To date, these sections of the Labor Law have been liberally or broadly interpreted by the courts to effectuate the purpose of the state legislature in adopting the law. The courts have held that in enacting the Labor Law, particularly sections 240 and 241, the state legislature meant to place “ultimate responsibility for safety practices at building construction jobs where such responsibility actually belongs, on the owner and general contractor instead of on workers, who are scarcely in a position to protect themselves from accident.” See Balbuena v. IDR Realty, LLC, 6 N.Y.3d 338, 358 (2006) citing Zimmer v. Chemung County Performing Arts, 65 N.Y.2d 513, 520 (1985), quoting Koenig v. Patrick Constr.Co., 298 N.Y. 313, 318 (1948).

Case Background

The plaintiff in Guryev was injured while renovating an individual condominium unit when a nail fired from a nail gun ricocheted, striking Mr. Guryev in the eye. At the time, he was employed by a contractor that had been hired by the individual condo unit owner to remodel the apartment. The unit owner (who was also a defendant) had the remodeling plans approved by the condominium association and the association retained the right to approve or disapprove of individual contractors and to stop the work if it found it necessary to do so.

Mr. Guryev sued his employer and the individual condominium unit owner. In addition, he sued the condominium, the board of managers and the managing agent for the building (which the court referred to collectively as the “condominium defendants”). The plaintiff alleged that the defendants had violated section 241(6) of the Labor Law, which imposes a non-delegable duty on property owners, general contractors and their agents to provide reasonable and adequate protection and safety for workers and to comply with specific sections of the New York State Industrial Code. Here, the plaintiff argued that the defendants failed to ensure that workers were provided with safety goggles, which would be a violation of the Industrial Code. Owners of one- and two-family dwellings who contract for work, but who do not direct the work are exempt from the statute's provisions.

The plaintiff's employer and the condominium defendants moved to dismiss the plaintiff's complaint. The trial court denied the motions. On appeal, the Appellate Division, Second Department (an intermediate appellate court) reversed and granted judgment to the condominium defendants dismissing the plaintiff's cause of action. The Court of Appeals granted leave for the plaintiff to take a further appeal and upheld the order of the Appellate Division.

Decision

Although the condominium owned the land under the building where the individual condominium unit was located, the Court of Appeals agreed with the intermediate appellate court that the condominium defendants were not “owners” for purposes of Labor Law section 241(6). In upholding the dismissal of the plaintiff’s action in Guryev, the Court of Appeals relied on the fact that individual condominium unit owners own their units outright (i.e., “fee simple absolute,” a term derived from the law of property denoting an ownership interest in real property that is limited absolutely to a person and his heirs and assigns forever without limitation or condition). Because the individual unit at issue was owned outright by the occupant and not by the condominium, and because the work was not for the benefit of the condominium, the Court ruled that the condominium defendants could not be held liable under section 241(6).

Plaintiff’s attorneys argued that the condominium defendants were owners for purposes of liability under section 241(6) due to the terms of a mandatory alteration agreement entered into by the unit owner and the condominium's board of managers. Per the terms of the agreement, the condominium retained the power to insist on compliance with the provisions of the Industrial Code. It also retained the right to reenter the apartment for purposes of inspecting the unit owner's work and to ensure that the work conformed to the plans and specifications contained in the agreement. The majority, however, rejected that argument, and reasoned that the terms of the agreement merely reflected the condominium board's interest in making certain that the renovations were carried out in a way that safeguarded the integrity of the building, the other units and the common areas, and complied with applicable laws.

The majority decision was followed by a strong dissent written by Chief Judge Lippman, with which Judge Ciparick concurred. The dissent argued that section 241(6) imposed non-delegable duties not only on owners but also on contractors and agents. They therefore argued that the majority's reliance on title ownership as a prerequisite for liability under section 241(6) was misplaced. To the dissenters, the critical factor in determining whether a party should be treated as an “owner” for purposes of assigning liability under the Labor Law was whether a party retained an owner's prerogative to insist on compliance with proper safety practices. Based on their interpretation of the agreement between the condominium board and the individual unit owner, the dissenters reasoned that the condominium board clearly retained the prerogatives of an owner.

The plaintiff's sole cause of action against his employer was limited to recovery of workers’ compensation benefits. Likewise, the individual unit owner was exempt from liability under Labor Law section 241(6) as he was the owner of a one-family dwelling. Thus, the dissenting judges argued that the majority’s decision upholding the dismissal of the plaintiff's claims against the condominium defendants deprived the plaintiff of an effective remedy. Chief Judge Lippman wrote that the majority's decision “rips a gaping hole in the Labor Law's protective mantle – one that the Legislature will have to mend if the statutory scheme is not to be rendered utterly arbitrary in its application and largely inefficacious in meeting its vaunted objectives.”

The dissent argued that in similar circumstances, residential cooperative corporations could be deemed to be owners for purposes of section 241(6). Therefore, the plaintiff was denied a recovery based on a legal technicality underpinning the form of ownership. Chief Judge Lippman argued that a condominium retains an ownership interest in an individual unit just as a residential cooperative corporation retains an ownership interest in its units. Thus, to the dissent, there was no rationale for treating the two types of entities differently when apportioning responsibility under the Labor Law. The majority, however, did not view the form of legal ownership as a technicality.

Potential Legislative Activity

The court's decision in Guryev was decided on a four-to-two basis, which is normally viewed as a strong precedential value. In this instance, however, the dissent was denied a potential third vote by the untimely death of Judge Theodore Jones on November 6, 2012. Judge Jones was generally recognized as part of the liberal wing of the Court of Appeals, where he was often allied philosophically with Chief Judge Lippman and Judge Ciparick. It is not unreasonable, therefore, to think that a future court could revisit this issue.

Even if the Court of Appeals does not revisit the issue of whether a condominium may be held liable as an “owner” under similar circumstance pursuant to sections 200, 240 and 241 of the Labor Law, the question may become an issue for the New York State Legislature. The dissent by Chief Judge Lippman essentially invited legislative action to remedy what he described as a “gaping hole” in the statutory scheme meant to protect workers. Due to the number of condominium apartments in New York, the court's decision in Guryev can be viewed as a significant setback to the plaintiff's bar. Thus, legislative activity to address the decision is a possibility.