James V. Deegan and Daniel P. Mevorach Obtain Defense Verdict in Labor Law Action

In a matter tried before Justice Barbara Jaffe in Supreme Court, New York County, GVK Partners James Deegan and Daniel Mevorach obtained a unanimous defense verdict on behalf of our client React Industries, Inc. (“React”)

Prior to trial, general contractor Structure Tone, Inc. settled for $3.625 million with the Plaintiff, who had obtained summary judgment against them under Labor Law 240(1).

The Plaintiff was a steamfitter who fell from a ladder while moving a pipe in a high ceiling under the direction of Structure Tone’s superintendent. The ladder collapsed, causing him serious and permanent injuries and ending his career as a steamfitter. At trial Structure Tone sought to recover against various subcontractors, including our client React, alleging it was entitled to contractual indemnification.

Structure Tone relied on a Blanket Insurance/Indemnification Agreement that it required all of its subcontractors to sign periodically. The jury agreed with our argument that the Blanket Agreement was not triggered because our client had no written or oral agreement with Structure Tone to perform work on the jobsite, and instead that our client was on the job site pursuant to an oral arrangement with Structure Tone’s direct contractor, FRP Sheet Metal Contracting Corp.

The contractual arrangements here were a bit unusual. In resolving a prior appeal, the Appellate Division, First Department found questions of fact about whether our client React had a contractual indemnification obligation to Structure Tone. Structure Tone had originally intended to hire our client, React, to manage and retain sub-subcontractors to complete the entire HVAC portion of the work, which is composed of two parts: mechanical work done by steamfitters and ductwork done by sheet metal workers. However, React was barred by the building management company from contracting with Structure Tone because React had a mechanic’s lien on the building. Structure Tone then wrote out purchase orders to sheet metal contractor FRP, one for mechanical work and one for sheet metal work. FRP had an oral “gentleman’s agreement” with React where React would handle the mechanical work. React then subcontracted the actual performance of the mechanical work to Plaintiff’s employer, FL Mechanical. We successfully convinced the jury that under this scenario, React lacked the relationship with Structure Tone necessary for the Blanket Insurance/Indemnification Agreement to apply.