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A Queens jury yesterday determined that our client was negligent, but not a substantial cause of plaintiff’s injuries, thus entitling our construction-management client to enforce its contractual indemnification clause transferring risk to its subcontractor. The result should ultimately require return more than $5 million that had been funded by the client’s insurance after the excess insurer refused to contribute on behalf of the construction manager despite owing “additional insured” coverage. All of that money now will be returned to the construction manager’s insurer. Prior to verdict, the highest settlement offer was a mere $500,000.
The case arose from a construction-site accident in which an employee of a subcontractor had been injured when the Baker scaffold he was working on collapsed. The subcontractor’s excess insurer declined to contribute to the settlement, even though our client was an additional insured, and even though the employer’s primary liability policy offered its full limit towards the $7 million settlement with the worker. The construction manager’s third-party claim for contractual indemnification therefore proceeded to a jury trial.
The Contractual Indemnification Dispute
At trial, there was little dispute that the accident arose out of the subcontractor’s work. That fact triggered the indemnification provision contained in the parties’ contract. The subcontractor contended that the construction manager had been negligent in carrying out its own responsibilities to maintain a safe work site. The subcontractor argued that, under New York’s General Obligations Law, a finding of negligence against the construction manager would reduce or potentially eliminate the subcontractor’s contractual indemnification obligation. The firm’s trial team responded with a two-part strategy. First, the team argued that the construction manager had not been negligent. Second, the team established that even if the jury found some negligence, the subcontractor was still required to prove that the negligence was a substantial factor in causing the accident.
Focusing the Jury on Causation
The evidence presented at trial included the injured worker’s testimony that he did not know what had caused the scaffold to fail. He had also testified that the scaffold appeared to be in good working condition when he previously used it. The trial team deployed that testimony to argue that there was no evidence of an observable defect that the construction manager’s superintendent should have discovered during his regular site inspections. Even if the jury concluded that the construction manager could have done more from a general safety standpoint, that conclusion did not establish that any act or omission by the construction manager caused the scaffold to collapse.
The jury ultimately found that the construction manager was negligent. Critically, however, the jury also found that the negligence was not a substantial factor in causing the accident. The verdict was therefore in the firm’s client’s favor on the contractual indemnification claim.
Effective Use of Trial Demonstratives
The team’s presentation included a summation demonstrative prepared by associate Dua Tahir. The demonstrative organized the arguments into concise points and paired them with supporting excerpts from the governing contracts. Following the verdict, jurors identified the demonstrative as particularly helpful in evaluating the contractual language and in understanding the distinction between a general finding of negligence and the separate requirement of causation.
This verdict marks the third consecutive favorable trial outcome for the team of Sim Shapiro and Dua Tahir! Those results have involved three distinct areas of law: product liability, motor vehicle liability, and contractual indemnification.
We are grateful to practice with talented lawyers like Sim and Dua, who roll up their sleeves and do the work, and who effectively advocate for clients and create solutions.
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