New York Appellate Division Rejects Construction Manager’s Claim Seeking Common Law Indemnity from Architect Where Construction Manager’s Liability Was Not Purely Vicarious

Genesee/Wyoming YMCA v. Bovis Lend Lease LMB, Inc
2012 N.Y. App. Div. LEXIS 6358(N.Y. App. Div. Sept. 28, 2012)

The Genesee/Wyoming YMCA (“YMCA”) contracted with Bovis Lend Lease LMB, Inc. (“Bovis”) and Thomas Associates Architects & Engineers (“Thomas”) for the construction of a new swimming complex. Bovis was the construction manager for the project, and Thomas was the architect. Shortly after the project was completed, defects were discovered in the roof and insulation system. An inspection indicated that the roof and insulation system were defectively designed and that improper materials had been selected.

Thomas designed a standing seam roof with a flat pitch and a taped insulation system using fiberglass batt insulation. Before construction began, Bovis reviewed the proposed design and materials and recommended to the YMCA that it move forward with the project in accordance with Thomas’ design.

The YMCA sued Bovis for breach of contract. In particular, the YMCA alleged that Bovis breached its contractual obligation to “review and approve design, constructability and materials used to construct the roof and insulation systems” by approving the defective design and improper materials. Bovis then commenced a third party action against Thomas, seeking common law indemnity for any damages Bovis may owe to the YMCA in the underlying action.

The trial court denied Thomas’ motion to dismiss the common law indemnity count, and Thomas appealed. The Appellate Division reviewed the principle of common law indemnity, which permits one who has been compelled to pay for the wrong of another to recover from the wrongdoer the damages it paid to the injured party. The court noted that one’s ability to recover common law indemnity depends upon vicarious liability without actual fault on the part of the party seeking indemnification, and indemnity is unavailable to one who participated to some degree in the wrongdoing.

Applying the principles of common law indemnity, the court found that Bovis’ liability to the YMCA was not vicarious or based solely on Thomas’ conduct, but rather on Bovis’ failure to perform its own contractual obligation to review and approve the design and selected materials. Therefore, the court concluded that Bovis failed to state a claim for common law indemnification under New York law and reversed the order of the trial court.

Stephen W. Kiefer

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