01.12.2021

SACS Obtains Complete Victory In The First Department In A Decade-Long Litigation

Last week, the SACS Litigation/Appellate Strategy & Advocacy Group obtained an important affirmance in the Appellate Division, First Department for our client, Aztec Metal Maintenance Corp., in its long-running dispute with Trump Palace Condominium.  The case originally began as a Labor Law action when the plaintiff filed suit after he was injured polishing brass pursuant to a contract between Aztec and A&P.  The plaintiff’s complaint  eventually spawned a contractual dispute between Trump and Aztec regarding the latter’s duties to indemnify and procure insurance.  The Supreme Court initially dismissed Trump’s claims for indemnification, but denied Aztec’s motion for summary judgment relating to the complaint’s third cause of action. 

SACS subsequently filed a motion for reargument, maintaining that the third cause of action was merely an inartfully pled claim for contractual indemnification, or in the alternative, failed to allege a claim for breach of contract.  The Supreme Court, for the reasons set forth in the motion, agreed with us and dismissed Trump’s complaint in its entirety, setting the stage for the instant appeal.

On appeal, Trump argued that the language in an undated rider relating to marble maintenance required Aztec to provide indemnification.  Trump further claimed that the Supreme Court abused its discretion in granting reargument and that Aztec’s contract with A&P obligated Aztec to procure insurance for Trump.   Aztec countered that Trump’s reliance on the rider was misplaced as plaintiff was not injured while working on marble and was only at the site pursuant to a contract between A&P and Aztec.  Simply stated, neither the work nor the parties supported Trump’s argument.  Any other result stretched the basic precepts of contract interpretation beyond their breaking point.  As to the insurance procurement claim, Aztec maintained that the Supreme Court properly granted reargument because Trump’s purported insurance procurement claim plainly sought contractual indemnification given the relief it sought.  Alternatively, the claim was subject to dismissal as Trump failed to identify a contract requiring Aztec to procure insurance.

The First Department agreed with our arguments, holding that “requiring indemnification for work unconnected to any contract between Aztec and [Trump] would ‘produce a result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the parties.’” Similarly, the Court held that Trump’s third cause of action was really an inartfully pled claim for contractual indemnification.  Finally, the Court embraced our alternative argument that even if Trump’s third cause of action alleged a breach of an insurance procurement provision, it was subject to dismissal for failure to state a claim.    

The successful motion and appeal was briefed by Jonathan Shaub, Tim Capowski and Chris Theobalt, and argued before the First Department by Jonathan. 

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