Commercial Division Blog

Posted: November 23, 2022 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz / Category Commercial Division Justices

Common-Law Indemnification Crossclaim Should Be Dismissed Where Duty to Comply Was Not Delegable

On November 10, 2022, Justice Borrok of the New York County Commercial Division issued a decision in 85 Jane Realty, LLC v. Xhema of N.Y., Inc., 2022 NY Slip Op 33838(U) holding that a crossclaim for common law indemnification must be dismissed when the duty allegedly violated was not delegable, stating:

Tectonic argues that the common-law indemnification crossclaim must be dismissed because common-law indemnification is unavailable to a party that is being sued for its own breach of contract. In their opposition papers, Xhema argues that because they allege that the incidents giving rise to 85 Jane's alleged damages were caused by the culpable conduct of Tectonic, dismissal is unwarranted. Xhema is not correct.

In the construction context, a party may seek common-law indemnification from a construction professional where it delegated to another professional the duty it was obligated to discharge and such duty was the actual cause of the loss (Bd. of Managers of Porter House Condo. v. Delshah 60 Ninth LLC, 192 AD3d 415, 415, 144 N.Y.S.3d 10 [1st Dept 2021] [internal citations omitted]). However, Xhema's duty to comply with the plans and specifications set forth in the CM Agreement was not delegated to Tectonic. Tectonic's [*4] role was that of special inspector. This arrangement therefore can not form the basis for a common-law indemnification claim. Thus, Xhema's common-law indemnification crossclaim must be dismissed.

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