Moses Flores,
Plaintiff,
v.
The Lower East Side Service
Center, Inc.,
Third-Party Appellant,
v.
Procida Realty and Construction
Corp.,
Third-Party Respondent.
2005 NY Int. 49
Workers' Compensation Law § 11 permits an owner to
bring a third-party claim against an injured worker's employer in
only two circumstances: where the injured worker has suffered a
"grave injury" or the employer has entered into a written
contract to indemnify the owner. The issue in this case is
Defendant and third-party plaintiff Lower East Side Service Center (LES) is the owner of a multi-story building in Manhattan that was undergoing rehabilitation. Initially, LES hired third-party defendant Procida Realty and Construction Corp. to act as its on-site representative, having retained another firm to function as general contractor on the project. Following a dispute between LES and the other firm, Procida agreed to assume the role of general contractor.
In March 2000, LES sent Procida a written contract including a provision for Procida to indemnify LES for injuries "arising out of or resulting from performance of the work" on the $3 million project. In accordance with the terms of the agreement, Procida purchased liability insurance and obtained payment and performance bonds. In a June 23, 2000 memorandum entitled "Attachment 4 - Scope Clarifications" and forwarded to LES, a Procida representative acknowledged the existence of an agreement, clarifying that under "this contract" Procida assumed no responsibility for work performed by the previous general contractor. For reasons undisclosed in the record, Procida did not sign the March 2000 contract or the June 2000 addendum, but it performed the work specified in the contract and was paid in conformity with the documents.
In September 2000, plaintiff Moses Flores, a laborer
Following the completion of discovery and the filing of
a note of issue, LES moved for summary judgment on its third-
party complaint and Procida cross-moved for summary judgment
dismissing LES's claims. Although it acknowledged the existence
of a contract in its answer, Procida asserted that there was no
binding indemnification agreement with LES. Procida relied on
the fact that the March 2000 contract was never signed, arguing
that LES was precluded from seeking contractual indemnification
because Workers' Compensation Law § 11 authorizes such a claim
only when there is an executed document. LES countered that,
notwithstanding the failure to sign the agreement, Procida's
course of conduct demonstrated that it had assented to the terms
of the contract months before Flores was injured. Noting that
section 11 does not expressly state that an indemnification
Supreme Court denied LES's motion and granted Procida's cross-motion to dismiss the third-party complaint. After disposing of the common-law claims, Supreme Court reasoned that the contractual indemnification clause in the written agreement was unenforceable under Workers' Compensation Law § 11 because Procida did not sign the document. On appeal, the Appellate Division affirmed, concluding that a contract that was never executed was not "entered into" within the meaning of the statute. This Court granted LES leave to appeal and we now reverse, reinstate the contractual indemnification claim and grant summary judgment to LES.
Workers' Compensation Law § 11, as amended by the
Omnibus Workers' Compensation Reform Act of 1996 (L 1996, ch
635), prohibits most third-party claims for contribution or
indemnification against an employer for injuries sustained by an
employee acting within the scope of employment. But the statute
sets forth two exceptions: the employer may be impleaded when the
employee has sustained a "grave injury" or when there is a
"written contract entered into prior to the accident or
occurrence by which the employer had expressly agreed to
contribution to or indemnification of the claimant" (Workers'
In our prior cases construing section 11, this Court has attempt[ed] to effectuate the intent of the Legislature ( Majewski v Broadalbin-Perth Cent. School Dist., , 91 NY2d 577, 583 [1998] [citations omitted]). "As the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof ( id.). In this regard, we have declined to second-guess the policy choices made by the Legislature, adhering to the literal terms of the statute. Thus, in Castro v United Container Mach. Group (96 2 398 [2001]) and Meis v ELO Org. (97 2 714 [2002]), this Court strictly interpreted the "grave injury" designations specified by the Legislature.
We have had several opportunities to interpret the
grave injury exception, but this is the first case requiring us
to address the contractual indemnification exception to the
prohibition against third-party claims. As previously observed,
although the Legislature clearly intended to restrict claims
against employers when it adopted the "grave injury" standard, it
chose not to abrogate "the power of a third party to recover
under express contractual obligations between the employer and
the third party" ( Majewski, 91 NY2d at 582). Instead, the
Legislature preserved the right of parties to enter into binding
contractual indemnification agreements. Procida maintains that a
We have long held that a contract may be valid even if
it is not signed by the party to be charged, provided its subject
matter does not implicate a statute -- such as the statute of
frauds (General Obligations Law § 5-701) -- that imposes such a
requirement. In Brown Bros. Elect. Contr. v Beam Constr. Corp.
(41 2 397 [1977]), a landowner entered into a written
agreement with a general contractor for the construction of a
shopping plaza. The general contractor in turn contracted with
Brown, a subcontractor, for electrical work. When the general
contractor failed to pay Brown, the owner requested that Brown
complete the work, which Brown did. When Brown submitted its
bill for services to the owner, the owner refused to pay on the
basis that it had never executed a written contract with Brown.
After trial, the lower courts found that there was an enforceable
agreement, holding that "the course of conduct between [the
owner] and Brown, including their writings . . . was sufficient
to spell out a binding contract," notwithstanding the failure of
the parties to sign an integrated agreement ( Brown, 41 NY2d at
Thus, under the analysis in Brown, an unsigned contract may be enforceable, provided there is objective evidence establishing that the parties intended to be bound ( see also Matter of Municipal Consultants & Publ. v Town of Ramapo, , 47 NY2d 144 [1979][publishing contract was enforceable even though it was never signed by a representative of the town])."In determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look . . . to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds. . . And, while it is the responsibility of the court to interpret written instruments . . . , where a finding of whether an intent to contract is dependent as well on other evidence from which differing inferences may be drawn, a question of fact arises" ( Brown, 41 NY2d at 399-400 [citations and internal quotation marks omitted]).
When it enacted Workers' Compensation Law § 11, the
Legislature clearly intended to limit the number of
indemnification claims against employers by requiring that
indemnification agreements be memorialized in a "written
contract." But nothing in the language of the statute or its
legislative history provides a basis for us to conclude that, in
addition to requiring a written indemnification clause, the
Legislature intended to deviate from the common-law rule that
written documents can be enforced even if they are not signed.
Had the Legislature intended to alter this rule in the context of
Under these circumstances, we cannot presume that the
Legislature meant to impose a restriction it failed to include in
the statute. We therefore hold that the common-law rule -- which
authorizes review of the course of conduct between the parties to
determine whether there was a meeting of minds sufficient to give
This interpretation of section 11 is consistent with
our decisions analyzing comparable language in CPLR 7501 , a
statute that confers jurisdiction on courts to enforce
arbitration awards only if the parties have a "written agreement"
to arbitrate. In the arbitration arena, we have determined that
the statutory requirement is met even when the parties never
signed a contract expressly agreeing to arbitrate, as long as it
is evident from the totality of circumstances that the parties
intended to be bound by documents containing arbitration
obligations ( see Matter of Helen Whiting v Trojan Textile Corp.,
307 NY 360 [1954] [interpreting predecessor to CPLR 7501 , which
required that a contract to arbitrate future disputes must be "in
writing"]; see also Crawford v Merrill Lynch Pierce, Fenner &
Smith, , 35 NY2d 291 [1974] [although there was no integrated
contract containing arbitration agreement, documentary proof
established that each party was bound to arbitrate dispute]). Of
course, arbitration implicates different public policy concerns
than third-party claims against employers -- public policy favors
arbitration while the Legislature sought to reduce the liability
of owners under section 11. But we are unpersuaded that this
difference provides a reasoned basis for this Court to interpret
the term "written contract" to impose a signature requirement
As the fact-dependent nature of the Brown rule suggests, in many instances the issue of whether or when an indemnification agreement came into being in the absence of a signed document will present a question of fact to be resolved by the trier of fact. Based on the record presented in this case, however, LES is entitled to summary judgment on the contractual indemnification claim because Procida failed to come forward with evidence to present a triable dispute concerning the existence of an enforceable written contract.
In its answer, Procida conceded that it had entered into an agreement with LES. When it cross-moved for summary judgment, Procida argued only that the written contract it received from LES was not enforceable because the contract had not been signed. Notably absent from the affidavit of Procida's corporate secretary was any assertion that there had not been a meeting of the minds between LES and Procida concerning the terms of the agreement, nor did Procida claim that it had declined to sign the contract because the parties were engaged in ongoing negotiations.
To the contrary, Procida admitted that it had become
As an alternative ground for affirmance, Procida asks
this Court to dismiss the indemnification claim due to LES's
Accordingly, the order of the Appellate Division should be reversed, with costs, the third-party defendant's motion for summary judgment should be denied, the third-party plaintiff's motion for summary judgment on its cause of action for contractual indemnification should be granted and the case remitted to Supreme Court for further proceedings in accordance with this Opinion.
1 General Obligations Law § 5-701(a), the statute of frauds, specifies that certain types of agreements -- including those conveying interests in real property -- are void "unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith." As another example, General Business Law § 454(2), governing the sale of headstones and other monuments, similarly requires that each sale "be evidenced by a written contract which shall be signed by all the parties to the contract."
2 The copies of the performance bond and the payment and material bond that appear in the record also do not bear any signatures on behalf of Procida.