New York's Labor Law

Recently, in Sanatass v. Consolidated Investing Co., 10 NY3d 333 (2008), the court addressed the liability of an out-of-possession landlord where the activity giving rise to injury was performed without a landlord's knowledge and in violation of a lease provision. In so doing, it clarified the meaning of its earlier decision in Abbatiello v. Lancaster Studio Associates, 3 NY3d 46, 781 NYS2d 477 (2004), a somewhat misunderstood decision with respect to the liability of absentee owners. In both of these decisions, an analysis of the “nexus” between the worker and the absentee owner was crucial.

Ultimately, as will be discussed in this article, Abbatiello has been limited to its specific facts.

Background

At the outset, some historical context may be helpful. In Celestine v. City of New York, 59 NY2d 938, 466 NYS2d 319 (1983) (aff'd for reasons stated below, 86 AD2d 592, 446 NYS2d 131), the Court of Appeals established that Labor Law '241(6) imposes a nondelegable duty on owners to provide adequate protection to workers, even in the absence of control, direction or supervision of the work. The Labor Law makes no distinctions based on encumbrances of any sort on ownership. Liability may not be escaped by delegation. The court thus rejected the contention of defendant Long Island Rail Road that it should not be deemed an owner for purposes of the imposition of liability under Labor Law '241(6) because the property upon which the incident occurred was the subject of an easement granted by it to its co-defendants the city of New York and the Transit Authority. The court determined that, as the grantor of the easement, the LIRR remained liable as the fee owner of the property.

Subsequently, in Gordon v. Eastern Railway Supply, 82 NY2d 555, 606 NYS2d 127 (1993), the court held that the non-delegable statutory duty under Labor Law '240(1) does not require that the owner exercise supervision or control over the work site before liability attaches. In Gordon, the plaintiff was injured while cleaning the exterior of a railroad car situated on property owned by defendant Eastern Railway. The defendant contended that it could not be liable as an owner for several reasons. It did not own the structure (i.e., the railway car). It had leased the property to its wholly owned subsidiary. It had neither contracted to have the work performed, nor was the work performed for its benefit. Adopting the reasoning in Celestine, the court rejected the defendant's assertions and held that liability rested upon the fact of ownership. Whether defendant Eastern had contracted for the work or benefitted from it were legally irrelevant. The very presence of the structure on the defendant's property was the direct result of Eastern's actions and it established a sufficient nexus for liability to attach to it as an “owner.” The court held: “when the Legislature imposed the duties of section 240(1) on “[a]ll ' owners” it intended to include owners in fee even though the property might be leased to another.”

The court further observed that the statute imposes liability on “all owners,” without regard to encumbrances, and that the duty to provide safe working conditions is non-delegable, regardless of control.

Thereafter, in Coleman v. City of New York, 91 NY2d 821, 666 NYS2d 553 (1997), the court rejected the assertion of the city of New York that it could not be held liable under '240(1) as a property owner for injuries sustained by an employee of the New York City Transit Authority. The city contended that, although it was technically an “owner,” it lacked any ability to protect Transit Authority employees working on the transit system because of the statutory scheme creating the authority and establishing their lessor-lessee relationship. In rejecting this rationale and holding that the city was an “owner” under the statute, the court noted that its decisions in Celestine and Gordon articulated a “bright line rule” that Labor Law '240(1) applied to all owners, regardless of whether the property was leased to and controlled by some other entity, or whether the owner had the means to protect the worker. An examination of these three seminal cases shows that the nexus between the absentee owner and the worker, whether by a lease to a tenant or the grant of an easement or other property interest, was an essential element in the court's analysis.

The Abbatiello Case

This type of analysis was crucial in Abbatiello v. Lancaster Studio
Associates, 3 NY3d 46, 781 NYS2d 477 (2004), where the issue of the “nexus” between the worker and the owner rose to the forefront and was ultimately fatal to the plaintiff's case against the landowner. The plaintiff, a cable television technician, was dispatched by his employer to a building owned by defendant Lancaster in response to the complaint of a tenant, a cable service subscriber. Lancaster had no notice that plaintiff would be on its premises for any purpose. The Court of Appeals recognized that there was a departmental split on the liability of an owner specifically under these circumstances. The Appellate Division, First Department, generally had held that a cable technician called to the building by a tenant without the knowledge or consent of the owner was not an employee under the Labor Law, and thereby not within its protection. In so holding, it had followed the reasoning in Whelen v. Warwick Val. Civic & Social Club, 47 NY2d 970 (1979), that in order to come within the class for whose benefit liability is imposed, a plaintiff must demonstrate that he was both permitted to work on a building or structure and also that he was hired by someone, whether owner, contractor, or their agent. To the contrary, the Second and Third departments had held owners absolutely liable to such workers on the grounds that ownership alone determined the liability of an owner under '240(1).

Prior Decisions

In deciding Abbatiello, the Court of Appeals refused to impose absolute liability on the building owner under these circumstances. It stated that there was no nexus between the owner and the cable repair worker, and thus the worker could not be deemed an “employee.” The court distinguished its prior decisions, reasoning that the landowner was powerless to determine which cable company was entitled to operate or repair the cable facilities on its property. Rather, the decision was that of the municipality as the franchisor. Were it not for the Public Service Law, the plaintiff would be a trespasser. The plaintiff was deemed not to be an employee for purposes of '240(1).

This decision generated confusion, with some courts construing it to support the broader concept that an owner-landlord was not liable for work performed by a tenant without notice and in violation of a lease, rather than limiting the decision to its express facts.

For example, in Morales v. D&A Food Service, 41 AD2d 352, 839 NYS2d 464 (1st Dept. 2007), a tenant hired the plaintiff to make repairs without either notice to the landlord or consent, in violation of a written agreement which prohibited the tenant from making any structural alterations without the written consent of the landlord and requiring landlord's advance approval of all work plans.

The Morales court, in reliance upon Abbatiello, held that the landlord could not be held liable because the work was performed without the landlord's knowledge, and in violation of the lease requirement that the tenant obtain prior consent. The majority declined to limit Abbatiello to cable workers who were present on premises solely by operation of the Public Service Law. Instead, it focused upon the language in Abbatiello where the court stated that an owner “cannot be charged with the duty of providing ' for [workers] of whom it is wholly unaware.”

The Sanatass Case

Recently, however, in Sanatass v. Consolidated Investing Co., 10 NY3d 333, the Court of Appeals made it clear that a property owner is liable for a violation of Labor Law '240(1) that proximately caused injury to a worker, even if a tenant of the building contracted for the work without the owner's knowledge and consent and in violation of a notice provision in the lease. In so doing, it limited its holding in Abbatiello to its own peculiar facts.

The fact pattern in Sanatass, similar to that in Morales, reached the Court of Appeals as a result of a divided opinion in the Appellate Division. The plaintiff was injured while performing work in a sublessee's premises in a building owned by defendant Consolidated Investing. The tenant occupied the space pursuant to an assignment of the lease from a prior tenant. The lease contained provisions that all renovations, decorations, additions, installations, improvements and/or alterations required the prior written consent of the landlord.

Nonetheless, the plaintiff's employer was retained to install an air conditioning unit on the premises without the landlord's knowledge or consent. The plaintiff was injured when the unit fell while he and a coworker were hoisting it into the air. After determining that the installation of the unit was an alteration within the scope of '240(1), the court analyzed the issue of owner liability under the circumstances. The plaintiff claimed that Consolidated was an owner, despite its lack of notice or control. Consolidated contended that as an out-of-possession owner with no knowledge of the work being done on its premises, in express violation of the lease, it could not be held liable under '240(1). It further asserted that the tenant's breach of the lease provision, obligating it to obtain the owner's permission before hiring a contractor to perform any alterations, severed any nexus between Consolidated and the plaintiff.

Court of Appeals

The Court of Appeals rejected the defendant's contention that there was an insufficient nexus between the parties to impose liability under '240(1). Although the breach of the lease might have bearing upon indemnification claims between Consolidated and the tenant, it did not affect Consolidated's liability to the plaintiff. The court made it abundantly clear that the statute did not impose a notice requirement, holding: ” ' our precedents make clear that so long as a violation of the statute proximately results in injury, the owner's lack of notice or control over the work is not conclusive ' this is precisely what is meant by absolute or strict liability in t
his context ' “

In analyzing the issues in Sanatass, the court addressed its decision in Abbatiello. It distinguished Abbatiello from Celestine and its progeny, noting that in those cases a nexus existed between the out-of-possession owner and the plaintiff, be it by lease, easement or some other property interest.

The court made it clear that in Abbatiello, the injured cable technician was on the property solely by reason of provisions of the Public Service Law, which established mandatory access for cable repair workers. In the absence of this statute, the plaintiff would have been a trespasser on defendant's property. Under Public Service Law '219, the owner had no power to determine which cable company was entitled to operate the cable facilities on its property. As such, the court expressly stated, in distinguishing Abbatiello from Sanatass and its earlier decisions, and holding it to its peculiar facts, that it did not impose a new notice requirement under '240(1). It concluded that under the specific facts in Abbatiello, absent an adequate nexus between the cable technician and the owner, this worker was not entitled to the extraordinary protections of the Labor Law since he was not an “employee” for purposes of '240(1).

The court concluded by stating that an owner may not insulate itself from liability by contracting out of the
Labor Law.

This article originally appeared in the New York Law Journal, a sister publication of this newsletter.

Both Labor Law '240(1) and '241(6) impose a nondelegable duty on property owners to provide specified protections to workers. This duty exists regardless of whether or not the owner controlled, directed, or supervised the work.

As the courts have repeatedly observed, the imposition of this duty protects workers, by placing ultimate responsibility for their safety upon owners and contractors, instead of on the workers themselves. See Panek v. County of Albany , 99 NY2d 452, 457 (2003).

Determining who is an “owner” under '240(1) and '241(6) has been the subject of major decisions by New York's highest court, the Court of Appeals, which have analyzed the circumstances under which an absentee or out-of-possession landowner will be held liable for a statutory violation.

Recently, in Sanatass v. Consolidated Investing Co. , 10 NY3d 333 (2008), the court addressed the liability of an out-of-possession landlord where the activity giving rise to injury was performed without a landlord's knowledge and in violation of a lease provision. In so doing, it clarified the meaning of its earlier decision in Abbatiello v. Lancaster Studio Associates , 3 NY3d 46, 781 NYS2d 477 (2004), a somewhat misunderstood decision with respect to the liability of absentee owners. In both of these decisions, an analysis of the “nexus” between the worker and the absentee owner was crucial.

Ultimately, as will be discussed in this article, Abbatiello has been limited to its specific facts.

Background

At the outset, some historical context may be helpful. In Celestine v. City of New York , 59 NY2d 938, 466 NYS2d 319 (1983) (aff'd for reasons stated below, 86 AD2d 592, 446 NYS2d 131), the Court of Appeals established that Labor Law '241(6) imposes a nondelegable duty on owners to provide adequate protection to workers, even in the absence of control, direction or supervision of the work. The Labor Law makes no distinctions based on encumbrances of any sort on ownership. Liability may not be escaped by delegation. The court thus rejected the contention of defendant Long Island Rail Road that it should not be deemed an owner for purposes of the imposition of liability under Labor Law '241(6) because the property upon which the incident occurred was the subject of an easement granted by it to its co-defendants the city of New York and the Transit Authority. The court determined that, as the grantor of the easement, the LIRR remained liable as the fee owner of the property.

Subsequently, in Gordon v. Eastern Railway Supply , 82 NY2d 555, 606 NYS2d 127 (1993), the court held that the non-delegable statutory duty under Labor Law '240(1) does not require that the owner exercise supervision or control over the work site before liability attaches. In Gordon, the plaintiff was injured while cleaning the exterior of a railroad car situated on property owned by defendant Eastern Railway. The defendant contended that it could not be liable as an owner for several reasons. It did not own the structure (i.e., the railway car). It had leased the property to its wholly owned subsidiary. It had neither contracted to have the work performed, nor was the work performed for its benefit. Adopting the reasoning in Celestine, the court rejected the defendant's assertions and held that liability rested upon the fact of ownership. Whether defendant Eastern had contracted for the work or benefitted from it were legally irrelevant. The very presence of the structure on the defendant's property was the direct result of Eastern's actions and it established a sufficient nexus for liability to attach to it as an “owner.” The court held: “when the Legislature imposed the duties of section 240(1) on “[a]ll ' owners” it intended to include owners in fee even though the property might be leased to another.”

The court further observed that the statute imposes liability on “all owners,” without regard to encumbrances, and that the duty to provide safe working conditions is non-delegable, regardless of control.

Thereafter, in Coleman v. City of New York , 91 NY2d 821, 666 NYS2d 553 (1997), the court rejected the assertion of the city of New York that it could not be held liable under '240(1) as a property owner for injuries sustained by an employee of the New York City Transit Authority. The city contended that, although it was technically an “owner,” it lacked any ability to protect Transit Authority employees working on the transit system because of the statutory scheme creating the authority and establishing their lessor-lessee relationship. In rejecting this rationale and holding that the city was an “owner” under the statute, the court noted that its decisions in Celestine and Gordon articulated a “bright line rule” that Labor Law '240(1) applied to all owners, regardless of whether the property was leased to and controlled by some other entity, or whether the owner had the means to protect the worker. An examination of these three seminal cases shows that the nexus between the absentee owner and the worker, whether by a lease to a tenant or the grant of an easement or other property interest, was an essential element in the court's analysis.

The Abbatiello Case

This type of analysis was crucial in Abbatiello v. Lancaster Studio
Associates , 3 NY3d 46, 781 NYS2d 477 (2004), where the issue of the “nexus” between the worker and the owner rose to the forefront and was ultimately fatal to the plaintiff's case against the landowner. The plaintiff, a cable television technician, was dispatched by his employer to a building owned by defendant Lancaster in response to the complaint of a tenant, a cable service subscriber. Lancaster had no notice that plaintiff would be on its premises for any purpose. The Court of Appeals recognized that there was a departmental split on the liability of an owner specifically under these circumstances. The Appellate Division, First Department, generally had held that a cable technician called to the building by a tenant without the knowledge or consent of the owner was not an employee under the Labor Law, and thereby not within its protection. In so holding, it had followed the reasoning in Whelen v. Warwick Val. Civic & Social Club , 47 NY2d 970 (1979), that in order to come within the class for whose benefit liability is imposed, a plaintiff must demonstrate that he was both permitted to work on a building or structure and also that he was hired by someone, whether owner, contractor, or their agent. To the contrary, the Second and Third departments had held owners absolutely liable to such workers on the grounds that ownership alone determined the liability of an owner under '240(1).

Prior Decisions

In deciding Abbatiello, the Court of Appeals refused to impose absolute liability on the building owner under these circumstances. It stated that there was no nexus between the owner and the cable repair worker, and thus the worker could not be deemed an “employee.” The court distinguished its prior decisions, reasoning that the landowner was powerless to determine which cable company was entitled to operate or repair the cable facilities on its property. Rather, the decision was that of the municipality as the franchisor. Were it not for the Public Service Law, the plaintiff would be a trespasser. The plaintiff was deemed not to be an employee for purposes of '240(1).

This decision generated confusion, with some courts construing it to support the broader concept that an owner-landlord was not liable for work performed by a tenant without notice and in violation of a lease, rather than limiting the decision to its express facts.

For example, in Morales v. D&A Food Service, 41 AD2d 352, 839 NYS2d 464 (1st Dept. 2007), a tenant hired the plaintiff to make repairs without either notice to the landlord or consent, in violation of a written agreement which prohibited the tenant from making any structural alterations without the written consent of the landlord and requiring landlord's advance approval of all work plans.

The Morales court, in reliance upon Abbatiello, held that the landlord could not be held liable because the work was performed without the landlord's knowledge, and in violation of the lease requirement that the tenant obtain prior consent. The majority declined to limit Abbatiello to cable workers who were present on premises solely by operation of the Public Service Law. Instead, it focused upon the language in Abbatiello where the court stated that an owner “cannot be charged with the duty of providing ' for [workers] of whom it is wholly unaware.”

The Sanatass Case

Recently, however, in Sanatass v. Consolidated Investing Co. , 10 NY3d 333, the Court of Appeals made it clear that a property owner is liable for a violation of Labor Law '240(1) that proximately caused injury to a worker, even if a tenant of the building contracted for the work without the owner's knowledge and consent and in violation of a notice provision in the lease. In so doing, it limited its holding in Abbatiello to its own peculiar facts.

The fact pattern in Sanatass, similar to that in Morales, reached the Court of Appeals as a result of a divided opinion in the Appellate Division. The plaintiff was injured while performing work in a sublessee's premises in a building owned by defendant Consolidated Investing. The tenant occupied the space pursuant to an assignment of the lease from a prior tenant. The lease contained provisions that all renovations, decorations, additions, installations, improvements and/or alterations required the prior written consent of the landlord.

Nonetheless, the plaintiff's employer was retained to install an air conditioning unit on the premises without the landlord's knowledge or consent. The plaintiff was injured when the unit fell while he and a coworker were hoisting it into the air. After determining that the installation of the unit was an alteration within the scope of '240(1), the court analyzed the issue of owner liability under the circumstances. The plaintiff claimed that Consolidated was an owner, despite its lack of notice or control. Consolidated contended that as an out-of-possession owner with no knowledge of the work being done on its premises, in express violation of the lease, it could not be held liable under '240(1). It further asserted that the tenant's breach of the lease provision, obligating it to obtain the owner's permission before hiring a contractor to perform any alterations, severed any nexus between Consolidated and the plaintiff.

Court of Appeals

The Court of Appeals rejected the defendant's contention that there was an insufficient nexus between the parties to impose liability under '240(1). Although the breach of the lease might have bearing upon indemnification claims between Consolidated and the tenant, it did not affect Consolidated's liability to the plaintiff. The court made it abundantly clear that the statute did not impose a notice requirement, holding: ” ' our precedents make clear that so long as a violation of the statute proximately results in injury, the owner's lack of notice or control over the work is not conclusive ' this is precisely what is meant by absolute or strict liability in t
his context ' “

In analyzing the issues in Sanatass, the court addressed its decision in Abbatiello. It distinguished Abbatiello from Celestine and its progeny, noting that in those cases a nexus existed between the out-of-possession owner and the plaintiff, be it by lease, easement or some other property interest.

The court made it clear that in Abbatiello, the injured cable technician was on the property solely by reason of provisions of the Public Service Law, which established mandatory access for cable repair workers. In the absence of this statute, the plaintiff would have been a trespasser on defendant's property. Under Public Service Law '219, the owner had no power to determine which cable company was entitled to operate the cable facilities on its property. As such, the court expressly stated, in distinguishing Abbatiello from Sanatass and its earlier decisions, and holding it to its peculiar facts, that it did not impose a new notice requirement under '240(1). It concluded that under the specific facts in Abbatiello, absent an adequate nexus between the cable technician and the owner, this worker was not entitled to the extraordinary protections of the Labor Law since he was not an “employee” for purposes of '240(1).

The court concluded by stating that an owner may not insulate itself from liability by contracting out of the
Labor Law.

This article originally appeared in the New York Law Journal, a sister publication of this newsletter.