Where an employee of an electrical sub-subcontractor was injured on the jobsite, he sued the project developer, the prime contractor, and others.  Those firms in turn filed a third-party claim against the sub-sub claiming the right to common law indemnity as well as contractual indemnity.  The court concluded that the provisions of the prime contract related to contractual indemnification were not incorporated by reference because they did not concern “scope, quality, character and manner of the work.”  Lawrence Persaud v. Bovis Lend Lease, 941 N.Y.S.2d 208 (NY 2012).

The court held that the claim for common law indemnity must be dismissed because under New York law an employer may only be held liable for contribution or indemnification at common law if there has been “grave injury” to the employee.  In this case, the court found there was no “grave injury” as that term is defined in the state statute.

With regard to the contractual indemnity claim, the court held it must be dismissed because there was no written agreement requiring the sub-sub to indemnify the others.  Although there was a prime contract containing an indemnification clause, that provision was not deemed to be incorporated by reference into the subcontract under New York law.  “Under New York law, incorporation clauses in a construction subcontract, incorporating prime contract clauses by reference into a subcontract, bind a subcontractor only as to the prime contract provisions relating to the scope, quality, character and manner of the work to be performed by the subcontractor.” The court concluded that the provisions of the prime contract related to contractual indemnification were not incorporated by reference because they did not concern “scope, quality, character and manner of the work.”  Lawrence Persaud v. Bovis Lend Lease, 941 N.Y.S.2d 208 (NY 2012).

About the author: Article written by J. Kent Holland, Jr.,  a construction lawyer located in Tysons Corner, Virginia,  with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 15, No. 3 (Mar 2013).

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