NY City Unable To Escape Labor Law Liability In Crane Collapse

In the ongoing In re 91st Street Crane Collapse Litigation, the City recently moved for summary judgment under Labor Law § 240(1), arguing that it was neither the title owner of record for the subject premises, nor controlled the construction project at which the crane was operating when it collapsed.  At issue was the City’s complicated deed for the property, in which the City granted the premises to the New York City Educational Construction Fund, subject to the conditions of the disposition agreement entered into between the City and NYCECF and also subject to the provisions of the lease between the same parties.  The conveyance was structured in this way to allow the premises to be developed as a new public school and mixed-use residential/commercial space.

Labor Law § 240(1) places a duty on owners, contractors and their agents.  While the statute is silent on the duties of lessees, case law has construed this statute to apply to lessees who hire contractors and thus have the right to control the work being done.  Here, the City argued that it had simply leased the property to 1765 First Associates through the NYCECF and, as such had no control of the property such that it would be subject to liability under the Labor Law.

The trial court disagreed and in its discussion noted the court’s duty to search for a nexus or link to the party disclaiming ownership when determining whether a party has divested itself of all traces of control and consequently ownership of a subject property.  The court focused on the lease language that indicated the lease would commence once the applicable City agencies had issued the necessary approval of the relevant documents that included the agreement that designated 1765 First Associates as the developer of the property.  The court, therefore, held that a question of fact existed as to the nature of and basis for the City agencies’ approval.  Despite this intricate web of conveyance, the fact that the City reserved the right to render final approval made it easy for the court to find a contractual connection for the City to continue exercising some control over the property, thereby potentially subjecting it to Labor Law liability.

Special thanks to Michael Nunley for his contributions to this post.  For more information, please contact Nicole Brown at nbrown@wcmlaw.com.