First Department:

Under Labor Law Sponsor Is Improper Defendant Where Condo Board of Managers Is In Place

As part of our continuing commitment to provide outstanding representation and to serve as an information resource, we wish to inform you of a recent decision from the First Department concerning the Labor Law.

It is fairly typical in Labor Law cases for a plaintiff to seek to name as many defendants as they can in an action. That is because under Labor Law Section 240, the owner is strictly liable for an injured worker's injury. Thus, plaintiffs seek to find and name any appropriate "owner" of the premises. An interesting fact pattern arose concerning a condominium and a sponsor which demonstrates this.

In Jerdonek v. 41 West 72 LLC, the plaintiff was injured when the scaffolding moved in the boiler room in which he was working - a common area. The plaintiff commenced a Labor Law action against the condominium board of managers as well as the sponsor of the building who had previously owned the units prior to its conversion to a condominium. In fact, at the time that the claim arose the sponsor continued to own a sufficient number of units to enable it to control the condominium's board of managers. Plaintiff moved for summary judgment on his Labor Law Section 240(1) claim and the sponsor 41 West 72 LLC moved for summary judgment.

The lower court granted plaintiff's motion for summary judgment and denied the sponsor's motion for summary judgment. The First Department reversed. The First Department found that plaintiff's motion for summary judgment was properly granted. However the First Department found that the sponsor should have also been granted summary judgment. The Court noted that it is well established that a claim arising from the operation of the common elements does not lie against owners of individual units but rather the proper defendant is the board of managers.

The First Department found that the proper defendant was the board of managers of the condominium and not the sponsor even though the sponsor continued to hold an ownership interest in unsold units. The Court noted that if the sponsor of a condominium conversion could be sued on a post conversion cause of action arising from the common elements based on the sponsor's continued ownership of unsold units, then individual unit owners could be sued on exactly the same ground. The Court rejected such a construction.

The Appellate Division also found that there would not be a different result if, at the time the claim arose, the sponsor continued to own a sufficient number of units to control the condominium=s board of managers. The Court had previously rejected such an argument in a prior case and the Appellate Division found that since there was no argument that the condominium did not have a functioning and adequately capitalized board of managers at the time of plaintiff's accident, there was no reason to depart from the First Department's prior holding not to allow the plaintiff to sue any owner of an individual unit on a claim arising from an area that was under the exclusive control of the board of managers. Thus, the sponsor could not be sued.

In Labor Law cases, it is always important to clarify the parties and their relationships the plaintiff has named as defendants since not all may be proper defendants. In such a case a motion for summary judgment would be appropriate.

Should you have any questions, please call.

Thomas M. Bona