Wade Clark Mulcahy LLP

The Second Department recently highlighted the importance of surrounding factual circumstances in claims for contractual indemnity.  In Zapototsky v. Ascape Landscape & Construction Corp. et al, NY Slip Op 06165 (2nd Dept. 2023), plaintiff sought to recover damages after he slipped and fell on a patch of ice between a parking lot and a store entrance at a strip mall. Simon, the mall landlord, had contracted with Ascape to handle snow and ice removal at the premises and on the abutting sidewalks.

Simon moved for summary judgment on the crossclaims it had brought for contractual indemnification, breach of contract, and an award of attorney's fees, and Ascape cross-moved for dismissal of all claims. The Supreme Court in 2020 denied Simon’s motion and granted Ascape’s, and Simon appealed.

The Second Department affirmed in part and reversed in part. As a general principle, when it comes to contractual indemnity “[t]he right to contractual indemnification depends upon the specific language of the contract.” Poalacin v. Mall Props., Inc., 155 AD3d 900, 909 (2nd Dept. 2017). Furthermore, “[t]he promise to indemnify should not be found unless it can be clearly implied from the language and the purpose of the entire agreement and the surrounding circumstances” Meadowbrook Pointe Dev. Corp. v F & G Concrete & Brick Indus., Inc., 214 AD3d 965, 970 (2nd Dept. 2023).

In the contract at issue in Zapotosky, Ascape agreed to indemnify Simon for third-party personal injury claims in any way relating to or resulting, in whole or in part, from Ascape’s performance or failure to perform under the contract. Their affirmative obligations included to salt and keep clear the store entrances and provide 24-hour snow removal until all walkways were slip-free following “snow events.”

The contract language was unambiguous, and the Court’s analysis placed greater emphasis on the surrounding circumstances portion of the inquiry. The Supreme Court failed to recognize that, Simon “failed to eliminate triable issues of fact as to whether the plaintiff's claim related to or resulted from Ascape's performance or failure to perform its services under the contract.” Zapototsky, NY Slip Op 06165 at 2. Given factual issues concerning the circumstances of the plaintiff’s accident, Simon’s motion was rightly denied.

On the other hand, the Supreme Court erred in granting summary judgment in Ascape’s favor dismissing the crossclaims. Specifically, Ascape “failed to establish as a matter of law that the plaintiff's accident did not relate to or result from Ascape's performance or failure to perform its services under the contract.” Just as the surrounding circumstances cast doubt upon Simon’s indemnity claim and warrantted a trial, so too did the circumstances prevent outright dismissal in Ascape’s favor.  

The primary takeaway for defense practitioners is to focus not only on the indemnity language in a commercial contract, but the specific factual circumstances of an accident, in preparing motions for summary judgment on contractual indemnity claims.