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Saturday, May 7, 2011

Co-op Apartment Liability for Construction Accidents


            The New York State Labor Law provides protection for many types of accidents involving construction, renovation and demolition work activities.  Generally speaking, the owner of the premises and the general contractor are legally responsible for maintaining a safe work site and are held responsible because they are in the best position to ensure worker safety (See, New York State Labor Law §§200, 241(6) and 240(1)).  In New York City, in particular, where many of the private residential buildings are owned as cooperative apartments (or co-ops) the question of who is legally responsible for construction accidents is clear – but perhaps not easily understood.  The individual unit “owner” is generally protected by the single family homeowner exception to the Labor Law.  However, the building owner can be held liable – even for work being done solely inside an individual apartment.

            In Coleman v. City of New York, 91 N.Y.2d 821, 666 N.Y.S.2d 553, 689 N.E.2d 523 (1997) the Court of Appeals examined the liability of a cooperative corporation and held that:

the owner of the property argued that it was not liable because it leased the property to a contractor who performed the work leading to the injury and did not itself contract for or benefit from the construction involved.  We disagreed, stating that "[l]iability rests upon the fact of ownership and whether Eastern had contracted for the work or benefitted from it are legally irrelevant."  (Supra, at 560, 606 N.Y.S.2d 127, 626 N.E.2d 912.)  Relying on our earlier decision in Celestine v. City of New York, 59 N.Y.2d 938, 466 N.Y.S.2d 319, 453 N.E.2d 548, affg. 86 A.D.2d 592, 446 N.Y.S.2d 131, we articulated the bright line rule that "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" (Gordon v. Eastern Ry. Supply, supra, 82 N.Y.2d, at 560, 606 N.Y.S.2d 127, 626 N.E.2d 912).

More recently, in Pineda v. 79 Barrow Street Owners Corp., 297 A.D.2d 634, 636, 747 N.Y.S.2d 236, 239 (2d Dept. 2002) where the plaintiff fell from a ladder while painting the living room of an individual shareholder without the prior consent or notice to the cooperative building owner, the Second Department held that, “as the fee owner and the owner’s agent, the defendants are absolutely liable under the Labor Law . . .”  The issue of a cooperative corporation's liability under Labor Law §241(6) was also addressed in DeNota v. 45 East 85th Street Corp., 163 Misc.2d 734, 622 N.Y.S.2d 192 (S.Ct. N.Y. Co. 1995).  In DeNota the plaintiff was cutting wood with a power saw in an apartment unit at the cooperative building owned and controlled by the defendants.  The cooperative corporation alleged that it should not be liable since it did not contract for the renovation work, which was done on behalf of the individual apartment owner.  The Court rejected this argument and denied the cooperative corporation's motion for summary judgment on this ground, explaining that (622 N.Y.S.2d at 193):

However, the statutory purpose of affording protection to workers employed in construction, excavation or demolition is to provide a recourse to the workers regardless of the absence of control, supervision or direction of the work [cites omitted].  The owner is in the position to ensure that adequate protection is provided and the statutory liability provides the motive [cases omitted].

            The Courts are merely following the centuries old definition of “owner” in coming to this conclusion.  While most people believe that they “own” a co-op apartment, in reality the apartment is owned by the cooperative corporation that owns the entire building.  The individual merely owns shares in the co-op corporation that entitles them to occupy a particular unit in the building.  Therefore, as the true “owner” of the work site the coop corporation can be held responsible for construction accidents. 

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