Vol 18, No. 4 (518) 869-9800 October 1999
Inside this edition: Governor Vetoes Disclosure Of Names On Certified Payrolls * President's Message * Section 11-a of NYS Lien Law * Legal: Hold Harmless Law * New Members * Payroll Paperwork Bill Vetoed * NESCA's Lien Filing Service
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PERSONAL PRIVACY UPHELD: GOVERNOR VETOES DISCLOSURE OF NAMES ON CERTIFIED PAYROLLS (Go Top)
On September 7, 1999, Governor Pataki vetoed a bill which would have compromised the personal privacy of construction employees working on public works projects. The bill, Senate 4468/Assembly 6923A, would have amended the Labor Law and the Public Officers Law by requiring state agencies, cities, towns, school districts and other public entities to disclose specific data, including employee names, collected from "certified payrolls" submitted by contractors and subcontractors on public projects. In addition, the bill would have amended the Freedom of Information Law (FOIL) to specify that a public entity may not withhold the names of private employees who work on a public project in response to a FOIL request for such information. Currently, the Labor Law requires contractors and subcontractors working on public projects to submit "certified payrolls" to the public owner, within 30 days after issuance of the first payroll, and every 30 days thereafter. The law also requires that such certified payrolls maintained by contractors and subcontractors include hours and days worked by each worker, laborer or mechanic; the occupation at which he/she worked; the hourly wage rate paid; and the supplements paid or provided. Current law does not require the names of workers. Despite vigorous opposition by NESCA and other contractor groups, S4468/A6923A was lobbied hard by organized labor and was passed by both houses of the state Legislature just before the session ended in July. Subsequently, it was sent to Governor Pataki for his consideration. NESCA and many of its members sent letters to the Governor expressing opposition to the bill and urging him to veto it because it constituted a serious violation of employee privacy. In his veto message (No. 21), Governor Pataki pointed out that state agencies and the Committee on Open Government have consistently taken the position that the names of employees of private entities performing contractual services for government entities may be withheld on the grounds that disclosure would constitute "an unwarranted intrusion of personal privacy" in accordance with FOIL and the Personal Privacy Law. He added that individual private employees have a significant privacy interest in avoiding disclosure of their names, particularly where the names are coupled with personal financial information. To back his position, the Governor cited a recent opinion from the United States Court of Appeals for the Second Circuit, Hopkins v. U.S. Department of Housing and Urban Development, 929 F.2d 81 (2d Cir. 1991), in which the Court concluded that release of such information would constitute an impermissible invasion of privacy. Thank you to the many NESCA members who wrote to the Governor in opposition of this bill.
NESCA kicked off its 1999-2000 membership meeting calendar on September 9, 1999 at the Century House with an interesting presentation by Jim Barriere with the law firm Couch, White, Brenner, Howard & Feigenbaum, LLP. Jim addressed some of the legal implications of the Y2K computer issue, and provided attendees with practical advice and suggested contract language related to Y2K compliance. If you missed the meeting and would like a copy of Jim's suggested contract language, please contact the NESCA office. While on the subject of membership meetings, a question often arises about who or how many from your company may attend NESCA meetings and events. All members should note that since membership in NESCA is a company membership, company principles as well as any and all employees you wish to send are definitely welcome! In fact, depending on the meeting or seminar topic, I highly recommend you send the people from within your business who normally handle that issue. By now you should know that NESCA's 19th Annual Trade Show is coming up soon and will be held on October 14, 1999. The Trade Show will be held at the Century House from 5:00-8:30 pm. Close to 50 members will have exhibits at the Show displaying a wide variety of commercial construction products and services in virtually every trade category. NESCA's Trade Show is a one-of-a-kind annual event for our region's commercial construction industry and we expect more than 500 area general contractors, subcontractors, suppliers, architects, engineers and building owner representatives will attend. If you've never attended a NESCA Trade Show before, don't miss this one! Finally, I'd like to note that ENTEC Consultants, Inc. was the name pulled for our "attendance drawing" at the September membership meeting. Had a representative from ENTEC been in attendance, he or she would have won $50. Since we did not have a winner in September, the pot for the November 11th membership meeting attendance drawing will now be increased to $100. If your company is represented at the November meeting and your name is pulled..... you'll be a winner!! I hope to see you there!
Brian B. Carmer President
DID YOU KNOW..... that Section 11-a of the NYS Lien Law allows subcontractors and suppliers on public projects to make a written demand upon the public owner to be notified when the completion and acceptance date of a project occurs? This is very important information to know since lien rights on public projects expire 30 days after the completion and acceptance date. Section 11-a further requires public owners to provide such notification within 5 days of the completion and acceptance date.
HOLD HARMLESS LAW DOES NOT PRECLUDE INDEMNIFICATION FOR SCAFFOLD ACT CLAIM (Go Top)
The New York State Supreme Court, Appellate Division, recently held that a subcontractor who failed to acquire liability insurance naming the owner and general contractor as additional insureds, as required by its contract, is strictly liable for a breach of contract, regardless of the subcontractor's liability under an indemnity clause. The court further held that an owner, whose liability for a construction accident is solely under the New York State Scaffolding Act, is entitled to contractual indemnification from the subcontractor notwithstanding an anti-indemnity statute as long as the owner was not negligent. Kennelty v Darlind Construction, Inc., 688 N.Y.S. 2d 584 (2d Dept. 1999). In Kennelty v. Darlind Construction, Inc., Robert Kennelty ("Kennelty"), the plaintiff, was injured in a construction accident while performing electrical work. Ciba-Geigy Corporation, now known as Noaritis Pharmaceuticals Corporation, owned the site at which the accident occurred. The general contractor on the project was Torcon, Inc., and Kennelty's own employer was Mehl Electric Co., Inc., an electrical subcontractor to Torcon, Inc. Kennelty fell from the top of an extension ladder owned by another subcontractor, Darlind Construction, Inc. Kennelty commenced the action to recover for personal injuries against the ladder owner, the site owner, and the general contractor. Kennelty claimed that the defendants were all negligent in the ownership, operation, maintenance and control of the site at which the accident occurred, and that they violated New York's Scaffolding Law. Torcon, Inc. brought a third-party action against the ladder owner and the electrical subcontractor, alleging breach of contract for failure to obtain liability insurance naming the owner and general contractor as additional insureds on the subcontractor insurance policy, and for contractual indemnity. The Appellate Division reversed in part and affirmed in part the trial court's decision to deny the owner's and contractor's motion for summary judgment on their third-party claims against the subcontractor. The Appellate Division, noting that "[i]t is well settled that an agreement to purchase insurance coverage is clearly distinct and treated differently from the agreement to indemnify", held the subcontractor liable for failure to procure general liability insurance naming the defendants as additional insureds, regardless of its ultimate liability under the indemnity claims. Kennelty v. Darlind Construction, Inc., 688 N.Y.S. 2d at 586. The Court stated, "[n]either the ladder owner nor the electrical subcontractor established that they had purchased the insurance required under the contracts. Therefore, they are responsible for all "resulting damages, including the liability [of the general contractor and the site owner] to [the] plaintiff." Kennelty v. Darlind Construction, Inc., 688 N.Y.S. 2d at 586-587. The Court further ruled that the owner, Ciba-Geigy Corporation, was entitled to summary judgment on its claim of contractual indemnity. The Court stated, "[w]hile owners and general contractors owe nondelegable duties under the Labor Law to plaintiffs who are employed at their work sites, these defendants can recover in indemnity, either contractual or common law, from those considered responsible for the accident." Kennelty v. Darlind Construction, Inc., 688 N.Y.S. 2d at 587. The Court noted that, however, under New York General Obligations Law, any indemnification clause that seeks to indemnify a party for its own acts of negligence is void as a matter of law (New York General Obligations Law Section 5-322.1). In the case at hand, the lower court found that the site owner was liable to the plaintiff under the Scaffolding Law based solely on its ownership of the premises. The lower court found no evidence that the site owner was negligent. Since there was no proof that the site owner directed, controlled, or supervised the manner in which the injured plaintiff performed its work, there was no evidence that the site owner was negligent. Therefore, the site owner was entitled to summary judgment on its cause of action against the electrical subcontractor based on the hold harmless and indemnification clauses in its contract with the electrical subcontractor. The Court, however, found that the site owner was not entitled to summary judgment for indemnification against the ladder owner because there was no evidence that the ladder owner had any authority to direct, supervise or control the plaintiff's work on the site. The general contractor was not entitled to summary judgment on the indemnity claim because questions of fact existed as to whether the contractor exercised control over the subcontractor's work. In conclusion, all parties to a contract with an indemnification provision should keep in mind that courts will not enforce such a provision so as to indemnify a party for its own negligence.
Terence J. Burke NESCA Legal Counsel
The Safety Wearhouse, LLC 30 Saratoga Avenue S. Glens Falls, NY 12803 (518) 745-5325; FAX (518) 745-5389 Contact: Patricia Moffitt
Van Buren Enterprises, Inc. P.O. Box 82 Guilderland Center, NY 12085 (518) 861-6070; FAX (518) 861-7436 Contact: Arthur E. Van Buren
Yaun Co., Inc. 240 Chestnut Street Liberty, NY 12754 (914) 292-6400; FAX (914) 292-5118 Contact: Daniel W. Yaun
PAYROLL PAPERWORK BILL VETOED (Go Top)
On September 7, 1999, and for the second year in a row, a bill which would have required contractors and subcontractors on public projects to submit a summary transcript of "certified payrolls" to public owners upon the completion of a project was vetoed by Governor Pataki. The bill would have required that at the completion of a public project (any project subject to the prevailing wage law, section 220 of the Labor Law) a summary transcript be submitted specifying the hours and days worked and the hourly wage rate paid to workers on the project. In 1997, section 220 of the Labor Law was amended to require contractors and subcontractors to provide "certified payrolls" to owners every 30 days during the course of a public project. The bill just vetoed was slightly different from last year's version in that it would have required that the tax identification number of each individual classified as an independent contractor be included on the summary transcript. Other than this minor change, the bill would have required no additional information than is already being provided by contractors and subcontractors pursuant to the 1997 legislation. It simply would have required that this same information be provided in summary form at the completion of a project. In his veto message (No. 22), Governor Pataki stated that the bill "...would impose unnecessary and duplicative reporting requirements on contractors. Requiring a summary transcript at the end of the project is a needless bureaucratic mandate that would increase contractor costs without providing any new or useful information." The Governor added that the bill's provision requiring independent contractors to obtain and submit a tax identification number "....is unnecessary, because the Department of Taxation and Finance already requires this information."
Lien On Us Let NESCA's Free Lien Filing Service Help You To Collect Your Overdue Payments (Go Top)
One of NESCA's most important and most utilized services of membership is the association's free lien filing service. NESCA has operated the lien filing service for more than 20 years, and annually files more than 250 private mechanic's liens and public improvement liens on behalf of members who haven't been paid for labor and/or materials furnished to construction projects in New York State. NESCA will file liens for members against projects located anywhere within New York State - both private projects and public works projects. Every NESCA member is entitled to the preparation and filing of up to three (3) liens free of charge during any given NESCA fiscal year. This includes the cost of all filing fees, service of the lien, postage and administrative expenses. Additional lien filings carry a $75 administrative fee. Members wishing to utilize this service should call NESCA at 518-869-9800 and request an "Information Required to File a Lien" form. Once you have completed the form, fax it back to our office and work will begin immediately to get your lien filed.