In a decision dated October 3, 2024, the Appellate Division, First Department reversed a lower court decision denying our client, PSI Plumbing, summary judgment dismissing all claims against it. This subrogation action arises out of a fire that occurred on June 5, 2013, at the Lexington Hotel located in New York, New York.  In 2011, more than two years before the fire, the Hotel observed water entering the building through a point of entry for Consolidated Edison’s electrical facilities and leaking onto a box housing the Hotel’s electrical equipment in its subbasement. Shortly after the water was discovered, Con Edison performed a dye-test, which confirmed that the water was coming from its vault. Approximately two years later, in early 2013, the Hotel undertook a remediation project which involved relocating most of its electrical equipment from the subbasement to the basement. The Hotel’s prime contractor, Integral, hired PSI to relocate certain water lines to accommodate the electrical scope of work. Following the fire, the insurance companies for the building commenced suit against Con Edison. Con Edison filed a third-party action against PSI and a number of subcontractors seeking common law indemnity and contribution. In the underlying motion, we argued that Con Edison could not be entitled to common law indemnity as a matter of law because the only claims against it were for common law negligence (i.e., it was not subject to statutory or vicarious liability). We also argued that because PSI was not negligent, there was no basis for an apportionment of fault against it and Con Edison’s contribution claims should also be dismissed. The lower Court denied the motion based on a finding that there was a question of fact regarding whether PSI launched a force or instrument of harm. On appeal, the First Department unanimously agreed with our argument that the lower Court erred in finding a question of fact because PSI did not work on the point of entry and based on the undisputed evidence that Con Edison’s vault, not PSI’s work, was the source of the water.

Ace American Insurance Company v. Consolidated Edison Company of New York, Inc., 2024 WL 4375426, – N.Y.S.3d – (1st Dep’t 2024)