Court “Fl[u]shes Out” Leaking Loo Litigation

This was originally posted on the SGR Blog.

A ceiling fixture falls on a tenant in his apartment. Shortly before the incident a toilet leaking from the unit above was replaced. The tenant blames the owner. And the owner blames the plumber. Case closed. Not. Issues of fact as to causation and notice. Claims for contribution and indemnification. Cross-claims for negligence. A textbook case worthy of a bar exam  question.

Daniel Ebalo claimed that he was injured when a ceiling light fixture in his bathroom fell onto him due to the negligent installation of the toilet in the apartment above his by the Trustees of Columbia University, Columbia University, the property owners, and Titan PH LLC, a plumbing contractor.

Columbia filed a third-party action against Titan alleging causes of action for contribution, indemnification, and breach of contract. Titan  moved (1) for summary judgment dismissing as against it, the sole cause of action of the amended complaint and the third-party claims, and (2) a sanction for spoliation of evidence in the form of (a) dismissal of the Ebalo’s amended complaint and Columbia’s third-party claims as against Titan; or (b) precluding Ebalo and Columbia from introducing evidence at trial that Titan failed to properly install the toilet that leaked and allegedly caused the light fixture to fall on him or (c) an adverse inference at trial.

It was undisputed that, on December 4, 2013, Ebalo suffered serious injuries when he was struck by a light fixture in his bathroom in unit 2D at 90 Morningside Drive, which is owned by Columbia. Both Ebalo and his partner, Alan Stewart, stated that they had complained to Columbia about the leaks. Ebalo also claimed that the fixture fell from his ceiling after becoming waterlogged from an allegedly leaking toilet in Unit 3D of the building, the unit directly above the one where he resided. Ebalo claimed that the leak was caused, at least in part, by the negligent installation of the toilet by Titan three months earlier, in September 2013. It was also undisputed that, approximately one week after the accident, Columbia hired Alafogiannis Plumbing and Servicing to do repairs and replace the toilet installed by Titan. On December 11, 2013, APH disposed of the toilet installed by Titan.

A landowner has a duty to maintain premises in a reasonably safe condition. Landowners may be held liable for failing to maintain premises if they either created a dangerous condition thereon or had actual or constructive notice within a sufficient time prior to the accident to be able to remedy the condition. Thus, in premises liability matters, defendants moving for summary judgment have the initial burden of making a prima facie showing that they neither created the hazardous condition nor had actual or constructive notice of its existence for a sufficient length of time to discover and remediate. In order to constitute constructive notice, a defect must be visible and apparent for a sufficient length of time to permit discovery and remediation.

In support of the motion to dismiss the  complaint, Titan relied upon the deposition testimony of numerous witnesses: (1) Ebalo; (2) Alan Stewart; (3) Consolcio Herrera, building superintendent; (4) Joseph Alafogiannis, the owner of the plumbing company that replaced the toilet in Unit 3D; (5) Gisela White, the occupant of apartment 3D; (6) Cathleen Ryder, the Director of Residential Services for Columbia-owned buildings; (7) Spiros Skendros, the APH plumber who installed the replacement toilet; and (8) Carlos Ulloa, one of the two Titan plumbers who installed the toilet that allegedly leaked.

These submissions did not prima facie eliminate the existence of triable issues of fact as to Titan’s negligent installation of the toilet. Ebalo and Stewart stated they had experienced leaks in his bathroom and reported them to Columbia. Herrera testified that when the toilet was replaced, Skendros advised him that there was a leak in the right-hand corner on the back side of the toilet. Furthermore, Alafogiannis, the owner of APH, testified that a leak, such as the one alleged to have occurred, can be the result of the seal between the toilet tank and the bowl not being installed correctly and tightened down. Alafogiannis further testified that he would not anticipate being able to see the leak immediately and that sometimes it can take a day or even a week for the leak to present itself. According to Alafogiannis, the pressure of someone sitting on a improperly installed toilet can cause the bowl to move and over time a leak can develop.

APH’s employee, Skendros, also testified that, when a toilet is not set properly, a leak between the tank and the bowl can develop. He testified that the leak generally develops when the rubber seal between the tank and the bowl gets pinched, which can occur when the bowl is moved around too much while it is being installed; and, consistent with Affogianni, he testified that it cannot always be told from looking at the toilet if the seal has been pinched or spot the leakage right away. Ulloa, who replaced the toilet along with Skendros, likewise testified that a leak can develop when the plumber does not tighten the fasteners between the tank and the bowl properly. Specifically, if the screws or fasteners that connect the tank and the bowl are not tight enough upon installation, then the gasket can move as a result of normal use of a toilet when leaned on by the user. That testimony raised triable issues of fact as to whether the toilet bowl was properly installed.

Moreover, even if Titan had met its prima facie burden in the first instance, both Columbia and Ebalo raised triable issues of fact with their submissions. Ebalo’s expert, Frank Musella, a licensed plumber with more than 30 years of experience in installing and repairing the same model toilet bowl, opined that “absent evidence of any other contributing factors, negligent installation is the only plausible explanation of the leaking toilet.” Musella unequivocally stated that the accident would not have occurred if the tank-to-bowl gasket and tank-to-bowl bolts were properly set upon installation by Titan. And Ryder testified that Alafogiannis told her that there was something wrong with the toilet, but that she did not recall what it was.

Ebalo also relied upon the deposition testimony of Titan’s CEO Peter Skyllas who testified that he believed that a leak from the back of the toilet could have caused the leak, but also testified that it would be detectable upon installation. However, Skyllas admitted that the original work order prepared when Titan installed the toilet did not specifically indicate that the technicians checked to see if the toilet was installed properly, and opined that the employees who installed the toilet were typically “lazy.”

Ebalo also submitted an unsigned letter from Alafogiannis to Ryder stating that APH had responded to a heavy water leak, performed a fixture test and found that the existing toilet was “leaking from the bottom of the toilet tank.” The unsigned letter stated that: “The seal between the toilet and tank was not set right. Every time the toilet flushed the toilet leaked from the seal in the back.”

Titan argued that the letter was inadmissible hearsay that the court could not consider on a motion for summary judgment. However, as Ebalo correctly argued under these circumstances the court could consider the document in opposing summary judgment regardless of whether a trial judge ultimately finds it to be hearsay. The Court found that, given the quantity of other evidence, the report, which clearly support Ebalo’s contention that there was a triable issue of fact as to Titan’s negligence in installing the toilet, the court could consider the unsigned letter. Thus, Titan’s motion for summary judgment dismissing Ebalo’s complaint was denied.

Titan moved for summary judgment dismissing Columbia’s third-party claims for indemnification, contribution and breach of contract to procure insurance.

To establish a claim for common law indemnification, a party must show that (1) it has been held vicariously liable without proof of any negligence or actual supervision on its part, and (2) the proposed indemnitor was either negligent or exercised actual supervision or control over the injury-producing work. Similarly, contribution is only available where two or more tortfeasors combined to cause an injury and it is determined in accordance with the relative culpability of each such person. As such, in order to prevail on a motion for summary judgement dismissing the claims for common-law indemnification and contribution, the third-party defendants must establish, prima facie, that they were not negligent. The Court found that Columbia established that the leak which ultimately caused Ebalo’s injury may properly be found to be a result of an improperly installed toilet by Titan. Thus, Titan’s motion for summary judgment dismissing Columbia’s claims for common-law indemnification and contribution was denied.

In support of its summary judgment motion seeking to dismiss Columbia’s claim for contractual indemnification, Titan submitted its agreement with Columbia under which it seeks indemnification, a provision states in relevant part:

Since the agreement stated that Titan may be required to indemnify Columbia for any bodily injury “arising out of or relating to the performance of Work by the Contractor,” and Titan may properly be found to be negligent, summary judgment dismissing Columbia’s claim for contractual indemnification was also denied.

To obtain summary judgment on a claim for breach of contract for failing to procure insurance, Titan was required to demonstrate that there was either no contract provision requiring Titan to procure insurance or that it did comply with such an underlying requirement.

Titan contended that it was entitled to summary judgment because it purportedly procured an aggregate of $6 million in “liability insurance coverage” and thereby satisfied its obligation to procure insurance.  But Article 9 of the agreement required Titan to maintain:

To prove compliance with the provision, Titan submitted two insurance declaration pages: one from their commercial liability umbrella insurance policy and the other declaration from Titan’s commercial general liability insurance policy. The declaration for the commercial umbrella liability policy described the commercial general insurance liability policy as underlying insurance under Titan’s umbrella policy. Titan argued that when the coverage amounts in these two policies were aggregated, those declarations showed that Titan procured $6,000,000 in personal injury, bodily injury, and property damage insurance coverage per occurrence, thereby satisfying its agreement with Columbia.

Those declarations, did not, on their face eliminate triable issues of fact as to whether Titan complied with insurance requirements under the agreement. The agreement specified that Titan must maintain “general commercial liability insurance” “with minimum limits of coverage not less than $5,000,000 per occurrence and in the annual aggregate unless otherwise approved by the Owner against claims for personal injury, bodily injury and property damage.” The limit per occurrence on the face of the declaration for general commercial liability insurance is only for $1,000,000.00 rather than the $5,000,000.00 as the agreement requires.

Furthermore, the agreement specifically mentioned maintaining commercial general liability insurance in bold letters and did not state that Columbia Titan could satisfy this condition by maintaining a commercial general liability policy with only $1,000,000 of coverage per occurrence and then aggregating additional coverage under a commercial umbrella policy. Titan submitted no proof that this was “approved by [Columbia];” that Columbia was aware that Titan structured its insurance coverage in this fashion; or that Columbia intended something other than what the agreement said. As the best evidence of what parties to a written agreement intend is what they said in their writing, there were triable issues of fact on the record as to whether Titan breached the agreement with Columbia.

Titan also argued that it was entitled to summary judgment dismissing the cause of action because Columbia could not prove the necessary element of damages for its breach of contract claim for failure to pay insurance. Titan argued that damages resulting from a breach of a contract to procure insurance are limited to out of pocket damages such as the cost of Columbia purchasing its own insurance. The Court held that if a party sues for a breach of another party’s obligation to procure insurance it is limited to recover premiums for its own insurance if that insurance covered the injury.  However, regardless of whether Columbia purchased its own insurance, which was not established in the record, Columbia satisfied the element of damages. If Titan is found liable at trial for failing to procure insurance for Columbia, Columbia will either recover damages equal to premiums it paid for its own insurance or, if Columbia did not have insurance, its claimed damages will be the money it would have recovered from Titan’s insurance provider if Titan had complied with the agreement to obtain coverage. Thus, summary judgment dismissing the cause of action for breach of contract was denied.

Under New York law, spoliation sanctions are appropriate where a litigant, intentionally or negligently, disposes of crucial items of evidence involved in an accident before the adversary has an opportunity to inspect them after being placed on notice that such evidence might be needed for future litigation. The court had broad discretion to provide proportionate relief to the party deprived of the lost evidence, such as precluding proof favorable to the spoliator to restore balance to the litigation or employing an adverse inference instruction at the trial of the action.

On a motion for spoliation sanctions, the moving party must establish that (1) the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the records were destroyed with a `culpable state of mind,’ which may include ordinary negligence; and (3) the destroyed evidence was relevant to the moving party’s claim or defense. In deciding whether to impose sanctions, courts look to the extent that the spoliation of evidence may prejudice a party, and whether a particular sanction is necessary as a matter of elementary fairness. The burden is on the party requesting sanctions to make the requisite showing.

Striking a pleading is a drastic sanction to impose in the absence of willful or contumacious conduct. The imposition of such a sanction is only appropriate where the evidence was destroyed with a culpable state of mind. The sanction of striking a pleading is warranted only where the alleged spoliation prevents the movant from inspecting a key piece of evidence which is crucial to the movant’s case or defense or has left the movant prejudicially bereft of the means of presenting their claim. The Court found that this was not the case here.

The Court found that there was no grounds for sanctions against Ebalo because he was never in custody or control of the toilet.

Columbia claimed that APH disposed of the toilet when in installed a replacement seven days after the incident; APH did so in the ordinary course of business; and Columbia had no culpable state of mind in the failure to preserve the toilet. And the Court agreed that Titan had not demonstrated that that Columbia was guilty of willful or contumacious conduct in an effort to frustrate discovery.

There was merit to Titan’s contention that Columbia was on notice that there was a significant probability that the accident would result in litigation. Columbia’s superintendent, Herrera, witnessed Stewart taking photographs of the accident and took his own photographs of the light fixture. When asked why he took photographs, Herrera testified that he took photographs “for evidence” because he “[knew] there is going to be a lawsuit” and he wanted to “show the manager what happened. Exactly what happened [sic].” Herrera further testified that he accompanied Ryder to inspect Ebalo’s apartment and apartment 3D on the day of the incident. Thus, Columbia was, at a minimum, negligent in not directing APH to preserve the toilet and should have known that it had a duty to take steps to ensure that the toilet was preserved for inspection in the likely event of litigation. As such, the court concluded that, while striking the answer was not warranted, spoliation sanctions against Columbia in the form of an adverse inference charge and preclusion of evidence could can be requested at the time of trial.

Whatever remedy the trial court deemed appropriate would prevent Columbia from using the disposal of the toilet by its agent that repaired the toilet to its tactical advantage. Such sanctions could be appropriately tailored to restore the balance between Columbia’s right to defend itself and the prejudice to Titan that would arise if Columbia were to offer evidence relating to Titan’s culpability for any negligence related to the accident.

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