The Residential Board of Managers v. 46th Street Development, LLC, et al., and a third-party action, Plaza Construction LLC formerly known as Plaza Construction Corp., v. Del Salvio Masonry Corp., et al., and V.A.L. Floors, Inc.
Supreme Court, Appellate Division, First Department, October 3, 2017
This is a construction defects case brought by the condominium board against the sponsor. In a third-party action, the sponsor sued its construction manager, Plaza Construction Corp. Then, in a second third-party action, Plaza Construction Corp., the construction manager for the project, sued V.A.L. Floors, Inc., as well as several other trades, for indemnity and contribution. V.A.L. subsequently moved to dismiss the second-third party complaint. The Supreme Court denied the motion and the Appellate Division upheld the decision.
The Appellate Division reasoned that, contrary to V.A.L.’s assertions, the second third-party complaint was not time-barred because the statute of limitations on a claim for indemnity or contribution accrues only when the person seeking indemnity or contribution has paid the underlying claim. In this case, Plaza had not paid anything to the Sponsor, and therefore the limitations period had not yet accrued.
The Court further held that if V.A.L. is eventually obliged to indemnify Plaza, the indemnification would have to arise out of defects in the work performed by V.A.L., not from the design of the work performed by the construction manager.