Procuring Insurance Is Not Equal To Indemnification

In the matter of Verduzco-Soto v. Georgia Properties Inc., a scaffold worker fell while descending from a scaffold, suffering personal injuries while working on the exterior of 275 Central Park West. He was working for Viles Contracting Corp, the contractor hired by Georgia Properties, the building owner.

Viles obtained insurance covering Georgia Properties pursuant to the “Standard Form of Agreement Between Owner and Contractor”, which does not include a clause requiring Viles to indemnify Georgia Properties.

Meanwhile, there was a subsequent “Hold Harmless” agreement, which contains an Indemnification clause between Viles as “Contractor” and RCR Management LLC and Affiliates as “Owner/Landlord.” Ari Paul, the RCR Management LLC managing agent, testified that: RCR was the property manager for the Building on the date of the alleged accident; neither he nor RCR had any relation to Georgia Properties; he did not report to Georgia Properties regarding the construction at issue; and he did not report to Georgia Properties in his capacity as managing agent of the Building.

Georgia Properties was cross-moving for summary judgment on the grounds that it is—or was intended to be—covered by the “Hold Harmless” Agreement between Viles Contracting Corp. and RCR Management LLC and its Affiliates, and lists this latter entity as the “Owner/Landlord.”

The Court concluded there was no evidence that Georgia Properties was an RCR Management LLC affiliate. Further, the President of RCR Management LLC testified that there was no relationship between Georgia Properties and RCR Management LLC, and that he had no responsibility to report to Georgia Properties regarding the construction being done by Viles or his management of the Building.

The Court was unmoved by Georgia Properties’ argument that Vile’s procurement of insurance coverage equates to an intention to indemnify, since an agreement to procure insurance is not an agreement to indemnify or hold harmless, and the distinction between the two is well recognized. So, Georgia Properties’ cross-motion was denied by the Court.

Ari Paul signs leases and renewals as “Owner” for 275 Central Park West and other properties held in trust for various beneficiaries (including Richard Eisenberg). RCR Management LLC and Georgia Properties (along with another 19 building corporations) list 155 Riverside Drive as their official address, according to the NY Department of State, Division of Corporations online database.

Perhaps the Court decision would have been different had any relationship between RCR Management LLC and Georgia Properties been elucidated.

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