Petrosian v. B & A Warehousing, Inc.
Attorneys and Parties
Brief Summary
Construction site safety and punitive damages under New York Labor Law §§ 200 [codifies the common-law duty to provide a safe place to work], 240(1) [imposes absolute liability on owners and contractors for elevation-related risks requiring safety devices], and 241(6) [requires compliance with specific Industrial Code safety provisions].
The Supreme Court granted summary judgment on liability against B & A Warehousing, Inc. and TBS Realty Management, LLC under Labor Law §§ 200, 240(1), and 241(6), denied summary judgment against Aaron Berger, allowed an amended complaint to add punitive damages, tried damages only, and the jury awarded $10,000,000 in punitive damages based on Berger’s conduct.
The $10,000,000 punitive damages award against the defendants.
Punitive damages are parasitic and require an underlying finding of liability on a substantive cause of action. The jury was erroneously instructed that Berger’s liability had already been determined, and it was not asked to decide his liability. Because Berger was never found liable on any substantive claim, punitive damages based on his conduct could not be awarded.
Background
In 2010, George Petrosian was injured when a mobile lift collapsed while he was repairing a parking garage on property allegedly owned by B & A Warehousing, Inc. and managed by TBS Realty Management, LLC. Aaron Berger owned both entities. Petrosian and his wife, Nadejda, sued for personal injuries and derivative loss, alleging violations of Labor Law §§ 200, 240(1), and 241(6). After discovery, plaintiffs obtained summary judgment on liability against B & A and TBS but not against Berger. With leave, plaintiffs added a punitive damages claim, and a damages-only trial followed, where the jury was instructed to consider punitive damages based on Berger’s conduct and awarded $10,000,000.
Lower Court Decision
By order dated November 30, 2016, the Supreme Court granted plaintiffs summary judgment on liability against B & A and TBS under Labor Law §§ 200, 240(1), and 241(6), and denied summary judgment against Berger. A damages-only trial ensued on compensatory and punitive damages; the court instructed the jury that Berger’s liability had been determined and asked it to consider punitive damages based on his conduct. The jury awarded $10,000,000 in punitive damages, and judgment was entered on February 3, 2020.
Appellate Division Reversal
The Appellate Division reversed the judgment insofar as it awarded $10,000,000 in punitive damages. It held that New York does not recognize an independent cause of action for punitive damages; they are parasitic and require liability on a substantive claim. Because Berger’s liability was never adjudicated and the jury was improperly told it had been, punitive damages could not be imposed based on his conduct. The respondent’s motion to dismiss the appeal as academic was denied.
Legal Significance
Reaffirms that punitive damages in New York cannot stand without a predicate finding of liability on a substantive cause of action, and that erroneous jury instructions suggesting liability has been established—when it has not—mandate vacatur of a punitive award. In damages-only trials, courts must ensure the punitive-damages predicate (actual liability of the actor whose conduct is at issue) is established or submitted to the jury.
No punitive damages absent an underlying liability finding against the actor whose conduct forms the basis for punishment; misinstruction that presumes such liability is reversible error.