Calle v JRR Contracting Inc.
Attorneys and Parties
Brief Summary
This construction and Labor Law case concerned whether a general contractor could obtain a default judgment on third-party claims for indemnification, contribution, and breach of contract based on a subcontractor's failure to appear, including failure to procure insurance.
The lower court denied JRR Contracting Inc.'s motion for entry of a default judgment against Regalado Contracting Inc. on JRR's third-party claims.
The Appellate Division reversed the order denying JRR's motion and granted entry of a default judgment on the third-party claims against Regalado.
The appellate court found that JRR properly served Regalado under Business Corporation Law § 306(b) [service on a corporation through the Secretary of State] and CPLR 3215(g)(4) [additional notice requirement for certain default judgment applications], showed sufficient cause for any delay under CPLR 3215(c) [one-year deadline to seek default judgment], and provided adequate proof of the facts constituting its claims under CPLR 3215(f) [proof required to support entry of default judgment], including deposition testimony and the subcontract establishing lack of supervision, indemnification rights, and Regalado's insurance obligations.
Background
Plaintiff Marco Calle sought damages for injuries sustained while performing construction work at a building. JRR Contracting Inc. was hired to perform façade restoration work and subcontracted all façade work to Regalado Contracting Inc. JRR then commenced a third-party action against Regalado asserting claims for indemnification, contribution, and breach of contract based in part on Regalado's alleged failure to procure insurance and name JRR as an additional insured. Regalado did not appear, and JRR moved for a default judgment.
Lower Court Decision
Supreme Court, Bronx County, denied JRR's motion for entry of a default judgment on its third-party claims against Regalado.
Appellate Division Reversal
The Appellate Division unanimously reversed, without costs, and granted JRR's motion. The court held that JRR timely and properly served Regalado and that, although the breach of contract claim for failure to procure insurance was not contingent on a liability finding and therefore remained subject to CPLR 3215(c) [one-year deadline to seek default judgment], JRR showed sufficient cause for the delay because it took affirmative steps within and shortly after the one-year period, including making two default motions and providing additional notice under CPLR 3215(g)(4). The court further held that JRR satisfied CPLR 3215(f) [proof required to support entry of default judgment] by submitting sworn deposition testimony and the subcontract, which demonstrated JRR's lack of supervision over the work, its entitlement to indemnification, and Regalado's contractual insurance obligations.
Legal Significance
The decision confirms that in New York construction litigation, a contractor seeking a default judgment on third-party claims must still comply with procedural requirements for service and proof, but courts may excuse tardiness where the movant has diligently pursued default relief. It also distinguishes between contingent indemnification and contribution claims, which depend on liability in the main action, and a breach of contract claim for failure to procure insurance, which is not contingent and remains subject to CPLR 3215(c) [one-year deadline to seek default judgment].
A contractor can obtain a default judgment against a nonappearing subcontractor where service is proper, the movant acts diligently even if slightly late, and the record includes sworn proof and the subcontract establishing indemnification and insurance-procurement obligations.