Background
Roberson Sarmiento was allegedly injured in a fall from a ladder at 217 Thompson Street in New York City. West Lake 217 Thompson LLC owned the property; Method General Contractors LLC served as West Lake’s general contractor. Method Maintenance LLC, a Method General subcontractor, employed Sarmiento. After plaintiff filed suit in December 2023, defendants’ counsel timely filed answers. Defendants then failed to appear at three successive preliminary conferences — in May, July, and October 2024 — resulting in a default judgment entered against them in October 2024 pursuant to 22 NYCRR § 202.27(a).
Days before the default judgment was entered, defendants filed a third-party complaint against Method Maintenance seeking contractual and common-law indemnification and contribution. Method Maintenance answered the third-party complaint in January 2025. Defendants’ subsequent motion to vacate the default was denied for failure to show a reasonable excuse and a meritorious defense. Plaintiff and defendants eventually settled the main action in January 2026. Method Maintenance then moved to dismiss the surviving third-party complaint, arguing that defendants’ default constituted an admission of negligence, making them 100% responsible and barring any indemnification. Supreme Court granted the motion. The First Department reversed.
The Court’s Holding
The court held that a default judgment entered under CPLR § 202.27(a) for failure to appear at conferences is not a merits determination of defendants’ negligence. While a default can be treated as an admission of liability, it does not establish the degree of negligence or that defendants bore sole responsibility for plaintiff’s injuries. Without a finding that either defendant was 100% responsible — or that Method Maintenance bore no negligence at all — neither law of the case nor issue preclusion supported dismissing the third-party complaint.
The court also addressed the scope of the indemnification clause. The operating contracts required Method Maintenance to indemnify defendants for damages caused by its negligence “to the fullest extent permitted by law.” Under General Obligations Law § 5-322.1, a clause that does not require indemnification for the promisee’s own negligence is enforceable. Such a clause permits partial contractual indemnification: even a partly-at-fault owner or general contractor can seek contribution or indemnification from a negligent subcontractor for the subcontractor’s share of the fault. The default judgment did not constitute a determination that Method Maintenance was free from negligence — that question remains to be decided in the reinstated third-party action.
Key Takeaways
- A default judgment entered for failure to appear at court conferences (22 NYCRR § 202.27) is not a finding on the merits of negligence; it does not prevent the defaulting party from pursuing indemnification claims against third parties whose own negligence contributed to the injury.
- Under General Obligations Law § 5-322.1, contractual indemnification clauses that limit indemnification to the indemnitor’s own negligence are enforceable; a partially at-fault owner or GC can still obtain partial indemnification from a negligent subcontractor.
- The main action settlement between plaintiff and defendants rendered the default-vacatur issue moot, but the third-party claims survived for reinstatement because they involve different parties and different relief.
- Defendants who have suffered a default and settled the main claim should not assume the default forecloses third-party indemnification — the subcontractor’s fault is a separate question that remains open.
Why It Matters
This decision matters for every construction-injury case in which an owner or general contractor faces a default, as those situations are not uncommon when counsel fails to calendar court appearances. The ruling prevents a default from becoming a kill switch on third-party practice — an important protection given that the very scaffolding or tool that injured the worker was typically supplied or operated by the employing subcontractor. For plaintiffs’ counsel: this means insurers for owners and GCs can still pursue subcontractor indemnification even after a default, potentially affecting settlement dynamics and the allocation of ultimate responsibility for the judgment. For construction-project owners and GCs: the decision confirms that prompt filing of a third-party complaint (as defendants did here, even before the default was entered) preserves indemnification rights regardless of subsequent default against the main defendant.