Appellate Court Dismisses Company Wrongly Included in Suit
Case Study

Appellate Court Dismisses Company Wrongly Included in Suit

September 24, 2019

For attorney Reed M. Podell, defending a company in a multimillion-dollar lawsuit filed by workers injured on a construction project in January 2012 was complicated for the very reason it was simple: The company was included in the suit by mistake because its name was so similar to that of the plaintiffs’ intended defendant, an engineering firm involved in rebuilding the bus ramps at a Staten Island Ferry terminal.

Ultimately Reed used the mistake to his client’s advantage, scoring a decisive victory in the form of an August 2019 appellate court ruling dismissing all claims against the company. It wasn’t easy, though. Rather than getting the wrongly included defendant immediately released from the suit, the plaintiffs’ error led to a head-spinning volley of motions, cross-motions, and other legal maneuvering that turned the case into a chess match, keeping Reed’s client in the thick of the claim and requiring him to think steps ahead.

Reed, now special counsel at Goldberg Segalla and a member of Goldberg Segalla’s General Liability practice group, was equal to the task. A civil litigator with more than 20 years of experience defending property owners, contractors, architects, engineers, and other insureds in high-exposure matters, he’s recognized for his ability to obtain dismissals, risk transfers, and favorable settlements and secure successful appeals.

Tapped to represent the wrongly included defendant in the Staten Island construction-accident suit, Reed devised a legal strategy that would work no matter which way the case twisted or turned. He was prepared to argue that his client shouldn’t be involved in the suit, period, because the company had nothing to do with the Staten Island construction project. And he also was ready to argue that the legal concept of “united in interest” didn’t apply to the relationship between his client and the intended defendant, though the plaintiffs, having run out of time to add the correct company to the suit, argued that it did because the companies shared an office location and some officers.

Calling the decision “an easy one,” the lower court sided with the plaintiffs, ruling that there was unity of interest between the two companies and denying Reed’s motion for summary judgment, which would have dismissed his client from the suit. But the ruling didn’t entirely favor the plaintiffs. It dismissed some claims, against certain defendants, prompting the plaintiffs to appeal.

Before appealing, the plaintiffs reached a settlement with one defendant and discontinued all claims against Reed’s client and the similarly named engineering firm, leaving Reed to defend the company only from its co-defendants and any claims or cross-claims they might make. For any such cross-claims to be viable, the party filing them would have to rely on the lower court’s decision that the two similarly named companies were united in interest. So Reed had to fight the court’s unity of interest ruling by appealing it.

The Appellate Division seemed to agree with Reed’s argument that there was no unity of interest, saying his client should have been granted summary judgment and dismissed from the case. The court not only dismissed all claims against Reed’s client, it awarded the company costs. The court also reversed the motion court’s decision and dismissed the plaintiffs’ Labor Law 240(1) and 241(6) claims, leaving still in effect only the plaintiffs’ negligence and Labor Law 200 claims against the other two defendants.

ABOUT GOLDBERG SEGALLA’S GENERAL LIABILITY PRACTICE GROUP

The group’s attorneys have a wealth of experience defending companies of all sizes in various industries, along with municipalities, school districts, and other public entities, in a broad spectrum of matters. Its trial record and commitment to early dispositive motions is our hallmark of success. In matters of liability, we employ creative settlement resolutions and resort to alternative dispute resolution (ADR) wherever possible.