        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

237
CA 14-01446
PRESENT: SCUDDER, P.J., CENTRA, PERADOTTO, LINDLEY, AND WHALEN, JJ.


MICHAEL D. FILER, PLAINTIFF-RESPONDENT,

                    V                             MEMORANDUM AND ORDER

KEYSTONE CORPORATION, ABS MACHINING, LTD.,
ARTHUR SIMMONS AND SUPERIOR TECHNICAL
RESOURCES, INC., DEFENDANTS-APPELLANTS.


GOLDBERG SEGALLA LLP, BUFFALO (ALBERT J. D’AQUINO OF COUNSEL), FOR
DEFENDANT-APPELLANT KEYSTONE CORPORATION.

DAMON MOREY LLP, BUFFALO (HEDWIG M. AULETTA OF COUNSEL), FOR
DEFENDANTS-APPELLANTS ARTHUR SIMMONS AND SUPERIOR TECHNICAL RESOURCES,
INC.

HURWITZ & FINE, P.C., BUFFALO (DAVID R. ADAMS OF COUNSEL), FOR
DEFENDANT-APPELLANT ABS MACHINING, LTD.

PROVOST UMPHREY LAW FIRM, L.L.P., BEAUMONT, TEXAS (JENNIFER J. SEALE,
OF THE TEXAS BAR, ADMITTED PRO HAC VICE, OF COUNSEL), DELDUCHETTO &
POTTER, SYRACUSE, FOR PLAINTIFF-RESPONDENT.


     Appeals from an order and judgment (one paper) of the Supreme
Court, Erie County (John L. Michalski, A.J.), entered February 7,
2014. The order and judgment denied the motions of defendants for
summary judgment.

     It is hereby ORDERED that the order and judgment so appealed from
is unanimously modified on the law by granting the motion of
defendants Arthur Simmons and Superior Technical Resources, Inc. and
dismissing the third amended complaint against them, and as modified
the order and judgment is affirmed without costs.

     Memorandum: Plaintiff commenced this action seeking damages for
injuries he sustained while employed by nonparty Dresser-Rand Company
(Dresser), which manufacturers compressors used in oil and gas
production. Plaintiff was unloading a crate containing industrial
diaphragm sections when the crate collapsed and the diaphragms spilled
out, knocking him to the ground. The diaphragms were manufactured by
defendant ABS Machining, Ltd. (ABS) pursuant to a contract with
Dresser, which required that the diaphragms be nickel-plated. ABS
contracted with defendant Keystone Corporation (Keystone), an
industrial metal finisher, to perform that portion of the work.
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                                                         CA 14-01446

     Both ABS and Keystone contend that Supreme Court erred in denying
their respective motions for summary judgment dismissing the third
amended complaint against them because they did not owe a duty of care
to plaintiff. We reject those contentions. ABS and Keystone were
part of the manufacturing and distribution of the diaphragms and thus
owed a duty to plaintiff based on common-law negligence and strict
products liability principles (see Hoover v New Holland N. Am., Inc.,
23 NY3d 41, 53; Codling v Paglia, 32 NY2d 330, 339; MacPherson v Buick
Motor Co., 217 NY 382, 388). ABS manufactured the diaphragms, and
designed and provided the crate, blocking and banding used for
packaging and shipping the diaphragms to Keystone. After nickel-
plating the diaphragms, Keystone repackaged the product and shipped it
directly to the end user, Dresser, in the crate provided by ABS. Both
ABS and Keystone had duties to comply with standard industry practices
with respect to packaging and shipping of the product, and neither
placed any instructions or warnings on or with the crate regarding
safe methods of uncrating the product. ABS failed to establish as a
matter of law that it used reasonable care in the design and testing
of the packaging for its product, i.e., the crate, and that it
provided adequate warnings with the product regarding the safe
uncrating of it. Keystone, likewise, failed to establish as a matter
of law that it used reasonable care in repackaging the product after
performing its nickel-plating process, or that it provided adequate
warnings regarding safe methods of uncrating the product.

     ABS and Keystone also failed to establish as a matter of law that
they had no duty to plaintiff arising out of the subject contracts.
It is well established that “ ‘a contractual obligation . . .
impose[s] a duty . . . in favor of the promisee and intended
third-party beneficiaries’ ” of the contract (Espinal v Melville Snow
Contrs., 98 NY2d 136, 140) and, contrary to the contention of ABS, we
conclude that plaintiff was an intended third-party beneficiary of the
contract between ABS and Dresser (see id.; cf. Hughey v RHM-88, LLC,
77 AD3d 520, 522; Betancourt v Trump Empire State Partners, 27 AD3d
604, 605-606). The contract required that “all packaging materials be
of sufficient construction to ensure that the integrity and stability
of the entire package provides for safe handling upon delivery to
[Dresser]” (emphasis added). It therefore “clearly appear[s]” from
the language of the contract that Dresser and ABS “intended to confer
a direct benefit” on Dresser employees such as plaintiff who would be
unloading the crates “to protect [them] from physical injury” (Bernal
v Pinkerton’s, Inc., 52 AD2d 760, 760, affd 41 NY2d 938; see All Am.
Moving & Stor., Inc. v Andrews, 96 AD3d 674, 674-675).

     With respect to Keystone, although plaintiff was neither a party
to the contract between Keystone and ABS nor an intended third-party
beneficiary thereof (see Aiello v Burns Intl. Sec. Servs. Corp., 110
AD3d 234, 241-242; Hughey, 77 AD3d at 522; Gerbino v Tinseltown USA,
13 AD3d 1068, 1070), we conclude that Keystone failed to establish as
a matter of law that it did not assume a duty of care to plaintiff by
“ ‘launch[ing] a force or instrument of harm’ ” (Church v Callanan
Indus., 99 NY2d 104, 111; see Espinal, 98 NY2d at 139; Dunleavy v
Tuttle, 83 AD3d 995, 996). It is undisputed that diaphragm sections
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                                                         CA 14-01446

were typically shipped flat on pallets. Here, however, Keystone
required ABS to ship the diaphragms in an upright position, curved-
side down, for Keystone’s convenience. Keystone then repackaged the
diaphragms vertically in the crates provided by ABS for pickup by
Dresser, even though Dresser did not ask Keystone to do so and
Keystone’s production manager testified at his deposition that he knew
of no reason why Keystone had to ship the diaphragms to Dresser
upright in a crate as opposed to flat on pallets. There is also an
issue of fact whether Keystone repackaged the crates in the same
manner as the crates were received from ABS. Although Keystone’s vice
president of operations and production manager testified at his
deposition that Keystone “returns all parts in the packaging or
containers supplied by the customer,” plaintiff’s coworker testified
that there was no wood “blocking” in the crate that broke open and
injured plaintiff. We therefore conclude that there is an issue of
fact whether Keystone “create[d] an unreasonable risk of harm to
others, or increase[d] that risk,” by packaging the diaphragms in a
vertical position without adequate stabilization (Church, 99 NY2d at
111; see Meyers-Kraft v Keem, 64 AD3d 1172, 1173). Finally, we
conclude that ABS and Keystone failed to meet their initial burden of
establishing as a matter of law that any acts or omissions on their
part were not a proximate cause of the accident (see Malamas v Toys
“R” Us-Delaware, Inc., 94 AD3d 1438, 1438-1439).

     We agree with defendants Arthur Simmons and Superior Technical
Resources, Inc. (Superior), however, that the court erred in denying
their motion for summary judgment dismissing the third amended
complaint against them, and we therefore modify the order and judgment
accordingly. Simmons and Superior established as a matter of law that
Simmons was a special employee of Dresser at the time of his alleged
negligence, and plaintiff failed to raise a triable issue of fact in
opposition (see Munion v Trustees of Columbia Univ. in City of N.Y.,
120 AD3d 779, 780-781; Davis v Butler, 262 AD2d 1039, 1039-1040).
Simmons had been employed by Dresser for over 30 years until his
retirement in 2004. In 2006, he returned to work for Dresser pursuant
to a contract with Superior, an employment agency. Simmons testified
at his deposition that he “never . . . met anybody from Superior,” and
that his entire relationship with Superior consisted of sending
timesheets to Superior and receiving a paycheck in return. At all
times relevant to the instant action, Simmons worked exclusively at
Dresser under Dresser’s supervision, with all training, assignments,
instruction, evaluation, and oversight coming from Dresser. Those
facts, which are undisputed, “ ‘establish surrender of complete
control by the general employer [Superior] and assumption of control
by the special employer [Dresser]’ ” (Cobb v AMF Bowling Prods., Inc.,
19 AD3d 1162, 1163). In opposition to the motion, plaintiff relied
solely on language in the Superior-Dresser contract stating that
Simmons was an employee of Superior, not Dresser, which is
insufficient to raise an issue of fact under the circumstances of this
case (see generally Thompson v Grumman Aerospace Corp., 78 NY2d 553,
559-560).
Entered: May 1, 2015                            Frances E. Cafarell
                                                Clerk of the Court
