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Dunham v. Weissman3/13/2001
to Toa liability for plaintiff's stipulation. Indeed, Weissman himself testified that he believed that the stipulation was only a personal obligation which ceased as soon as he sold the building. In view of the circumstance that Toa plainly was not liable under the contract of sale to indemnify Weissman for the obligation Weissman incurred under his stipulation with plaintiff, Weissman's concealment of that stipulation at the time of Toa's purchase of the subject premises from Weissman cannot be said to have been damaging to Toa and, accordingly, the counterclaim for fraudulent concealment, termed "intentional misrepresentation" by the IAS court, should have been dismissed.
Nor, contrary to the IAS court's holding, did Toa have any sustainable claim for indemnification against Weissman for the costs of the third-party litigation. We note in this connection that the IAS court erred in reading paragraph 34a of the contract as a whole for determining the parameters of Toa's agreement to indemnify Weissman, while reading the third sentence of that paragraph in a vacuum in order to find an undertaking by Weissman to indemnify Toa on the instant matter. All of paragraph 34a is limited to tort situations, and indemnification agreements are to be strictly construed so as to avoid reading into them a duty which the parties never intended to be assumed (see, Hooper Assocs. v AGS Computers, 74 NY2d 487, 491), and thus it does not provide a basis for indemnification of Toa by Weissman with respect to the costs of the litigation engendered by plaintiff's breach of contract claim.
Toa, however, is not without recourse to recover the costs of defending the third-party action. We note that the IAS court termed Weissman's third-party action "thoroughly baseless" as well as "graceless and burdensome", and we perceive no ground upon which to differ from that characterization. We, accordingly, remand the matter to Supreme Court for a hearing as to whether sanctions and/or costs should be imposed upon Weissman pursuant to 22 NYCRR ยง 130-1.1 for frivolous practice in connection with his institution and conduct of the within third-party action.
We have reviewed appellants' remaining arguments and find them to be unavailing.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: MARCH 13, 2001
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