Equipment-Supplying Contractor’s Lack of Site Control Defeats Labor Law § 200 and § 241(6) Claims but Not Common-Law Negligence Under Espinal — DeMarco v. C.A.C. Industries, Inc.

Introduction

In DeMarco v. C.A.C. Industries, Inc., 2025 NY Slip Op 05500 (2d Dept. Oct. 8, 2025), the Appellate Division, Second Department, clarified the distinct paths of liability that can attach to a contractor who supplies equipment and an operator to a municipal worksite. The case arises from a trench collapse at a New York City Department of Environmental Protection (DEP) excavation where the plaintiff, a DEP worker, was injured while repairing a water leak.

The legal issues were multi-layered and familiar in New York construction and excavation litigation:

Whether a contractor with limited involvement at the site can be liable under Labor Law § 200 (codifying the common-law duty to provide a safe workplace) and § 241(6) (Industrial Code-based claims).
Whether the contractor’s operator (John Romeo) was a “special employee” of the City/DEP, thereby breaking the causal chain and undermining vicarious liability.
Whether, even without supervisory authority over the site, the contractor could face common-law negligence liability under Espinal’s “launch a force or instrument of harm” theory for excavation work that allegedly created or exacerbated the trench hazard.

The decision provides a crisp roadmap: absence of supervisory control defeats statutory Labor Law claims against a non-owner/non-general contractor, but it does not automatically foreclose common-law negligence where the contractor’s own operations may have created the dangerous condition.

Summary of the Opinion

The Second Department affirmed the Supreme Court, Queens County’s order, “insofar as appealed and cross-appealed from,” as follows:

Labor Law § 200: Summary judgment dismissing the § 200 claim against the contractor (C.A.C. Industries) was properly granted. The defendant established it lacked the requisite control over the worksite associated with a premises-condition § 200 claim, and the plaintiff failed to raise a triable issue of fact.
Labor Law § 241(6): Summary judgment dismissing the § 241(6) claim to the extent predicated on 12 NYCRR 23-4.2 and 23-4.4 was properly granted. The court emphasized that liability under § 241(6) against a non-owner/non-general contractor requires proof the defendant had authority to supervise and control the injury-producing work; here, the contractor established it lacked such authority.
Common-law negligence: The court properly denied the contractor’s motion for summary judgment dismissing the common-law negligence claim and also denied the plaintiff’s motion for summary judgment on liability. Triable questions exist under Espinal as to whether the contractor’s operator’s excavation created or exacerbated the dangerous condition leading to the trench collapse, and the contractor failed to establish as a matter of law that the operator was a special employee of DEP.

Bottom line: The statutory Labor Law claims against the equipment-supplying contractor were pared back based on lack of supervisory authority, but the negligence claim survives because a jury could find that the contractor’s own work “launched an instrument of harm.”

Factual and Procedural Background

The plaintiff, a DEP employee, was working in a trench in Queens in January 2017 when the trench walls collapsed. The defendant, C.A.C. Industries, Inc. (CAC), had been retained by DEP to provide a backhoe loader and an operating engineer (John Romeo) to perform excavation work and related services.

The plaintiff sued CAC for common-law negligence and violations of Labor Law §§ 200 and 241(6), invoking Industrial Code provisions relating to trench and excavation safety (12 NYCRR Part 23, Subpart 4). CAC moved for summary judgment, arguing, among other things, that:

It lacked authority to supervise or control the worksite, defeating § 200 and § 241(6) liability.
Its operator (Romeo) was DEP’s “special employee,” which would undercut vicarious liability and otherwise affect tort exposure.

The plaintiff cross-moved for summary judgment on liability under common-law negligence, § 200, and § 241(6) (as predicated on 12 NYCRR 23-4.3 and 23-4.4).

The Supreme Court granted dismissal of the § 200 claim and the § 241(6) claim insofar as based on 12 NYCRR 23-4.2 and 23-4.4; denied dismissal of the common-law negligence claim; and denied the plaintiff’s motion for summary judgment. Both sides appealed. The Appellate Division affirmed.

Detailed Analysis

Precedents Cited and How They Shaped the Decision

Calle v City of New York, 212 AD3d 763, 765: Cited for the bedrock proposition that Labor Law § 200 codifies the common-law duty of owners, contractors, and their agents to provide workers with a safe workplace. The court applies the “premises condition” branch of § 200, focusing on site control and creation/notice.
Impagliazzo v Judlau Contr., Inc., 2025 NY Slip Op 04771: Reinforces the same § 200 codification principle in a recent decision, underscoring the continuity of the doctrine.
Giraldo v Highmark Ind., LLC, 226 AD3d 874, 877; Marquez v L & M Dev. Partners, Inc., 141 AD3d 694, 698–699: Establish the § 200 premises-condition test: liability hinges on control over the worksite plus creation of the condition or failure to remedy it on actual/constructive notice. These cases buttress the finding that CAC, as an equipment supplier without site control, is not a § 200 defendant.
Woodruff v Islandwide Carpentry Contrs., Inc., 222 AD3d 920, 921; Lamar v Hill Intl., Inc., 153 AD3d 685: For § 241(6), a non-owner/non-general contractor is liable only if it had the authority to supervise and control the injury-producing work as an “agent” of the owner or general contractor. The court relies on this principle to narrow the § 241(6) claim against CAC.
Uhl v D’Onofrio Gen. Contrs., Corp., 197 AD3d 770, 772–773: Applied to show a contractor can obtain summary judgment on § 241(6) by demonstrating lack of supervisory control; used here to affirm dismissal of the 12 NYCRR 23-4.2 and 23-4.4 predicates.
Thompson v Grumman Aerospace Corp., 78 NY2d 553, 557–558; Spencer v Crothall Healthcare, Inc., 38 AD3d 527, 528; Perkins v Crothall Healthcare, Inc., 148 AD3d 1189, 1190; Gonzalez v Woodbourne Arboretum, Inc., 100 AD3d 694, 697; Abreu v Wel-Made Enters., Inc., 105 AD3d 878, 879; James v Highland Rehabilitation & Nursing Ctr., 222 AD3d 736, 737–738; Salinas v 64 Jefferson Apts., LLC, 170 AD3d 1216, 1221: This cluster sets out the “special employee” doctrine. Its key elements are (a) the presumption that general employment continues; (b) the centrality of who controls and directs the manner, details, and result of the work; and (c) evidentiary markers such as who pays wages, supplies equipment, and holds the right to discharge. The court draws on these cases to conclude CAC failed, at the summary judgment stage, to prove Romeo was DEP’s special employee as a matter of law, particularly where CAC owned/stored the backhoes and paid Romeo’s wages.
Espinal v Melville Snow Contrs., 98 NY2d 136, 140; Forbes v Equity One Northeast Portfolio, Inc., 212 AD3d 780, 781; Martinelli v Dublin Deck, Inc., 198 AD3d 635, 637; Calle v 16th Ave. Grocery, Inc., 219 AD3d 450, 451: Establish the general rule that a contractual obligation does not create tort duties to third parties—subject to three exceptions. The court invokes Espinal to hold that even without supervisory control, CAC may face common-law negligence if its excavation work “launched a force or instrument of harm,” i.e., created or exacerbated the dangerous trench condition.
Tamrazyan v 379 Ocean Parkway, LLC, 232 AD3d 736, 737–738; Nesbitt v Advanced Serv. Solutions, 224 AD3d 841, 843–844: Cited to support that triable issues arise when evidence suggests the contractor’s conduct may have created or worsened the hazard, defeating summary judgment on a negligence claim.

Legal Reasoning

1) Labor Law § 200 (Premises-Condition Theory)

The court treated the trench collapse as a “premises condition” § 200 case. Under this line, an owner, general contractor, or agent may be liable only if it controlled the worksite and either created the dangerous condition or had actual/constructive notice of it. The record showed CAC was retained to supply a backhoe and operator; it did not have site-wide supervisory authority. The defendant made a prima facie showing that it lacked control over the worksite. The plaintiff did not raise a triable issue in opposition. Accordingly, the § 200 claim was properly dismissed as to CAC.

2) Labor Law § 241(6) (Industrial Code-Based Liability)

Section 241(6) imposes a nondelegable duty on owners and general contractors to comply with the Industrial Code; an entity that is neither an owner nor a general contractor can be liable as an “agent” only if it had authority to supervise and control the injury-producing work. The court emphasized this threshold requirement (citing Woodruff and Lamar).

Applying that rule, the court held CAC established prima facie that it lacked the requisite supervisory authority. Consequently, the Supreme Court properly dismissed the § 241(6) claim to the extent it rested on 12 NYCRR 23-4.2 and 23-4.4. The opinion does not resolve any predicate under 12 NYCRR 23-4.3, which was not dismissed by the order under review; that portion, if asserted, remains procedurally unaddressed in this appeal and thus potentially live for further proceedings.

3) Special Employee Doctrine

CAC argued that its operator (Romeo) became a “special employee” of DEP, which would sever CAC’s vicarious responsibility and situate control with DEP. The Second Department, tracking Thompson, Spencer, and James, underscored that general employment is presumed to continue absent a clear surrender of control and assumption by the special employer. Crucially:

Who controls and directs the manner, details, and ultimate result of the work is the “significant and weighty factor.”
Other indicators include who pays wages, supplies equipment, and holds the right to discharge.

CAC’s own submissions showed it owned and stored the backhoes and paid Romeo’s wages. On that record, it failed to carry its prima facie burden to establish special employment as a matter of law. Because the dispositive facts were disputed or equivocal, the issue remains for the jury.

4) Common-Law Negligence and the Espinal Exceptions

Although “a contractual obligation, standing alone, will not give rise to tort liability in favor of a third party,” Espinal recognizes three exceptions:

Launching a force or instrument of harm (affirmative creation or exacerbation of a hazard).
Detrimental reliance by the plaintiff on the contractor’s continued performance.
Complete displacement of the owner’s duty to maintain the premises safely.

The court held that triable issues exist under the first exception—whether Romeo’s excavation of the trench created or worsened the condition that caused the cave-in. Citing Tamrazyan and Nesbitt, the court concluded that neither side was entitled to summary judgment on the negligence claim: CAC because factual disputes remain about creation/exacerbation, and the plaintiff because those same disputes preclude an affirmative finding as a matter of law.

Impact and Practical Implications

Distinct liability tracks: DeMarco reinforces that statutory and common-law paths are analytically distinct. A contractor with no authority to supervise or control the worksite can defeat § 200 and § 241(6) claims, yet still face common-law negligence exposure if its operations may have created the hazard (Espinal “launch a force”).
Municipal equipment-supply contracts: Contractors retained merely to supply equipment and an operator—particularly on municipal jobs—should not assume global immunity. While lack of supervisory control is a strong defense to § 200 and § 241(6), those contractors must still adhere to safe excavation practices because the affirmative-creation theory can keep negligence claims alive.
Special employee defense remains fact-intensive: Paying the operator’s wages and owning/storing the equipment are powerful facts against special employment. Absent clear, undisputed facts showing DEP’s assumption of control over the manner and details of work, courts will hesitate to declare special employee status as a matter of law.
Narrowing § 241(6) claims against non-owners/non-GCs: The opinion emphasizes that agent liability under § 241(6) depends on authority to supervise/control the injury-producing work. Plaintiffs should focus § 241(6) claims on owners and general contractors, or on other entities only where record evidence shows site-control authority.
Litigation posture going forward: On remand, the negligence claim proceeds to discovery/trial on whether CAC’s excavation created or exacerbated the trench hazard and on whether Romeo was a special employee of DEP. The § 241(6) predicates under 12 NYCRR 23-4.2 and 23-4.4 are out as to CAC; the opinion leaves any 23-4.3 predicate unresolved in this appeal, suggesting careful attention to motion scopes and pleadings.
Contract drafting and risk transfer: Owners and contractors should calibrate contracts to clarify who has site control and safety supervision, and consider indemnity and insurance provisions responsive to Espinal exposure arising from affirmative acts.

Complex Concepts Simplified

Labor Law § 200: New York’s codification of the common-law duty to provide a safe workplace. For “premises condition” cases (like a trench collapse), liability typically requires the defendant to have site control and to have created the condition or had notice of it.
Labor Law § 241(6): Allows workers to sue based on violations of specific, concrete Industrial Code rules. Owners and general contractors are directly liable; others can be liable as “agents” only if they had authority to direct/supervise the injury-producing work.
12 NYCRR 23-4.2, 23-4.3, 23-4.4: Industrial Code rules addressing trench and excavation safety (e.g., excavation support, sloping/shoring, and related precautions). In this case, the § 241(6) claims against CAC premised on 23-4.2 and 23-4.4 were dismissed because CAC lacked supervisory authority; any 23-4.3 theory was not resolved in the appeal.
Special employee doctrine: A worker can be a general employee of one entity and a “special employee” of another if the latter assumes control over the manner and details of the work. The general employment presumption is strong; proving special employment on summary judgment requires clear, undisputed facts showing a shift in control.
Espinal exceptions: Even without a duty from contract, a contractor can owe a duty to third parties if it (a) affirmatively creates or worsens a dangerous condition (“launches a force or instrument of harm”), (b) the plaintiff detrimentally relies on its performance, or (c) it entirely displaces the other party’s duty to maintain safety. DeMarco proceeds under the first exception.
Summary judgment standards: The moving party must establish entitlement as a matter of law (a prima facie showing). If the movant fails to meet that burden, or if the opponent raises material factual disputes, the court denies summary judgment and the issue goes to a jury.

Conclusion

DeMarco v. C.A.C. Industries, Inc. delineates a critical boundary in New York excavation and construction litigation: equipment-supplying contractors who lack site control can shed statutory Labor Law § 200 and § 241(6) exposure, yet remain in the case on common-law negligence where their own excavation work may have created the dangerous condition under Espinal’s “launch a force” exception. The Second Department also underscores the evidentiary rigor of the special employee defense—ownership of equipment and wage payment remain potent facts preserving general employment and precluding summary disposition.

For practitioners, the case is a reminder to: (1) segregate statutory claims from common-law negligence theories; (2) develop the record on who possessed supervisory authority and who controlled the means, methods, and results of the injury-producing work; and (3) anticipate Espinal-based exposure even when site control is absent. Strategically, DeMarco will influence how plaintiffs target defendants in trench-collapse cases and how contractors structure their municipal support services with safety protocols, indemnity, and insurance aligned to the residual risks that persist under the common law.

Panel: Duffy, J.P.; Miller, Warhit; and Love, JJ. Decision: Affirmed insofar as appealed and cross-appealed from, without costs or disbursements.