Prior Owners: Premises-Liability Exposure May Survive Conveyance Under Labor Law § 200/Common-Law Negligence, But Not Under Labor Law §§ 240(1) and 241(6); No Standalone Counterclaim for 22 NYCRR 130-1.1 Sanctions

1. Introduction

Quintero v MBH Capital, LLC (2026 NY Slip Op 03010 [249 AD3d 921] [2d Dept May 13, 2026]) addresses two recurring fault lines in New York Labor Law litigation: (i) when a former property owner can still face liability for a worker’s injury tied to an allegedly dangerous premises condition, and (ii) whether a defendant can plead “sanctions” as a standalone counterclaim—and obtain a default judgment if the plaintiff fails to reply.

The plaintiff, Fernando Vasquez Quintero, alleged he fell and was injured while working at a Brooklyn property that he contended was owned/managed by Federal Brick Management Group, LLC (“Federal Brick”). He sued asserting Labor Law §§ 200, 240(1), and 241(6), plus common-law negligence. Federal Brick responded that it had already sold the premises to MBH Capital, LLC before the accident and counterclaimed for “sanctions” on the theory that suing it was frivolous.

On appeal, the Second Department parsed (a) premises-based claims under Labor Law § 200/common-law negligence versus (b) statutory construction-activity claims under Labor Law §§ 240(1) and 241(6), and also corrected procedural and substantive errors relating to the counterclaim and default practice.

2. Summary of the Opinion

  • Labor Law § 200 / common-law negligence (premises liability theory): Summary judgment for Federal Brick was properly denied because its proof did not eliminate the narrow “prior owner” exception—i.e., it failed to address whether the dangerous condition existed at conveyance and whether the new owner had reasonable time to discover/remedy it.
  • Labor Law §§ 240(1) and 241(6): Summary judgment should have been granted to Federal Brick because the “prior owner” premises-liability exception does not apply to these construction-activity statutes, and Federal Brick established it was not the owner or general contractor at the time of the accident.
  • Plaintiff’s late reply / nunc pro tunc relief and summary judgment against the counterclaim: The Supreme Court should not have deemed the late reply served nunc pro tunc or granted summary judgment dismissing the counterclaim because plaintiff failed to show a reasonable excuse for the default, the court should not entertain nonjurisdictional defenses without vacating the default, and issue was not joined (CPLR 3212[a]).
  • Federal Brick’s request for a default judgment on its sanctions counterclaim: Properly denied because Federal Brick failed to state a viable cause of action—New York recognizes no independent cause of action for sanctions under 22 NYCRR 130-1.1 (or CPLR 8303-a).

3. Analysis

3.1. Precedents Cited

A. Premises liability; notice/creation; former owners

  • Carey v Five Bros., Inc., 106 AD3d 938, 941 [2013]
    Used for the summary-judgment framework in dangerous/defective premises-condition cases: a movant must show it neither created the condition nor had actual/constructive notice. The Court also relied on Carey’s statement that Labor Law § 200 codifies the common-law duty to provide a safe workplace—linking § 200 to premises-liability principles.
  • Bittrolff v Ho's Dev. Corp., 77 NY2d 896, 898 [1991]
    Supplies the key “general rule” (no liability for prior owners) and the “narrow exception”: a prior owner may be liable where a dangerous condition existed at conveyance and the new owner has not had a reasonable time to discover (if unknown) and remedy it. This exception is the doctrinal hinge for why Federal Brick could not obtain summary judgment on the premises-based § 200/common-law claims with the affidavit it submitted.
  • Mullen v Zoebe, Inc., 205 AD2d 597, 597 [1994]
    Cited alongside Bittrolff to reinforce the contours of the narrow former-owner exception.
  • Larrier v Gateway Sherman, Inc., 60 AD3d 913 [2009] and McKoy v Bagot, 245 AD2d 276 [1997]
    Both are used to show what a former owner must address on summary judgment: evidence must negate the Bittrolff exception by confronting whether the dangerous condition existed at conveyance and whether the new owner had reasonable time/knowledge to correct it. The Federal Brick affidavit’s silence on these points was fatal at the prima facie stage.

B. Scope of Labor Law §§ 240(1) and 241(6)

  • Saint v Syracuse Supply Co., 25 NY3d 117, 124 [2015] and Ricottone v PSEG Long Is., LLC, 221 AD3d 1032, 1034 [2023]
    Cited for the proposition that Labor Law §§ 240(1) and 241(6) apply to certain construction-related activities. The Second Department uses these authorities to differentiate activity-based statutory duties from premises-condition duties, and to hold the Bittrolff “prior owner” exception inapplicable to §§ 240/241 claims.

C. Defaults, nunc pro tunc relief, and summary judgment timing

  • GITSIT Solutions, LLC v Azcuy, 242 AD3d 956, 958 [2025] and Triple E. Constr., Inc. v Green-Citi Mgt., Inc., 238 AD3d 1192, 1193 [2025]
    Applied for the requirement that a party seeking to vacate a default must show a reasonable excuse for the delay. The plaintiff’s failure to provide one barred nunc pro tunc treatment of the late reply.
  • Newrez LLC v Jebco OGM Resources, 236 AD3d 1373, 1374 [2025] and Bank of N.Y. Mellon Trust Co., N.A. v Lagasse, 224 AD3d 800 [2024]
    Cited for the rule that without vacating the default, the court should not reach nonjurisdictional defenses raised by the defaulting party.
  • Elias v Serota, 103 AD2d 410, 417 [1984] and CPLR 3212 [a]
    Stand for the principle that summary judgment generally requires issue to be joined. Because the plaintiff never successfully vacated the default and serve a valid reply, issue was not joined on the counterclaim—so summary judgment dismissing it was procedurally improper.

D. Default judgment proof; and “sanctions” as a non-cause of action

  • Pantanilla v Yuson, 237 AD3d 1213, 1214 [2025], CPLR 3215 [f], and Nationstar Mtge., LLC v Gross, 201 AD3d 942, 944 [2022]
    These authorities frame the evidentiary requirements for a default judgment (service, facts constituting the claim, and default).
  • Barbetta v Facchini, 236 AD3d 623, 624-625 [2025]
    Used for two points: (i) the movant must still show a viable cause of action even on default, and (ii) the court has discretion and must ensure the claim is legally viable rather than ministerially entering judgment.
  • Cerciello v Admiral Ins. Brokerage Corp., 90 AD3d 967, 968 [2011]
    The decisive authority for rejecting Federal Brick’s counterclaim: New York does not recognize an independent cause of action for sanctions under CPLR 8303-a or 22 NYCRR 130-1.1. Thus, even though plaintiff defaulted in replying, the counterclaim could not support a default judgment because it was not a cognizable claim.

3.2. Legal Reasoning

A. The court separates “premises condition” liability from “construction activity” statutory liability

A central move in the decision is the categorization of the plaintiff’s theories: (1) premises-condition liability (Labor Law § 200/common-law negligence), versus (2) statutory liability tied to construction-related activity (Labor Law §§ 240(1) and 241(6)). That categorization determines whether former ownership can matter.

B. Why Federal Brick could not win summary judgment on Labor Law § 200/common-law negligence (premises liability)

Federal Brick’s showing—an affidavit that it had sold the premises and no longer owned/operated it at the time of the incident—was not enough. Under Bittrolff v Ho's Dev. Corp., former owners can remain potentially liable if a dangerous condition existed at conveyance and the new owner lacked reasonable time to discover/remedy it. Because Federal Brick’s affidavit did not address those exception elements (existence at conveyance; new owner’s knowledge/time), Federal Brick did not meet its prima facie burden to eliminate premises-based exposure.

The court then links this directly to Labor Law § 200 by quoting Carey v Five Bros., Inc.: § 200 is a codification of the common-law duty of owners and general contractors to provide a safe place to work. Accordingly, the same “dangerous premises condition” analysis governs § 200 (to the extent it sounds in premises liability), and the same gap in proof required denial of summary judgment.

C. Why Federal Brick did win summary judgment on Labor Law §§ 240(1) and 241(6)

The Second Department holds that the Bittrolff “narrow exception” is a premises-liability concept and does not extend to the “statutory liability imposed by Labor Law §§ 240 (1) and 241 (6).” Relying on Saint v Syracuse Supply Co. and Ricottone v PSEG Long Is., LLC, the court characterizes §§ 240/241 as addressing construction-related activities, not the lingering responsibility for premises conditions after conveyance.

On that framework, Federal Brick’s proof that it was not the owner (and not the general contractor) at the time of the accident was sufficient to establish prima facie entitlement to judgment on those statutory claims, and the plaintiff failed to raise a triable issue.

D. The counterclaim and defaults: procedural rigor plus a substantive backstop

The appellate court addresses three separate problems with the Supreme Court’s handling of the counterclaim:

  1. No reasonable excuse to vacate the default: Under GITSIT Solutions, LLC v Azcuy and Triple E. Constr., Inc. v Green-Citi Mgt., Inc., plaintiff did not justify the delay, so the default in replying should not have been excused via nunc pro tunc relief.
  2. No reaching nonjurisdictional defenses while default stands: Under Newrez LLC v Jebco OGM Resources and Bank of N.Y. Mellon Trust Co., N.A. v Lagasse, the court should not have entertained the plaintiff’s nonjurisdictional arguments against the counterclaim without first vacating the default.
  3. Premature summary judgment: Under CPLR 3212 [a] and Elias v Serota, summary judgment was improper because issue had not been joined on the counterclaim.

But despite plaintiff’s default, Federal Brick still could not obtain a default judgment because the counterclaim itself was legally defective: under Cerciello v Admiral Ins. Brokerage Corp., “sanctions” under 22 NYCRR 130-1.1 are not an independent cause of action. Barbetta v Facchini supplies the doctrinal mechanism: a default does not cure a failure to plead a viable claim, and courts retain discretion to deny default judgment when the claim is nonviable.

3.3. Impact

  • Sharper pleading and proof burdens for former owners in § 200/common-law premises cases: Defendants relying on “we sold the property” must affirmatively negate the Bittrolff exception—addressing the condition at conveyance and the new owner’s reasonable time/knowledge—if they want summary judgment.
  • Clear doctrinal boundary: former-owner premises exception does not migrate into §§ 240/241: The decision reinforces a clean separation between premises-condition liability and activity-based statutory liability; former ownership may leave some residual premises exposure, but not the extraordinary/strict statutory regimes of §§ 240(1) and 241(6) when the defendant is no longer an owner/contractor at the time of injury.
  • Defaults do not substitute for viable causes of action: Even where a plaintiff defaults in replying, defendants cannot convert sanctions regimes (22 NYCRR 130-1.1; CPLR 8303-a) into freestanding claims via counterclaim pleading.
  • Procedural discipline in counterclaim practice: The opinion underscores that (i) nunc pro tunc relief demands a real excuse, (ii) courts should not address nonjurisdictional defenses while default stands, and (iii) CPLR 3212(a)’s “issue joined” requirement has teeth.

4. Complex Concepts Simplified

Labor Law § 200
A statute that largely mirrors ordinary negligence principles for workplace safety. In premises cases, it functions like common-law premises liability: focus is on who controlled the premises and whether they created or had notice of the hazard.
Labor Law § 240(1) and § 241(6)
Statutes aimed at construction-related risks and compliance. They attach to particular roles (e.g., owners/contractors) tied to the work and project responsibilities. This case treats them as not extending to prior owners based on a premises-condition carryover theory.
“Prior owner” general rule and “narrow exception” (Bittrolff)
Normally, once you sell property, you are not liable for later injuries there. The exception: if the dangerous condition already existed when you sold, and the new owner had not yet had a reasonable chance to discover and fix it, the prior owner can still face liability (in premises-liability terms).
Nunc pro tunc
Latin for “now for then”—a court order treating a late filing as if it were timely. Courts generally require a reasonable excuse to grant it in default situations.
“Issue joined” (CPLR 3212[a])
Summary judgment usually cannot be sought/decided until the opposing party has served a responsive pleading, meaning the dispute is formally framed.
Sanctions under 22 NYCRR 130-1.1
A court’s tool to penalize frivolous conduct, sought by motion in the action. This case reiterates that it is not a standalone lawsuit claim that can be pleaded as a counterclaim for damages.

5. Conclusion

Quintero v MBH Capital, LLC clarifies three practical rules for New York litigators: (1) a former owner seeking summary judgment on premises-based Labor Law § 200/common-law negligence must negate the Bittrolff v Ho's Dev. Corp. exception with proof tailored to the condition at conveyance and the new owner’s opportunity to discover/remedy; (2) that premises-liability exception does not extend to Labor Law §§ 240(1) and 241(6), which the court treats as construction-activity statutes tied to ownership/contractor status at the time of the accident; and (3) “sanctions” under 22 NYCRR 130-1.1 cannot be repackaged as an independent counterclaim—so even a defaulting opponent does not permit entry of a default judgment on a legally nonexistent cause of action.