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USAA Cas. Ins. Co. v. Permanent Mission of the Republic of Namib.

United States Court of Appeals for the Second Circuit

December 6, 2011, Argued; May 25, 2012, Decided

Docket No. 10-4892-cv

Opinion

 [*104]  Jose A. Cabranes, Circuit Judge:

The question presented is whether the Permanent Mission of the Republic of Namibia to the United Nations ("the  [**2] Mission"  [*105]  or "Permanent Mission") may be sued for the damage to an adjoining property caused by its alleged failure to comply with the New York City Building Code ("the Building Code").2 The Mission brings this interlocutory appeal from a November 17, 2010 order of the United States District Court for the Southern District of New York (Laura Taylor Swain, Judge) denying it immunity under the Foreign Sovereign Immunities Act ("FSIA"),3 in the circumstances presented.

We affirm.

BACKGROUND4

At some point before the events that gave rise to this action, the Republic of Namibia made the decision to house the chancery, or base of operations,  [**3] of its Permanent Mission to the United Nations in a Manhattan townhouse located at 135 E. 36th Street (the "Building"). The Mission commissioned extensive interior construction in order to render the Building suitable for a diplomatic mission. To perform the proposed construction, the Mission hired an independent general contractor, Federation Development Corporation ("Federation"), which in turn hired a subcontractor, Ryback Development, Inc. ("Ryback") (together with Federation, the "Contractors").

The townhouse adjoining the Building, 133 E. 36th Street, was then owned by Robert Adelman and insured by USAA Casualty Insurance Co. ("USAA"). The Building was separated from the Adelman townhouse by a brick and mortar party wall, upon which the support beams of the Adelman townhouse rested.

In early December 2008, Ryback employees began pouring a reinforced concrete wall in the interior of the Building, alongside the existing party wall. On December 15, as the concrete wall was being poured, the party wall collapsed, causing substantial damage to Adelman's property. Adelman filed an insurance claim with USAA, which paid Adelman $397,730 for his damages.

On April 21, 2010, USAA brought suit  [**4] as Adelman's subrogee against the Contractors and the Mission (jointly, the "defendants") in New York State Supreme Court.5 On May 26, 2010, the Mission removed the suit to federal court, and on July 8, 2010, with court approval, USAA filed an amended complaint (the "Amended Complaint"). The Amended Complaint alleged five counts against the Mission, its contractor, and its subcontractor: (1) negligence; (2) nuisance; (3) trespass; (4) ultrahazardous activity; and (5) res ipsa loquitur.6

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681 F.3d 103 *; 2012 U.S. App. LEXIS 10688 **; 2012 WL 1889409

USAA CASUALTY INSURANCE CO., as subrogee of Robert Adelman, Plaintiff-Appellee, v. PERMANENT MISSION OF THE REPUBLIC OF NAMIBIA, Defendant-Appellant, RYBACK DEVELOPMENT, INC., FEDERATION DEVELOPMENT CORP., Defendants.

Subsequent History: As Amended June 7, 2012. As Amended July 17, 2012.

Prior History:  [**1] The Permanent Mission of the Republic of Namibia to the United Nations ("the Mission") brings this interlocutory appeal from the District Court's denial of immunity under the Foreign Sovereign Immunities Act. The District Court (Laura Taylor Swain, Judge) held that the Mission, an instrumentality of the Republic of Namibia, is not immune from a tort suit based on its alleged failure to comply with the New York City Building Code.

USAA Cas. Ins. Co. v. Permanent Mission of the Republic of Namib., 2010 U.S. Dist. LEXIS 123672 (S.D.N.Y., Nov. 17, 2010)

Disposition: Affirmed.

CORE TERMS

Mission, regulation, party wall, discretionary function, contractors, nondelegable duty, discretionary, structural integrity, tortious activity, immunity, omission, sovereign immunity, amended complaint, delegable, imposes, alleged failure, foreign state, townhouse, shore, implementing, Permanent, adjoining, chancery

Torts, Comparative Fault, Common Law Concepts, Res Ipsa Loquitur, Real Property Law, Encumbrances, Adjoining Landowners, Lateral & Subjacent Supports, Civil Procedure, Appeals, Appellate Jurisdiction, Collateral Order Doctrine, International Law, Sovereign Immunity, Foreign Sovereign Immunities Act, Appellate Review of Decisions, Standards of Review, De Novo Review, Questions of Fact & Law, Jurisdiction, Subject Matter Jurisdiction, General Overview, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Exceptions, Noncommercial Torts, Discretionary Functions, Commercial Activities, Burdens of Proof, Governments, Local Governments, Ordinances & Regulations, Vicarious Liability, Independent Contractors, Nondelegable Duties, Construction Law, General Premises Liability, Duties of Care, Proof, Violations of Law, Ordinances, Elements, Duty, Duty On Premises, Reasonable Care, Legislation, Interpretation, Construction & Interpretation, Foreign & International Immunity, Federal Tort Claims Act