City of New York v. Welsbach Electric Corp

In City of New York v. Welsbach Electric Corp., 9 NY3d 124 (2007) Welsbach contracted with the City of New York in 1992 to maintain traffic signals in Queens. In 1993, a two car accident occurred in Queens at an intersection controlled by a traffic signal maintained by Welsbach. A negligence action was commenced by a driver and passenger of one car (the Angerome plaintiffs) against the other driver John Malin, Welsbach and the City. Welsbach asserted a cross claim against the City and the other defendants. The City did not cross claim against Welsbach. Welsbach was dismissed from the case because it owed no "duty in tort or contract to members of the general public to perform its duties under its contract" ... . The case went to trial before a jury. The City was found 100% liable for plaintiffs' injuries due to the malfunctioning traffic light. The drivers were found not liable because each had a green light when entering into the intersection. After paying the judgment, the City filed a suit against Welsbach for indemnification or contribution based upon its alleged failure to maintain the traffic signal. Welsbach argued that the City's action was barred by res judicata or collateral estoppel due to the prior grant of summary judgment. The Court of Appeals rejected Welsbach's arguments because Welsbach's liability to the City was not decided previously. Thus, the City was permitted to maintain its claims against Welsbach.