JohnsonKreis Construction Company, Inc. v. Howard Painting, Inc.; Auto-Owners Insurance Company; and Owners Insurance Company (Appeal from Jefferson Circuit Court: CV-20-900230).
SC-2023-0882
Ala.Mar 21, 2025Background
- JohnsonKreis Construction Company (general contractor) hired Howard Painting, Inc. (subcontractor) for hotel construction in Birmingham, Alabama.
- The subcontract required Howard to indemnify JohnsonKreis for liabilities arising from Howard's proportional fault and to name JohnsonKreis as an additional insured on its insurance policies.
- During construction, a worker employed under Howard was killed in an accident involving equipment operated and owned by JohnsonKreis.
- The worker’s estate sued both JohnsonKreis and Howard for wrongful death; JohnsonKreis settled its part of the lawsuit without Howard’s or Howard’s insurer’s participation.
- JohnsonKreis and its insurer (Cincinnati Insurance Company, CIC) later sued Howard and its insurers (Auto-Owners and Owners Insurance) for indemnification, breach of contract, and bad faith.
- The trial court granted summary judgment to Howard and Owners, holding that indemnity provision was unenforceable due to the indivisibility of punitive damages in Alabama wrongful death cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is proportional indemnity for wrongful death claims enforceable under Alabama law? | Indemnity clause is valid and enforceable; Howard responsible for its share. | Alabama law doesn’t allow apportionment in wrongful death; clause unenforceable. | Indemnity provision is enforceable; trial court erred. |
| Are Owners/Howard required to indemnify JohnsonKreis for the settlement? | Owners/Howard must indemnify per contract and insurance policies. | JohnsonKreis solely responsible; no indemnity owed. | Remanded for trial court to address remaining factual issues. |
| Does bad faith or breach of contract survive summary judgment if indemnity found enforceable? | Owners denied coverage in bad faith; breach occurred as denial was wrongful. | No breach because indemnity not allowed; no bad faith possible. | Reversed; further proceedings required on these issues. |
| Can the court revisit settlement apportionment after judgment? | Apportionment is proper if contractually agreed. | Settlement and damages are indivisible and can’t be reallocated. | Apportionment allowed if supported by contract. |
Key Cases Cited
- Black Belt Wood Co. v. Sessions, 514 So. 2d 1249 (Ala. 1986) (explains punitive nature and indivisibility of wrongful-death damages under Alabama law)
- Tatum v. Schering Corp., 523 So. 2d 1042 (Ala. 1988) (generally bars contribution among joint tortfeasors absent statutory or contractual basis)
- Holcim (US), Inc. v. Ohio Cas. Ins. Co., 38 So. 3d 722 (Ala. 2009) (enforcement of contractual indemnity provisions is allowed even if otherwise not permitted by tort law)
- Mobile Infirmary Ass'n v. Quest Diagnostics Clinical Labs., Inc., 381 So. 3d 1133 (Ala. 2023) (upholds validity of proportional-fault indemnity clauses in contracts)
- Parker Towing Co. v. Triangle Aggregates, 143 So. 3d 159 (Ala. 2013) (no contribution or indemnity among joint tortfeasors unless contractually provided)
- Industrial Tile, Inc. v. Stewart, 388 So. 2d 171 (Ala. 1980) (contractual indemnity, even for indemnitee’s own wrongdoing, is enforceable if clearly stated)