BURLINGTON COAT FACTORY OF PENNSYLVANIA, LLC AND BURLINGTON COAT FACTORY WAREHOUSE CORPORATION v. GRACE CONSTRUCTION MANAGEMENT COMPANY, LLC
No. 2036 EDA 2013
IN THE SUPERIOR COURT OF PENNSYLVANIA
FILED OCTOBER 29, 2015
2015 PA Super 227
2015 PA Super 227
BURLINGTON COAT FACTORY OF PENNSYLVANIA, LLC AND BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
Appellants
v.
GRACE CONSTRUCTION MANAGEMENT COMPANY, LLC
Appellee No. 2036 EDA 2013
Appeal from the Order Dated June 14, 2013
In the Court of Common Pleas of Philadelphia County
Civil Division at No: 2011 No. 001844
BEFORE: BOWES, J., DONOHUE, J., SHOGAN, J., LAZARUS, J., MUNDY, J., OLSON, J., WECHT, J., STABILE, J., аnd JENKINS, J.
OPINION BY STABILE, J.: FILED OCTOBER 29, 2015
Appellants, Burlington Coat Factory of Pennsylvania, LLC (“BCF of PA”) and Burlington Coat Factory Warehouse Corporation (“BCFW” and, collectively with BCF of PA, Appellants), appeal from the June 14, 2013 order granting the summary judgment motion of Grace Construction Management Company (“Grace”). We vacate and remand.
In this case, we must decide whether and to what extent Grace undertook and breached a contractual obligation to defend and indemnify Appellants in a negligence action filed by an employee of Grace’s sub-
Pursuant to the Contract, Grace had a duty to supervise all portions of the performance of the Contract:
The Contractor shall supervise and direct the Work, using the Contractor’s best skill and attention. The Contractor shall be solely responsible for and have control over construction means, methods, techniques, sequences and procedures, and for coordinating all portions of the Work.
Contract, General Conditions, at Heading III, ¶ 3.a.
The Contract also contains two indemnifications provisions, both of which are relevant tо this appeal. The first--contained within the General Conditions to the Contract--provides:
To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless BCF […] from and against all claims, damages, losses and expenses, including but not limited
to attorneys’ fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting there from, but only to the extent caused in whole or in part by negligent acts or omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnifiеd hereunder.
Id. at Heading III, ¶ 12 (emphasis added).
The second, Exhibit A to the Contract, is both similar and different from that quoted above and provides:
Grace Construction Management Company releases BCF and assumes entire responsibility and liability for any and all claims and/or damages of any nature or character whatsoever arising under the Contract Documents, by operation of law, or in any other manner with respect to work covered by this CONTRACT and agrees to indemnify and save BCF harmless from and against all claims, demands, liabilities, interest, loss, damage, attorneys’ fees, costs and expenses of whatsoever kind or nature, whether for property damage, personal injury, or bodily injury (including death) to any and all persons, whether employees of, Grace Construction Management Company, BCF or others, or otherwise, caused or occasioned thereby, resulting therefrom, оr occurring in connection therewith.
Id. at Exhibit A, ¶ 1 (emphasis added). Significantly, the indemnity provision contained within the General Conditions limits Grace’s obligations to claims arising out of its negligence or that of its subcontractors. The indemnity obligation under Exhibit A to the Contract does not have a similar limitation.
The General Liability coverage shall include BCF as an Additional Insured and include the “Aggregate Limits per Project” endorsement. This $2,000,000 general Aggregate limit shall by endorsement apply to each project of the Grace Construction Management Company and the $2,000,000 aggregate endorsement shall be fully available under this CONTRACT with Contractors and shall not be depleted by claims arising from any other project, work, job, sale or delivery. The General Liability coverage shall include contractual liability coverage for the liability that Grace Construction Management Company assumes and/or undertakes (for example, indemnification obligations), under this CONTRACT. […]. Before commencing work, and before delivering any materials, articles and/or equipment hereunder, Grace Construction Management Company shall furnish a properly completed Accord Evidence of Insurance addressed to BCF establishing that all the insurance coverage required hereunder is in force and will not be canceled with less than thirty (30) days prior written notice to BCF, such notice to be by Certified Mail. The certificates will list BCF as an additional named insured. […] Failure of BCF to require the production of such certificates of insurance shall not absolve CONTRACTOR of its obligations in respect thereto. […] No payment shall be made on this CONTRACT agreement prior to receipt of certificate of insurance acceptable to BCF.
Id. at Exhibit A, ¶ 2(D) (emphasis added).
On October 1, 2009, Bryan Eddis (“Eddis”), an employee of Belfi Brothers, one of Grace’s sub-subcontractors, sustained injures when the gate of a freight elevator (the “Elevator”) closed on him. Eddis filed suit (the
On November 3, 2011, Appellants’ third-party administrator tendered Eddis’ damage claim to Grace. Id. at ¶ 20 and Exhibit C. On June 15, 2011, Appellants tendered their defense in the Eddis Action to Grace. Id. at ¶ 22 and Exhibit D. On September 12, 2011, Grace’s insurer declined the tender, reasoning that Eddis alleged negligence against Appellants but not against Grace. Id. at ¶ 23 and Exhibit E. Grace’s insurer also reasoned that the accident with the Elevator was not related to Grace’s work under the
In October of 2011, Appellants commenced this breach of contract action against Grace. The complaint alleged a single claim of breach of contract based on multiple acts. According to the complaint, BCFW and Grace were the parties to the Contract. Complaint, 10/14/11, at ¶ 11. BCF of PA was a third-party beneficiary of the Contract. Id. at ¶ 12. Appellants alleged the Contract obligated Grace “to provide and supervise appropriately trained labor for the renovations,” and that Eddis was under Grace’s supervision and control pursuant to the Contract. Id. at ¶¶ 13-14. Appellants therefore alleged that Grace breached its contractual obligation to “train and/or properly train its subcontractors, their subcontractors, and their employees regarding use of the freight elevators within the Store, thereby causing the incident that gave rise to the Eddis Action.” Id. at ¶ 25(e). Likewise, Appellants averred Grace breached its contractual obligation to “supervise and/or properly supervise its subcontractors, their subcontractors, and their employees regarding use of the freight elevators within the Store, thereby causing the incident that gave rise to the Eddis Action[.]” Id. at ¶ 25(f). Finally, Appellants alleged that Grace breached its obligation to defend and indemnify them in the Eddis Action, and that Grace also breached its obligation to “ensure that BCFW and BCF of PA were added as Additional Named Insureds on its policy of insurance.” Id. at ¶ 25(a),
Appellants filed a summary judgment motion on January 15, 2013 seeking judgment in their favor on their breach of contract claim. Grace filed a cross motion for summary judgment on January 18, 2013, asserting (1) that Appellants were not parties to the Contract; (2) maintenance of the Elevator was outside the scope of Grace’s obligations under the Contract; (3) Appellants’ voluntary settlement of the Eddis Action precluded a claim for indemnity from Grace; and (4) the Contract did not obligate Grace to indemnify Appellants for their own negligence.3
On June 14, 2013, the trial court denied Appellants’ motion for summary judgment and granted summary judgment in favor of Grace. The trial court found that the record evinced Appellants’ negligence in failing to maintain the Elevator. The trial court found no evidentiary support, and thus no triable issue of fact, for Appellants’ allegations of Grace’s negligence. In particular, the trial court found no evidence that any negligence on Grace’s part was a proximate cause of Eddis’ injury. Trial Court Opinion, 6/14/13, at 6. The trial court also found that Grace did not agree to indemnify Appellants for their own negligence. Id. Finally, the trial court found that Grace discharged its contractual obligation to insure Appellants
Appellants present questions for review as follows:
- Did the lower court err in granting summary judgment in favor of [Grace], a construction manager, on a finding that only Burlington Coat Factory (“Burlington”), a building owner, could be liable for an injury to a construction worker that occurred in Burlington’s freight elevator when there was evidence frоm which a jury could find that:
- The elevator did not malfunction; or
- The injury was caused, in whole or in part, by the negligence of [Grace] or persons for whose negligent acts [Grace] undertook to indemnify Burlington, including the injured workman?
- Did the lower court err in granting summary judgment to the construction manager on a conclusion of law that the construction contract did not require the construction manager to indemnify the store owner for its negligence when a general indemnification provision in the General Conditions of the contract benefitting numerous parties limited the indemnification duty to ‘the extent caused by’ negligence of the construction manager or anyone working under it, but a more specific provision in the contract, relating only to the store owner, provided for an unlimited duty of indemnity?
- Did the lower court err in granting summary judgment to the construction manager upon a conclusion of law thе manager satisfied its obligation to procure insurance naming the store owner as an additional insured, when the insurance procured was not primary, and, accordingly, the parties’ intentions to allocate the burden of buying insurance for a construction project was defeated?
We begin with our standard of review:
[S]ummary judgment is appropriate only in those cases where the record clearly demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Pa.R.C.P. No. 1035.2(1).5 When
Appellants first argue the trial court erred in finding no triable issue of fact as to the negligence of Grace and/or any entity or person for whom Grace assumed responsibility under the Contract. In their complaint, Appellants alleged that Grace breached its contractual duty to indemnify Appellants for Grace’s negligence and/or the negligence of Belfi and Eddis.
Three elements are necessary to plead properly a cause of action for breach of contract: [(1)] the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages. Additionally, it is axiomatic that a contract may be manifest orally, in writing, or as an inference from the acts and conduct of the parties.
J.F. Walker Co., Inc. v. Excalibur Oil Grp., Inc., 792 A.2d 1269, 1272 (Pa. Super. 2002). At issue here are elements two and three.
As noted above, Grace agreed to supervise its own employees and those of its subcontractors in the performance of the work. Contract, at
Eddis was an employee of Belfi Brothers, one of the sub-subcontractors working on Store renovations pursuant to the Contract. Eddis sustained his injury while in the process of moving a wheelbarrow filled with tile from a loading dock onto the Elevator. Appellants produced evidence that construction workers were required to have supervision while using the Elevator. Arthur C. Snellbaker, Jr. (“Snellbaker”) was the on-site supervisor for Grace. Appellants’ Motion for Summary Judgment, 1/15/13, at Exhibit F, pp. 19, 24.7 One of Appellants’ employees instructed Snellbaker how to use Appellants’ freight elevators, including the Elevator. Id. at 48. According to Snellbaker, “Burlington Coat had requested that we grab either an assistant manager or the security guard to operate the freight elevators for us.” Id. at 49. Snellbaker informed the subcontractors’
Kevin Cromwell (“Cromwell”) worked in loss prevention for Appellants. Grace’s Motion for Summary Judgment, 1/18/13, at Exhibit Q, p. 7.8 His job was to be present as a loss prevention agent during remodeling of the Store. Id. at 9. He rode the Elevator with Eddis on several occasions. Id. at 18. Cromwell also showed Eddis how to use the Elevator properly, including how to use the “run/stop” switch. Id. at 19-20. Cromwell explained the need to stand clear of the doors when the switch is set to “run.” Id. at 26. Eddis told Cromwell he understood. Id. at 27. Cromwell did not recall a supervisor directing him to give instructions on proper use of the Elevator. Id. at 29. He did so on his own. Id. Cromwell was not aware of whether and to what extent his employer was responsible for conducting periodic safety inspections of the Elevator. Id. at 54.
Cromwell observed surveillance footage of Eddis’ accident:
I observed Mr. Eddis in the process of getting onto the [Elevator] from the loаding dock area in a wheelbarrow. He was getting on and pulled out and he got back on a second time and the inner door came down. The inner door struck him on his mid back and the door went back up.
Id. at 59. Cromwell stated the run/stop switch “would have to be in run mode” at the time. Id. Due to a brown out, Cromwell was unable to preserve that footage. Id. at 58-59, 73. When Cromwell spoke with Eddis after the accident, Cromwell observed a six-inch by two-inch red mark on Eddis’ back. Id. at 61. Eddis told Cromwell he was “fine” and completed the remainder of his work shift. Id. at 88. Cromwell tested the Elevator immediately after the accident and found it to be functioning properly. Id. at 78-79.
Eddis testified in his deposition that when he asked for a freight elevator operator, none was available. Appellants’ Motion for Summary Judgment, 1/15/13, at Exhibit H, p. 118. Specifically, Eddis asked a fellow Belfi Brothers employee for а freight elevator operator, but was laughed at. Id. at 118-19.9
The Ross report notes several occasions throughout 2009 on which the Elevator malfunctioned in some way. The Elevator gate was stuck on May 14, 2009. Id. On May 22, 2009, the Elevator was “opening and closing on its own.” Id. On May 23, 2009 the Elevator “became stuck on the loading dock level with the doors cycling.” Id. at 9. On May 25 and July 23, 2009, the Elevator was “not working.” Id. The Elevator was reported “out of service” on September 17, 2009. Id. A post-accident investigation of the Elevator on November 4 and 5, 2009 revealed that the Elevator’s alarm bell failed to sound before the gate closed. Id. at 10. The Ross Report
To summarize the foregoing, Snellbaker’s testimony confirms that Appellants instructed Grace not to permit workers to use the freight elevators unsupervised. Both Snellbaker and Cromwell—a loss prevention officer—testified that the supervised use of the freight elevators was meant to prevent theft. In this regard, Appellants’ argument in their brief that “[i]t is undisputed that Burlington requested that Grace adopt a safety precaution relating to the use of the freight elevator by Grace’s supervisees, including Eddis, and Grace agreed to adopt that precaution” and that “[a] workman getting hit by a closing door is precisely the kind of accident that the disregarded safety rule was intended to avoid” is not accurate. Appellants’ Substituted Brief for Reargument En Banc, at 21, 37 (emphasis added). The record does not support a conclusion that supervised elevator use was a safety precaution rather than a loss prevention measure. Cromwell instructed workers, including Eddis, on how to use the Elevator, but apparently did so without any directive from Appellants.
On the other hand, Grace has prоduced the Ross report, in which Ross documents Appellants’ repeated failure to maintain and repair the Elevator, and repeated breakdowns and failures of the Elevator in the months leading up to the Eddis accident. Based on the Ross report and what it deemed “scant” evidence of Grace’s negligence, the trial court found that Appellants produced insufficient evidence to establish that any breach of duty on Grace’s part was the cause of Eddis’ accident. Trial Court Opinion, 6/14/13, at 5 (“In this case, there is no evidence, expert or otherwise, that Mr. Eddis’ or Grace’s failure to request assistance, rather than an alleged malfunction of the elevator, was the cause of his injuries.”). Thus, Grace asserts that its negligence, if any, cannot be the legal cause of the Eddis accident.
Contrary to Grace’s argument, Appellants’ failure to present expert testimony does not require a different conclusion. Expert testimony is necessary when a case presents questions beyond the ken of the average layperson. Vazquez v. CHS Professional Practice, P.C., 39 A.3d 395, 398-99 (Pa. Super. 2012). Grace argues that expert testimony is necessary here because a jury will otherwise be unable to determine causation in this case. Grace fails to consider that the nature of the negligence alleged by
Grace cites MIIX Insurance Co. v. Epstein, 937 A.2d 469 (Pa. Super. 2009), a medical malpractice case in which this Court held summary judgment was appropriate because the plaintiffs failed to produce expert reports in support of their claims. We do not find the instant case analogous to professional negligence cases. The alleged acts of negligence asserted by Appellants do not concern professional malpractice, which by necessity requires expert testimony. MIIX, therefore, is inapplicable to consideration of Appellants’ proffered evidence of Grace’s and/or Eddis’ alleged negligence. Accordingly, the absence of an expert report from Appellants does not warrant summary judgment in Grace’s favor on the issue of causation.11
The parties next dispute whether the trial court еrred in finding that the Contract does not require Grace to indemnify Appellants for Appellants’ own negligence. The Contract contains two conflicting indemnity clauses, both of which are quoted above. For the following reasons, we conclude that the more restrictive provision applies and that Grace does not have the obligation to indemnify Appellants for Appellants’ own negligence.
An agreement to indemnify is “an obligation resting upon one person to make good a loss which another has incurred or may incur by acting at the request of the former, or for the former’s benefit.” Potts v. Dow Chemical Co., 415 A.2d 1220, 1221 (Pa. Super. 1980). “Indemnity agreements are to be narrowly interpreted in light of the parties’ intentions as evidenced by the entire contract.” Consolidated Rail Corp. v. Delaware River Port. Auth., 880 A.2d 628, 632 (Pa. Super. 2005), appeal denied, 898 A.2d 1071 (Pa. 2006). “In interpreting the scope of an
the scope of the indemnification agreement; the nature of the underlying claim; its coverage by the indemnification agreement; the reasonableness of the alleged expenses; and, where the underlying action is settled rather than resolved by payment of a judgment, the validity of the underlying claim and the reasonableness of the settlement.
McClure v. Deerland Corp., 585 A.2d 19, 22 (Pa. Super. 1991).
A party cannot obtain indemnification for its own negligence unless the contract clearly and unequivocally provides for such indemnification. Ruzzi v. Butler Petroleum Co., 588 A.2d 1, 7 (Pa. 1991); Perry v. Payne, 66 A. 553, 557 (Pa. 1907). “Unless the language of the contract is clear and unambiguous, however, such that the ‘contract puts it beyond doubt’ […] we must opt for the interpretation that does not shoulder [the indemnitor] with the fiscal responsibility for [the indemnitee’s] negligence.” Greer v. City of Philadelphia, et al., 795 A.2d 376, 380 (Pa. 2002) (citing Perry, 66 A. at 557; Ruzzi, 588 A.2d at 4). Where an agreement includes multiрle contradictory indemnity provisions drafted by the same person, we construe the agreement against the drafter and enforce the narrower provision. Chester Upland School Dist. v. Edward Melony, Inc., 901 A.2d 1055, 1061-62 (Pa. Super. 2006).
We reject Grace’s argument that Appellants’ voluntary settlement of the Eddis Action bars their claim against Grace for contractual indemnity. Grace cites Willard v. Interpool, Ltd., 758 A.2d 684 (Pa. Super. 2000),
Finally, we address Appellants’ contention the trial court erred in granting summary judgment on Appellants’ claim that Grace breached its obligation to procure insurance. The facts stated previously indicate Appеllants required Grace to procure insurance to support the indemnity obligations imposed upon Grace under the Contract. The trial court granted summary judgment in Grace’s favor on this claim stating only that “there is nothing in the Contract that requires that Grace’s insurance be primary.” Trial Court Opinion 6/14/13, at 4. It is not clear how the trial court came to this conclusion given the insurance provision contained within Exhibit A, ¶2
Grace finally argues that Appellants cannot recover on their contract claims because they are not parties to the Contract. Grace contends the plain and unambiguous language of the Contract reveals that the Contract is between Grace and “Burlington Coat Factory,” not BCFW. Appellants’ Substituted Brief for Reargument En Banc, at 23. Grace contends that suit now by BCFW is a post-loss request to reform the Contract. Id. at 24. In opposition to Grace’s summary judgment motion, Appellants produced evidence that “Burlington Coat Factory” is not a distinct legal entity, but a licensed trаde name used by the Appellants.14
Appellants’ Memorandum of Law in Opposition to Grace’s Motion for Summary Judgment, 2/21/13, at Exhibits K and L. Appellants further produced copies of checks issued by BCFW and accepted by Grace totaling approximately $700,000 for work performed under the Contract. Id.Appellants’ use of “Burlington Coat Factory” as a trade name is considered use of a fictitious name under Pennsylvania’s “Fictitious Names Act.”15
See 54 Pa.C.S.A. § 302 (definitions – a “Fictitious Name” is anyThe point is amply demonstrated in the early case of Ulick v. Vibration Specialty Co., 35 A.2d 332 (Pa. 1944). In Ulick, the question presented was whether a warrant of attorney to confess judgment contained in a contract signed by the “Federal Home Improvement Co.,” a fictitious name for an individual--Edna Ulick--who owned the company, could be еxercised by Ulick against the other contracting party. Id. at 333. Ulick had registered the trade name of “Federal Home Improvement Co.” under the Pennsylvania’s Assumed or Fictitious Names Act prior to execution of the contract.17
Id. The Court held that registration being of record was constructive notice of the nature of the person or business that was negotiating or contracting. Id. As such, the appellant in Ulick could not “plead ignorance of facts of which it was deemed to have had notice,” or claim it was “deceived in any manner or that any fraud was perpetrated upon it.” Id. Ulick was in fact the real contracting party to the contract and the trial court therefore properly refused to strike off the confessed judgment. Id. at 334.For all of the foregoing reasons, we vacate the order entering summary judgment in favor of Grace and remand this matter to the trial court for further proceedings consistent with this opinion.
Order vacated. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/29/2015