*1 COMPANY CONSTRUCTION PICKENS-BOND v. NORTH CO. SURETY & CASUALTY AETNA COMPANY ELECTRIC ROCK LITTLE W. 459 S. 5-5352 9, 1970 November delivered Opinion *2 Friday By: Smith, Williams, Bowen; William S. & Mehlburger, appellants. Sutton and Max C. for Jennings; Storey, Wright, Lindsey By: D. & James appellee. for Appellant A. Pickens-Bond Fogleman, Justice. John Company Construction and its insurance car- Casualty Surety Company sought rier from sums & Aetna to recover appellee Company North Rock Little Electric all paid personal carrier in settlement of employee appellee. claims of an of Pickens-Bond was job, appel- contractor on a construction employee lee was the electrical subcontractor. The injured performing while work for this subcontractor job by explosion on the site. He liquid was burned of heating fuel fuel, obtained from a stove. The its con- belonged tainer and the stove all to Pickens-Bond. The can heating of fuel was near stove when the ex- plosion only persons vicinity occurred. The the stove and fuel can at time North were Little Company employees, although Rock Electric Pickens- employees working Bond job were on the site on that day. specified employees While of Pickens-Bond had the resрonsibility refueling time, the stove from time to employees occasionally put of other subcontractors fuel identity in person the stove. The of neither the who explosion, last filled the stove before the nor the one placed proximity who known. the fuel stove, can in
Appellants’ upon suit was based an clause contained the contract between Pickens-Bond Company. The circuit Little Rock Electric and North summary judgment. granted appellee’s motion court agreement too in its terms. That broad It found the should be construed held that the clause court of the indemnitee be- unequivocal expressed in is not cause this intention words. judgment feel because we reverse the We question question of fact be determined before must coverage be of Pickens-Bond can question follows: considered. clause responsible Party his the shall second every part thereof, and all of work and own every description there- used connection work with. distinctly assume, specifically and He shall *3 injury damage assume, or from of all risks and does persons property used em- or to or cause whatever ployed work, and of with his or in connection on property any damage injury to or cause all from op- resulting any located, from action or wherever or in connection under this sub-contract eration with promise work, to his and undertake and against party protect of first and defend any damage injury. or of such all claims on account subcontractor, Appellants this that the contend employees injury from all risk of to his clause assumed any general including whatever, cause indemnity Appellee that the contends contractor. resulting injuries from does not cover indemnity general only contends that It contractor. resulting against employees to effective any operation under the subcontract action or from .to demon- thereon. order connection with the work conflicting out the two constructions we set strate these undertaking. appellee’s versions of APPELLANTS’ VERSION APPELLEE’S VERSION specifically specifically and He shall and He shall distinctly distinctly risks all assume assume all risks (1) from damage injury injury damage (1) or or . whatever cause cause from whatever property persons property persons or used or used employed (a) (b) or on employed or or or in con- on in connection with his nection with his work work,
and and (2) damage injury (2) damage of all or all or any property any property from cause to from wherever from cause to resulting
located, wherever located opera- any or action
tion under this subcontract
inor connection with his
work, any action promise and and undertake operation or subcontract or tion under this protect defend and against connec- [general contractor] work, with and account of claims on all any promise to damage injury. undertake and protect suсh [gen- and defend the eral all contractor] claims on account injury. such readily appellee’s if It will be seen that construction adopted many unnecessary are words is clause. A contract there is to construed for the of con rules construction accordance generally. Anthony Arkansas Louisiana tracts *4 denied, Railway (8th 1963), Co., cert. 316 F. 858 Cir. 2d (1963), 74, 830, Ed. 61 U. 84 S. L. S. Ct. 375 aff’g 2d involving Supp. (W. 1961) D. 199 F. Ark. law; Am. Arkansas contract and Arkansas 2d Jur. Indemnity Indemnity 697, 13; S. 8. § § C. J. give construing contract, a the courts endeavor to must meaning every may to words and effect word and discard parties surplusage only as clearly the when intention of Dyer, Miller v. Ark. makes them such. Co., 275; Ins. S. W. Fowler v. Unionaid Life Repetition preposi Ark. S. W. 611. of “damage” clearly “of” tion in the two indicates clauses damage parallel separate types of two and distinct injury: persons property in first, on or to or or used work, from what connection with the subcontractor’s located, second, property, cause; ever and to wherever any operation resulting any from action or cause from under the work or connection with the subcontract correct, appеllee Then, is there if of the subcontractor. would have been necessity repetition words no “property” damage injury. Furthermore, the word or any repeated. about If there be doubt need have been not surplusage words, we are sure above the the words
“in work” would connection with his repeated parties the result been if the intended have urges. appellee parties
Surely to ac- if had intended contract cording appellee’s opening to version the clause would have read: distinctly specifically risks
He assume all shаll and persons employed injury to used or or property, located, or from on the work any to wherever operation any or cause from action with under this subcontract or work connection # * # the words “from whatever The contrast between any “from cause” also indicates cause” and “resulting opera- modifying action clause with his this tion under subcontract connection phrase limit is intended to latter work” cause” where serves as a contrast “whatever and property employed persons or in con- “used or on “any his work” are with nection with concerned cause” “property where wherever is involved. located” appellee’s agree construction We cannot appellants’ version clear us contract. It seems ambiguity We find no construction. the correct to resort contract, us which would cause meaning its of construction ascertain to rules upon example, Thus, are we not called words. Pickens-Bond, strictly against most the contract construe Dyer, Ark. apparently prepared it. Miller v. who *5 District, 981, 275; Decatur School W. v. S. 2d Coffelt Brinkley, Stoops 1; 743, Bank v. Ark. S. W. 2d 127, 593. Ark. S. W. contract, however, construction of the Óur does not completely appellee’s argument that, foreclose specific requiring absence words indemnification of against liability negligence, Pickens-Bond for its own appellee liability. the contract cannot bind to this There important problem confronting is an factual us before argument appellant. case, we can reach this In this language “damage injury the from whatever cause” comprehensive language is about as broad and as is likely appear in suсh a contract. A literal construction certainly negligence of it would include the position indemnitee. We have stated our on a contract this such v. Hass Hardeman as Ark. Company, S. 439 W. We 281. said: precise question The indemnity is whether this provision obligates the subcontractor to prime damages arising contractor for out of the prime proxi- contractor which was the Turpin’s mate injuries. cause of The intention of obligate Hass to expressed so itself must be in clear that no unequivocal and terms and to the extent meaning other can be 2d, asсribed. 41 Am. In- the Jur. demnity 15. § Where an is caused sole many courts, indemnitee interpreting predicate contract, their interpretation theory on liability that such would be courts endeavor to harsh; unusual consequently, and
relieve the indemnitor of negligent p.R., indemnitee. A. L. § 18. demonstrating burden the nonexistence of appellee. upon questions lay fact v. Mason Funder 521, 446 S. 543. W. It Ark. burk, failed determining discharge point burden. this this liberally construed favor evidence must be against motion, resolved party opposing all doubts presumptions inferences re judgment and all McDaniel, Ark. v. movаnt. Wilson solved 944; Funderburk, supra. Mason 449 S. W. 2d say We cannot as a matter of law that the wholly part, caused, of Cornelius were either in *6 negligence of Pickens- If the Pickens-Bond. injuries, proximate then cause these a Bond damages come within that the clear it seems event, coverage it clause. of the agree- unnecessary whether the to determine would appellants comprehensive contend. as as is ment question, we fact an unresolved there Because proceedings. further Since case for remand must posed by appеllee if it will arise be shown proximate question was a of Pickens-Bond Cornelius, consider we will cause express argument appellee’s of the lack of as to the effect litigants. guide trial court in order to words difficulty. given great question deal us a jurisdiction, ruling precedent in own no our findWe divergence subject. authority on this wide and a policy upon public bave considerations Decisions based position bearing here, we took because little By disregard token, we the same the Hardeman case. those factors govern were which would if Pickens-Bond utility, public public carrier, service a common a a coupled agency or the conductor of business public interest. a majority juris-
It a of decisions other seems that general, support the rule that mere broad and dictions seemingly language is insufficient create all-inclusive binding agreement party against a consequences Am. of his own See Jur. Building 141; 41 8 § and Construction Contracts Indemnity 15; Annot. A. L. R. § Am. Jur. (1948). This arises from the natural aversion rule or omissions the courts to hold one liable for the acts of its basis over whom he has no control. It also has another prob- construction,
in the rule of strict which ably application no there is should have no where ambiguity. upon some- are based clauses
Some these cases hand, we at as have con- different from the clause what it, must claim for in that the strued performance, nonperformance have resulted from the malperformance undertaking of the contractual g., Indemnity See, e. Glens indemnitor. Falls Co. v. (1945). merely Reimers, Ore. P. Others 2d 923 indemnity agreements containing gen- broad, hold that employed as here eral losses such do not cover *7 solely by negligence
caused indemnitee. g., See, Layman, 275, Pac. e. Southern Co. v. Ore. 173 (1944) 145 P. and cases therein. cited 2d 295 holdings general There are also terms are injuries concurring sufficient negligence where result from indemnitee, though of indemnitor and even requiring indemnity where the sole cause is the negligence. g., See, indemnitee’s e. Sinclair Prairie Oil Thornley, (10th 1942). Co. v. F. 127 Cir. 2d 128 Some agree- courts hold that a contractor’s or subcontractor’s against ment an owner or contractor person property or cover part, caused, in or contractor’s subcontractor’s for which ownеr would passive negligence failing have been liable perform duty injured party. g., See, a e. Dudar Realty Corporation, 415, v. Y.N. 180 N. 258 E. Milef (1932); Mayer Center, v. Fairlawn 102 38 N. Jewish J. 549, 274, (1962). 186 A. A. L. 604 2d 97 R. In the 2d vein, coverage same it been said that should be excluded the rule of strict construction in cases in- volving affirmative acts of See Vinnell Com- pany Railway Co., Rptr. v. Electric Cal. 52 2d Pacific (1959). 411, 340 P. 604 2d many upon persuasive cases,
We also find based reasoning, holding that clauses similar to that involved damages here do cover general an indemnitee was who contractor or owner. g., See, Broderick, e. v. 901, Wash. 27 2d 182 Griffiths (1947); P. 1 A. L. R. 2d 175 Standard Accident Ins. Proofing Co. App. Co., v. National Fire Ohio 39 176 (1931); Agric. Tampa N. E. 591 American Chem. Co. v. (5th Works, 1963); Armature 315 F. 856 Cir. 2d New Kilroy Amsterdam Co., Cas. Co. v. Structural Steel 159
397 Mercury 1959); App. (Ohio St. Paul Ct. N. E. 797 2d (Ohio App. Kopp, Company Ct. Indemnity N. E. 23 v. 121 2d Co. Smith, 365 1954); (Tex. S. W. 2d 621 v. Oil Ohio Corp. Sup. 1963); Const. v. Princemont Ct. App. (Mun. Co., Ct. 131 A. & Ohio R. Baltimore Ry. 1957); v. Thornton Bros. Co. Northern Pac. D. C. (1939); Russell v. Co., N. W. Minn. (1949). App. 168, Co., N. E. Oil Ill. Shell Robertson, also, Line R. Co. Atlantic Coast See (4th 1954); Buckeye Oil Co. v. Cotton F. 2d Cir. (6th 1928). Co., Cir. F. & N. R. 2d 347 Louisville point construction out that rules strict of them Most application no where the indemnitee have unambiguous language fact is or that comprehensive not render does equivocal unclear, one case uncertain. In at least it apply rule to construction it said that to the strict opposite cause a construction result would reach an *8 language patently plain and clear inconcistent with the contracting parties. Terminal Co. v. of the Jacksonville Railway Exp. Agency, (1962), denied, cert. F. 296 2d 256 Many 949, L. Ed. 18.1 S. Ct. 8 396 U. S. 2d 82 this trend. In one of have tended follow recent cases Corp. L. Ltd. v. Smith & F. & Assur. Acc. these [General (6th 1959), Oby L. R. Co., F. A. Cir. 2d 2d suggested that, denied, F. it was reh. 819] 2d specifical liability spelled out if were ly, might be limited to the clause Roscoe-Ajax Company negligence. In Moses-Ecco 1963), App. Corporation, (D. F. C. Ct. court said: phraseology of broad- is difficult to conceive
It indemnify agreement to Ros- er than Moses-Ecco’s damage, coe-Ajax against “any cost, loss, and all * * * any claim, expense of demand on account applied thought by case was States Circuit 1 This what United Corp. v. Appeals Court of to be Florida Oil Atlantic Law. Gulf denied, Line, (Fla. 1967), App. Coast cert. 201 So. So. 2d specific language (1967), requiring explicit was rule applied. Although subsequent a case that United States Circuit decision, Appeals applied Court of the rule of this Florida text less appropriate. referred to in the seems no * * * any employee by on behalf of or suit * * specified parties Since [Moses-Ecco] “any” those “all” losses on claims included specifica- employees, we think further Moses-Ecco’s superfluous and ritualistic. More- tion would appear over, it that no valid claim an would employee against Roscoe- Moses-Ecco could arise Ajax except through Roscoe-Ajax’s negligence. own Consequently by Roscoe- to exclude losses caused Ajax’s negligence deprive of the would by employees clause which refers to the claims against Roscoe-Ajax virtually the Moses-Ecco only meaning possibly it can have. appellate Jersey Superior
The of the division New problem considering an Court wrestled indemnity agreement between an and a con- owner building tractor.2 There a owner was an em- sued converting ployee engaged in of the contractor injured building. employee when owner’s рart The a ceiling alleged fell on He that the him. was the result of the owner’s failure to furnish a safe place ceiling in that the was in a weakened work repair. defended the owner’s state suit to recover for the amount
paid by the on latter employee’s injury ground the the account of the contract owner on the should not be construed to arising losses out his own Jersey The New court’s critical of the cases evaluation support requiring unequivocal of the rule clear and expression indemnify against intent in- *9 negligence generally demnitеe’s applied revealed that it was not coverage partially to frustrate of losses attributa- negligence language indemnitee, ble to of the if the of agreement surrounding the and the are circumstances indicative a contractual intent that broad. That court weight authority supported said the rule the something express less an from than reference to losses negligence an indemnitee’s otherwise and if the intent was sufficient appears of the contract surrounding Among the circum- circumstances. Larocca, (1958). 2 SeeStern v. A. Super. 49 N. J. any passive there considered were the nature stances passive there considered were the nature circumstances of any negligence on the of the owner and negligence negligence of the owner likelihood that and pointed concurring of the contractor were causes. It was preclude recovery every out to in where the case degree negligence any of the indemnitee contributed practically to the loss would where leave rio occasion actually operative. was ultimate holding contemplated was that basis the claim was agreement regardless for indemnification under the negligence of the owner with reference to the condition ceiling, though may even have guilty been of no The court stated that the expressed obligation intent would be frustrated if the qualified degree were construed to be kind or negligence causally injuries, fault related to the long they precipitated by phase doing so as were Still, the work contracted. a distinction seems to have applicability been made between the of thе clause passive negligence. cases of active and those of This may distinction project attributable fact that the entire control, was under the contractor’s he was possession premises to have had exclusive as opinion well. Particular attention was called in to holding negligence cases that the of the indemnitor is long negligence immaterial as as the of the indemnitee was not the sole cause. building contractor’s aon annotation
An extensive owner agreement an liability upon injury to an neg- persons owner’s frоm an third There, (1969). ligence appears R. A. L. specific in the absence that even indicated it was generally negligence, it held coverage owner’s of an passive protection where is afforded owner that the contractor’s with the secondary concurs or active or or owner’s negligence, but when primary concurring primary sole active of cases number However, found a the annotator cause. where in- to be entitled held been the owner here, the one involved demnity similar clauses under or con- caused were though involved even *10 negligence, ted to and tribu the own others which holding general courts have been aided indemnity negligence clauses afford where the owner’s upon factor, was a the basis that otherwise the clause meaningless, virtually would be so. The annotator great majority also found that courts had recognized specific express language held or covering negligence, including the owner’s active or negligence, unnecessary, affirmative if the intention protection clearly appears to afford such from the surrounding used, the facts and circumstances purposes objects parties. Among and the and the circumstances considered these courts were the requirements per- existence of insurance or contractual taining provisions thereto, other contract and the extent possession premises. and control of the work denying coverage While a number of cases were cited injuries solely by primary negligence of on the caused or active
part jurisdictions (Pa. owner, some and Y.) deny coverage N. seem to where active of the owner was a concurrent No cause. real basis making exists for a distinction between rules of law applicable to contracts between owners and contractors and to those between contractors and subcontractors.
Resort to other clauses in the contract at hand appellee required statutory discloses that to furnish compensation public liability workmen’s and, insurance, and apparently, security agree- for his “hold harmless ment.” The certificate of insurance furnished Pickens- requirements Bond specifically cоvers these men- agreement” adjunct tions the “hold harmless as an comprehensive general liability policy. If it was in- appellee’s tended to cover employees arising employment, its out of the compensation policy adequately workmen’s would have covered the pos- situation. Since no valid claim could sibly be asserted contractor in the part, absence of some on its it seems obvious that the contract clause should cover situations which legal there is some basis for on the conclusion, however, Pickens-Bond. This does
401 logical complete solution, is a because there to a amount basis for the passive-active negligence sole-con- curring cause distinctions. reaching conclusion, absence direct in the
In our spirit quided by law of our precedent, be we must involving relationships. expressed in other decisions Compress Harrington, 256, Ark. Co. v. Gulf (n. s.) 249, 1205,3 held that a S. stipulation L. R. A. we W. receipt in warehouse the warehouse- a responsible man was loss fire” did not for “[n]ot provide liability exemption from for loss fire result- ing negligence, from the warehouseman’s in the аbsence express indicating words the intention to do so. court said not he were the fact that the warehouseman would been in of the clause unless
have liable the absence negligent significant was not because the same exemptions contract also enumerated other legal for which there would have been no basis. This argument latter cannot be advanced as to contract before us. exculpatory, in- though than an rather an Even Compress
demnity clause, was involved Gulf holding to with its case, not seem consistent it would employed general were suffi- say here words impose of which ciently clear general proximate contractor’s was clause sole active however, matter, quite where there a different It is contractor, general negligence on the
no was concurring negligence cause. If a or where general not indemnified then was we contractor held that situations, the clause in those under this clause law, virtually meaningless. Under our would be may full held liable employee who damages subcontractor’s a amount compensated fully workmen’s the lаtter’s under has been compensation insurance, if the former’s any degree, employee’s contributed Transportation Pac. in Missouri recognized holding was 3 This Williams, Co. v. S. W. 2d 762. Ark. Company Maner, slight. v. The Baldwin however general contractor But the W. Ark. S. 2d 28. judgment paid recover contribu such cannot who has tort-feasor, joint was a who tion from his subcontractor guilty may though been of 99% have even the latter injuries. causing Elec L. Rural C. & the tric Coop Corp. Kincaid, W. Ark. S. addressed, obviously This clause the contract 337. at least It gence. inequitable part, result. of this to avoidance negli degrees litigation also avoid as would *12 enforceability recognized just the cited The case indemnity agreement proper circumstances.4 such of a Consequently, clearly question find the clause in
we that general indemnity provides unequivocally and contractor, contributing guilty though he was even damage injury the subcontrac to to general employee, contractor’s active unless the tor’s proximate was the sole cause. why indemnity course, Of there is no reason an against general being contractor’s held liable fоr parties given acts or omissions of third by not be should Company a subcontractor. In Indus- Batson-Cook v. (5th 1958), Erectors, trial Steel F. 410 Cir. relied 257 2d upon by clearly appellee, recognized it was indemnity damages would cover or caused by indemnitee, neither indemnitor nor but unrelated parties, though third even the court held that the in- demnity consequences did not cover the of the indemni- here, tee’s own Unlike the contract question provided indemnity injury clause in damage alleged or "sustained or to have been in con- nection with or arisen to have out of or the Subсontractor * * performance of the work purpose indemnity The is re- not confined to quiring general subcontractor save the harmless from acts or omissions of the subcontractor. general scope It is and would cover situation where the is not due to negligence, contractor’s sole active which is eliminated also, Fidelity if Casualty Co. 4 See New York v. A. Jones J. Co., Construction Supp. F. (E. 200 1961), D. 264 Ark. aff'd F. 325 (1963). shifting The stated. hereinabove for the reasons no which the contractor the risk incidents of responsibility particularly we unreasonable, when is not respоnsibility must, assumed realize, the real as we actually premiums. payment insurance conjunction “or” as “and” read the We should not are, 'which to matters in order restrict the might be, It is control. under the subcontractor’s permissible when the context read the word “or” so requires done to effectuate it is that it be in which a used render manifest or when not to do so would intention meaning ambiguous or result in an of the clause absurdity. 465, Mills, Hines Ark. S. W. 2d v. Products, 181; McCarroll Southwest Distilled v. Beasley 5; Parnell, 729, Ark.
Ark. W. v. S. 10; State, Ark. S. W. 2d Williams such 1913A No condition S. W. Ann. Cas. 1056. before us. exists clause summary judgment and the cause is reversed proceedings with this
remanded further consistent opinion.
Byrd, J., concurs. concurring. Conley the I concur with Justice, Byrd, virtually result, reversal and arrive at the but it same appears injury long to me that so as the risk (the arise,
must “in connection with subcon- tractor’s) any injury resulting general work,” from the the contractor’s indemnity agreement. active excluded from sole is possible it sub-
Since is that a injured employee be from a not contractor’s can risk arising employer’s in not with work and connection general from the sole active of the contrac- making appears majority tor, the then it that the is indеmnity parties bargained than the for. broader
Suppose general building the contractor was story skyscraper, a stalling the subcontractor was in- that a wiring floor and on the 12th
electrical
testing
pressure
the
boiler
such
in
manufacturer
boiler
explode in
boiler to
caused the
basement
building
In this case
to
the
to fall.
cause
as
manner
employees
would
to the subcontractor’s
the
negli-
general
active
contractor’s sole
the
be caused
majority opinion could
gence
the
but
indemnity
subcontractor’s
to think
the
one
lead
protect
general
agreement
con-
involved
the
here
would
indemnity agreement
hand, if the
other
On the
tractor.
protecting
em-
those
as
is construed
arising
ployees
work,
with the subcontractor’s
in connection
in-
would be without
the
interpretation
demnity.
the
It seems me that
latter
preferable
more
construction because it would
is the
by safety
give
inspections,
control,
rules or
some
the subcontractor
his control.
over those matters under
my
Admittedly
arriving at
in
construction of
agreement,
reading
I
word
as
am
“or”
phrase, “employed
in
in
on or
cоnnection
“and”
is
his work.” This
in accord
authorities.
with
with
They
popular
point
out that
use of “or” and “and”
frequently
is
meaning
loose and
inaccurate that
their strict
so
departed
readily
more
from than that
may
place
be
words and that one
read
other
meaning
See
other
deference
context.
(1911).
State,
Furthermore,
this
Williams
For reasons concur opinion. majority