Pickens-Bond Construction Co. v. North Little Rock Electric Co.Pickens-Bond Construction Co. v. North Little Rock Electric Co.
Lead Opinion
Appellant Pickens-Bond Construction Company and its liability insurance carrier Aetna Casualty & Surety Company sought to recover from appellee North Little Rock Electric Company all sums paid by the carrier in settlement of personal injury claims of an employee of appellee. Pickens-Bond was the general contractor on a construction job, and appel-lee was the electrical subcontractor. The employee was injured while performing work for this subcontractor on the job site. He was burned by explosion of liquid fuel obtained from a heating stove. The fuel, its container and the stove all belonged to Pickens-Bond. The can of fuel was near the heating stove when the explosion occurred. The only persons in the vicinity of the stove and fuel can at the time were North Little Rock Electric Company employees, although Pickens-Bond employees were working on the job site on that day. While specified employees of Pickens-Bond had the responsibility of refueling the stove from time to time, employees of other
Appellants’ suit was based upon an indemnity clause contained in the contract between Pickens-Bond and North Little Rock Electric Company. The circuit court granted appellee’s motion for summary judgment. It found the agreement too broad in its terms. That court held that the clause should not be construed to indemnify against the negligence of the indemnitee because this intention is not expressed in unequivocal words. We reverse the judgment because we feel that a question of fact must be determined before the question of coverage of the negligence of Pickens-Bond can be considered. The clause in question follows:
Party of the second part shall be responsible for his own work and every part thereof, and all of the work of every description used in connection therewith. He shall specifically and distinctly assume, and does assume, all risks of damage or injury from whatever cause to property or persons used or employed on or in connection with his work, and of all damage or injury from any cause to property wherever located, resulting from any action or operation under this sub-contract or in connection with his work, and undertake and promise to protect and defend the party of the first part against all claims on account of any such damage or injury.
Appellants contend that the subcontractor, by this clause assumed all risk of injury to his employees from any cause whatever, including the negligence of the general contractor. Appellee contends that the indemnity does not cover injuries resulting from negligence of the general contractor. It contends that the indemnity is only effective against injuries to employees resulting from any action or operation under the subcontract in connection with the work thereon. In order .to demonstrate these conflicting constructions we set out the two versions of appellee’s undertaking.
APPELLANTS’ VERSION
He shall specifically and distinctly assume all risks
(1) of damage or injury from whatever cause to property or persons used or employed (a) on or (b) in connection with his work,
and
(2) of all damage or injury from any cause to property wherever located, resulting from any action or operation under this subcontract or in connection with his work,
and undertake and promise to protect and defend the [general contractor] against all claims on account of any such damage or injury.
APPELLEE’S VERSION
He shall specifically and distinctly assume all risks
(1) of damage or injury from whatever . cause to property or persons used or employed on or in connection with his work
and
(2) of all damage or injury from any cause to property wherever located
resulting from any action or operation under this subcontract or in connection with his work, and undertake and promise to protect and defend the [general contractor] against all claims on account of any such damаge or injury.
Surely if the parties had intended to contract according to appellee’s version the opening clause would have read:
He shall specifically and distinctly assume all risks of damage or injury to persons used or employed on the work or to property, wherever located, from any cause resulting from any action оr operation under this subcontract or in connection with his work # * #
The contrast between the words “from whatever cause” and “from any cause” also indicates that the modifying clause “resulting from any action or operation under this subcontract or in connection with his work” is intended to limit the latter phrase only and serves as a contrast of “whatever cause” where persons and property “used or employed on or in connection with his work” are concerned with “any cause” where “property wherever located” is involved.
We cannot agree with appellee’s construction of the contract. It seems clear to us that appellants’ version is the correct construction. We find no ambiguity in the language of the contract, which would cause us to resort to rules of construction to ascertain the meaning of its words. Thus, for example, we are not called upon to construe the contract most strictly against Pickens-Bond, who apparently prepared it. Miller v. Dyer,
Óur construction of the contract, however, does not completely foreclose appellee’s argument that, in the absence of specific words requiring indemnification of Pickens-Bond against liability for its own negligence, the contract cannot bind appellee to this liability. There is an important factual problem confronting us before we can reach this argument of appellant. In this case, the language “damage or injury from whatever cause” is about as broad and comprehensive language as is likely to appear in such a contract. A literal construction of it would certainly include the negligence of the indemnitee. We have stated our position on a contract such as this in Hardeman v. Hass Company,
Thе precise question is whether this indemnity provision obligates the subcontractor to indemnify the prime contractorfor damages arising out of the negligence of prime contractor which was the proximate cause of Turpin’s injuries. The intention of Hass to so obligate itself must be expressed in clear and unequivocal terms and to the extent that no other meaning can be ascribed. 41 Am. Jur. 2d, Indemnity § 15. Where an injury is caused by the sole negligence of the indemnitee many courts, in interpreting the indemnity contract, predicate their interpretation on the theory that such a liability would be unusual and hаrsh; consequently, the courts endeavor to relieve the indemnitor of liability to the negligent indemnitee. 175 A. L. R., p. 32, § 18.
The burden of demonstrating the nonexistence of questions of fact lay upon appellee. Mason v. Funderburk,
We cannot say as a matter of law that the injuries of Cornelius were caused, either wholly or in part, by negligence of Pickеns-Bond. If the negligence of Pickens-Bond was not a proximate cause of these injuries, then it seems clear that the resulting damages come within the coverage of the indemnity clause. In that event, it would be unnecessary to determine whether the agreement is as comprehensive as appellants contend.
Because there is an unresolved fact question, we must remand the case for further proceedings. Since the question posed by appellee will arise if it be shown that the negligence of Pickens-Bond was a proximate cause of the injuries to Cornelius, we will cоnsider appellee’s argument as to the effect of the lack of express words in order to guide the trial court and the litigants. The question has given us a great deal of difficulty. We find no ruling precedent in our own jurisdiction, and a wide divergence of authority on this subject. Decisions based upon public policy considerations bave little bearing here, because of the position we took in the Hardeman case. By the same token, we disregard those factors which would govern if Pickens-Bond were a public utility, a common carrier, a public service agency or the conductor of any business coupled with a public interest.
It seems that a majority of decisions in other jurisdictions support the rule that mere general, broad and seemingly all-inclusive language is insufficient to create a binding agreement to indemnify a party against the consequences of his own negligence. See 13 Am. Jur. 2d 152, Building and Construction Contracts § 141; 41 Am. Jur. 2d 699, Indemnity § 15; Annot. 175 A. L. R. 8 (1948). This rule arises from the natural aversion of the courts to hold one liable for the acts or omissions of another over whom he has no control. It also has its basis in the rule of strict construction, which probably should have no application where there is no ambiguity.
Some of these cases are based upon clauses somewhat different from the clause at hand, as we have construed it, in that the claim for damage or injury must have resulted from the performance, nonperformance or malperformance of the contractual undertaking of the indemnitor. See, e. g., Glens Falls Indemnity Co. v. Reimers,
There are also holdings that general terms are sufficient where the injuries result from concurring negligence of indemnitor and indemnitee, even though not requiring indemnity where the sole cause is
We also find many cases, based upon persuasive reasoning, holding that clauses similar to that involved here do cover damages resulting from the negligence of an indemnitee who was a general contractor or owner. See, e. g., Griffiths v. Broderick,
It is difficult to conceive of any phraseology broader than Moses-Ecco’s agreement to indemnify Roscoe-Ajax against “any and all loss, cost, damage, or expense * * * on account of any claim, demand or suit * * * by or on behalf of any employee of [Moses-Ecco] * * Since the parties specified that “all” losses on “any” claims included those of Moses-Ecco’s employees, we think further specification would be superfluous and ritualistic. Moreover, it would appear that no valid claim by an employee of Moses-Eccocould arise against Roscoe-Ajax except through Roscoe-Ajax’s own negligence. Consequently to exclude losses caused by Roscoe-Ajax’s negligence would deprive that part of the clause which refers to the claims by employees of Moses-Ecco against Roscoe-Ajax of virtually the only meaning it can possibly have.
The appellate division of the New Jersey Superior Court has wrestled with the problem in considering an indemnity agreement between an owner and a contractor.
An extensive annotation on a building contractor’s liability upon an agreement to indemnify an owner for injury to third persons resulting from an owner’s negligence appears in 27 A. L. R. 3d 663 (1969). There, it was indicated that even in the absence of specific сoverage of an owner’s negligence, it is generally held that the owner is afforded protection where his passive or secondary negligence concurs with the contractor’s active or primary negligence, but not when the owner’s active or primary negligence was the sole or concurring cause. However, the annotator found a number of cases where the owner has been held to be entitled to indemnity under clauses similar to the one involved here, even though the injuries involved were caused or con-tribu ted to by his own negligence, and others in which the courts
Resort to other clauses in the contract at hand discloses that appellee was required to furnish statutory workmen’s compensation and public liability insurance, and, apparently, security for his “hold harmless agreement.” The certificate of insurance furnished Pickens-Bond covers these requirements and specifically mentions the “hold harmless agreement” as an adjunct of a comprehensive general liability policy. If it was intended that appellee’s indemnity cover only the injuries to its employees arising out of the employment, the workmen’s compensation policy would have adequately covered the situation. Since no valid claim could possibly be asserted against the general contractor in the absence of some negligence on its part, it seems obvious that the contract clause should cover situations in which there is some legal basis for liability on the part of Pickens-Bond. This conclusion, however, does not amount to a complete solution, beсause there is a logical basis for the passive-active negligence and sole-concurring cause distinctions.
In reaching our conclusion, in the absence of direct precedent, we must be quided by the spirit of our law expressed in decisions involving other relationships. In Gulf Compress Co. v. Harrington,
Even though an exculpatory, rather than an indemnity clause, was involved in the Gulf Compress case, it would not seem consistent with its holding to say that the general words employed here were sufficiently clear to impose indemnity for injuries оf which the sole proximate clause was the general contractor’s active negligence.
It is quite a different matter, however, where there was no negligence on the part of the general contractor, or where his negligence is only a concurring cause. If we held that the general contractor was not indemnified under this clause in those situations, then the clause would be virtually meaningless. Under our law, the general
Of course, there is no reason why an indemnity against the general contractor’s being held liable for acts or omissions of third parties should not be given by a subcontractor. In Batson-Cook Company v. Industrial Steel Erectors,
We should not read the conjunction “or” as “and” in order to restrict the indemnity to matters 'which are, or might be, under the subcontractor’s control. It is permissible to so read the word “or” when the context in which it is used requires that it be done to effectuate a manifest intention or when not to do so would render the meaning of the clause ambiguous or result in an absurdity. Hines v. Mills,
The summary judgment is reversed and the cause remanded for further proceedings consistent with this opinion.
Notes
This case applied what was thought by the United States Circuit Court of Appeals tо be Florida Law. In Gulf Oil Corp. v. Atlantic Coast Line,
See Stern v. Larocca, 49 N. J. Super. 496,
This holding was recognized in Missouri Pac. Transportation Co. v. Williams,
See also, Fidelity if Casualty Co. of New York v. J. A. Jones Construction Co.,
Concurrence Opinion
concurring. I concur with the reversal and virtually arrive at the same result, but it appears to me that so long as the risk of damage or injury must arise, “in connection with (the subcontractor’s) work,” any injury resulting from the general contractor’s sole active negligence is excluded from the indemnity agreement. Since it is possible that a subcontractor’s employee
Suppose that the general contractor was building a 24 story skyscraper, that the subcontractor was installing electrical wiring on the 12th floor and that a boilеr manufacturer in testing the pressure of a boiler in the basement caused the boiler to explode in such manner as to cause the building to fall. In this case the injury to the subcontractor’s employees would not be caused by the general contractor’s sole active negligence but the language of the majority opinion could lead one to think that the subcontractor’s indemnity agreement here involved would protect the general contractor. On the other hand, if the indemnity agreement is construed as protecting only those injuries of employees arising in connection with the subcontractor’s work, the general contractor would be without indemnity. It seems to me that the latter interpretation is the more preferable construction because it would give the subcontractor some control, by safety rules or inspections, over those matters under his control.
Admittedly in arriving at my construction of the indemnity agreement, I am reading the word “or” as “and” in the phrase, “employed on or in connection with his work.” This is in accord with the authorities. They point out that the popular use of “or” and “and” is so loose and frequently inaccurate that their strict meaning is more rеadily departed from than that of other words and that one may be read in place of the other in deference to the meaning of the context. See Williams v. State,
For the reasons stated, I only concur with the result of the majority opinion.