American Agric. Chem. Co. v. Tampa Armature Works

• Decision Date: 04 April 1963
• Docket Number: 19944.,No. 19943,19943
• Citation: 315 F.2d 856
• Parties: AMERICAN AGRICULTURAL CHEMICAL COMPANY, Appellant, v. TAMPA ARMATURE WORKS, INC. and Fidelity & Casualty Company of New York, Appellees. AMERICAN AGRICULTURAL CHEMICAL COMPANY, Appellant, v. Fred S. NYE et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

315 F.2d 856 (1963)

AMERICAN AGRICULTURAL CHEMICAL COMPANY, Appellant, v. TAMPA ARMATURE WORKS, INC. and Fidelity & Casualty Company of New York, Appellees.

AMERICAN AGRICULTURAL CHEMICAL COMPANY, Appellant, v. Fred S. NYE et al., Appellees.

Nos. 19943, 19944.

United States Court of Appeals Fifth Circuit.

April 4, 1963.

T.J. Blackwell, Willis H. Flick, Edward L. Magill, Miami, Fla., Blackwell, Walker & Gray, Miami, Fla., for appellant.

William T. Keen, Thomas C. MacDonald, Jr., Tampa, Fla., Shackleford, Farrior, Stallings, Glos & Evans, Tampa, Fla., of counsel, for appellees.

Before BROWN, GEWIN, and BELL, Circuit Judges.

GRIFFIN B. BELL, Circuit Judge.

George I. Powell and Fred S. Nye, employees of Tampa Armature Works, Inc., brought separate suits against appellant American Agricultural Chemical Company, seeking damages for personal injuries suffered on the property of appellant and which allegedly resulted from the negligence of appellant. The facts giving rise to each suit were the same, and appellant filed third-party actions in both against Tampa Armature Works, Inc., and its insurer, Fidelity and Casualty Company of New York, appellees here.

The facts and the applicable law relating to each third-party action were the same. In each instance, the third-party complainant sought indemnification from the third-party defendants for any recovery which the respective plaintiffs might obtain against appellant, together with the third-party plaintiff's attorneys fees and the costs of litigation. In each instance, the court overruled motions for summary judgment filed by appellant as third-party plaintiff, and granted summary judgments in favor of appellees, the third-party defendants. These are appeals, consolidated for decision, from the final judgments entered under Rule 54(b), F.R.Civ.P.

When injured, Powell and Nye were employed by Tampa Armature as electricians. In turn, Tampa Armature was at the time engaged in installing electrical work in connection with the construction of expanded facilities for appellant at its phosphorous works in Pierce, Florida. The work was being done pursuant to a written contract between appellant, as owner, and Tampa Armature, as contractor.

Powell and Nye were injured on the job site while installing electrical conduits for their employer under the contract when they inhaled phosphorous fumes set loose by employees of appellant. They each collected workmen's compensation benefits from their employer, and filed the tort suits against appellant which gave rise to these appeals.

Appellees refused on demand to take over the defense of the suits and the third-party complaints followed. In the meantime each suit has been settled by appellant with Powell and Nye.

Appellant claimed contractual indemnity from Tampa Armature and its insurer, and common law indemnity from Tampa Armature. We do not reach the question of common law indemnity in view of our holding on contractual indemnity.

Contractual indemnity from Tampa Armature was premised on the provisions of Article 9 of the contract between appellant and Tampa Armature. Appellees contend that this article must be construed in conjunction with Articles 8 and 10. The three articles, seriatim, are:

"Article 8 — DAMAGE TO PROPERTY

"(a) Work, Materials and Equipment — The Contractor shall be responsible for all work, materials and equipment covered by this contract and, in case of loss or damage prior to the completion and final acceptance of the work by an authorized representative of the Owner, shall repair or replace the same at his own expense.

"(b) Property of the Owner — The Contractor shall be responsible for and make good to the satisfaction of the Owner any loss of or damage to existing structures and property belonging to the Owner if such loss or damage is due to the negligence or wilful acts or omissions of the Contractor, his employees, agents, representatives or subcontractors.

"(c) Property of the Public — The Contractor shall indemnify and save the Owner harmless from all claims for damage to property other than the Owner\'s property arising under or by reason of this Agreement if such claims result from the negligence or wilful acts or omissions of the Contractor, his employees, agents, representatives or subcontractors.

"Article 9 — INJURY TO PERSONS —

"Contractor shall indemnify and save Owner harmless from all claims for injuries to or death of any and all persons including without limitation, employees, agents and servants of Contractor or its subcontractors, arising out of or in connection with or by reason of the work done by Contractor, its employees, agents, representatives or subcontractors."

"Article 10 — EQUIPMENT AND EMPLOYEES OF THE OWNER —

"The Contractor\'s responsibility for damage to property and injury to or death of persons as set forth in Articles 8 and 9 includes damage, injury, or death caused in whole or in part by any machinery, tools, or equipment belonging to the Owner and used by the Contractor, or his subcontractors, in the performance of this Agreement, or caused by negligence or wilful acts or omissions of any employee of the Owner while such employee is acting under the direction or control of the Contractor or its subcontractors and in his behalf carrying out for him the work to be performed under this Agreement."

Contractual indemnification was claimed from the insurer on the basis of the requirements of the contract that Tampa Armature carry workmen's compensation and employer's liability insurance, contractor's public liability insurance, and automobile liability insurance in stated amounts at its own expense with companies satisfactory to appellant. It was agreed that Tampa Armature would have the insurance carrier certify to appellant that all insurance required under the contract was in force and would not be cancelled without notice to appellant. The insurer issued a certificate to appellant reflecting that it had issued the required insurance to Tampa Armature, which certificate contained the substance of Article 9 under the heading "Remarks":

"Hold Harmless Agreement

"Contractor shall indemnify and save Owner harmless from all claims for injuries to or death of any and all persons including without limitation, employees, agents and servants of Contractor or its subcontractors, arising out of or in connection with or by reason of the work done by Contractor, its employees, agents, representatives or subcontractor."

The separate issue of whether appellant is entitled to indemnification from the insurer of the contractor as a third-party beneficiary is not now before the court. It is implicit from the record that the insurer to date has been treated as having the status of standing in the shoes of Tampa Armature. This was made clear on argument. This leaves for decision the matter of contractual indemnity as between appellant and the contractor, Tampa Armature.

The controlling facts are essentially undisputed, and our conclusion rests on what we deem to be the meaning of Article 9 of the contract. Appellees contend that Article 9 created no obligation on the part of Tampa Armature to indemnify appellant under these circumstances where the injuries to Powell and Nye resulted solely from the negligence of appellant. Their argument goes that there is no express language that the contractor would indemnify the owner for injuries to its employees resulting from the negligence of the owner, and that Articles 8, 9 and 10 considered together make it plain that this was not to be the case. It is the position of appellant owner, on the other hand, that this question is controlled to the contrary by Jacksonville Terminal Co. v. Railway Express Agency, Inc., 5 Cir., 1962, 296 F.2d 256, cert. den., 369 U.S. 860, 82 S.Ct. 949, 8 L.Ed.2d 18.

That case, just as this, involved a Florida contractor. We pointed out there that Florida law controlled the construction and validity of the indemnity clause in dispute, and that under Florida law, as elsewhere, the cardinal rule of construction is to ascertain the intention of the contracting parties and to give effect to that intention if it can be done consistently with legal principles. Where the language chosen by the parties, given its ordinary and natural meaning, unambiguously manifests that intention, the judicial task is at an end.

The pertinent provision of the contract there was:

"* * * it is hereby expressly stipulated that the said Express Company will fully indemnify and save harmless the said Terminal Company * * * from and against all charges, expenses, loss, damage, injuries, suits, or judgments, arising by reason of or in connection with occupation and use of the premises of the Terminal Company by the Express Company under this agreement, whether to the property of, or persons in employ of, the Terminal Company * * *."

A switchman employed by the Terminal Company was injured while performing duties in connection with the switching of express cars for the Terminal Company on the property leased to Railway Express when he stepped on a rotten crosstie and fell. The Terminal Company under the contract was to maintain the track at the expense of the Express Company. He was provided medical services and paid for lost time. He sued in the state court and collected a money judgment from the Terminal Company. Railway Express rejected the demand of the Terminal Company to defend the suit, and for indemnity. We held in the resulting suit for indemnity that Railway Express was required to indemnify the Terminal Company for the sums paid the switchman, plus the expense incurred in defending the state court suit.

Our conclusion rested on the basis that the words "in connection with" in an indemnity contract are to be given their natural and ordinary meaning, and thus the injuries sustained arose in connection with the occupation and use of the premises by Railway Express. We also concluded that under Florida law an indemnity...