Waddell v. LTV Steel Co., Inc.

• Decision Date: 03 December 1997
• Docket Number: No. 71811,71811
• Citation: 124 Ohio App.3d 350,706 N.E.2d 363
• Parties: WADDELL et al., v. LTV STEEL COMPANY, INC. et al., Appellants; Northern RCR, Inc., Appellee. *
• Court: Ohio Court of Appeals

Page 350

124 Ohio App.3d 350

706 N.E.2d 363

WADDELL et al., v. LTV STEEL COMPANY, INC. et al., Appellants; Northern RCR, Inc., Appellee. ^*

No. 71811.

Court of Appeals of Ohio Eighth District, Cuyahoga County.

Decided Dec. 3, 1997.

McNeal, Schick, Archibald & Biro Co., L.P.A., and Paul W. Ziegler, Cleveland, for appellants.

Reminger & Reminger Co., L.P.A., and Clifford C. Masch, Cleveland; Edison H. Hall, Jr., Cleveland, for appellee.

ROCCO, Judge.

LTV Steel Co., Inc. ("LTV") and Richard Rigby appeal from a November 25, 1996 judgment of the common pleas court directing a verdict in favor of Northern RCR, Inc. ("RCR") and dismissing with prejudice LTV and Rigby's joint complaint for indemnity and contribution. We affirm based upon R.C. 2305.31 and related case law, which void indemnity and contribution clauses contained in a contract or agreement relative to the maintenance of a building or structure.

RCR contracted with LTV to perform routine maintenance on the kilns located at LTV's Grand River, Ohio plant. On July 26, 1991, Waddell, an employee of RCR, was injured when he fell from a dumpster which Richard Rigby, an LTV employee, had lifted above the floor with a forklift. Four days later, LTV issued a purchase order, which contained the terms of its contract with RCR and included indemnification clauses. Both parties later stipulated that the purchase order contained the terms of their contract for the performance of kiln maintenance.

The indemnification clauses provided that RCR agreed to indemnify LTV against liability arising from personal injuries sustained by RCR, its employees, or by any other party, arising out of RCR's performance of the contract, and indemnify LTV for legal costs and attorney fees. They further provided that if any of LTV's employees participated in RCR's work by operating LTV equipment, they and the equipment would be respectively deemed, at that time, employees of RCR and equipment in RCR's sole custody and control. They also required RCR to purchase public liability, workers' compensation, property damage, and automobile insurance policies.

Thereafter, Waddell and his wife, in an amended complaint, commenced the instant case against LTV and Rigby, raising claims against both parties for negligence and loss of service, companionship, and consortium. LTV and Rigby subsequently filed a joint third-party complaint against RCR, seeking indemnity and contribution pursuant to the terms of the foregoing purchase order. All parties eventually filed summary judgment motions, which the court denied, and the case proceeded to trial.

Following the opening statement by counsel for LTV and Rigby, RCR moved for a directed verdict on LTV and Rigby's claim for indemnity and contribution. RCR argued that, pursuant to R.C. 2305.31, the purchase order's indemnification clauses violated public policy and contained no express waiver of RCR's workers' compensation immunity and, therefore, were void.

LTV and Rigby then contended that the clauses were valid, since R.C. 2305.31 applies to fixtures or appliances attached to real estate rather than to the forklift, which is mobile equipment, and since Rigby and the LTV equipment, pursuant to the indemnification clauses, were deemed to be under the sole control of RCR at the time Waddell was injured. LTV further argued that even if the indemnification clauses were void, the clause requiring RCR to indemnify LTV and Rigby for legal costs and attorney fees remained valid. LTV and Rigby also urged that RCR violated the indemnification clause, which required it to purchase public liability, personal property, and automobile insurance policies.

The court then granted RCR's directed verdict motion, stating in the transcript of proceedings at 26-27: "The Court has as a matter of law dismissed the third-party complaint of LTV on the indemnity agreement, finding that the statute, Revised Code Section 2305.31, is controlling. And that the indemnity agreement is in violation of public policy." The Waddells then settled their claims against LTV and Rigby.

On November 25, 1996, the court journalized both the dismissal of LTV and Rigby's complaint against RCR and the settlement agreement and dismissal with prejudice of the Waddells' claims against LTV and Rigby. LTV and Rigby now appeal from only the dismissal of their indemnity and contribution claims against RCR, raising one assignment of error for our review.

The sole assignment of error states:

"Whether the trial court erred to the prejudice of defendants and third-party plaintiff-appellants, LTV Steel Co., Inc., and Richard Rigby, by directing a verdict on their third-party complaint in favor of third-party defendant-appellee, Northern RCR, Inc.?"

LTV and Rigby contend that the trial court erred when it directed the verdict in favor of RCR. They argue that R.C. 2305.31 does not render void the indemnification clauses because a forklift, rather than a fixture, was involved in Waddell's injury. They further contend that the language of the clauses evokes RCR's intent to waive its workers' compensation immunity, that the clauses requiring RCR to purchase insurance policies are valid, and that Ohio workers' compensation law does not render void the clauses with respect to the payment of attorney fees and costs.

RCR urges that the trial court did not err when it directed a verdict in RCR's favor. RCR contends that R.C. 2305.31 does render void the indemnification clauses because it prohibits indemnification agreements contained in contracts that involve the repair or maintenance of a building and its appliances. RCR further urges that the statute also renders void the clauses with respect to the indemnification of attorney fees and costs, that the language of the clauses does not evoke RCR's intent to waive its workers' compensation immunity, and that, since RCR retained such immunity, it was not required to purchase the insurance policies required by the purchase agreement.

The purchase order stated:

"12. PERSONAL INJURY, DEATH AND PROPERTY DAMAGE--By its acceptance of this order, Seller [in this case, RCR] expressly agrees to defend, indemnify and save harmless Buyer (as used in the Clause, 'Buyer' means and includes LTV Steel Company * * *) from and against any and all liability, loss, damages, costs and expenses (including attorneys' fees), claims, suits and demands for any loss or damage to property or injuries to persons, including death, sustained by Buyer, its employees or its customers, or by Seller or its employees, or by any other party, arising out of the performance of any work * * * by Seller under this order. Seller further expressly agrees that it is the intent hereof that Seller shall assume all risk of such loss, damage or injuries, and shall absolve and indemnify Buyer therefrom whether or not such loss, damage or injuries are due to the sole or joint negligence of Buyer or its employees.

"In the event Buyer's machinery or equipment is used by Seller in the performance of any work that might be required under this Purchase Order, such machinery or equipment shall be considered as being under the sole custody and control of Seller during the period of such use by Seller, and if any person or persons in the employ of Buyer should be used to operate said machinery or equipment during the period of such use, such person or persons shall be deemed during such period of operation to be an employee or employees of Seller.

"Seller expressly agrees that it may be joined as an additional or third-party defendant and may be held liable for damages, contribution or indemnity, in any action, at law or otherwise, in which the employee or employees of Seller or any other person, their heirs, assigns or anyone otherwise entitled to receive damages by reason of injury or death brings an action against Buyer in respect thereof.

"13. INSURANCE--Where fulfillment of this Purchase Order requires Seller to perform work on the premises of Buyer * * * Seller shall procure at its own cost and keep in force the following insurance * * *:

"(a) Workmen's Compensation Insurance, as required by the Workmen's Compensation laws of the state in which the work is being performed; and

"(b) Public liability and Property Damage insurance, including contractual liability insurance as required to cover liabilities assumed in Clause 12, and Automobile Liability and Property Damage insurance if automobiles, trucks, trailers or other vehicles are to be used." (Emphasis added.)

Civ.R. 50(A)(4) provides that the trial court shall direct a verdict for the moving party "after construing the evidence most strongly in favor of the party against whom the motion is directed," if it "finds that upon any determinative issue reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party." A motion for directed verdict raises a question of law, since it tests the legal sufficiency of the evidence. Clark v. Southview Hosp. & Family Health Ctr. (1994), 68 Ohio St.3d 435, 628 N.E.2d 46; Keeton v. Telemedia Co. of S. Ohio (1994), 98 Ohio App.3d 405, 648 N.E.2d 856.

Since the trial court in this case directed a verdict following counsel's opening statement, we take notice of Brinkmoeller v. Wilson (1975), 41 Ohio St.2d 223, 70 O.O.2d 424, 325 N.E.2d 233, in which the court stated at the syllabus:

"A trial court should exercise great caution in sustaining a motion for a directed verdict on the opening statement of counsel; it must be clear that all the facts expected to be proved, and those that have been stated, do not constitute a cause of action or a defense, and the statement must be liberally construed in favor of the party against whom the motion has been made."

In addition, the Brinkmoeller court stated at 227, 70 O.O.2d at 426, 325 N.E.2d at 236:

"[A] motion for non-suit is an admission by defendant, for the purpose of the motion, of the truth of all the...