GENERAL ACC. F. & L. ASSUR. CORP., LTD. v. Finegan & Burgess, Inc., 16065.

• Decision Date: 09 October 1965
• Docket Number: No. 16065.,16065.
• Citation: 351 F.2d 168
• Parties: GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORP., LTD., a foreign corporation, Plaintiff-Appellant, v. FINEGAN & BURGESS, INC., a Michigan corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

351 F.2d 168 (1965)

GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORP., LTD., a foreign corporation, Plaintiff-Appellant, v. FINEGAN & BURGESS, INC., a Michigan corporation, Defendant-Appellee.

No. 16065.

United States Court of Appeals Sixth Circuit.

October 9, 1965.

David J. Watters, Jr., Detroit, Mich., Ward, Plunkett, Cooney, Rutt & Peacock, Charles T. McGorisk, Detroit, Mich., on brief, for appellant.

Lawrence A. Bohall, Detroit, Mich., Cary, BeGole & Martin, Detroit, Mich., on brief, for appellee.

Before WEICK, Chief Judge, and MILLER and EDWARDS, Circuit Judges.

EDWARDS, Circuit Judge.

This appeal involves a "hold harmless" indemnity agreement between a general contractor and one of its subcontractors. The general contractor was found liable for negligent injury and paid a $14,000 judgment. In this same suit the jury found no cause for action against the subcontractor. Plaintiff-appellant insurance company, having paid this judgment, now seeks as subrogee of the general contractor to recover against the subcontractor under the indemnity agreement.

At trial at the completion of plaintiff's proofs, defendant offered no evidence, and plaintiff and defendant both moved for directed verdicts. District Judge Machrowicz granted the motion of defendant. Plaintiff appeals from this directed verdict.

This case arises out of an accidental injury suffered by Robert Kania, a project engineer for the Wayne County Road Commission. At the time Kania was representing the Road Commission in supervising the construction of a hangar at the Detroit Metropolitan Airport, which is owned and operated by the Road Commission.

Plaintiff-appellant herein, General Accident Fire & Life Assurance Corp., Ltd., was the insurer for the general contractor, A. J. Etkin Construction Co. Defendant-appellee, Finegan & Burgess, Inc., was one of Etkin's subcontractors charged with fabricating and erecting a large electric sign for American Airlines for which the Wayne County Road Commission was building the hangar.

The contract between Etkin and Finegan & Burgess contained the following indemnity clause:

"The Subcontractor shall save and hold harmless the General Contractor and Owner from and against, all suits for claims that may be placed upon any alleged injury (including death) to any person or property that may occur, or that may be alleged to have occurred, in the course of the performance of this Contract by the Subcontractor, whether such claim shall be made by an employee of the Subcontractor, or by any other person, and whether or not it shall be claimed that the alleged injury (including death) was caused through a negligent act or omission of the Subcontractor. At his own epense, the Subcontractor shall defend any and all such actions, and pay all charges of attorneys, and all costs and other expenses arising therefrom."

On the date of the accident, defendant had completed all of its construction work on the sign; but final inspection, acceptance and payment by the Wayne County Road Commission had not occurred.

Since we review a verdict directed against plaintiff, we view the facts from the point of view favorable to plaintiff (as plaintiff has set them forth) from which the jury would have had a right to view them:¹

"American Airlines requested use of the sign prior to the time they occupied the completed hangar. A meeting was arranged for the evening of June 2, 1958. Robert Kania was Project Engineer for the Wayne County Road Commission in charge of the various construction projects around the Airport at that time.

"`The purpose of my being there that evening was to make an inspection of the 10-foot sign on the west elevation of the American Airlines hangar, for the purpose of accepting or not accepting the sign, as the Board\'s representative, as the owner\'s representative.

"`* * * If American was satisfied with the sign, and if the Board or myself, as the Board\'s representative, was satisfied with the operation of this sign, and the fact that it had been installed in accordance with plans and specifications, we would accept that sign from the general contractor and put the warranty into effect as of the date we accepted the sign.

"`* * * two of American Airlines\' representatives were at the job site, Mr. Burgess arriving shortly after my arrival.\'

"There was no one there from A. J. Etkin Co. The only one representing the sign construction company was Mr. Burgess.

"Francis J. Burgess was vice-president of Finegan-Fontana-Burgess, Inc. He was in charge of field operations, field installations for the firm. Mr. Finegan would go out and get the business, handle the office and financial work and drawings, and Burgess would go out on the job and install the signs. On the job as far as installation was concerned, Burgess was the top man, subject to Finegan\'s approval.

"According to Mr. Burgess, the only contract involved in his going out there that evening was his subcontract with the A. J. Etkin Construction Co. for the erection of this sign. He went out for the purposes of participating in an inspection of the sign.

"`I was asked by Mr. Finegan if I would make arrangements for that evening to assist in turning on the lights, in checking the lighting. * * *

"`I arrived at approximately 8:30 p. m. to check the lights for illumination and also to turn the sign lights off.\' (Emphasis Supplied.)

"A visual inspection of the sign from outside the building was made but from a position so close Kania could not view the entire sign. One of the Airlines representatives went to the terminal building to get the other one, leaving Kania and Burgess alone. Kania relates what happened:

"`Not having completed the inspection with all of the people that were requested to attend the inspection that evening, I indicated to Mr. Burgess that I wanted to further view the sign with the American Airlines\' people, and from a further distance, and Mr. Burgess indicated he had to leave.\'

"Mr. Burgess had brought his wife and children along on this `opening night\' for the sign and they were in the car.

"`He indicated he wanted to leave and when he did that I requested him to show me where the sign could be turned off after completion of the inspection with the American Airlines\' representatives.\'

"Burgess agreed to take Kania up to show him the location of the switch. It was dark. Burgess had a flashlight and was leading Kania. Kania fell, and sued for his injuries in Circuit Court, obtaining judgment against A. J. Etkin Construction Co., in the amount of $14,771.35. Plaintiff paid $1800.10 in defense of the Circuit Court action, Plaintiff\'s Ex. 3, a statement for the attorneys\' fee was received into evidence, without objection.

"The judgment was paid by plaintiff, General Accident, Etkin\'s liability insurance carrier. It became subrogated to A. J. Etkin Company\'s rights and brought the instant action for indemnity against Finegan & Burgess, Inc. under a hold harmless or indemnity provision of the subcontract between Etkin and Finegan & Burgess.

"At the close of plaintiff\'s proofs, defendant moved for a directed verdict, indicated he had no proofs to offer, and plaintiff then moved for a directed verdict. The motions were argued together and the defendant\'s motion was granted."

Four undisputed facts should be added. First, no representative of Etkin, the general contractor, ever showed up at the June 2 meeting. Second, Etkin had performed the carpentry work on the hangar itself and had left a railing off the catwalk from which Kania fell....