Camp, Dresser & McKee, Inc. v. Paul N. Howard Co.

• Decision Date: 13 June 2003
• Docket Number: No. 5D01-2539.,5D01-2539.
• Citation: 853 So.2d 1072
• Parties: CAMP, DRESSER & McKEE, INC., et al., Appellants, v. PAUL N. HOWARD COMPANY, et al., Appellees.
• Court: Florida District Court of Appeals

853 So.2d 1072

CAMP, DRESSER & McKEE, INC., et al., Appellants, v. PAUL N. HOWARD COMPANY, et al., Appellees.

No. 5D01-2539.

District Court of Appeal of Florida, Fifth District.

June 13, 2003.

Rehearing Denied September 10, 2003.

James D. Kisio, of Irby G. Pugh, P.A., Orlando, and William H. Selde, of Sodoro, Daly & Sodoro, P.C., Omaha, Nebraska, for Appellants.

Michael M. Bell, of Bell, Leeper & Roper, P.A., Orlando, for Appellees Paul N. Howard Company, INA of Texas, Pacific Employers Insurance Company, INA Insurance Company of Illinois, and Atlantic Employers Insurance Company.

H. Gregory McNeill, of Lowndes, Drosdick, Doster, Kantor & Reed, P.A., Orlando, for Appellee Insurance Company of North America.

GRIFFIN, J.

Camp, Dresser & McKee, Inc., and its insurers, Imperial Casualty & Indemnity Company and International Insurance Company [collectively "CDM"] appeal a summary final judgment entered in favor of Paul N. Howard Company ["Howard"], Insurance Company of North America ["INA"] and their insurers, INA of Texas, Pacific Employers Insurance Co., INA Insurance Company of Illinois, and Atlantic Employers Insurance Company in the underlying contractual indemnity action. We reverse.

Background

When Orange County ["the County"] undertook to construct the Southwest Orange County Water Conservation Effluent Transmission Main ["the project"] in 1984, it hired CDM to provide the necessary engineering work and Howard as its contractor for the project. Howard hired Affholder, Inc., and Kern Affholder ["Affholder"] to construct underground tunnels necessary for the project. Affholder in turn contracted with Ed Waters & Sons Contracting Company, Inc. ["Waters"] to construct steel reinforced pits necessary to set up Affholder's tunneling apparatus. Construction of the pits required the use of sheet piling for reinforcement. As Robert Eiler, an employee of Waters, was unhooking the sheet piling from a crane, the crane got too close to a power line and electricity arced from an overhead power line to the crane and from the crane to Mr. Eiler. Mr. Eiler received an electrical shock which caused severe and permanent brain damage.

Suit was instituted by Mr. Eiler's guardian against CDM, Howard, and Affholder, as well as other parties connected with the project. Summary judgments, which were subsequently affirmed by this court, were entered in favor of Howard and Affholder based on their immunity from liability for Mr. Eiler's claims under Florida's Workers' Compensation Act. In the end, only CDM was left as a defendant in the Eiler suit.

On January 27, 1993, CDM contacted Howard by letter informing them of the current status of the suit and the scheduled settlement mediation set for February 12, 1993, and asserted a right of indemnification from Howard under the project's construction contract documents. CDM explained:

As discovery has progressed in this matter it has become increasingly apparent that Mr. Eiler was injured as the sole result of the negligence of your subcontractor or sub-subcontractor on this project. As a result, Camp Dresser & McKee, Inc. will look to your firm to indemnify it against any recovery had by the Plaintiff against Camp Dresser & McKee, Inc. in this matter.

The letter asked that a representative of Howard attend the mediation and explained that if Howard failed to attend, CDM would "hear no objection" as to the reasonableness of any settlement it might reach. On February 9, 1993, CDM's counsel wrote an even more extensive letter explaining that Eiler's injuries were not due to CDM's design of the project and that CDM was convinced it was entitled to indemnity from Howard notwithstanding the fact that Orange County had earlier asserted a similar indemnification claim under the same contract provisions that had failed in court. Howard made no response to these and subsequent demands. In the case below, Howard filed an affidavit claiming it did not respond to CDM because it considered CDM's notice to be "inadequate" and because, having obtained a summary judgment in its favor on Orange County's claim for indemnity based on the same indemnification clause, it believed that it had no duty to CDM under the indemnification agreement.

After Howard and INA failed to respond to CDM's demand, CDM eventually settled Mr. Eiler's claim for the sum of $3.55 million dollars. CDM then filed a complaint against Howard, INA, and their insurers seeking contractual indemnity.

The indemnity action was based on the following indemnity provisions contained in the County's agreement with Howard:¹

Indemnification:

6.30. To the fullest extent permitted by law, CONTRACTOR [Howard] shall indemnify and hold harmless OWNER [Orange County] and ENGINEER [CDM] and their agents and employees from and against all claims, damages, losses, and expenses including but not limited to attorneys' fees arising out of or resulting from the performance of the work, provided that any such claim, damage, loss or expense (a) is attributable to bodily injury, sickness, disease or death ... and (b) is caused in whole or part by any negligent act or omission of CONTRACTOR [Howard], any Subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder.

Eiler v. Camp, Dresser & McKee, Inc., 594 So.2d 753 (Fla. 5th DCA 1992); Eiler v. Camp, Dresser & McKee, Inc., 591 So.2d 641 (Fla. 5th DCA 1992). There was also a provision limiting the scope of the indemnification.

6.32 The obligations of CONTRACTOR [Howard] under paragraph 6.30 shall not extend to the liability of ENGINEER [CDM], his agents or employees arising out of the preparation or approval of maps, drawings, opinions, reports, surveys, Change Orders, designs or specifications.

INA, as Howard's surety, was named as a party to the indemnity action based on a performance bond INA issued for the project which included an indemnity clause whereby INA was to indemnify the County and CDM as follows:

[INA] shall indemnify and save harmless the said Owner [Orange County] and the Engineer [CDM] and his agents against payments of any and all damages that may happen to persons or property by reason of the excavations or embankments, obstructions and all other work in the streets or alleys or in the site in connection with the said work, or arising out of any act, neglect or omission of said principal [Howard], his or its agents, suppliers, subcontractors or employees with relation to said work....

The summary final judgment presently on appeal is the second judgment rendered in favor of Howard and INA and against CDM. Earlier in the proceedings, the trial court had granted summary judgment in favor of Howard and INA on the ground that section 725.06, Florida Statutes (1983), precluded CDM's claim absent specific consideration from CDM; that there was no special relationship by which CDM was vicariously liable for the negligence of Howard or its subcontractors; and that the exclusive remedy provision of the Worker's Compensation Act barred the action because Howard was Mr. Eiler's statutory employer. CDM subsequently appealed and this court reversed. We held that the action was not barred by the exclusive remedy provision of the Worker's Compensation Act; that CDM could seek indemnity as a third party beneficiary to the contract where the County gave consideration in exchange for the agreement to indemnify the County and CDM; and that in attempting to recover under a contractual indemnity clause CDM was not required to establish a special relationship between itself and Howard that would make its liability vicarious, constructive, derivative or technical. Camp Dresser & McKee, Inc. v. Paul N. Howard Co., 721 So.2d 1254, 1257 (Fla. 5th DCA 1998) ["Camp Dresser I."] We remanded the case to the trial court because the issue of CDM's negligence appeared to remain unresolved.

On remand, the trial court resisted Howard's impassioned argument that our opinion in Camp Dresser I was just plain wrong² and was based on a misreading of the indemnity agreement. Notwithstanding our opinion in Camp Dresser I, Howard continued to press the view that CDM could have no right to indemnity under paragraph 6.30 of the contract because CDM had been sued only for CDM's own negligence, not Howard's, Waters' or Affholder's negligence. Howard's unwavering view then and now is that unless CDM had been sued on a theory of vicarious liability for Howard's negligence, both common law and contractual indemnity were simply not available to CDM.

Howard is wrong. As we tried to explain in Camp Dresser I, common law indemnity is an equitable remedy that arises out of obligations imposed through special relationships, but contractual indemnity is not concerned with "special relationships" or vicarious, constructive, derivative or technical liability; it is concerned with the express terms of the agreement to indemnify. See Metropolitan Dade County v. Florida Aviation Fueling Co., 578 So.2d 296 (Fla. 3d DCA 1991)

; Grain Dealers Mut. Ins. Co. v. Quarrier, 175 So.2d 83 (Fla. 1st DCA 1965). In cases involving contractual indemnity, the terms of the agreement will determine whether the indemnitor is obligated to reimburse the indemnitee for a particular claim. See Dade County School Bd. v. Radio Station WQBA, 731 So.2d 638 (Fla.1999); Arison v. Cobb Partners, Ltd., 807 So.2d 101 (Fla. 3d DCA 2002); ICA Const. Corp. v. Fredrick R. Harris, Inc., 701 So.2d 113, 115 (Fla. 3d DCA 1997).

Howard is also wrong in its contention that under no reading of paragraph 6.30 could it be said that Howard is contractually bound to provide indemnity to CDM for claims alleging CDM's own negligence. Certainly contracts purporting to indemnify a party against its own negligence will only be enforced if they clearly express such an intent, Charles Poe Masonry, Inc. v. Spring Lock Scaffolding Rental...