Borroel v. Lakeshore, Inc.

• Decision Date: 24 September 1985
• Docket Number: No. 84-K-1707.,84-K-1707.
• Citation: 618 F. Supp. 354
• Parties: David BORROEL, Plaintiff, v. LAKESHORE, INC., a Michigan corporation, and General Motors Corporation, a Delaware corporation, Defendants, and LAKESHORE, INC., a Michigan corporation, Defendant and Third-Party Plaintiff, v. DICK CORPORATION, a Pennsylvania corporation, Third-Party Defendant.
• Court: U.S. District Court — District of Colorado

618 F. Supp. 354

David BORROEL, Plaintiff, v. LAKESHORE, INC., a Michigan corporation, and General Motors Corporation, a Delaware corporation, Defendants, and LAKESHORE, INC., a Michigan corporation, Defendant and Third-Party Plaintiff, v. DICK CORPORATION, a Pennsylvania corporation, Third-Party Defendant.

No. 84-K-1707.

United States District Court, D. Colorado.

September 24, 1985.

Susan Smith Fisher, Breit, Best, Richman & Bosch and Patricia C. Coan, Brauer & Buescher, Denver, Colo., for plaintiff.

James A. Smith, Hall & Evans, Denver, Colo., for Lake Shore, Inc.

Charles L. Casteel & Michael J. Gallagher, Davis, Graham & Stubbs, Denver, Colo., for General Motors Corp.

Kim B. Childs, Cooper & Kelley, Denver, Colo., for Dick Corp.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

In this diversity action the Dick Corp. has moved for summary judgment on the claims presented in a third party complaint against it brought by Lake Shore, Inc. For the reasons below, summary judgment on the first claim for relief is denied. Summary judgment is granted on the second, third and fourth claims for relief.

BACKGROUND

Dick leased from Lake Shore a Terex Ts-24B loadrunner scraper. For purposes of the summary judgment motion, Dick admits there is an express agreement between it and Lake Shore which contains the following terms:

REPAIRS:

Lessee shall, at its expense, maintain the machinery in good operating condition, repair and appearance, and shall have all maintenance and repair work performed only by qualified persons ...

LIABILITY:

... Lessee covenants and agrees to indemnify and save Lessor harmless of and from any and all liability arising out of the use, maintenance and/or delivery of said Equipment.

INSURANCE:

LESSEE ASSUMES ALL RISK AND LIABILITY for and agrees to indemnify, save and hold LESSOR and manufacturer harmless from ... all loss, damage, claims, penalties, liability and expenses including attorney's fees howsoever arising or incurred because of the Equipment or the storage, use or operation thereof.

The plaintiff, David Borroel, was injured while operating the Terex TS-24B loadrunner scraper. Borroel was employed by Dick at the time of the injury. Borroel was paid personal injury benefits by Dick under the Colorado Workmen's Compensation Act. Section 8-42-102, Colo.Rev.Stat. (Supp.1984) provides:

An employer who has complied with the Act ... shall not be subject to ... any other liability for the death of or personal injury to any employee, except as provided in said articles; and all causes of action, actions at law, suits in equity, proceedings, and statutory and common law rights and remedies for and on account of such death of or personal injury to any such employee and accruing to any person are abolished except as provided in said articles.

Borroel brought an action against Lake Shore for strict liability, negligence, breach of express warranties, misrepresentation, negligent misrepresentation and damages. Lake Shore then filed a third party complaint against Dick alleging that Dick is or may be liable to Lake Shore for express contractual indemnity, negligence, products liability and contribution. Dick has moved for summary judgment on Lake Shore's third party claims asserting that the claims are barred by the Colorado Workmen's Compensation Act. In the alternative, Dick argues that even if Lake Shore's indemnity claim is not barred by the Act, the lease agreement cannot reasonably be construed as an intentional forfeiture by Dick of its protection from suit under the Act. Lake Shore has responded with a brief opposing Dick's motion for summary judgment.

Summary judgment is a drastic remedy. The Tenth Circuit has cautioned that any relief pursuant to Rule 56 of the Federal Rules of Civil Procedure should be applied with care. Jones v. Nelson, 484 F.2d 1165, 1168 (10th Cir.1973). Rule 56 states that summary judgment shall be rendered when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Pleadings and factual issues of material fact must be viewed in the light most favorable to the party opposing summary judgment. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970). Unless the moving party can demonstrate his entitlement beyond a reasonable doubt, summary judgment must be denied. Norton v. Liddell, 620 F.2d 1375, 1381 (10th Cir.1980).

Because the issues presented in this case vary in complexity, I will first address Dick's motion for summary judgment on Lake Shore's negligence and contribution claims. I will then address Dick's motion for summary judgment on Lake Shore's claim for express contractual indemnity. The last issue I will address is Dick's motion for summary judgment on Lake Shore's claim for products liability.

I NEGLIGENCE

In Lake Shore's second claim for relief, Lake Shore asserts that Dick owed a duty to Lake Shore to maintain and repair the Terex TS-24B loadrunner scraper and that Dick was negligent in performing that duty. The rule, however, is that an employer who complies with the Colorado Workmen's Compensation Act cannot be subject to a common law action for damages brought by a third person. Holly Sugar Corp. v. Union Supply Co., 194 Colo. 316, 572 P.2d 148, 150 (1977); Hilzer v. MacDonald, 169 Colo. 230, 454 P.2d 928, 931 (1969); Ward v. Denver & R.G.W.R. Co., 119 F.Supp. 112 (D.Colo.1954). Lake Shore's claim for negligence is a common law action "for and on account of" the employee's personal injury. Accordingly, Dick's motion for summary judgment on Lake Shore's second claim for relief is granted.

II CONTRIBUTION

In Lake Shore's fourth claim for relief, Lake Shore asserts that Dick is or may be liable to Lake Shore pursuant to the provisions of the Uniform Contribution Among Tortfeasors Act, Colo.Rev.Stat. § 13-50.5-101 to 13-50.5-106 (Supp.1984). Section 102(1) of the Act establishes a right of contribution "where two or more persons become jointly or severally liable in tort for the same injury." Colo.Rev.Stat. § 13-50.5-102(1).

In Public Service Co. of Colo. v. District Court In & For The City & County of Denver, 638 P.2d 772 (Colo.1981), the Colorado Supreme Court specifically declined to consider whether a third party may bring a claim for contribution against an employer who has complied with the provisions of the Workmen's Compensation Act. The court observed, however, that the majority view is that the employer cannot be held liable for contribution or indemnity in the absence of a preexisting legal relationship or a duty between the parties. Id. at 776.¹

Two decisions in this federal district have held that an employer who complies with the Workmen's Compensation Act cannot be subject to third party actions for contribution. Greer v. Intercole Automation, Inc., 553 F.Supp. 275 (D.Colo.1982); Hammond v. Kolberg Manufacturing Corp., 542 F.Supp. 662 (D.Colo.1982). The district court's rationale was that an employer who complied with the Workmen's Compensation Act was immune from common law liability. Consequently, the employer could not become jointly and severally liable in tort so as to trigger a right of contribution in a third party. Greer, 553 F.Supp. at 276-77; Hammond, 542 F.Supp. at 663.

In light of the two district court decisions and the majority viewpoint, I hold that Dick cannot be subject to a third party action for contribution. Therefore, Dick's motion for summary judgment on Lake Shore's fourth claim for relief is granted.

IV

EXPRESS CONTRACTUAL INDEMNITY

Lake Shore alleges in its first claim for relief that Dick is liable to Lake Shore on the contract of indemnification for all or a part of any judgment that may enter in favor of the plaintiff and against Lake Shore. Dick argues that the claim is barred by the Workmen's Compensation Act.

Common law actions for indemnity² are clearly barred by the act. Holly Sugar Corp., 572 P.2d at 150; Hilzer, 454 P.2d at 931; Ward, 119 F.Supp. 112. I have not found, however, and the parties have not presented any controlling Colorado cases that have considered whether actions based on express contracts of indemnity between third parties and employers are barred by the Colorado Workmen's Compensation Act. "We are, therefore, faced with a situation where we must attempt to construe the law of the State of Colorado in the manner in which the Supreme Court of Colorado would if faced with the same facts and issue.... In so doing we may look to all resources, including decisions of other states, as well as Colorado and federal decisions, and to the general weight and trend of authority." City of Aurora, Colorado v. Bechtel Corp., 599 F.2d 382, 386 (10th Cir.1979); Bennett v. Furr's Cafeterias, Inc., 549 F.Supp. 887, 892 (D.Colo.1982).

The Act on its face seems to preclude "all causes of action" against an employer "accruing to any person" except as stated in the Act. Moreover, strong dicta indicate that the Act bars all other causes of action:

Clearly, the Act expresses an intent by the Colorado legislature to render such an employer immune from all liability, save that imposed by the Workmen's Compensation Act itself.

Particularly the phrase "and accruing to any and all persons whomsoever" would seem to leave no room for any other construction. To place any other meaning upon this legislative language would do violence to the plain meaning of these words, and would violate the basic rule of statutory construction that in the absence of a specialized or technical usage of a word it will be given its generally accepted meaning within the phrase where used.

Ward, 119 F.Supp. at 114; see also Greer, 553 F.Supp. at 276;³ Public Service Co. of Colo., 638 P.2d at 776.⁴

On the other hand, the overwhelming majority of courts in jurisdictions outside of Colorado hold that express contracts for indemnification are not barred by Workmen's Compensation Acts. See eg., City of Artesia v....