Callahan v. A.J. Welch Equipment Corp.

• Decision Date: 03 June 1994
• Docket Number: No. 93-P-327,93-P-327
• Parties: Joseph CALLAHAN v. A.J. WELCH EQUIPMENT CORPORATION & another 1 ; Sutton Corporation, third-party defendant.
• Court: Appeals Court of Massachusetts

Page 134

634 N.E.2d 134

36 Mass.App.Ct. 608

Joseph CALLAHAN v. A.J. WELCH EQUIPMENT CORPORATION & another ¹ Sutton Corporation, third-party defendant.

No. 93-P-327.

Appeals Court of Massachusetts Middlesex.

Argued March 8, 1994.

Decided June 3, 1994.

David J. Hopwood, Newton, for Sutton Corp.

Andre A. Sansoucy, Boston, for A.J. Welch Equipment Corp. and another.

Before DREBEN, KAPLAN and PORADA, JJ.

PORADA, Justice.

The principal issues raised by this appeal are: (1) whether the indemnity clause of a construction subcontract requires the subcontractor to indemnify the general contractor for its tort liability to the plaintiff whose injury a jury attributed to the concurrent conduct of the subcontractor, another subcontractor and the general contractor and (2) whether an indemnitor may obtain contribution from its indemnitee under the provisions of G.L. c. 231B, § 1(e ). ² We summarize the procedural and undisputed factual history of the case.

The plaintiff broke his leg while working for the Sutton Corporation (Sutton) in the construction of the Cambridgeside Galleria project. Sutton was the earth-support systems subcontractor at that job site. The plaintiff received workers' compensation benefits from Sutton's insurance carrier and brought an action in the Superior Court for negligence against A.J. Welch Equipment Corporation (Welch), the excavation subcontractor, and Beaver Builders, Inc. (Beaver), the general contractor, of the Galleria project. In that action, Beaver filed claims against Sutton and Welch for indemnification based upon identical indemnification clauses in their subcontracts. ³ In response, Welch filed claims for contribution against Beaver and Sutton. Sutton also filed a claim for contribution against Welch.

Prior to trial, Welch entered into a settlement agreement with the plaintiff for $115,000. The plaintiff then dismissed his claims against both Beaver and Welch. This left the cross claims and third-party complaints for indemnification and contribution for trial. All parties agreed that the case would be submitted to the jury on special questions after which the judge would decide the respective claims of contribution and indemnification. The special verdict questions asked only whether Beaver was negligent, whether Beaver proximately caused the plaintiff's injuries and whether Sutton and Welch "caused" the accident. The jury responded that Beaver was negligent and its negligence was the proximate cause of the accident and that both Welch and Sutton "caused" the accident. Based on the jury's responses, the judge then ruled for Welch on its claim for contribution in the amount of $57,500 against Beaver and against Beaver on its claim for contribution from Welch. The judge also ruled that Beaver was not entitled to indemnification from Welch but was entitled to indemnification from Sutton for $57,500. The judge found for Welch on Sutton's claim for contribution. ⁴

On appeal, Sutton claims that the judge erred in ruling that Beaver was entitled to indemnification from Sutton based on the provisions of G.L. c. 149, § 29C, ⁵ as appearing in St.1985, c. 228, § 3, and the language of the indemnification clause. Sutton also claims that the judge erred in awarding Welch contribution from Beaver because G.L. c. 231B, § 1(e ), bars contribution when the party seeking contribution is obligated to indemnify the party from whom the contribution is sought. Finally, Sutton contends that where the indemnification clause in Welch's subcontract was identical to Sutton's indemnity clause in its subcontract, the judge erred in failing to find Welch liable to Beaver on its claim for indemnification.

We address each of those claims of error.

1. Indemnification clause. Sutton argues that a subcontractor cannot be held liable under an indemnity clause in a construction contract under the provisions of G.L. c. 149, § 29C, unless the subcontractor is found negligent. It claims that the jury's finding that it was a "cause" of the accident is not the equivalent of a finding of negligence and, thus, the indemnity clause of its contract does not apply.

The current version of G.L. c. 149, § 29C, declares void indemnity provisions in construction contracts when the subcontractor is obligated to indemnify any party for an injury, which is "not caused by the subcontractor or its employees, agents or subcontractors...." See Jones v. Vappi & Co., 28 Mass.App.Ct. 77, 81-82, 546 N.E.2d 379 (1989). See also Harnois v. Quannapowitt Dev., Inc., 35 Mass.App.Ct. 286, 288-289, 619 N.E.2d 351 (1993). In the Harnois case, which was decided after the trial court's decision, we advocated focusing on the language of the indemnity clause to determine its validity under § 29C rather than on the facts of the particular accident and assessment of fault of the parties. In that case, we held that the indemnity clause was void because it contained a provision requiring the subcontractor to indemnify the general contractor for an injury that may not have been caused by the subcontractor or its employees, agents, or subcontractors. Id. at 288-289, 619 N.E.2d 351. Unlike the indemnity clause in the Harnois case, Sutton's obligation to indemnify is limited to an injury resulting from the negligence or act or omission of Sutton or its agents "to the fullest extent permitted by law." Because of that limitation, we do not consider the indemnity clause void under § 29C.

The question thus remains whether "cause" as used in § 29C requires a finding of negligence. There is no mention of negligence in § 29C even though the Legislature, in the earlier version of this statute, expressly provided that indemnity clauses which absolved indemnitees from their own negligence were against public policy and void. St.1985, c. 228, § 3. Jones v. Vappi & Co., supra. That being so, one could assume that if the Legislature had intended to validate indemnity clauses in construction contracts only when the subcontractor or its agents and employees were negligent, rather than the cause of the loss, it would have said so. See Bronstein v. Prudential Ins. Co., 390 Mass. 701, 708, 459 N.E.2d 772 (1984). We need not, however, decide this issue because Sutton failed to raise it at trial. Commissioner of Correction v. McCabe, 410 Mass. 847, 850 n. 7, 576 N.E.2d 654 (1991). Lease-It, Inc. v. Massachusetts Port Authy., 33 Mass.App.Ct. 391, 397, 600 N.E.2d 599 (1992). In fact, Sutton argued against this very interpretation and did not object to the special question to the jury which asked: "Did the defendant, Sutton Corporation, cause the plaintiff's, Joseph Callahan, injuries?" or the judge's instructions which differentiated between Beaver's liability based on negligence and Sutton's liability based on causation arising out of breach of contract or safety rules incorporated therein. Accordingly, we deem the issue waived.

Sutton next contends that the judge incorrectly determined that it was obligated to indemnify Beaver because the language of the indemnity clause did not clearly specify that Sutton would indemnify Beaver even if Beaver were found negligent. The mere fact that an indemnity clause does not expressly provide for indemnity even where the indemnitee is negligent will not preclude the right to indemnity if the intent sufficiently appears in the language and circumstances attending its execution. Shea v. Bay State Gas Co., 383 Mass. 218, 222-223, 418 N.E.2d 597 (1981); Kelly v. Dimeo, Inc., 31 Mass.App.Ct. 626, 629, 581 N.E.2d 1316 (1991). Here, the indemnity clause speaks of indemnification "from and against...