Christy v. Menasha Corp., 43417
| Citation | 297 Minn. 334,211 N.W.2d 773 |
| Decision Date | 28 September 1973 |
| Docket Number | No. 43417,43417 |
| Parties | Paul E. CHRISTY, et al., Plaintiffs, v. MENASHA CORPORATION, Defendant. RAUENHORST CORPORATION, Defendant and Third-Party Plaintiff, Respondent, v. H. S. HORWITZ, INC., a.k.a. H. S. Horwitz & Son, Third-Party Defendant, Appellant. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. Indemnity provisions of a subcontract agreement were sufficiently broad and inclusive to support trial court's finding that the subcontractor was required to indemnify the general contractor for damage caused by the negligence of the general contractor and beyond the control of the subcontractor.
2. Where an indemnity contract is one against mere claims as well as liability and is not limited to loss or damage, actual damage to the indemnitee is not a condition to the liability of the indemnitor.
3. A general contractor's insurer, as a subrogee, may enforce an indemnity agreement between that contractor and a subcontractor even though the damage or loss is occasioned by the insured's own negligence.
Mahoney, Dougherty, Angell & Mahoney and John F. Angell, Minneapolis, for appellant.
Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan, O. C. Adamson, II and Mary Jeanne Coyne, Minneapolis, for respondent.
Heard and considered en banc.
The main issue in this case is whether a subcontractor is liable to a general contractor considering the particular contract of indemnity and all of the facts and circumstances involved. The initial action was brought by Paul E. Christy to recover for personal injuries received on a construction project. The action was against Rauenhorst Corporation, the general contractor for the construction of a building for Menasha Corporation in Lakeville, Minnesota. 1 Plaintiff was an employee of H. S. Horwitz, Inc., a plumbing subcontractor to Rauenhorst on the building construction.
Plaintiff was injured in the course of his employment when an employee of Rauenhorst negligently threw a plank from a second-floor window and it struck plaintiff on the head. This negligent act was allegedly the only factual and proximate cause of the plaintiff's injuries. Plaintiff received workmen's compensation benefits from Horwitz's compensation carrier prior to commencing this action.
Thereafter, Rauenhorst filed a third-party complaint against Horwitz for indemnity based on their subcontract agreement. This agreement, which was a standard form subcontract drafted by the Associated General Contractors of Minnesota, contained provisions whereby the subcontractor agreed to save the general contractor harmless from all responsibility and liability for damages arising out of or in any manner connected with the subcontractor's work on the project. Horwitz appeals from a summary judgment for indemnity ordered by the trial court.
A settlement of plaintiff's claim was subsequently reached whereby Horwitz, through its liability insurer, paid plaintiff $200,000 but preserved the issue of indemnity between the contractor and subcontractor on this appeal. It was also stipulated that Rauenhorst's liability insurer would have paid a judgment granted against Rauenhorst.
Horwitz raises three principal issues on this appeal: (1) Whether the provisions of the subcontract agreement require Horwitz to indemnify for damages occasioned by Rauenhorst's own negligent acts; (2) whether under the agreement Rauenhorst is entitled to a judgment of indemnity befor it has suffered loss or damage; and (3) whether Rauenhorst's insurer is equitably subrogated to its cause of action for breach of the indemnity agreement.
1. Horwitz argues that the indemnity provisions of the standard form subcontract agreement were intended to apply only to damages resulting from activities within the control of and caused by Horwitz and not to indemnify Rauenhorst for its own negligence. The provisions of the subcontract pertinent to the responsibility of the parties for losses and damages are contained in several different clauses each relating to particular liabilities. Article VI of the agreement provides that Horwitz would save Rauenhorst, as well as other subcontractors, harmless from losses occasioned by failure to fulfill the subcontract unless it was beyond the control of Horwitz. Article VIII specifies that Horwitz is responsible for cleaning up and repairing damages occasioned by its own work on the project. Article IX imposes a duty on Horwitz to adequately protect its work and to be responsible for damages caused by its noncompletion.
In addition to these particularized responsibilities, the subcontract contains a general liability provision. The first paragraph of Article VII requires Horwitz to acquire certain compensation and liability insurance in specified amounts. The second paragraph of this article reads in pertinent part:
'The Sub-Contractor agrees to assume entire responsibility and liability for all damages or injury to all persons, whether employees or otherwise, and to all property, arising out of, resulting from or in any manner connected with the execution of the work provided for in this Sub-Contract * * * and the Sub-Contractor agrees to indemnify and save harmless the Contractor, his agents and employees from all such claims including, without limiting the generality of the foregoing, claims for which the Contractor may be, or may be claimed to be, liable * * *.'
We believe this language is sufficiently broad and inclusive to require indemnity for injuries suffered by an employee of Horwitz on the construction site in the course of his employment, even though the particular injury was caused by the negligence of Rauenhorst. Although other articles of the agreement relating to liability for particular damages refer to matters within the subcontractor's control, the broad language of Article VII is not modified or limited so as to require that the damages or injury under that provision must arise from matters within the control of the subcontractor. Under Article VII, the subcontractor agrees, without limitation, to indemnify for all damages or injuries 'arising out of, resulting from or in any manner connected with' the work being performed under the subcontract. An injury to an employee performing work for the subcontractor at the construction site comes within this language regardless of the injury's cause.
Horwitz argues that in our recent decision of Kehne Elec. Co. Inc. v. Steenberg Const. Co., 287 Minn. 193, 177 N.W.2d 309 (1970), we interpreted this same standard subcontract agreement as intending to provide indemnity only for damages arising from causes within the control of the subcontractor. In that decision we construed the subcontract in relation to a general contract in determining who was responsible for flood damage to the construction project. In the course of holding that the subcontractor was not responsible for acts of God, we observed:
'The subcontract contains explicit references to the subcontractor's liability for damage Caused by forces within its control but, unlike the general contract, it is conspicuously silent regarding responsibility for acts of God * * *.' (Italics supplied.) 287 Minn. 198, 177 N.W.2d 311.
In Kehne we were considering only the responsibility for an act of God and not ruling on the construction of Article VII in the present context. Flood damage cannot be said to arise out of 'the execution of the work provided for in the Sub-Contract.' That situation is distinguishable from the present case where the subcontractor's employee was injured while on the job site performing work under the subcontract. It follows that the injuries arose out of or at least were connected with the work.
It is also argued that causation is a prerequisite to an indemnitor's liability under an express contract of indemnity. We have consistently rejected this argument following our decision in N.P. Ry. Co. v. Thornton Bros. Co., 206 Minn. 193, 198, 288 N.W. 226, 228 (1939), where we stated:
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