Chrysler Corp. v. Brencal Contractors, Inc.

• Decision Date: 24 February 1986
• Docket Number: Docket No. 76957
• Citation: 381 N.W.2d 814,146 Mich.App. 766
• Parties: CHRYSLER CORPORATION, a foreign corporation, Plaintiff-Appellant, v. BRENCAL CONTRACTORS, INC., a Michigan corporation, Defendant-Appellee. 146 Mich.App. 766, 381 N.W.2d 814
• Court: Court of Appeal of Michigan — District of US

Page 814

381 N.W.2d 814

CHRYSLER CORPORATION, a foreign corporation, Plaintiff-Appellant, v. BRENCAL CONTRACTORS, INC., a Michigan corporation,

Defendant-Appellee.

Docket No. 76957.

146 Mich.App. 766, 381 N.W.2d 814

Court of Appeals of Michigan.

Submitted Feb. 21, 1985.

Decided Nov. 5, 1985.

Released for Publication Feb. 24, 1986.

[146 MICHAPP 768] Dice, Sweeney, Sullivan, Feikens, Hurbis & Foster, P.C. by William McCandless, Detroit, for plaintiff-appellant.

Vandeveer, Garzia, Tonkin, Kerr, Heaphy, Moore, Sills & Poling, P.C. by James M. Prahler and Robert D. Brignall, Detroit, for defendant-appellee.

Before WAHLS, P.J., and SHEPHERD and QUINNELL ^*, JJ.

PER CURIAM.

Plaintiff, Chrysler Corporation, appeals as of right from an order of the Wayne County Circuit Court granting judgment notwithstanding the verdict to defendant, Brencal Contractors, Inc. We reverse and remand for entry of judgment on the verdict.

In 1975, Chrysler and Brencal entered into a contract for work to be done by Brencal at Chrysler's Centerline plant. The contract between Chrysler and Brencal contained an indemnity provision which reads as follows:

"The Seller [Brencal] shall assume all risk of damage to property or of bodily injury, sickness or disease of persons (including death resulting at any time therefrom) used or employed on or in connection with the work, and of all damage to property or of bodily injury, sickness or disease of persons (including death resulting at any time therefrom) wherever located, resulting from or arising out of any action, omission or operation under the contract or in connection with the work.

"The Seller shall secure, protect, defend, hold harmless[146 MICHAPP 769] and indemnify the Purchaser [Chrysler] from and against any and all loss, cost, damage, expense, or claims, whether groundless or not, arising out of the bodily injury, sickness or disease (including death resulting at any time therefrom) which may be sustained or claimed by any person or persons, or the damage or destruction of any property, including the loss of use thereof, arising out of or in connection with the performance of any work in connection with the Purchase Order, including any extra work assigned to the Seller in connection therewith, based upon any act or omission, negligent or otherwise, of (a) the Seller or any of its employees, agents or servants, (b) any subcontractor of the Seller or any employees, agents or servants of such a contractor, or (c) any other person or persons, including the Purchaser, or any employees, agents or servants of the Purchaser; and the Seller shall, at its own cost and expense, defend any such claim and any suit, action or proceeding which may be commenced thereunder, and the Seller shall pay any and all judgments which may be recovered in any such suit, action or proceeding, and any and all expense, including, but not limited to, costs, attorneys' fees and settlement expenses which may be incurred therein."

During the course of the performance of the work, Archie Rabon, a jackhammer operator for Brencal, accidentally came in contact with electrical lines imbedded in concrete and was injured. Rabon thereafter brought a negligence action against Chrysler. At that trial Chrysler admitted negligence and the jury returned a verdict for Rabon against Chrysler for some $210,000. Brencal was not a party to that suit.

Thereafter Chrysler filed the instant complaint against Brencal for indemnity, alleging that Brencal's negligence was also a proximate cause of Rabon's injuries and that Chrysler was therefore entitled to indemnity under the above-quoted indemnity agreement. The jury returned a special verdict finding that Brencal was negligent, that [146 MICHAPP 770] such negligence was a proximate cause of Rabon's injuries, and that Brencal was required to indemnify Chrysler under the indemnity agreement. During trial Brencal had made a motion for a directed verdict, which was taken under advisement by the trial judge. Following the return of the verdict, the court granted Brencal's motion for a judgment notwithstanding the verdict. The trial court found that a portion of the indemnity agreement was void under M.C.L. Sec. 691.991; M.S.A. Sec. 26.1146(1), which provides as follows:

"A covenant, promise, agreement or understanding in, or in connection with or collateral to, a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenance and appliance, including moving, demolition and excavating connected therewith, purporting to indemnify the promisee against liability for damages arising out of bodily injury to persons or damage to property caused by or resulting from the sole negligence of the promisee or indemnitee, his agents or employees, is against public policy and is void and unenforceable."

The trial court further found that, with the void provision excised from the indemnity agreement, Brencal was not required to indemnify Chrysler.

I

This is a pure contractual indemnity claim, as distinct from an implied contract of indemnity and from common law indemnity, Skinner v. D-M-E Corp., 124 Mich.App. 580, 584-585, 335 N.W.2d 90 (1983), and from other possible theories of indemnity, Dale v. Whiteman, 388 Mich. 698, 704-705, 202 N.W.2d 797 (1972). Since Chrysler's indemnity theory is one of express contract, Chrysler is not required to plead or prove freedom from causal [146 MICHAPP 771] fault. Further, since the jury found that Brencal was negligent, we need not decide whether Brencal could be required to indemnify Chrysler if Brencal had not been negligent; Nanasi v. General Motors Corp., 56 Mich.App. 652, 224 N.W.2d 914 (1974); Peeples v. Detroit, 99 Mich.App. 285 296 fn. 1, 297 N.W.2d 839 (1980). Since nothing in the record indicates that the injury was caused by the concurrent negligence of a Brencal subcontractor and of Chrysler, but without negligence on the part of Brencal, we are not called upon to decide whether Chrysler could require indemnity under those circumstances.

II

There are several well established rules of construction of indemnity contracts. An indemnity contract is construed in accordance with the rules for the construction of contracts generally. The cardinal rule in the construction of indemnity contracts is to enforce them so as to effectuate the intentions of the parties. Intention is determined by considering not only the language of the contract but also the circumstances surrounding the contract, ¹ including the situation of the parties. Indemnity contracts are construed most strictly against the party who drafts them and against the party who is the indemnitee. Pritts v. J.I. Case Co., 108 Mich.App. 22, 29, 310 N.W.2d 261 (1981).

Earlier cases imposed the additional rule of construction that indemnification contracts will not be construed to indemnify the indemnitee against losses from his own negligent acts unless such an intent is expressed in unequivocal terms. [146 MICHAPP 772] Vanden Bosch v. Consumers Power Co., 56 Mich.App. 543, 558, 224 N.W.2d 900 (1974). Peeples, supra, and cases cited therein. That rule of construction no longer applies; Vanden Bosch v. Consumers Power Co., 394 Mich. 428, 230 N.W.2d 271 (1975); Pritts, supra, 108 Mich.App. p. 28, 310 N.W.2d 261; Paquin v. Harnischfeger Corp., 113 Mich.App. 43, 51-52, 317 N.W.2d 279 (1982); Harbenski v. Upper Peninsula Power Co., 118 Mich.App. 440, 454, 325 N.W.2d 785 (1982).

III

By way of circumstances of the present contract, it appears that Chrysler was in need of the installing of a pump and a drain and some related work at its plant as part of a pollution spill prevention plan. The contract eventually let was in the amount of $19,780. Brencal is an experienced contractor, but is nowhere near the size of Chrysler; Brencal may employ as many as 250 people at any given time. Previous to this particular contract, Brencal had bid on perhaps as many as 5,000 Chrysler contracts. The indemnity language quoted above is found as paragraph 54 of the standard rider attached to Chrysler's purchase order.

IV

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