City of Albuquerque v. Bplw Architects

• Decision Date: 09 June 2009
• Docket Number: No. 27,837.,27,837.
• Citation: 2009 NMCA 081,213 P.3d 1146
• Parties: CITY OF ALBUQUERQUE, Defendant/Cross-Claimant/Appellee, v. BPLW ARCHITECTS & ENGINEERS, INC., Defendant/Cross-Defendant/Appellant.
• Court: Court of Appeals of New Mexico

213 P.3d 1146

2009 NMCA 081

CITY OF ALBUQUERQUE, Defendant/Cross-Claimant/Appellee, v. BPLW ARCHITECTS & ENGINEERS, INC., Defendant/Cross-Defendant/Appellant.

No. 27,837.

Court of Appeals of New Mexico.

June 9, 2009.

The Baker Law Firm, Jeffrey L. Baker, Renni Zifferblatt, Albuquerque, NM, for Appellee.

Montgomery & Andrews, P.A., Kevin M. Sexton, Albuquerque, NM, for Appellant.

OPINION

FRY, Chief Judge.

{1} This case arises from a dispute over an indemnification clause in a contract between the City of Albuquerque and BPLW Architects & Engineers, Inc. (BPLW) for the design and construction of the rental car facility at the Albuquerque International Airport. After a pedestrian was injured at the facility, the City requested a defense from BPLW pursuant to the indemnification clause. BPLW denied the request, and the City filed a claim against BPLW. The district court granted partial summary judgment in the City's favor, finding that BPLW was required to defend the City in the lawsuit brought by the pedestrian because the claim arose from BPLW's design and construction of the facility. BPLW appeals. We affirm.

BACKGROUND

{2} In 1998, the City entered into an architectural services contract with BPLW for the design of the rental car facility at the airport. While BPLW was initially responsible only for the design of the facility, the contract provided that the City could require BPLW to perform construction services if needed. Pursuant to this provision, BPLW took full responsibility for the construction administration services for the project and proceeded to oversee the construction of the facility it had designed. The project was completed, and the City took possession in 2001. Two weeks after the facility opened, a pedestrian John Pound, fell off a curb while exiting one of the car rental buildings located at the facility. Pound suffered extensive injuries and filed suit against the City, alleging that the curb from which he fell was excessively high and that the City had "failed to properly construct the curb and adjacent pavement," had "failed to correct a hazardous condition, specifically the excessively high curb," and had "failed to inspect and/or maintain the curb and adjacent pavement where" he had fallen. Pound later filed an amended complaint, reasserting his allegations against the City and adding a number of additional defendants, including BPLW. In the amended complaint, Pound alleged that BPLW had negligently designed the curb and had failed to use reasonable care in the inspection and supervision of the construction of the curb.

{3} As revealed by discovery later, the curb that Pound fell from was adjacent to a handicap ramp and varied in height from about eleven inches, where the curb met the top of the ramp, to less than one inch where the base of the ramp began. According to BPLW, this curb was a "header curb" built in compliance with a standard design specification for header curbs provided by the City. The portion of curb where Pound fell was apparently located near the door to one of the rental car buildings, about a foot high, and it was neither marked to indicate that there was a sharp change in elevation nor blocked by any type of barrier to prevent a person from stepping off the curb. Pound alleged that it was the placing of this high curb in a pedestrian pathway that caused him to fall.

{4} After receiving Pound's complaint, the City requested that BPLW honor its contractual obligation to defend and indemnify the City. BPLW refused. The City then filed a cross-claim against BPLW, alleging that BPLW had a contractual duty to defend and indemnify the City for any cause of action arising out of BPLW's performance of the contract. The City and BPLW later independently settled the claims brought against them by Pound, leaving only the cross-claim between the City and BPLW to be litigated.

{5} The City then filed a partial motion for summary judgment limited solely to the issue of whether BPLW had a duty to defend. The district court granted the City's motion, finding that BPLW had a duty to defend, and awarded the City approximately $90,000 in attorney fees for the expenses the City incurred defending the claims Pound brought against it. The district court also certified its order as final under Rule 1-054(B) NMRA, finding that there was no just reason for delay. BPLW timely appealed.

{6} On appeal, BPLW argues that it did not have a contractual duty to defend the City because none of Pound's allegations alleged that the City was vicariously liable for BPLW's negligence and because all of the allegations against the City were for the City's direct negligence, not BPLW's. BPLW also argues that it does not have a duty to defend because the indemnity clause contained an exception that relieves BPLW of its duty to defend the City if the cause of action arises out of the City's negligence in approving designs or providing design specifications. Because the City approved all of the designs for the rental car facility and because the curb in question complied with a City design specification, BPLW argues that the cause of action falls within this exception to its duty to defend.

DISCUSSION

Standard of Review

{7} On appeal from the grant of summary judgment, we ordinarily review the whole record in the light most favorable to the party opposing summary judgment to determine if there is any evidence that places a genuine issue of material fact in dispute. Rummel v. Lexington Ins. Co., 1997-NMSC-041, ¶ 15, 123 N.M. 752, 945 P.2d 970; see Gormley v. Coca-Cola Enters., 2005-NMSC-003, ¶ 8, 137 N.M. 192, 109 P.3d 280. However, if no material issues of fact are in dispute and an appeal presents only a question of law, we apply de novo review and are not required to view the appeal in the light most favorable to the party opposing summary judgment. Rutherford v. Chaves County, 2003-NMSC-010, ¶ 8, 133 N.M. 756, 69 P.3d 1199. Neither party argues that there are any material facts in dispute, nor do we find any disputed facts in our review of the record. Instead, both parties argue that resolution of this appeal depends solely on the legal question of when a contractual duty to defend is triggered and on the interpretation of the indemnity clause between BPLW and the City. Thus, we review the district court's grant of summary judgment de novo.

The Duty to Defend Arises From the Terms of the Contract and the Allegations of the Complaint

{8} The City argues that in order to determine whether a duty to defend exists, we should look at the terms of the contract and the allegations contained in the complaint. According to the City, if the allegations in the complaint fall within the terms of the contract, then the duty to defend is triggered. BPLW, on the other hand, argues that a contractual duty to defend can only be triggered if vicarious liability is alleged in the underlying complaint. While BPLW acknowledges that our case law suggests that the City's view is correct, it argues that the cases that set out this rule all involve insurance contracts and thus that the rule is inapplicable to a duty to defend contained in other types of contracts. See, e.g., Bernalillo County Deputy Sheriffs Ass'n v. County of Bernalillo, 114 N.M. 695, 697, 845 P.2d 789, 791 (1992) (holding that an insurer's duty to defend arises from the allegations in the complaint against the insured). We disagree with BPLW and, as we explain below, we hold that a contractual duty to defend is triggered by the allegations in the complaint.

{9} In disputes stemming from insurance contracts, the "duty to defend arises out of the nature of the allegations in the complaint," Miller v. Triad Adoption & Counseling Servs., Inc., 2003-NMCA-055, ¶ 9, 133 N.M. 544, 65 P.3d 1099, and is determined "by comparing the factual allegations in the complaint with the insurance policy." Lopez v. N.M. Pub. Sch. Ins. Auth., 117 N.M. 207, 209, 870 P.2d 745, 747 (1994). If a complaint "states facts that bring the case within the coverage of the policy," then the duty to defend will be triggered. Bernalillo County Deputy Sheriffs Ass'n, 114 N.M. at 697, 845 P.2d at 791. However, "[i]f the allegations of the complaint clearly fall outside the provisions of the policy, neither defense nor indemnity is required." Id.

{10} BPLW argues that these rules are inapplicable and "irrelevant to a non-insurance scenario." As its sole support for this argument, BPLW cites a number of Florida cases that it interprets as holding that a contractual duty to defend is triggered only when vicarious liability is alleged in a complaint. E.g., Metro. Dade County v. CBM Indus. of Minn., Inc., 776 So.2d 937, 939 (Fla.Dist.Ct.App.2001) (finding duty to defend where complaint stated a cause of action for vicarious liability); SEFC Bldg. Corp. v. McCloskey Window Cleaning, Inc., 645 So.2d 1116, 1117 (Fla.Dist.Ct.App.1994) (refusing to find duty to defend where complaint alleged only active negligence of indemnitee); Metro. Dade County v. Fla. Aviation Fueling Co., 578 So.2d 296, 298 (Fla.Dist.Ct.App.1991) (finding duty to defend where complaint alleged vicarious liability). Contrary to BPLW's argument, these cases did not hold that a duty to defend can only be triggered if the allegations of a complaint allege vicarious liability. Instead, these cases were decided on the ground that the indemnity agreements in question expressly precluded indemnity for the indemnitee's own negligence. In CBM Industries, for example, the indemnity agreement expressly stated that "nothing herein shall ... require [CBM] to indemnify the [c]ounty against liability resulting from the willful, negligent, or unlawful acts ... of the [c]ounty." 776 So.2d at 938 (first alteration in original) (emphasis omitted) (internal quotation marks omitted). Because the contract expressly excluded indemnification of claims that the county was negligent, the only way the county could establish a...