Cone Bros. Contracting Co. v. Ashland-Warren, Inc., ASHLAND-WARRE

• Decision Date: 09 November 1984
• Docket Number: No. 84-579,ASHLAND-WARRE,INC,84-579
• Citation: 458 So.2d 851
• Parties: CONE BROTHERS CONTRACTING COMPANY and Fidelity & Casualty Company of New York, Appellants, v., Appellee.
• Court: Florida District Court of Appeals

Page 851

458 So.2d 851

CONE BROTHERS CONTRACTING COMPANY and Fidelity & Casualty Company of New York, Appellants, v. ASHLAND-WARREN, INC., Appellee.

No. 84-579.

District Court of Appeal of Florida Second District.

Nov. 9, 1984.

Charles T. Wells of Wells, Gattis, Hallowes & Carpenter, P.A., Orlando, for appellants.

Peter P. Murnaghan and Michael L. Rosen of Holland & Knight, Tampa, for appellee.

CAMPBELL, Judge.

Appellants, Cone Brothers Contracting Company ("Cone Brothers") and Fidelity & Casualty Company of New York, appeal a final summary judgment against only appellant Cone Brothers awarding appellee $183,638.22 in damages and attorney's fees on a claim for breach of contract. We affirm.

Henceforth, in this opinion, we will use the term appellant to refer only to Cone Brothers.

In July 1977, Macasphalt Corporation entered into a contract with the Florida Department of Transportation (DOT) for the construction of improvements and modifications of a portion of Interstate 4 in Orange and Osceola counties. Macasphalt subsequently merged with and became a division of Ashland-Warren, Inc. (Ashland-Warren). When using the term appellee, we will refer to the merged and successor entity, Ashland-Warren. Subsequently, appellee subcontracted with appellant for performance of certain work within the DOT project, including modifications to the Bonnet Creek Bridge.

On February 10, 1979, and again on May 13, 1979, a motor vehicle collided with a temporary "barrier wall" which had been placed near the Bonnet Creek Bridge by appellant in the performance of their contract. As a consequence of the two accidents, appellee and appellant were named as defendants in four personal injury actions in Orange County.

The contract between appellee, as contractor, and Cone Brothers, as the subcontractors, provided in paragraph five of the "Terms and Conditions" as follows:

5. The Subcontractor shall provide and maintain compensation insurance for the protection of his employees, as required by law of an employer and as will protect the Subcontractor from loss or damage because of personal injuries including death to his employees, or any of them; and the Subcontractor shall provide and maintain minimum public liability and property damage insurance in companies acceptable to the Contractor, in such amounts as may be agreed upon; and in the absence of such agreement, as follows:

Public Liability (Including completed operations coverage): Bodily Injury/Property Damage $300,000/$500,000/$100,000

Automotive Public Liability: Bodily Injury/Property Damage $300,000/$500,000/$100,000

The Subcontractor specifically obligates itself to indemnify and protect the Contractor and save it harmless from any and all claims, suits or liabilities for injuries to property, injuries to persons, including death, and from any other claims, suits or liabilities arising out of the performance of the work or in any way occasioned by any act or omission of the Subcontractor or any of its officers, agents, employees or servants or any Subcontractor or other person directly or indirectly engaged by it. All of the insurance policies as hereinbefore provided under this section shall name the Contractor as an additional assured thereunder, shall assume and provide for the Contractor's defense, and shall serve to indemnify and protect the Contractor and save it harmless from all claims, suits or liabilities as set forth in these Terms and Conditions or any of them.

The Subcontractor shall furnish the Contractor with certificates evidencing that such insurance is provided and in full force and effect before starting work and at any other time when requested by the Contractor. All of said certificates shall set forth on the face thereof contractual coverage as required herein. No amendment or cancellation of any of said policies shall be effective until after thirty (30) days notice in writing to the Contractor. (Emphasis added.)

Paragraph six of the "Terms and Conditions" contained the following provision:

The Subcontractor shall indemnify and protect the Contractor and the Owner and save them harmless from any and all loss, damage, costs, expenses and attorney's fees suffered or incurred on account of any breach of the aforesaid obligations and covenants, and any other provision or covenant of this contract.

After being named a defendant in the personal injury actions, appellee promptly demanded that appellant, or its insurer, undertake Ashland-Warren's defense and cover any liability in accordance with the subcontract. However, that demand was rejected based on the contention that appellee was negligent and, thus, the indemnification clause was unenforceable. The demand was also rejected because appellant had not made appellee a named insured on the liability insurance policy as required by paragraph five of the subcontract. Consequently, appellee was required to retain its own counsel to defend the four lawsuits.

One of those lawsuits ultimately went to trial and resulted in a jury verdict finding that appellant was sixty percent negligent, appellee was twenty-five percent negligent, and the driver of the car was fifteen percent negligent. The other three cases were settled through negotiations which were conducted principally by appellant, acting on behalf of appellee and other defendants, as well as itself. Eventually, appellee was required to pay damages totaling $103,638.22, and incurred attorney's fees totaling over $66,600 in defending the four suits.

In September 1982, appellee instituted an action against appellant, stating three distinct counts for recovery. Count I sought damages, costs and interest based on "contractual indemnity" under paragraphs five and six of the subcontract. Count II sought damages, costs and interest based on "common law indemnity" alleging that the proximate cause of the accidents was appellant's negligence and that appellee's liability was merely constructive or derivative. Finally, Count III sought damages, costs, interest and attorney's fees for "breach of contract" based on appellant's failure to obtain liability insurance making appellee a named insured as required by paragraph five of the subcontract.

Appellant answered generally denying liability and affirmatively defending on the grounds that: (a) the jury verdict finding appellee partially negligent precluded appellee's claim for contractual or common law indemnity in any of the four cases; (b) appellee was negligent in administering the contract or discharging its supervisory duties, thus precluding any recovery under contractual or common law indemnity; and (c) the contract failed to comply with section 725.06, Florida Statutes (1981), which imposes certain restrictions on indemnification provisions in construction contracts. By subsequent amendment, appellant was allowed to plead as additional affirmative defenses that appellee was estopped from asserting the claim for indemnity, had waived its right to claim indemnity, and had released appellant as a result of the settlements of the other lawsuits. Appellee filed replies denying all of appellant's affirmative defenses.

Both parties filed motions for partial summary judgment. Appellant requested partial summary judgment on appellee's claims for contractual indemnity and common law indemnity. On the other hand, appellee sought partial summary judgments on the issue of appellant's liability for breach of contract for failing to obtain liability insurance that included appellee as a named insured.

The trial court conducted a hearing to consider appellant's motion for partial summary judgment on the claims for indemnity and appellee's motion for partial summary judgment on...