Dillard v. Shaughnessy, Fickel and Scott Architects, Inc.

• Decision Date: 25 February 1997
• Docket Number: No. WD,WD
• Citation: 943 S.W.2d 711
• Court: Missouri Court of Appeals
• Parties: Lee DILLARD, et al., Plaintiff, v. SHAUGHNESSY, FICKEL AND SCOTT ARCHITECTS, INC., Defendant, A.L. Huber & Son Inc., Appellant, P&S Masonry, Inc., Respondent. 52665.

Page 711

943 S.W.2d 711

Lee DILLARD, et al., Plaintiff, v. SHAUGHNESSY, FICKEL AND SCOTT ARCHITECTS, INC., Defendant A.L. Huber & Son Inc., Appellant P&S Masonry, Inc., Respondent.

No. WD 52665.

Missouri Court of Appeals Western District.

Feb. 25, 1997.

Motion for Rehearing and/or Transfer to

Supreme Court Denied April 1, 1997.

Application to Transfer Denied

May 27, 1997.

Mark E. Johnson, Lora R. Schultz, Morrison & Hecker L.L.P., Kansas City, for appellant.

Jerome V. Bales, Arlen L. Tanner, Wallace, Saunders, Austin, Brown And Enochs, Chartered, Kansas City, for respondent.

Before BRECKENRIDGE, P.J., and SPINDEN and LAURA DENVIR STITH, JJ.

LAURA DENVIR STITH, Judge.

Appellant A.L. Huber & Son, Inc., a general contractor on a construction project, appeals the trial court's ruling on motion for summary judgment that the indemnity provision of its subcontract with P&S Masonry, Inc. did not entitle it to indemnity for the attorney's fees it expended in defending a lawsuit brought against it by a worker injured on the construction project.

We affirm the trial court's determination that Kansas law governs the interpretation of this subcontract and that under Kansas law Huber's own attorney's fees were not included in the provision requiring P&S to indemnify Huber for "any liability, loss, cost or expenses ... caused by either the General Contractor or the Sub-Contractor or by their work."

We find, however, that the subcontract's indemnity provision was broad enough to require P&S to indemnify Huber for the moneys Huber had paid to the project's architect and engineer in settlement of their claims that the indemnity provision of Huber's contract with the landowner explicitly required Huber to reimburse them for the attorney's fees and expenses they incurred in defending the same personal injury suit. These sums constituted a liability of Huber to the architect and engineer, and hence came within the indemnity provision of the subcontract. Similarly, the subcontract required P&S to reimburse Huber for the moneys it was required to pay the landowner to reimburse it for the attorney's fees it incurred in defending the personal injury claims against the landowner. Reversed and remanded for further proceedings in accordance with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Most Reverend Ignatius J. Strecker, Archbishop of the Roman Catholic Archdiocese of Kansas City, Kansas, hired A.L. Huber & Son, Inc. as general contractor for the construction of a church and a school in Leawood, Kansas. He also hired Shaughnessy, Fickel & Scott Architects, Inc. ("SFS") to serve as architect for the construction project, and hired Structural Engineering Associates, Inc. ("SEA") to serve as structural engineer for the project. The contract between Huber and the Archbishop contained a provision requiring Huber to indemnify the Archdiocese, SFS, and SEA for any claims and expenses, including attorney's fees, caused in whole or in part by the negligence of Huber or its subcontractors.

Huber requested and received bids from several subcontractors, including P&S Masonry, Inc. It is unclear when Huber accepted P&S's bid, but P&S began work on January 24, 1991. On January 28, 1991, Huber mailed P&S two subcontracts, one for masonry work on the church and one for masonry work on the school. On March 1, 1991, John Pinnell, president of P&S, signed the subcontracts on behalf of P&S in its office in Lenexa, Kansas. Mr. Pinnell then mailed the subcontracts back to Huber along with an attached list of exclusions and clarifications. Randy K. Huber, Vice-President of Huber, signed the subcontracts on behalf of Huber on March 4, 1991, in Huber's office in Kansas City, Missouri.

The subcontract signed by Huber and P&S contained an indemnity provision which stated in part that:

The Sub-Contractor will save the General Contractor harmless from any liability, loss, cost or expenses, resulting from injuries or damages to persons or property caused by either the General Contractor or the Sub-Contractor or by their work.

(emphasis added). This indemnification provision was contained in small gray print as part of a "boilerplate" series of pre-printed provisions on the back of the contract form.

On March 20, 1991, Lee Dillard, an employee of P&S, was injured when a masonry wall on the construction site collapsed. Mr. Dillard subsequently filed suit against the Archbishop, SFS, SEA, Huber, and two other corporations he alleged were responsible for the placement and maintenance of scaffolding involved in the fall. Archbishop Strecker demanded that Huber provide him with a defense pursuant to the indemnity provision of his contract with Huber. Huber's insurer provided a defense to the Archbishop, and Mr. Dillard subsequently dismissed his claim against the Archbishop.

On May 19, 1992, Huber's attorney sent a letter to P&S stating that Mr. Dillard's injury was attributable to P&S's work, and that P&S had "a contractual obligation to A.L. Huber with respect to plaintiffs' claims in the Dillard lawsuit as well as any related claims that may be made against A.L. Huber by the codefendants in that lawsuit or by others." Huber demanded that P&S or its insurer defend and indemnify Huber against Mr. Dillard's suit and all future claims.

SFS and SEA were granted summary judgment on all of Mr. Dillard's claims against them. They then filed cross-claims against Huber seeking indemnification for their expenses and attorney's fees incurred in defending Mr. Dillard's claims. The circuit court found they were not entitled to indemnity. On appeal, this Court reversed and remanded. We noted that, in addition to suing SFS and SEA, Mr. Dillard had claimed that his injuries were caused in whole or in part by Huber and P&S. If this were proved, it would trigger the indemnity provision of the contract between Huber and the Archbishop, which specifically required:

the General Contractor to indemnify Architects and Architects' consultant (Engineers) from claims and expenses, including attorney fees attributable to injury caused in whole or in part by the negligence of the General Contractor [Huber] or its subcontractors.

Dillard v. Shaughnessy, Fickel and Scott Architects, Inc., 884 S.W.2d 722, 723 (Mo.App.1994) (emphasis added).

On remand, Huber settled SFS and SEA's indemnity claims against it by paying them $34,210.11 and $43,084.49, respectively. He then filed a third-party petition against P&S, Count II of which sought indemnity from P&S for the moneys Huber had paid in settlement of SFS and SEA's claims against Huber for indemnity. Count I sought indemnity from P&S for the attorney's fees and expenses Huber itself incurred in defending against Mr. Dillard's suit. Count III sought indemnity for the attorney's fees and other expenses it had paid in defending Mr. Dillard's claims against Archbishop Strecker.

P&S and Huber filed cross-motions for summary judgment. Both motions were based on the language of the indemnity provision of their subcontract, which, as earlier noted, required P&S to indemnify Huber for "any liability, loss, cost or expenses" resulting to Huber from injuries to persons such as Mr. Dillard which arose in whole or in part out of Huber's or P&S's negligence.

The trial court ruled that the phrase "any liability, loss, cost or expenses" as used in the indemnity provision of the subcontract did not include Huber's attorney's fees incurred in defending Mr. Dillard's claims against Huber itself because it did not use the words "attorney's fees." For this same reason, the court found that Huber was not entitled to indemnity from P&S for the amounts it had paid to the Archbishop, SFS, and SEA, because those amounts consisted largely of reimbursement for the attorney's fees and expenses those parties had incurred in defense of Mr. Dillard's claims against them and the language of the contract did not clearly show an intent to indemnify Huber for the liability it contractually incurred for these other parties. Huber has appealed these determinations.

The trial court also found that, under the indemnity provision of the Huber-P&S subcontract, Huber was entitled to indemnity from P&S for its costs and expenses other than attorney's fees incurred in defending Mr. Dillard's claims against it. P&S has not appealed that determination.

II. STANDARD OF REVIEW

"The propriety of summary judgment is purely an issue of law which we review de novo on the record submitted and the law." Bonds v. Missouri Dep't of Mental Health, 887 S.W.2d 418, 421 (Mo.App.1994). We review the grant of summary judgment by looking to the entire record to determine whether there is any issue of material fact and whether the moving party was entitled to judgment as a matter of law. Dial v. Lathrop R-II Sch. Dist., 871 S.W.2d 444, 446 (Mo. banc 1994). We view the record in the light most favorable to the party against whom summary judgment was entered, and will affirm if the judgment is sustainable as a matter of law under any legal theory. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Denial of summary judgment is not appealable. Gilmore v. Erb, 900 S.W.2d 669, 671 (Mo.App.1995); Hammer v. Waterhouse, 895 S.W.2d 95, 99 (Mo.App.1995).

III. CHOICE OF LAW

Before we can decide whether Huber is entitled to indemnity for the attorney's fees it, the Archbishop, SFS, and SEA expended in defense of Mr. Dillard's claims, we must determine whether this issue is governed by Missouri law (as Huber argues) or by Kansas law (as respondents argue).

A. "Most Significant Relationship" Analysis.

When determining choice of law issues, Missouri courts apply the "most significant relationship" test set out in Section 188 of the Restatement (Second) of Conflict of Laws. CIT Group/Equip. Fin., Inc. v. Integrated Fin. Serv., Inc., 910 S.W.2d 722, 728 (Mo.App.1995); Brown v. Brown, 678 S.W.2d 831, 833 (Mo.App.1984). That section stat...