Dykstra v. Arthur G. McKee & Co.
| Decision Date | 02 February 1981 |
| Docket Number | No. 77-513,77-513 |
| Citation | 301 N.W.2d 201,100 Wis.2d 120 |
| Parties | Ralph C. DYKSTRA and Sandra Dykstra, his wife, Plaintiffs-Respondents, v. ARTHUR G. McKEE & COMPANY, a Foreign Corporation, and Jetco Properties, Inc., aDelaware Corporation, Defendants and Third-Party Plaintiffs-Appellants, J. F. Ahern Company, a Wisconsin Corporation, Third-Party Defendant-Appellant-Petitioner. |
| Court | Wisconsin Supreme Court |
Tom E. Hayes, Milwaukee (argued), for third-party defendant-appellant-petitioner; Edward A. Hannan and Hayes & Hayes, Milwaukee, on brief.
James P. O'Neill, Milwaukee (argued), for defendants and third-party plaintiffs-appellants; Douglass J. Carroll and Arnold, Murray, O'Neill & Schimmel, Milwaukee, on brief.
This is a review of a decision of the Court of Appeals, 1 which affirmed a judgment of the Circuit Court for Dodge County, Henry G. Gergen, Jr., Circuit Judge.
The principal question on this review is whether an indemnity contract which purports to indemnify a wholly negligent indemnitee for a violation of the safe place statute under circumstances where the indemnitor is totally free of negligence is contrary to public policy. We conclude that such a contract of indemnity is valid; and, accordingly, we affirm.
The petitioner on this review is J. F. Ahern Co. Ahern was a subcontractor, hired to do plumbing and refrigeration work on a building being constructed by the general contractor, Arthur G. McKee & Co. As a part of the subcontract, McKee and Ahern entered into an indemnification agreement, which McKee contends requires Ahern to indemnify it, McKee, for any injuries or damages which arise in connection with the performance of the subcontract, although Ahern were found to be completely free of negligence and McKee were found to be wholly negligent.
On August 16, 1972, Ralph Dykstra, who was a steamfitter employed by Ahern, sustained a disabling knee injury when he fell in a partially completed corridor in a building under construction by McKee. Dykstra, as a consequence of the injuries sustained at that time, brought an action against the McKee Co., alleging that he was a frequenter of a place of employment under the control of McKee and that McKee violated the safe place statute (sec. 101.11, Stats.) in that it failed to do what was reasonably necessary to protect the life, health, safety, and welfare of frequenters and failed to keep and maintain the place of employment safe. McKee then joined Dykstra's employer, Ahern, as a third-party defendant, seeking indemnification for damages under the provisions of the contract between McKee and Ahern. Jetco, the owner, was also joined as a party defendant subsequent to the filing of the original complaint.
The trial record shows that the corridor in the partially completed building was a major thoroughfare which was used by the several subcontractors and their employees. It was about five feet wide and 25 to 30 feet long. The floor was smooth, highly finished concrete. Although the exterior walls of the building had been erected, the roofing of the building had not been completed. The evidence adduced at trial showed that it had rained frequently for several days before the accident and that conditions of high humidity prevailed and that rain water from roof apertures fell into the corridor. There was evidence that the floor was moist with condensation and that it was slippery.
The question of McKee's negligence was tried to a jury, which found that McKee was 80 percent negligent and that Dykstra was 20 percent negligent. Following the trial by jury, McKee's indemnification action against Ahern was tried to the court. After trial, the court found the indemnity agreement to require that Ahern indemnify McKee in the amount of $134,679.55, the amount of Dykstra's judgment against McKee.
On appeal to the Court of Appeals, McKee and Jetco contended that the jury's verdict could not be sustained because the evidence was insufficient. Ahern also appealed on the grounds of the insufficiency of evidence to show a violation of the safe place statute and also contended, assuming arguendo that there had been a violation of the safe place statute, that the indemnification agreement on its face did not require it to indemnify McKee under the circumstances of this case and, in any event, were the agreement construed to require indemnification, the agreement was void and contrary to public policy as an unlawful attempt to delegate McKee's nondelegable safe place duties.
The Court of Appeals found the evidence sufficient to hold McKee liable for the violation of the safe place statute, and upheld the trial court's conclusion that the indemnification agreement covered the facts of this case, was not against public policy, and required Ahern to indemnify McKee. According to the record and information gleaned from the parties' briefs and at oral argument, Dykstra's judgment has been paid by McKee. Ahern, however, has petitioned this court for review of the Court of Appeals' decision holding that the indemnification agreement is applicable to the facts of this case and is not contrary to public policy. There is no issue before this court in respect to the underlying liability of any of the parties to Dykstra, the injured workman. The sufficiency of the evidence necessary to support a safe place violation is not an issue on this review.
The indemnification agreement entered into between McKee and Ahern as a part of the subcontract provided:
"INDEMNIFICATION You shall assume liability for, be responsible for, indemnify (and at our request, defend), and save harmless ourselves, and anyone (including our customers) to whom we may be liable by contract or otherwise, against any loss, damage, or expense arising from any actual or claimed death or actual or claimed injury to any person, or actual or claimed damage to property, whether owned by you, ourselves or third parties, including loss of use, which actually or allegedly results from, or actually or allegedly arises in connection with, the performance of this subcontract, (including any such injury, death, or damage caused in part by our negligence) unless you can prove by clear and convincing evidence that such death, injury, damage, or loss of use was caused solely by our active negligence and that you were at all times diligently trying to minimize the possibility of such death, damage, or loss of use and, if such occurred, the consequences thereof."
In Spivey v. Great Atlantic & Pacific Tea Co., 79 Wis.2d 58, 63, 255 N.W.2d 469 (1977), we recapitulated the rules applicable to the construction of indemnification agreements. Therein we said:
"The general rule accepted in this state and elsewhere is that an indemnification agreement will not be construed to cover an indemnitee for his own negligent acts absent a specific and express statement in the agreement to that effect."
We pointed out in Spivey that an indemnity contract which agreed to indemnify a party against its own negligence is not against public policy, but that we would not so construe a contract unless it is apparent that such result was clearly intended.
In Bialas v. Portage County, 70 Wis.2d 910, 912, 236 N.W.2d 18 (1975), we said:
"Such agreements are liberally construed when they deal with the negligence of the indemnitor, but are strictly construed when the indemnitee seeks to be indemnified for his own negligence."
In Spivey, supra, we nevertheless pointed out that this rule of "strict construction ... cannot be used to defeat the clear intent of the parties." (79 Wis.2d p. 63, 255 N.W.2d 469) We said:
An indemnification contract must be strictly construed to determine whether it is indeed the intent of the parties that a negligent indemnitee be indemnified for its own negligent conduct. Once that determination is made, however, as Spivey points out, the remaining provisions of the contract are not subject to rules of strict construction. Instead, their meaning is to be determined on the basis of ordinary contract construction rules.
Even applying the rules of strict construction, it can hardly be argued that the intent of the parties to this agreement was not to indemnify McKee, although it, the indemnitee, was negligent. Initially, the contract provides that Ahern is liable for indemnification, although the damage or injury was partially the result of McKee's negligence. In addition to requiring indemnity where part of the negligence was McKee's, the agreement also imposes on Ahern the obligation to indemnify even where the injury is "caused solely by our (McKee's) active negligence" if Ahern could not prove that it was "diligently trying to minimize the possibility" of such damages and the consequences thereof.
To state the clear meaning of the latter clause of the contract somewhat differently no indemnity was to be owed in the event the injuries were caused solely by McKee's active negligence and Ahern tried to minimize the possibility of such injuries. In view of the express provisions of the indemnity agreement, it is unnecessary to give strict construction to the agreement to find that it was the clear purpose of the parties to indemnify McKee for its own negligence. It is apparent that this was precisely what the agreement required. Once that express intent has been determined, and a strict construction, if necessary, supports that clear intent, the remainder of the contract is not subject to the rule of strict construction.
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Umansky v. Abc Ins. Co.
...According to Fox this means that the employer may not delegate this duty to its employees. ¶ 30 Dykstra v. Arthur G. McKee & Co., 100 Wis.2d 120, 131, 301 N.W.2d 201 (1981), on which Fox relies, explained the principle that an employer's duty under the safe place statute is nondelegable. Th......
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