East-Harding v. Horace A. Piazza & Assoc.

• Decision Date: 11 December 2002
• Docket Number: No. CA 01-1338.,CA 01-1338.
• Citation: 80 Ark. App. 143,91 S.W.3d 547
• Parties: EAST-HARDING, INC., and Robert East Company, Inc. v. HORACE A. PIAZZA & ASSOCIATES.
• Court: Arkansas Court of Appeals

91 S.W.3d 547

80 Ark. App. 143

EAST-HARDING, INC., and Robert East Company, Inc. v. HORACE A. PIAZZA & ASSOCIATES.

No. CA 01-1338.

Court of Appeals of Arkansas, Division III.

December 11, 2002.

Barber, McCaskill, Jones & Hale, P.A., by: G. Spence Fricke and Cynthia J. Worthing, for appellants.

David H. Williams, for appellee.

ANDREE LAYTON ROAF, Judge.

This appeal is from a trial court's ruling on cross-motions for summary judgment. The trial court granted summary judgment to appellee, Horace A. Piazza & Associates (Piazza), an architectural firm, requiring East-Harding, Inc. (East-Harding), a contractor, to indemnify Piazza for its attorney fees incurred in the settlement of an injured construction worker's suit against appellants, appellee, and another firm. We reverse and remand for further proceedings.

Timothy Gault (not a party) suffered serious injuries in a construction accident when he fell from a spiral staircase that had been purchased from Duvinage Corporation. At the time of his injury, Gault was employed as a construction worker by Little Rock Electrical Contractors, Inc. (not a party), a subcontractor of East-Harding.¹ East-Harding was the general contractor of the construction project at the Wildwood Park for the Performing Arts (Wildwood). Piazza was the project architect. Gault brought suit against East-Harding, Piazza, and Duvinage Corporation. The suit, alleging causes of action for product liability and negligence,² was settled without a finding of fault on the part of either East-Harding or Piazza.³ Piazza filed a cross-complaint against East-Harding for breach of the contract between East-Harding and Wildwood, which provided that East-Harding shall maintain insurance covering Piazza. Piazza amended the cross-complaint to seek indemnity under the contract. The indemnity provision at issue is part of American Institute of Architects (AIA) document A117, 1987 edition, and provides: 14.12 To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner, Architect, Architect's consultants, and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense if attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the work itself) including loss of use resulting therefrom, but only to the extent caused in whole or in part by negligent acts or omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss of expense is caused in part by a party indemnified hereunder. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity which would otherwise exist as to a party or person described in this Paragraph 14.12.

Paragraph 14.12.2 provides:

The obligations of the Contractor under this Paragraph 14.12 shall not extend to the liability of the Architect, the Architect's consultants, and agents and employees of any of them arising out of (1) the preparation or approval of maps, drawings, opinions, reports, surveys, Change Orders, Construction Change Directives, designs or specifications, or (2) the giving of or the failure to give directions or instructions by the Architect, the Architect's consultants, and agents and employees of any of them provided such giving or failure to give is the primary cause of the injury or damage.

Piazza filed a motion for summary judgment on its cross-complaint for indemnification. East-Harding then filed a cross-motion for summary judgment contending that the above indemnification provision does not apply because paragraph 14.12.2 provides that its duty of indemnification did extend to Gault's complaint that Piazza itself was negligent. At the hearing on the cross-motions for summary judgment, the parties stipulated that there had not been a finding of fault on the part of either East-Harding or Piazza. East-Harding also argued that the "but only to the extent caused" language in paragraph 14.12 limits the scope of its liability only to that portion of "claims, damages, losses and expenses" caused by the negligence of East-Harding or those under its supervision. East-Harding further argued that, even though Piazza did not design the stairs, because they were a prefabricated kit, Piazza was nevertheless precluded from seeking indemnity because Piazza prepared or approved the design and drawings which included the specifications of the stairs. The trial court found that the indemnification provision applied, even without a finding of fault on East-Harding's part. The trial court also found that there was no evidence that Piazza was at fault. This appeal followed.

East-Harding argues (1) that the indemnity agreement required a finding of fault on East-Harding's part before the indemnity provision would apply; (2) that the exclusion for Piazza's negligence would preclude application of the indemnity provision; and (3) that the order entered by the trial court did not accurately reflect the trial court's ruling on the cross-motions for summary judgment. Essentially, the first two points ask the same question, i.e., whether the trial court properly interpreted the indemnity provisions, and we will address it as one question. At oral argument, East-Harding abandoned the third point, and we need not address it.

Our court recently outlined the procedure regarding summary judgment in Regions Bank & Trust, N.A. v. Stone County Skilled Nursing Facility, Inc., 73 Ark. App. 17, 38 S.W.3d 916 (2001). There, we stated:

The purpose of a summary judgment hearing is not to try the issues, but rather to determine if there are any issues to try. The trial court must consider all proof in favor of the non-moving party. Once the moving party proves there are no genuine issues, the burden shifts to the non-moving party to set out specific facts that demonstrate there are genuine issues for trial. On summary judgment appeal, we limit our review to the pleadings, affidavits, and other supporting documents filed by the parties in support of their arguments. We review all evidence in the light most favorable to the non-moving party, and only reverse the trial court when we determine that a material question of fact remains. We need only decide if the grant of summary judgment was appropriate, considering whether the evidentiary items presented by the moving party in support of the motion left a material question of fact not answered.

Id. at 21-23, 38 S.W.3d at 919 (citations omitted).

Indemnity arises by virtue of a contract and holds one liable for the acts or omissions of another over whom he has no control. See Pickens-Bond Constr. Co. v. North Little Rock Elec. Co., 249 Ark 389, 459 S.W.2d 549 (1970). Contracts of indemnity are construed in accordance with our rules for the construction of contracts generally. Nabholz Constr. Corp. v. Graham, 319 Ark. 396, 892 S.W.2d 456 (1995). The first rule of interpretation is to give to the language employed by the parties the meaning they intended. Koppers Co. v. Missouri Pac. R.R. Co., 34 Ark.App. 273, 809 S.W.2d 830 (1991). Given the nature of indemnification, our courts have held that the language imposing indemnity must be clear, unequivocal, and certain. Nabholz, supra. For instance, in Arkansas Kraft Corp. v. Boyed Sanders Construction Co., 298 Ark. 36, 764 S.W.2d 452 (1989), our supreme court interpreted an indemnity contract. The court noted as follows:

[A] subcontractor's intention to obligate itself to indemnify a prime contractor for the prime contractor's own negligence must be expressed in clear and unequivocal terms and to the extent that no other meaning can be ascribed. While no particular words are required, the liability of an indemnitor for the negligence of an indemnitee is an extraordinary obligation to assume, and we will not impose it unless the purpose to do so is spelled out in unmistakable terms.

Id. at 39, 764 S.W.2d at 453.

The construction and legal effect of a written contract are to be determined by the court as a question of law, except where the meaning of the language depends on disputed extrinsic evidence. Arkansas Rock & Gravel Co. v. Chris-T-Emulsion Co., Inc., 259 Ark. 807, 536 S.W.2d 724 (1976). Indemnity agreements are construed strictly against the party seeking indemnification. See Potlatch Corp. v. Missouri Pac. R.R. Co., 321 Ark. 314, 902 S.W.2d 217 (1995).

We reverse the summary judgment because we believe that there are questions of fact that must be determined, that is, whether Gault's injuries were caused in whole or in part by the negligent acts or omissions of East-Harding or those for whose actions East-Harding may be responsible. It is this inquiry that determines whether East-Harding is obligated to indemnify Piazza. If the trial court determines that Gault's injuries are caused in whole or in part by East-Harding or those for whom it is responsible, a percentage of fault, if any, must be assigned to Gault, East-Harding, Piazza, and Duvinage, and East-Harding will be required to reimburse Piazza for East-Harding's percentage of the expenses and attorney fees.

In Pickens-Bond Construction Co. v. North Little Rock Electric Co., supra, the...