Economy Forms Corp. v. J.S. Constr.

• Decision Date: 28 November 2000
• Docket Number: ED77628
• Citation: 53 S.W.3d 552
• Parties: Economy Forms Corporation, Plaintiff/Respondent v. J.S. Alberici Construction, Defendant/Appellant. ED77628 Missouri Court of Appeals Eastern District
• Court: Missouri Court of Appeals

53 S.W.3d 552

ECONOMY FORMS CORPORATION, Plaintiff/Respondent

v J.S. ALBERICI CONSTRUCTION, CO., INC., Defendant/Appellant.

No. ED77628

COURT OF APPEALS OF MISSOURI, EASTERN DISTRICT, DIVISION TWO

November 28, 2000, Filed

Respondent’s Application for Transfer Sustained and Cause Ordered Transferred March 20, 2001.

Appeal from the Circuit Court of St. Louis County. Honorable Kenneth M. Romines.

REVERSED AND REMANDED.

CASE SUMMARY

David G. Millar, Greggory F. Hoffmann, St. Louis, MO, for appellant.

Gerald F. Hempstead, St. Louis, Missouri, for respondent.

William H. Crandall, Jr., Judge, Clifford H. Ahrens, P.J. and James R. Dowd, J., Concur.

William H. Crandall, Jr.

In this action involving interpretation of an indemnity clause in an agreement for the lease of concrete forms, defendant, J.S. Alberici Construction Co., Inc. (hereafter Alberici), appeals from the trial court’s grant of summary judgment for plaintiff, Economy Forms Corp. (hereafter EFCO). We reverse and remand.

Alberici is a construction company. EFCO manufactures and leases concrete forms used in construction. These forms can be shipped to a construction site and bolted together for use. After the concrete is poured, the forms can be disassembled and returned to EFCO. In 1989, a Vice President for Alberici, Joseph Krispin, placed an order with EFCO for forms to be used at a building renovation project in the City of St. Louis. Krispin signed a contract, provided by EFCO, titled “Economy Forms Corporation Lease Agreement “ (hereafter Lease Agreement) to lease concrete forms to be used for the renovation project. The contract is on a single sheet of paper with printing on both sides. On the back side of the Lease Agreement are twelve numbered paragraphs. One of these paragraphs is titled “LIABILITY,” (hereafter indemnity paragraph) that provides Alberici “shall indemnify, defend and save harmless” EFCO from certain claims. At the top of the Lease Agreement’s back side is a heading, “WARRANTY TERMS AND CONDITIONS.” According to Krispin, he understood from this heading that the Lease Agreement’s back side “had to do with product warranties offered by EFCO about the quality and condition of its concrete forms. I did not read the printed terms on the [back] side because I did not consider EFCO’s product warrranties to be very important to Alberici.” 1

In December 1989, Alberici’s employee, Christopher Stawizynski, fell and suffered injuries while disassembling EFCO’s forms at the renovation project. In addition to filing a workers’ compensation claim against Alberici, Stawizynski brought a negligence and product liability action against EFCO and five other defendants. EFCO then requested that Alberici defend and indemnify EFCO against Stawizynski’s action. Alberici’s insurance company denied the request stating that the Lease Agreement “makes no mention” that EFCO “was seeking” Alberici to indemnify and defend EFCO on claims of EFCO’s own fault or negligence. A trial was held on Stawizynski’s action and the jury returned a verdict for EFCO. Alberici’s insurance company denied EFCO’s renewed request that Alberici pay EFCO’s defense costs.

EFCO brought the present action against Alberici seeking the attorneys’ fees and expenses it incurred defending Stawizynski’s action. Both parties filed motions for summary judgment and agreed that there were no genuine issues of material fact. The trial court found that the parties were sophisticated commercial entities and the indemnity paragraph “clearly and unequivocally provided for Alberici to defend EFCO against any and all claims.” The court granted EFCO’s motion and awarded EFCO $ 412,198.88 in damages and interest. Alberici appeals from this judgment.

Summary judgment is proper to resolve claims regarding interpretation of a contractual indemnity provision. Chehval v. St. John’s Mercy Medical Center, 958 S.W.2d 36, 37 (Mo. App. E.D. 1997). Our review is essentially de novo and the key is the undisputed right to judgment as a matter of law. Id.

Alberici argues that the trial court erred in granting summary judgment because “under Missouri law even a broad indemnity agreement does not create a duty to indemnify against the indemnitee’s own fault or negligence unless the indemnity agreement states clearly and unequivocally that the indemnitee’s own fault or negligence is included.” Alberici contends that the indemnity provision does not clearly and unequivocally state that Alberici agreed to indemnify EFCO against EFCO’s own fault or negligence.

The indemnity paragraph provides as follows:

LIABILITY. Lessee shall be entirely responsible for and shall pay and exonerate Lessor from liability for damages arising from injury to any persons or property as the result of the use or possession of the Leased Equipment by Lessee, its agents, employees, sub-contractors or any others after its delivery by Lessor and until its return to Lessor’s possession. Lessee shall also indemnify, defend and save harmless the Lessor from any such claims, founded or unfounded and whether based upon alleged negligence or otherwise.

Where parties stand on substantially equal footing, one may legally agree to indemnify the other against the results of the indemnitee’s own negligence. Kansas City Power & Light Co. v. Federal Constr. Corp., 351 S.W.2d 741, 745 (Mo. 1961); see Parks v. Union Carbide Corp., 602 S.W.2d 188, 190 (Mo. banc 1980); Pilla v. Tom-Boy, Inc., 756 S.W.2d 638, 641 (Mo. App. 1988). But a contract of indemnity will not be construed to indemnify a party against loss or damage resulting from its own negligent acts unless such intention is expressed in clear and unequivocal terms. Id; see also Missouri District Telegraph Co. v. Southwestern Bell Telephone Co., 338 Mo. 692, 93 S.W.2d 19, 28 (Mo. banc 1935); Mathis v. Jones Store Co., 952 S.W.2d 360, 367 (Mo. App. W.D. 1997). Furthermore, “mere general, broad, and seemingly all-inclusive language in the indemnifying agreement is not sufficient to impose liability for the indemnitee’s own negligence.” Kansas City Power & Light Co., 351 S.W.2d at 745. In the absence of a clear expression or where any doubt exists as to the parties’ intentions, Missouri courts will not construe an indemnity contract to indemnify against the indemnitee’s own negligence. Parks, 602 S.W.2d at 190.

The indemnification paragraph fails to expressly provide that the lessee shall indemnify the lessor from the lessor’s own negligence. 2 In addition, the language is general and broad. Missouri courts have found indemnity language with similar characteristics as found here, insufficient where an indemnitee’s own negligence is at issue. 3 We find that the language of the indemnification paragraph fails to clearly and unequivocally require Alberici to indemnify EFCO from its own negligent acts, and therefore the trial court erred in granting summary judgment for EFCO.

EFCO relies on this court’s decision in Monsanto Co. v. Gould Electronics, Inc., 965 S.W.2d 314 (Mo. App. E.D. 1998)(relying in part on Alack, 923 S.W.2d at 338 n.4). In that case, Monsanto and Gould Electronics’ predecessor “signed the Undertaking, an indemnity agreement in regard to polychlorinated biphenyls (PCBs).” Monsanto Co., 965 S.W.2d at 316. The indemnity agreement provided as follows:

Buyer hereby covenants and agrees that, with respect to any and all PCB[]s sold or delivered by or after the date hereof and in consideration of any such sale or delivery, buyer shall defend, indemnify and hold harmless Monsanto, its present, past and future directors, officers, employees and agents, from and against any such sale or delivery. Buyer shall defend, indemnify and hold harmless Monsanto, its present, past and future directors, officers, employees and agents from and against any and all liabilities, claims, damages, penalties, actions, suits, losses, costs and expenses arising out of or in connection with the receipt, purchase, possession, handling, use, sale or disposition of such PCB’s by, through or under Buyer, whether alone or in combination with other substances, including, without implied limitation, any contamination of or adverse effect on humans, marine and wildlife, food animal feed or the environment by reason of such PCB[]s.

Id. In 1971 and 1972, Gould Electronics manufactured and delivered transformers, using PCBs. Id. Approximately fifteen years later, an incident occurred at a medical center involving PCBs produced by Monsanto and sold to Gould Electronics for use in a transformer. Id. Monsanto and Gould Electronics were sued for negligence. Id. Gould Electronics refused to indemnify Monsanto. Id. Monsanto brought an action against Gould Electronics, and the trial court found Gould Electronics was required to...