Estate of King v. Wagoner County

• Decision Date: 25 July 2006
• Docket Number: No. 100,814.,Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.,No. 101,114.,100,814.,101,114.
• Citation: 2006 OK CIV APP 118,146 P.3d 833
• Parties: The ESTATE OF Jonathon KING; Mark King, and Carol Stockham, individually and as survivors and next of kin to Jonathon King, deceased, Plaintiffs/Appellees, v. WAGONER COUNTY BOARD OF COUNTY COMMISSIONERS, Defendant/Appellant/Appellee, and KTUL, L.L.C., Defendant/Appellant/Appellee.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

146 P.3d 833

2006 OK CIV APP 118

The ESTATE OF Jonathon KING; Mark King, and Carol Stockham, individually and as survivors and next of kin to Jonathon King, deceased, Plaintiffs/Appellees, v. WAGONER COUNTY BOARD OF COUNTY COMMISSIONERS, Defendant/Appellant/Appellee, and KTUL, L.L.C., Defendant/Appellant/Appellee.

No. 100,814.

No. 101,114.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 2.

Court of Civil Appeals of Oklahoma, Division No. 2.

July 25, 2006.

Certiorari Denied October 16, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Appeal from the District Court of Wagoner County, Oklahoma; Honorable Bruce Sewell, Trial Judge.

AFFIRMED IN PART AND REVERSED IN PART.

Tim K. Baker, Kristi L. Hazen, Tim K. Baker and Associates, Tahlequah, OK, for Plaintiffs.

Barry K. Roberts, Norman, OK, Jerry S. Moore, Tahlequah, OK, for Defendant Wagoner County.

Eugene Robinson, The Robinson Law Firm, P.C., Tulsa, OK, for Defendant KTUL.

Opinion by JANE P. WISEMAN, Presiding Judge.

¶ 1 In this action for wrongful death resulting from a fall from a communications tower, Defendant Wagoner County Board of County Commissioners appeals a judgment of indemnity rendered against it and in favor of Defendant KTUL, L.L.C., and a partial summary adjudication determining it was acting as the agent of KTUL. KTUL likewise appeals the finding of an agency relationship, as well as admission of expert testimony, denial of its motion for a directed verdict, denial of its request to submit to the jury the issue of a third party's negligence, submission of punitive damages, and denial of indemnity for its own negligence and certain attorney fees. Having reviewed the record and applicable law, we affirm in part and reverse in part.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 KTUL leased a portion of its broadcast transmission tower to Wagoner County, whose sheriff's department placed on the tower a metal cabinet which holds radio communications equipment. On October 16, 2001, two deputy sheriffs climbed the tower to remove part of the equipment for repair. Because they did not have a key to access the locked cabinet, one of the deputies used a screwdriver to pry the door off the cabinet. When the deputies were finished, they replaced the door. The next day, S & K Structural Services was performing repair work on the tower for KTUL. Jonathon King (Decedent), an employee of S & K, was killed when the door came off the Wagoner County cabinet and knocked him from the tower.

¶ 3 Decedent's estate and his parents (Plaintiffs) filed a wrongful death suit against Wagoner County and KTUL. KTUL filed a crossclaim against Wagoner County seeking indemnity under a provision in the lease agreement.

¶ 4 The trial court granted summary judgment in favor of Wagoner County and against Plaintiffs on the ground that Wagoner County is exempt from liability under the Governmental Tort Claims Act.¹ The court also granted summary judgment to KTUL on its crossclaim for indemnity against Wagoner County. Based on the lease agreement between KTUL and Wagoner County, the court also determined as a matter of law that Wagoner County was acting as the agent of KTUL and, therefore, any negligence by Wagoner County would be imputed to KTUL.

¶ 5 In the first stage of the jury trial, the jury determined that Decedent was 10% contributorily negligent, KTUL was 10% negligent, and Wagoner County was 80% negligent. The jury fixed compensatory damages at $500,000. The trial court also submitted the issue of punitive damages to the jury, instructing the jury that it was to determine whether Wagoner County (not KTUL) acted with reckless disregard, and informing the jury that KTUL would be held liable for any punitive damages award because Wagoner County's actions were the responsibility of KTUL. The jury awarded $40,000 in punitive damages.

¶ 6 The trial court, pursuant to its summary judgment rulings and the jury's verdict, entered judgment in favor of Plaintiffs and against KTUL for $50,000 for its own negligence, $400,000 for Wagoner County's negligence, and $40,000 for punitive damages due to Wagoner County's actions, plus costs and interest. The court also entered judgment in favor of KTUL against Wagoner County for indemnity for damages related to Wagoner County's actions, ordering Wagoner County to indemnify KTUL in the amount of $487,845.26. The court denied KTUL's request for indemnification from Wagoner County for KTUL's own negligence.

¶ 7 The trial court also held that KTUL is entitled to indemnity for the attorney fees it had incurred before the summary judgment on its indemnification claim and before Wagoner County began providing a defense to KTUL. The court denied KTUL's request for fees it incurred for continued representation by its own counsel after Wagoner County began providing KTUL a defense, concluding that the continued representation "was at the expense of KTUL . . . and should not be assessed against Wagoner County pursuant to the terms of the indemnity provision."

¶ 8 Wagoner County appeals the trial court's findings that KTUL is entitled to indemnity under the lease agreement and that there was an agency relationship between Wagoner County and KTUL. KTUL also appeals the trial court's ruling on agency, as well as rulings regarding punitive damages, admission of expert testimony, negligence of Decedent's employer, indemnity for its own negligence and for a portion of its attorney fees, and denial of its motion for directed verdict.

WAGONER COUNTY'S APPEAL

A. Indemnity for Wagoner County's Negligence

¶ 9 To determine the issue of indemnity, it is necessary to analyze the lease agreement between KTUL and Wagoner County. Wagoner County leased from KTUL floor space in the transmitter building, tower space, and ground space for installation and use of Wagoner County's equipment.

¶ 10 Section 5 of the lease, entitled "Installation," states that "[d]uring installation and operation of its Equipment, [Wagoner County] shall not cause by its transmissions or its other activities on the Leased Property, interference of any kind whatsoever to the broadcasting activities or other communication facilities of [KTUL] or other lessees on the Tower." It requires Wagoner County to install the equipment "in a neat, workmanshiplike [sic] manner in accordance with standards of good engineering practice" and to keep the equipment "in a locked cabinet provided by [Wagoner County] so as to be rendered inaccessible to unauthorized persons."

¶ 11 In Section 13, entitled "Maintenance of Leased Property," Wagoner County is obligated to maintain its own property "in accordance with standards of good engineering practice to assure that at all times, [Wagoner County's] Equipment is in conformance with the requirements of the FCC and all other government bodies or agencies with jurisdiction over [Wagoner County]." And, in Section 14, "Alteration by Lessee," Wagoner County is allowed to perform changes or alterations to its equipment, as long as the changes conform to "standards of good engineering practice" and are "done in a neat, workmanshiplike manner."²

¶ 12 Section 11, entitled "Indemnification," provides as follows:

[Wagoner County] shall indemnify and defend [KTUL] against any claim for damages, liability, costs, or expenses, including attorney's fees, arising out of any breach by [Wagoner County] of its warranties, representations, or covenants under this Lease; provided, however, that [KTUL] shall provide [Wagoner County] with reasonably prompt written notice of any claim for which indemnification is sought and [Wagoner County] shall have the right and opportunity to undertake the legal defense of such claims. [KTUL] and its counsel may nevertheless participate in (but not control) such proceedings, negotiations or defense at its own expense.... (Emphasis added.)

¶ 13 Wagoner County argues that the lease's indemnity agreement does not encompass indemnity for tort liability, because the "warranties, representations, or covenants," as referred to in the indemnity clause, "are intended to protect the `main purpose' of the leased facility—the broadcast tower—which is the commercial broadcast of radio signals." The language of the lease, according to Wagoner County's argument, creates an agreement to indemnify against a "loss in conjunction with KTUL's broadcasting business," not an agreement to indemnify against tort liability.

¶ 14 As with other contracts, the cardinal rule in the interpretation of an indemnity contract is to "ascertain the intention of the parties and to give effect to that intention if it can be done consistently with legal principles." McAtee v. Wes-Lee Corp., 1977 OK 130, ¶ 6, 566 P.2d 442, 444 (quoting Clifford v. United States Fid. & Guar. Co., 1926 OK 564, ¶ 0, 119 Okla. 133, 249 P. 938, 938 (syllabus by the Court)). The intention of the parties should be derived from the whole contract, with particular clauses of a contract being subordinate to the general intent; and every part of a contract should be given effect, "each clause helping to interpret the others." 15 O.S.2001 §§ 157, 166; Wallace v. Sherwood Const. Co., 1994 OK CIV APP 82, 877 P.2d 632. Although the terms of a contract may be broad, "it extends only to those things concerning which it appears that the parties intended to contract." 15 O.S.2001 § 164. "A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates." 15 O.S.2001 § 163.

¶ 15 Viewing the lease agreement as a whole, we find that the agreement is not limited to indemnity for damages resulting from interference with the broadcasting tower, but it also includes indemnity against damages arising from tort. The indemnity clause provides that Wagoner County will indemnify and defend KTUL against claims for damages or liability "arising out of any breach by [Wagoner County] of its warranties, representations, or...