Fort Wayne Cablevision v. Indiana & Michigan Elec. Co.

• Decision Date: 06 January 1983
• Docket Number: No. 3-282A33,3-282A33
• Citation: 443 N.E.2d 863
• Court: Indiana Appellate Court
• Parties: FORT WAYNE CABLEVISION (formerly known as Citizens Cable of Fort Wayne, Inc.), Third Party Defendant and Third Party Plaintiff/Appellant v. INDIANA & MICHIGAN ELECTRIC CO., Defendant and Third Party Plaintiff/Appellee.

Page 863

443 N.E.2d 863

FORT WAYNE CABLEVISION (formerly known as Citizens Cable of

Fort Wayne, Inc.), Third Party Defendant and Third

Party Plaintiff/Appellant v. INDIANA & MICHIGAN ELECTRIC CO., Defendant and Third Party

Plaintiff/Appellee.

No. 3-282A33.

Court of Appeals of Indiana,

Third District.

Jan. 6, 1983.

Thomas L. Wooding, Hunt, Suedhoff, Borror & Eilbacher, Fort Wayne, for third party defendant and third party plaintiff/appellant.

Milford M. Miller, Jr., Richard P. Samek, Livingston, Dildine, Hayne & Yoder, Fort Wayne, for defendant and third party plaintiff/appellee.

GARRARD, Judge.

This appeal arises from the trial court's grant of summary judgment in favor of Indiana & Michigan Electric Co. (I & M).

The facts are not disputed. On October 1, 1978 Fort Wayne Cablevision (Cablevision) entered into a written contract with I & M which permitted Cablevision to attach its cable television equipment and lines to I & M's utility poles. The actual attachment of this cable equipment and lines was to be performed by a company known as Barnup & Sims Cable Communications, Inc. (Barnup). On September 26, 1979 Gary A. Montague, an employee of Barnup, was attaching Cablevision's lines to one of I & M's utility poles when the pole broke and he fell to the ground. As a result of his fall, Montague sustained personal injuries. The pole broke because the wood at ground level had rotted through. I & M does not dispute ownership of this pole or its rotted condition.

On May 14, 1980 Montague filed a complaint against I & M alleging that his injuries resulted from I & M's failure to inspect and maintain its utility pole and its failure to warn him of the pole's dangerous condition. I & M impleaded Cablevision as a third party defendant, seeking indemnification under paragraph 10 of its contract, and secured summary judgment to that effect.

On appeal Cablevision contends the summary judgment was improper (1) because as a matter of law the contract did not provide indemnification; (2) because there was a genuine issue of disputed fact concerning causation; and (3) because even if the contract provided for indemnification, it was void and unenforceable as against public policy.

Since the trial court granted I & M's motion for summary judgment on the basis of the indemnification clause in the October 1 contract, we commence by examining the language of the contract. It provides:

"10. Licensee agrees to obtain and maintain at all times during the joint use of poles hereunder comprehensive general liability policies of insurance as follows:

(a) Bodily injury liability insurance for itself in an amount not less than $500,000 for any one occurrence.

(b) Property damage liability insurance for itself in an amount not less than $100,000 for any one occurrence and, subject to the same limit for any one occurrence, in an aggregate amount not less than $250,000.

(c) Contractual liability insurance to cover the liability assumed by the Licensee under the agreement of indemnity herein below set forth.

Licensee hereby agrees to indemnify, hold harmless, and defend Owner from and against any and all actions or causes of action, claims, demands, liabilities, loss, damage or expense of whatsoever kind and nature, including attorneys' fees, which Owner may suffer or incur by reason of bodily injury, including death, to any person or persons, or by reason of damage to or destruction of any property, including the loss of use thereof, arising out of or in any manner connected with the facilities of Licensee to be installed hereunder, or which Owner may sustain or incur in connection with any litigation, investigation, or other expenditures incident thereto, including any suit instituted to enforce the obligation of this agreement of indemnity, whether or not due in whole or in part to any act, omission, or negligence of Owner, or any of its representatives or employees (except insofar as such indemnity arising out of such injury or damage caused by the sole negligence of Owner or such representatives or employees may be found to be contrary to law, in which case this agreement of indemnity shall in all other respects be and remain effective and binding). The amount of such indemnity shall be not less than $500,000 for bodily injury, including death, for any one occurrence, and not less than $100,000 for damage to or destruction of property, including the loss of use thereof, for any one occurrence and, subject to the same limit for any one occurrence, an aggregate amount not less than $250,000."

In Jones v. City of Logansport (1982), Ind.App., 436 N.E.2d 1138, 1143, this court restated the established policies regarding summary judgments:

"The purpose underlying the summary judgment procedure is to terminate those causes of action which have no factual dispute and which may be determined as a matter of law. This procedure is an aid in eliminating undue burdens upon litigants and exposing spurious causes. However, the summary judgment procedure must be applied with extreme caution so that a party's right to the fair determination of a genuine issue is not jeopardized; mere improbability of recovery by the plaintiff does not justify summary judgment for a defendant [citation omitted]."

Of the standard of review applicable to a grant of summary judgment, Jones said:

"In reviewing a grant of summary judgment, this Court uses the same standard applicable to the trial court. Richards v. Goerg Boat & Motors, Inc. (1979), Ind.App., 384 N.E.2d 1084, 1090 (trans. denied). We must reverse the grant of a summary judgment motion if the record discloses an unresolved issue of material fact or an incorrect application of the laws to those facts. Id."

436 N.E.2d at 1143.

Cablevision's first argument is that the trial court committed an error of law in granting I & M's motion for summary judgment because the indemnification clause of paragraph 10 does not cover Montague's injury. In short, Cablevision argues that the scope of paragraph 10 was not intended to include the risk of injury caused by I & M's rotted utility pole. Rather, Cablevision claims that its duty to indemnify I & M is limited to losses caused by "the facilities of licensee to be installed hereunder." To Cablevision, "facilities of licensee" does not include I & M's pole. ¹

I & M argues that paragraph 10 was intended to have a broad enough scope to include Montague's injury, and it points to two clauses in that paragraph to support its argument. First, I & M notes that according to the indemnification provision, Cablevision agreed to hold I & M harmless for all losses "arising out of or in any manner connected with the facilities of Licensee to be installed hereunder ...." Secondly, I & M notes that it is to be indemnified "whether or not due in whole or part to any act, omission, or negligence of Owner ...."

Two familiar rules of contract construction bear mention.

"It is everywhere agreed that words used in a contract are to be given their usual and common meaning unless, from the entire contract and the subject-matter thereof, it is clear that some other meaning was intended."

Haworth v. Hubbard (1942), 220 Ind. 611, 44 N.E.2d 967, 968.

Furthermore,

"It is well settled that words, phrases, sentences, paragraphs, and sections of a contract cannot be read alone. National Fire Proofing Co. v. Imperishable Silo Co., 1916, 63 Ind.App. 183, 112 N.E. 403; Straus v. Yeager, 1911, 48 Ind.App. 448, 93 N.E. 877. The entire contract must be read together and given meaning if possible. Equitable Surety Co. v. Taylor, 1919, 71 Ind.App. 382, 121 N.E. 283; Kann v. Brooks, 1913, 54 Ind.App. 625, 101 N.E. 513; 12 AM.JUR., Contracts, Sec. 241, p. 772."

Ahlborn v. City of Hammond (1953), 232 Ind. 12, 111 N.E.2d 70, 73.

Applying these rules to the instant facts we agree with the conclusion inherent in the trial court's grant of summary judgment that there is no ambiguity about the intended scope of paragraph 10. Reduced to a more concise form this paragraph provides that:

"Licensee hereby agrees to indemnify ... Owner from and against any and all actions of whatsoever kind and nature ... which Owner may suffer or incur ... arising out of or in any manner connected with the facilities of Licensee to be installed hereunder ... whether or not due in whole or in part to any act, omission, or negligence of Owner ...." (Emphasis added)

Giving the words "arising out of or in any manner connected with" their usual and common meaning we conclude that the indemnification provision applies to Montague's injury.

In deciding an appeal from the U.S. District Court for the Northern District of Indiana, the Seventh Circuit Court of Appeals in Indemnity Insurance Co. v. Koontz-Wagner Elec. Co. (1956), 233 F.2d 380, 382-83 rejected the indemnitor's argument that such phrases as "growing out of the performance of this order," "resulting from or arising in connection with," and "in any manner resulting from, or arising out of" performance of a contract should be given strict or narrow construction. Instead the court used such phrases as evidence that the parties intended the indemnity agreement to provide broad protection. We agree with that assessment.

In the present case, Cablevision's cable television attachments obviously could not function until attached to I & M's poles. The active nature of the process of attachment creates a risk of loss no less significant than that which exists once the attachment is completed. We believe that by the words "arising out of or in any manner connected with" the parties must have intended to cover both kinds of risks. Thus we conclude that Montague's injuries "arose out of" or were "connected with" the "facilities of Licensee to be installed."

The intended broad scope of this indemnity clause is further supported by other paragraphs in the contract. For example, the language of paragraph 11 indicates in two places that the risk of loss was to be...