General Acc. & Fire Assur. Corp. v. New Era Corp.

• Decision Date: 24 January 1966
• Docket Number: No. 20406,No. 2,20406,2
• Citation: 213 N.E.2d 329,138 Ind.App. 349
• Parties: GENERAL ACCIDENT AND FIRE ASSURANCE CORPORATION, Appellant, v. The NEW ERA CORPORATION, Appellee
• Court: Indiana Appellate Court

Page 329

213 N.E.2d 329

138 Ind.App. 349

GENERAL ACCIDENT AND FIRE ASSURANCE CORPORATION, Appellant, v. The NEW ERA CORPORATION, Appellee.

No. 20406.

Appellate Court of Indiana, Division No. 2.

Jan. 24, 1966.

Rehearing Denied Feb. 23, 1966.

[138 INDAPP 349]

G. Edward McHie, William J. Moran, Hammond, Peters, McHie, Enslen & Hand, Hammond, of counsel, for appellant.

Dale E. Custer, Stults, Custer & Kuzman, Gary, for appellee.

MOTE, Judge.

The case appealed herein was initiated by appellant, General Accident and Fire Assurance Corporation (hereinafter referred to as General Accident), as subrogee of The Austin Company, against appellee, New Era Corporation (hereinafter referred to as New Era), to recover an amount paid to Charles McBride, an employee of New Era, under the indemnity provisions of a contract between The Austin Company and New Era Corporation.

The Austin Company, as general contractor on a construction project at Inland Steel Company Plant at Indiana Harbor, Indiana, entered into a written contract with appellee, [138 INDAPP 350] New Era, as a subcontractor. The contract contained certain indemnity agreements whereby appellee agreed to indemnify Austin Company.

There are two indemnity provisions found in the contract, the first of which, appearing at page 3 of the said contract, in pertinent part reads as follows:

'Article XII INSURANCE

(a) * * * It (New Era) also agrees when required by law, to make payments to Subcontractors and employees or their dependents and to save Contractor harmless from all liability on account of such payments. * * *.'

The second provision, found under condition six of the contract and appearing on each page of the purchase order, reads as follows:

'INSURANCE--It is understood that Vendor (New Era) will carry Public Liability, Workmen's Compensation and Property Damage or other necessary insurance and agrees to protect and indemnify The Austin Company against all claims for damages, lawsuits, etc. which may arise in connection with the fulfillment of this Purchase Order. Any limitation of the liability or respondsibility of Vendor by provisions of Vendor's delivery tickets or other instruments, shall be entirely ineffective.'

The said employee of New Era sued The Austin Company for injuries received in the performance of said contract, and appellant, General Accident, was called upon and did defend The Austin Company in this matter. General Accident made demand upon New Era to assume the defense against the claim of said Charles McBride pursuant to the indemnity agreement, which demand was refused. Said claim was compromised and settled before trial or judgment and General Accident paid Charles McBride the sum of One Thousand, Four Hundred and Ninety-nine ($1,499.00) Dollars. Subsequent to the aforementioned settlement, appellant made demand on appellee for indemnification, which demand was [138 INDAPP 351] also refused. General Accident then instituted the suit herein to recover the amount paid to settle said claim, as well as attorney fees.

New Era's demurrer to General Accident's complaint was sustained and appellant moved for a change of venue from Lake County which was perfected to Porter Circuit Court. Again, New Era's demurrer was sustained; and, the appellant, having failed to plead over, judgments was rendered in favor of appellee.

The appellant assigns as error the following:

'1. The Court erred in sustaining appellee's Demurrer to appellant's Complaint.'

The appellant asserts that the court erred in two particulars:

First, the theory of the demurrer was that an indemnitee (The Austin Company) cannot recover for his own negligent acts unless the agreement so specifically provides, and the trial court went beyond the allegations contained in General Accident's complaint and assumed that General Accident admitted that its subrogor (The Austin Company) was negligent in the injury to New Era's employee. Since there is no allegation in the complaint that The Austin Company was negligent, and because a demurrer must take the complaint as presented and accept the allegations as correct and true for purposes of the pleading, under the theory of the demurrer herein, it should not have been sustained.

Secondly, even if this Court should not accept the above argument, the obvious intent of the parties to encompass all claims which might be brought against The Austin Company, including those arising from the negligence of The Austin Company, was stated positively, specifically and repeatedly and the trial court erred in interpreting the language of the indemnifying provisions of the contract.

In General Accident's first assertion of error it is, in effect, claiming that since the express word 'negligence' is [138 INDAPP 352] lacking in its complaint, the complaint is not subject to attack by demurrer.

The significant parts of appellant's complaint are as follow:

'2. That on the 26th day of April, 1960, and for some time prior thereto, there existed a policy of insurance issued by the plaintiff to the Austin Company, which insurance policy among other things, provided that the plaintiff would insure said Austin Company against losses sustained by virtue of litigation arising out of its normal business operations.

3. That on the 9th day of February, 1960, said Austin Company, and the defendant entered into a certain agreement, a copy of which is attached hereto, made a part hereof, and marked 'Exhibit A' by the terms of which the defendant in consideration of its employment as a subcontractor, agreed to perform certain tasks for the Austin Company in connection with said Austin Company's employment as a contractor for the Inland Steel Company, and further agreed to protect and indemnify said Austin Company against all claims for damages, lawsuits, etc., which might arise in connection with the fulfillment of said agreement by the defendant.

4. That on the 26th day of April, 1960, one Charles McBride, an employee of the defendant, while performing a task assigned to him by the defendant, was injured by a falling guard rail at the Inland Steel Company Plant at Indiana Harbor, Indiana.

5. That because of his injuries, said Charles McBride brought an action against the Austin Company in the United States District Court for the Northern District of Illinois.

* * *

* * * 7. That a settlement was reached in this matter whereby the plaintiff agreed and did pay to said Charles McBride the sum of One Thousand Four Hundred...