Giguere v. Detroit Edison Co., Docket No. 50521

Decision Date28 May 1982
Docket NumberDocket No. 50521
Citation319 N.W.2d 334,114 Mich.App. 452
PartiesGene Eric GIGUERE, Administrator of the Estate of Glen Allen Giguere, Deceased, Plaintiff, v. DETROIT EDISON COMPANY, Defendant, Third-Party Plaintiff-Appellee, v. HARLAN ELECTRIC COMPANY, Third-Party Defendant-Appellant. 114 Mich.App. 452, 319 N.W.2d 334
CourtCourt of Appeal of Michigan — District of US

[114 MICHAPP 454] Joselyn, Rowe, Jamieson, Grinnan, Callahan & Hayes, P. C., Detroit, for Detroit Edison Co.

Denenberg, Tuffley, Thorpe, Bocan & Patrick by John L. Hopkins, Jr., and Ilene Gordon, Southfield, and Dice, Sweeney, Sullivan & Feikens, P. C. by Ronald F. DeNardis, Detroit, for Harlan Elec. Co.

Before MAHER, P. J., and WALSH and RILEY, JJ.

PER CURIAM.

Third-party defendant, Harlan Electric Company (hereinafter Harlan), appeals from a judgment entered in favor of third-party plaintiff The Detroit Edison Company (hereinafter Edison), on the latter's claim for contractual and common-law indemnification.

The trial testimony established that Harlan contracted with Edison concerning the rewiring of certain utility poles. The agreement contained an indemnification provision. In May, 1976, plaintiff's decedent, an employee of Harlan, was killed in an accident while he and a co-worker were near the top of one of the 40-foot poles. A rope hanging from the utility pole was blown by the wind into an adjacent street and caught on the bumper of a passing automobile. The pressure exerted on the rope caused the pole to break and both workers fell to the pavement.

In May, 1976, plaintiff filed a suit against Edison and asserted several allegations of negligence. Edison denied any wrongdoing and, in September of 1977, filed a third-party action against Harlan seeking both contractual and common-law indemnity.

Less than one week before trial, which commenced on January 31, 1980, plaintiff and Edison [114 MICHAPP 455] entered into an agreement whereby plaintiff would drop several allegations of negligence contained in the complaint and proceed against Edison solely on the theory that the work involved was inherently dangerous. In return, Edison agreed to admit that the work was inherently dangerous and that decedent's death was the result of the inherently dangerous nature of the work.

Harlan then moved for both a continuance and a separate trial on Edison's indemnification claim. Harlan argued that it was surprised and prejudiced by the agreement between plaintiff and Edison. The trial court denied both motions. The court stated that plaintiff could change trial tactics at any time, that all issues could be resolved in one trial and that plaintiff's claim that the work was inherently dangerous was known to Harlan from the beginning of the proceedings.

After an 8-day trial, the jury rendered a verdict in favor of plaintiff. The jury determined that the activity was inherently dangerous and that Harlan was negligent. The jury also found that Edison was negligent, but that its negligence was not a proximate cause of the accident. Seven hundred and fifty thousand dollars in damages was awarded to plaintiff. Edison then moved for an entry of judgment on the third-party claim for indemnification. The trial court granted this motion and entered a judgment in favor of Edison on both contractual and common-law indemnity.

Harlan makes three arguments on appeal: (1) The trial court abused its discretion in denying its motions for a severance and a continuance; (2) Edison is not entitled to contractual indemnification; and (3) Edison is not entitled to common-law indemnification. We will first address Harlan's claim with respect to contractual indemnification [114 MICHAPP 456] since the resolution of this issue affects the disposition of the remaining two allegations of error.

In Peeples v. Detroit, 99 Mich.App. 285, 294-296, 297 N.W.2d 839 (1980), this Court stated the applicable law regarding contractual indemnity:

"Indemnity contracts, like other contracts, are to be enforced so as to effectuate the intentions of the parties. Gartside v. Young Men's Christian Ass'n, 87 Mich.App. 335, 339, 274 N.W.2d 58 (1978). In ascertaining the intentions of the parties, one must consider not only the language used in the contract, but also the situation of the parties and the circumstances surrounding the contract. Gartside, supra. Indemnity contracts are construed most strictly against the party who drafts them, and against the party who is the indemnitee. Gartside, supra, Fireman's Fund American Ins. Co. v. General Electric Co., 74 Mich.App. 318, 253 N.W.2d 748 (1977).

* * *

" * * * Freedom from fault is not required for a recovery on the basis of contractual indemnity. Nanasi v. General Motors Corp., 56 Mich.App. 652, 659, 224 N.W.2d 914 (1974).

* * *

"It is well-settled that a contract of indemnity will not be construed to indemnify the indemnitee against losses which are the result of his own negligence, unless such intention is expressed in clear and unequivocal terms. Fireman's Fund American Ins. Co., supra; Hubbert v. Acme Equipment Co., 55 Mich.App. 313, 315-316, 222 N.W.2d 224 (1974)." (Footnote omitted.)

In the instant case, the parties entered into a contract which contained the following provision:

"Contractor covenants and agrees that it shall indemnify and hold Edison, and all of its officers, agents and employes, harmless from any claim, loss, damage, cost, charge or expense, whether to any person or property or both, arising directly or indirectly out of Contractor's,[114 MICHAPP 457] or any of its Subcontractor's, performance of the Contract, to which Edison or any of its officers, agents or employes may be subject or put by reason of any act, action, neglect or omission on the part of Contractor, any of its Subcontractors or Edison, or any of their respective officers, agents and employes, except that neither Contractor nor any of its Subcontractors shall be liable under this section for damages arising out of injury or damage to persons or property directly caused by or resulting from the sole negligence of Edison, or any of its officers, agents or employes, as required by Michigan Act No. 165, P.A.1966, as amended. (Emphasis added.)

This contract explicitly provides that Harlan will indemnify Edison for injuries caused by Edison's own negligence and, on appeal, Harlan does not contend otherwise. See Hayes v. General Motors Corp., 106 Mich.App. 188, 308 N.W.2d 452 (1981) (indemnification provision with similar language construed to manifest an intent to indemnify the owner of the property for its own acts of negligence). Harlan does argue, however, that although the contract provides that it would indemnify Edison for Edison's negligence or Harlan's negligence, it does not cover a situation where both Harlan and Edison are negligent. We reject this construction of the contract.

In the last clause of the indemnification provision, the contract specifically provides that Harlan is not liable for any damages due to injuries arising from Edison's sole negligence. This clause was inserted in order to comply with M.C.L. Sec. 691.991; M.S.A. Sec. 26.1146(1). Therefore, the only possibility for indemnification against Edison's negligence lies where both parties are concurrently negligent. If the contract were construed otherwise, the indemnification provision would be both internally inconsistent and a violation of Michigan law. Therefore, [114 MICHAPP 458] we conclude that the trial court did not err in ruling that Edison was entitled to contractual indemnity.

Harlan also contends that Edison is precluded from asserting its contractual indemnity claim due to the exclusive remedy provision of the Worker's Disability Compensation Act, M.C.L. Sec. 418.131; M.S.A. Sec. 17.237(131). Harlan relies on Darin & Armstrong v. Ben Agree Co., 88 Mich.App. 128, 276 N.W.2d 869 (1979). However, Darin & Armstrong is distinguishable from the present case since the intent to indemnify is...

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