Glaspell v. Ohio Edison Co.

• Decision Date: 25 March 1987
• Docket Number: No. 86-567,86-567
• Parties: , 29 O.B.R. 393 GLASPELL et al. v. OHIO EDISON COMPANY et al., Appellants; Mahoning Valley Cablevision, Inc., Appellee.
• Court: Ohio Supreme Court

Page 44

29 Ohio St.3d 44

505 N.E.2d 264, 29 O.B.R. 393

GLASPELL et al. v. OHIO EDISON COMPANY et al., Appellants; Mahoning Valley Cablevision, Inc., Appellee.

No. 86-567.

Supreme Court of Ohio.

March 25, 1987.

Syllabus by the Court

1. While clauses limiting the liability of the drafter are ordinarily to be strictly construed, such strict construction need not be applied in the interpretation of an indemnification agreement entered into between business entities in a context of free and understanding negotiation.

2. When the subject of liability is anticipated in an enforceable indemnity agreement, such indemnification must be provided.

Thomas E. Glaspell was injured while employed by Mahoning Valley Cablevision, Inc. ("Cablevision"), appellee herein. At the time of injury, Glaspell was assigned the task of transferring Cablevision's equipment from the top of an older utility pole onto the top of a new, taller pole. This function he accomplished by means of metal gaffs which, when attached to his boots, allowed him to ascend or descend the pole.

On the date of the events at issue, Glaspell had climbed the older pole, dismantled the equipment and reinstalled it on the new pole located next to the older one. On his way down, he caught the gaff attached to his right boot in a metal clamp designed to hold a ground rod in place. In attempting to extricate the gaff from the clamp, he set the gaff on his left boot into the pole and then placed his weight upon it. The left gaff failed to hold Glaspell's weight and he fell approximately ten to fifteen feet, thereby sustaining injuries.

Glaspell and his wife filed a personal injury and loss of consortium action against United Telephone Company ("United Telephone") and Ohio Edison Company ("Ohio Edison"). It was alleged that these defendants, appellants herein, had owned and erected the utility poles and that Glaspell's fall was caused by, among other alleged causes, either negligent maintenance or the "willful, careless and wanton conduct * * * " of appellants.

Prior to trial, United Telephone filed a third-party complaint, pursuant to Civ.R. 14, against Cablevision. Ohio Edison then cross-claimed against Cablevision. Both claims against Cablevision are predicated upon an agreement entitled "Joint Use Agreement" which was signed between United Telephone and Cablevision. This agreement purported to require Cablevision to indemnify both United Telephone and Ohio Edison.

Ultimately the trial court was presented with the issue of whether the indemnification clause in the Joint Use Agreement was applicable to the circumstances of this case. Strictly construing the agreement against the allegedly negligent parties, the trial court found that the agreement failed to express in clear and unequivocal terms that Cablevision was required to indemnify appellants for their own alleged negligence. The court of appeals affirmed, finding the contract provisions to be unclear and equivocal.

This cause is now before the court pursuant to the allowance of a motion to certify the record.

Harrington, Huxley & Smith and John C. Litty, Jr., Youngstown, for appellant Ohio Edison Co Haynes & Sontich and Joseph P. Sontich, Youngstown, for appellant United Telephone Co.

Pfau, Pfau & Pfau and William E. Pfau, Jr., Youngstown, for appellee.

HOLMES, Justice.

The precise issues for determination are whether the indemnity agreement before the court is violative of public policy and, if not, whether its terms encompass the injury complained of. For the reasons expressed within, we find that the agreement is enforceable among the parties.

United Telephone granted Cablevision a license which, among other acts, permitted appellee to install equipment upon and make use of appellants' utility poles for the purpose of transmitting cable television signals to Cablevision's subscribers. The agreement also provided, in pertinent part:

"8. Indemnity to the Licensor

"(a) The Licensee [Cablevision] covenants and agrees to indemnify and save harmless the Licensor, its agents, officials, servants or workmen, and the Ohio Edison Company, its agents, officials, servants or workmen from and against any loss, cost, charges, damages and expenses which the Licensor or Ohio Edison Company may at any time or times hereafter bear, sustain, suffer, be at or be put unto for, or by reason of, or on account of (i) the installation, maintenance or use of the said equipment on or in the Licensor's or Ohio Edison Company's facilities, * * *; and the Licensee shall, upon demand and at its own sole risk and expense, defend any and all suits, actions or other legal proceedings which may be brought or instituted by third persons against the Licensor or Ohio Edison Company or their successors or assigns, on any such claim, demand or cause of action; and will pay and satisfy any judgment or decree which may be rendered against the Licensor or Ohio Edison Company, their respective successors or assigns, in any such suit, action or other legal proceedings; and will reimburse the Licensor or Ohio Edison for any and all legal expense, including court costs, incurred in connection therewith."

Agreements purporting to indemnify have received varied treatment by the law. Earlier common law disfavored the shifting of liability among potentially negligent parties. See, e.g., Merryweather v. Nixan (K.B. 1799), 8 T.R. 186, 101 Eng.Rep. 1337. In particular kinds of circumstances, Ohio has forbidden enforcement of indemnity agreements. See, e.g., R.C. 2305.31 and Kendall v. U.S. Dismantling Co. (1985), 20 Ohio St.3d 61, 20 OBR 360, 485 N.E.2d 1047 (construction contracts); R.C. 4123.82 and Ledex, Inc. v. Heatbath Corp. (1984), 10 Ohio St.3d 126, 10 OBR 449, 461 N.E.2d 1299 (employment contracts). However, absent specified public policy exceptions, the law of Ohio generally allows enforcement of indemnity agreements. See, e.g., Allen v. Standard Oil Co. (1982), 2 Ohio St.3d 122, 2 OBR 671, 443 N.E.2d 497; 18 Ohio Jurisprudence 3d (1980) 389, Section 38.

Where it is alleged that the agreement protects an indemnitee from the financial consequences of his own negligence, the greater weight of authority, particularly in Ohio, would construe the words of such an agreement most narrowly. George H. Dingledy Lumber Co. v. Erie RR. Co. (1921), 102 Ohio St. 236, 131 N.E. 723; Kay v. Pennsylvania RR. Co. (1952), 156 Ohio St. 503, 46 O.O. 417, 103 N.E.2d 751; Ohio Jurisprudence 3d, supra, at 393, Section 41; 15 Williston on Contracts (1972) 141, Section 1750; 6A Corbin on Contracts (1950) 602, Section 1472; see 2 Restatement of the Law, Contracts (1932) 1079-1081, Sections 574 and 575.

The requirement that this court strictly construe this particular category of indemnity agreement would be unreasonable, in that the rule was developed to guard against a specific practice. Often one party to a contract, being in a position to impose terms upon the other with no realistic opportunity to bargain afforded, would include those standardized clauses in the contract as would unreasonably impose upon the nonbargaining party burdens which were wholly inequitable. With such contracts of adhesion in hand, the drafting party invariably asserted, "the indemnity or the exculpation, so that the policies supporting the rule of 'contra proferentem' [against the proffering party], * * * caused the courts to apply the rule." Corbin on Contracts (1984 Supp., Part 2) 624, Section 1472(E). Thus, while clauses limiting the liability of the drafter are ordinarily to be strictly construed, we need not do so when such burden of indemnification was assented to in a context of free and understanding negotiation. See, e.g., Williston on Contracts, supra, at 141, Section 1750.

The parties in the case before us are commercial enterprises of sufficient size and quality as to presumably possess a high degree of sophistication in matters of contract. They all provide services to the general public as their means of producing income and customarily rely on contracts. Each has the financial power to provide against loss by insurance or other means.

Appellants' possession of property for which appellee sought rights of access and use merely describes the ordinary...