Goodyear Tire and Rubber Co. v. J.M. Tull Metals Co.

• Court: Supreme Court of Alabama
• Writing for the Court: HORNSBY; INGRAM
• Parties: The GOODYEAR TIRE AND RUBBER COMPANY v. J.M. TULL METALS COMPANY. 1920610.
• Decision Date: 17 September 1993

Page 633

629 So.2d 633 The GOODYEAR TIRE AND RUBBER COMPANY
v.
J.M. TULL METALS COMPANY. 1920610. Supreme Court of Alabama. Sept. 17, 1993.
Rehearing Denied Nov. 5, 1993.

Page 634

John D. Watson and Denise A. Dodson of Bradley, Arant, Rose & White, Birmingham, for appellant.

George M. Van Tassel, Jr. and Mac B. Greaves of Sadler, Sullivan, Herring & Sharp, P.C., Birmingham, for appellee.

HORNSBY, Chief Justice.

The Goodyear Tire and Rubber Company ("Goodyear") appeals from a dismissal of an action of indemnity; the trial court held the action was barred by the exclusive remedy provision of the Alabama Workers' Compensation Act, § 25-5-53, Ala.Code 1975, and dismissed it pursuant to Rule 12(b)(6), Ala.R.Civ.P.

In reviewing a Rule 12(b)(6) dismissal, this Court must examine the allegations in the pleadings and construe them so as to resolve all doubts concerning the sufficiency of the complaint in favor of the plaintiff, to determine whether the plaintiff can prove "any set of facts in support of his claim which would entitle him to relief." Jones v. Lee County Commission, 394 So.2d 928, 930 (Ala.1981). "[T]his Court does not consider whether the plaintiff will ultimately prevail, [but] only whether he has stated a claim under which he may possibly prevail." Fontenot v. Bramlett, 470 So.2d 669, 671 (Ala.1985) (emphasis original).

Goodyear sued Tull Metals ("Tull"), seeking indemnity for the amounts paid to David Cook, an employee of Tull, for injuries suffered during the course of his employment with Tull, due to the negligence of Goodyear; Goodyear also claimed that Tull had breached an agreement to procure public liability insurance naming Goodyear as an additional insured. ¹ Goodyear amended its complaint to add a claim that § 25-5-53, Ala.Code 1975, unconstitutionally impaired Goodyear's contract.

The complaint recites the following facts: For consideration, Tull agreed to deliver to Goodyear different types of metals to Goodyear's plant in Gadsden. On October 22, 1990, David Cook, an employee of Tull, was injured on the Gadsden premises while delivering materials pursuant to the agreement between Goodyear and Tull. Cook sued Goodyear, and Goodyear brought this action seeking a judgment declaring that Tull was required to indemnify Goodyear and seeking damages for breach of contract resulting from Tull's failure to provide public liability insurance.

The written purchase order contained the following provision requiring Tull ("Seller") to indemnify Goodyear ("Purchaser"):

"(13) To the extent that this Purchase Order calls for work to be performed upon property owned or controlled by Purchaser, it is agreed that:

"....

"(d) Seller will indemnify, save harmless and defend Purchaser from all liability for loss, damage or injury to person or property in any manner arising out of or incident to the performance of this Purchase Order.

"....

"(f) To the extent that this Purchase Order provides that Seller will indemnify, save harmless and defend Purchaser from liability, claims, demands or suits,

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it is the intention of Seller that such indemnity shall apply, to the extent permitted by law, whether or not the liability, claims, demands or suits arise out of the negligence of Purchaser...."

The purchase order also required Tull to provide public liability insurance to cover any indemnity obligation. The purchase order stated:

"Seller shall carry public liability insurance with limits that are at least the equivalent of a combined bodily injury and property damage single limit of $1,500,000 per occurrence, including contractual coverage with respect to the indemnity provisions of the terms and conditions of this Purchase Order, and shall have purchaser named as an additional insured thereon. Such insurance shall be deemed to be the primary liability coverage for all purposes hereof and Seller shall furnish Purchaser acceptable evidence of such insurance before commencing work hereunder."

I. The Contract to Indemnify

The first issue on appeal is whether § 25-5-53, the exclusive remedy provision of the Alabama Workers' Compensation Act, bars Goodyear's claim based upon the express indemnity agreement with Tull. The trial court, addressing this issue in its order granting Tull's motion to dismiss, stated:

"It is clear in Alabama that this provision [§ 25-5-53] not only bars suits by injured employees against their employers, but also bars suits by third parties seeking to enforce indemnity agreements that purport to insulate the third party from liability for the employee's injury. Paul Krebs & Associates v. Matthews & Fritts Construction Co., 356 So.2d 638 (Ala.1978); Union Camp Corp. v. McAbee Construction Co., 465 So.2d 390, 391 (Ala.1985)."

This Court, in Paul Krebs & Associates v. Matthews & Fritts Construction Co., 356 So.2d 638, 639 (Ala.1978), held:

"The [exclusive remedy provision, § 25-5-53, Ala.Code 1975,] says that no employer shall be held civilly liable for injuries to workmen injured in the course of [their] employment. To allow a third-party tort-feasor to recover over against an employer for injury to an employee would be to allow indirectly what is prohibited directly."

Also, this Court held that to allow a third party to bring an action seeking indemnity from an employer for damages paid to its employee would "write[ ] into the legislation an exception which is not there." Id. at 640. Since Krebs, this Court has consistently interpreted § 25-5-53 to prohibit any civil action against an employer arising out of an employee's on-the-job injury that is covered by the Workers' Compensation Act. See Redwing Carriers, Inc. v. Crown Central Petroleum Corp., 356 So.2d 1203, 1204 (Ala.1978); Hertz Equipment Rental Corp. v. Dravo Corp., 360 So.2d 325, 326 (Ala.1978); Stauffer Chemical Co. v. McIntyre Electric Service, Inc., 401 So.2d 745, 746 (Ala.1981); Union Camp Corp. v. McAbee Construction Co., 465 So.2d 390, 391-92 (Ala.1985); see also Aetna Casualty & Surety Co. v. Cooper Stevedoring Co., 504 So.2d 215, 217 n. 4 (Ala.1986), cert. denied, 483 U.S. 1022, 107 S.Ct. 3268, 97 L.Ed.2d 767 (1987).

Goodyear, asking this Court to overrule Krebs and to reverse that line of cases following Krebs, correctly notes that Alabama is the only state that has judicially interpreted its exclusive remedy provision to bar enforcement of express indemnity contracts against an employer. See 2B Arthur Larson, The Law of Workmen's Compensation § 76.43 (1989). Every other jurisdiction that has considered this issue has judicially interpreted its workers' compensation statute to permit enforcement of express indemnity contracts against employers by third parties. See Porello v. United States, 153 F.2d 605 (2d Cir.1946), aff'd in part and rev'd in part and remanded sub nom., American Stevedores, Inc. v. Porello, 330 U.S. 446, 67 S.Ct. 847, 91 L.Ed. 1011 (1947); Goodwin v. George Fischer Foundry Systems, Inc., 769 F.2d 708 (11th Cir.1985) (noting that Alabama is the only jurisdiction to hold that express indemnity agreements are unenforceable against an employer); Tran v. Manitowoc Eng'g Co., 767 F.2d 223 (5th Cir.1985); Lorenzen v. South Central Bell Telephone Co., 546 F.Supp. 694 (S.D.Miss.1982), aff'd, 701 F.2d 408 (5th Cir.1983); Troxler v. Owens-Illinois, Inc., 717 F.2d 530 (11th Cir.1983)

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(applying Georgia law); Burdue v. United States Steel Corp., 676 F.2d 1129 (6th Cir.1982); Dunlin v. Circle F Industries, Inc., 558 F.2d 456 (8th Cir.1977) (applying Arkansas law); Titan Steel Corp. v. Walton, 365 F.2d 542 (10th Cir.1966) (applying Utah law); Western Contracting Corp. v. Power Eng'r Co., 369 F.2d 933 (4th Cir.1966) (applying Virginia law); Halstead v. Norfolk & W. R.R., 236 F.Supp. 182 (S.D.W.Va.1964), aff'd, 350 F.2d 917 (4th Cir.1965) (applying West Virginia law); Northern Natural Gas Co. v. Roth Packing Co., 323 F.2d 922 (8th Cir.1963) (applying Nebraska law); Philadelphia Elec. Co. v. Nationwide Mut. Ins. Co., 721 F.Supp. 740 (E.D.Pa.1989); Keil v. United States, 705 F.Supp. 346 (E.D.Mich.1988); Bieger v. Consolidation Coal Co., 650 F.Supp. 1294 (W.D.Va.1987); Gatley v. United Parcel Service, Inc., 662 F.Supp. 200 (D.Me.1987); Casey v. United States, 635 F.Supp. 221 (D.Mass.1986); Borroel v. Lakeshore, Inc., 618 F.Supp. 354 (D.Colo.1985); Nieves v. Douglas Steamship, Ltd., 451 F.Supp. 407 (S.D.N.Y.1978); Crutchfield v. Atlas Offshore Boat Service, Inc., 403 F.Supp. 920 (E.D.La.1975); New England Telephone & Telegraph Co. v. Central Vermont Public Service Corp., 391 F.Supp. 420 (D.Vt.1975); Whitmarsh v. Durastone Co., 122 F.Supp. 806 (D.R.I.1954) (applying Rhode Island law); Manson-Osberg Co. v. State, 552 P.2d 654 (Alaska 1976); C & L Rural Elec. Co-op. Corp. v. Kincaid, 221 Ark. 450, 256 S.W.2d 337 (1953); City of Clearwater v. L.M. Duncan & Sons, 466 So.2d 1116 (Fla.Dist.Ct.App.), aff'd, 478 So.2d 816 (Fla.1985); General Tel. Co. of the Southeast v. Trimm, 252 Ga. 95, 311 S.E.2d 460 (1984); Kamali v. Hawaiian Elec. Co., 54 Haw. 153, 504 P.2d 861 (1972); Liberty Mutual Ins. Co. v. Adams, 91 Idaho 151, 417 P.2d 417 (1966); Bagwell v. Smith Louisiana Elev. Co-op. Ass'n, 228 So.2d 555 (La.App.1969); American Radiator & Standard Sanitary Corp. v. Mark Eng'g Co., 230 Md. 584, 187 A.2d 864 (1963); Liberty Mut. Ins. Co. v. Westerlind, 374 Mass. 524, 373 N.E.2d 957 (1978); Giguere v. Detroit Edison Co., 114 Mich.App. 452, 319 N.W.2d 334 (1982); Keefer v. Al Johnson Construction Co., 292 Minn. 91, 193 N.W.2d 305 (1971); Martin v. Fulton Iron Works Co., 640 S.W.2d 491 (Mo.App.1982); De Shaw v. Johnson, 155 Mont. 355, 472 P.2d 298 (1970); Union Pac. R.R. v. Kaiser Agricultural Chem. Co., 229 Neb. 160, 425 N.W.2d 872 (1988); American Fed. Savings Bank v. County of Washoe, 106 Nev. 869, 802 P.2d 1270 (1990); Ramos v. Browning Ferris Indus. of South Jersey, Inc., 103 N.J. 177, 510 A.2d 1152 (1986); City of Artesia v. Carter, 94 N.M. 311, 610 P.2d 198 (N.M.App.), cert. denied, 94 N.M. 628, ...