Grede Foundries, Inc. v. Price Erecting Co.

• Decision Date: 09 April 1968
• Citation: Grede Foundries, Inc. v. Price Erecting Co., 38 Wis.2d 502, 157 N.W.2d 559 (Wis. 1968)
• Parties: GREDE FOUNDRIES, INC., a Wis. corporation, Appellant, v. PRICE ERECTING CO., a Wis. corporation, Respondent.
• Court: Wisconsin Supreme Court

Page 559

157 N.W.2d 559

38 Wis.2d 502

GREDE FOUNDRIES, INC., a Wis. corporation, Appellant, v. PRICE ERECTING CO., a Wis. corporation, Respondent.

Supreme Court of Wisconsin.

April 9, 1968.

James R. Mattison, Becker, Kinnel, Doucette & Mattison, Milwaukee, for appellant.

Ames, Riordan, Crivello & Sullivan, Milwaukee, John H. Ames, Milwaukee, of counsel, for respondent.

CONNOR T. HANSEN, Justice.

The issue in this case is whether the legislative policy which limits an employer's liability to that provided under workmen's compensation, extends to actions for implied indemnification by third parties based on employer's breach of contract.

It is well established that the sole liability of an employer because of the injury of an employee in the course of his employment, either to the employee or to anyone else, is under Workmen's Compensation Law. Larsen v. J. I. Case Co. (1968), 37 Wis.2d 516, 155 N.W.2d 666; Algrem v. Nowlan (1967), 37 Wis.2d 70, 75, 154 N.W.2d 217; Engel v. Bindel (1965), 27 Wis.2d 456, 460, 134 N.W.2d 404; A. O. Smith Corp. v. Associated Sales & Bag Co. (1962), 16 Wis.2d 145, 149, 113 N.W.2d 562.

Such rule does not, however, apply to cases involving express agreements for indemnification. Engel v. Bindel, supra, at 460, 134 N.W.2d j04; Hintz v. Darling Freight Inc. (1962), 17 Wis.2d 376, 117 N.W.2d 271.

In the case at bar there is no express indemnification agreement. Appellant contends that its right to indemnification from Price Erecting Co. is predicated upon Price's breach of contract which caused Berger's injuries. Appellant admits that Price's sole liability, in tort, is governed by workmen's compensation; however, it is argued that this is not a tort action but rather one for breach of contract.

It is stipulated that Price would not allow its employees to work off ladders in direct violation of safety orders promulgated by the industrial commission. ¹

Failure to comply with a general safety order applying to places of employment promulgated by the industrial commission constitutes a violation of the safe-place statutes. Paluch v. Baldwin Plywood & Veneer Co. (1957), 1 Wis.2d 427, 434, 85 N.W.2d 373.

It is this violation which appellant contends breached the contract between Price and Grede. It is also this violation which appellant contends caused Berger's injuries since had ladders been used, Berger would not have walked along the monorail.

We consider the rule enunciated in Engel v. Bindel, supra, 27 Wis.2d 460, 134 N.W.2d 407, to be controlling in the case presently under consideration:

'We are urged to extend the common-law obligation to indemnify to implied contracts as well as express agreements upon the ground that no sound reason appears to distinguish them. After considering the arguments and authorities cited by the Antczaks, we are not persuaded to do so for the reason that we have concluded the legislature intended to limit the liability of the employer in exchange for his absolute liability under the Workmen's Compensation Act. If the liability of the employer is to be extended beyond the limits intended by the legislature it should not be by a legally implied agreement to indemnify.

'The rule as announced is not unduly harsh to the third party. He can, as a prerequisite, insist upon an express indemnity agreement or refrain from doing a prohibited act or an act which he knows or should know might subject him to liability.' (Emphasis added.)

The determination made in Engel, as above set forth, was recently confirmed in the case of Algrem v. Nowlan, supra, 37 Wis.2d p. 78, 154 N.W.2d p. 220:

'* * * If the owner incurs liability as a result of an accident caused by the negligence of the lessee, there is a common-law right to indemnification which would be applicable even in the absence of a written indemnity agreement. Hartford Accident & Indemnity Co. v. Worden-Allen Co., supra (238 Wis. 124, 297 N.W. 436); Zulkee v. Wing, supra (20 Wis. 408). See 50 Marquette L.Rev. 77, 80 (1966).

'It is only by this court's determination that the legislature intended to limit the employer's liability to that provided under the Workmen's Compensation Act that it, in Engel v. Bindel, supra, would not apply the common law and imply a contract of indemnity. Had it been clear in that case that the alleged indemnitor was solely at fault for the damages it would have been nore difficult to refuse to imply indemnification, although it would have still been required to do so. * * *' (Emphasis added.)

The appellant urges us to adopt the rationale of Ryan Stevedoring Co. v. PanAtlantic (1956), 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133. In Ryan, there was no express indemnity agreement and the case involved the interpretation of the Longshoremen's and Harbor Workers' Compensation Act (a federal act), which contained an exclusive remedy provision similar to that contained in sec. 102.03(2), Stats. ² The court, in...