Greer v. City of Philadelphia

• Decision Date: 24 April 2002
• Citation: 795 A.2d 376,568 Pa. 244
• Parties: Jason W. GREER v. CITY OF PHILADELPHIA; Commonwealth of Pennsylvania, Department of Transportation; Fischbach & Moore, Inc. and T.H. Green Electric Company, Inc.; Custom Tower Structures, Inc. and Thomas Devlin Appeal of Custom Tower Structures, Inc.
• Court: Pennsylvania Supreme Court

795 A.2d 376

568 Pa. 244

Jason W. GREER v. CITY OF PHILADELPHIA; Commonwealth of Pennsylvania, Department of Transportation; Fischbach & Moore, Inc. and T.H. Green Electric Company, Inc.; Custom Tower Structures, Inc. and Thomas Devlin

Appeal of Custom Tower Structures, Inc.

Supreme Court of Pennsylvania.

Argued October 16, 2001.

Decided April 24, 2002.

Herman Bloom, Ellen Bloom Glass, Philadelphia, for appellant, Custom Tower Structures, Inc. Jay M. Levin, Gaele McLaughlin Barthold, Philadelphia, for appellee, Dept. of Transp.

Thomas A. Masterson, Norristown, for appellee, Jason Greer.

Robyn S. McGrath, Philadelphia, for appellee, Thomas Devlin.

John J. Hatzell, Philadelphia, for appellee, T.H. Green Elec. Co., Inc.

Before: FLAHERTY, C.J., ZAPPALA, CAPPY, CASTILLE, NIGRO, NEWMAN and SAYLOR, JJ.

OPINION

Justice NIGRO.

We granted the Petition for Allowance of Appeal of Custom Tower Structures ("CTS") to consider whether under the contract at issue in this case, the Commonwealth Court's decision allowing indemnification for damage caused by the indemnitees' own negligence violates the rule set forth in Ruzzi v. Butler Petroleum Co., 527 Pa. 1, 588 A.2d 1 (1991). For the reasons that follow, we reverse.

In 1993, the Pennsylvania Department of Transportation ("PennDOT") entered into a contract with J.H. Green Electric Company ("Green") to remove large overhead signs from Interstate 95 in Philadelphia. As part of the contract, Green assumed responsibility for traffic management. Green, in turn, entered into a subcontract with CTS to undertake some of the work ("CTS Contract"), and by the terms of that subcontract, CTS assumed responsibility for traffic management. The CTS Contract also contained an indemnity clause in which CTS agreed to indemnify and hold harmless PennDOT and Green:

from and against claims, damages, losses and expenses, including but not limited to attorney's fees, arising out of or resulting from the performance of the Subcontractor's Work under this Subcontract... but only to the extent caused in whole or in part by negligent acts or omissions of the Subcontractor, the Subcontractor's Sub Subcontractors, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder.

CTS Contract, at § 4.6.1, R.R. at 29A (emphasis added).

The sign removal caused periodic stoppage of traffic in all lanes on I 95. Jason Greer was sitting at such a stoppage on April 30, 1993, when Thomas Devlin rear-ended his stopped car at approximately 55 m.p.h. Greer suffered permanent injuries, including paraplegia. Greer brought a negligence action against the City of Philadelphia, PennDOT, Green, and Green's parent company, Fischbach & Moore. CTS and Devlin were joined as additional defendants. Greer settled his claim with Devlin prior to trial. The case proceeded to a jury trial against the remainder of the defendants in January 1998. Before the jury began deliberations, the trial court granted motions for non-suit filed by the City of Philadelphia and Fischbach & Moore. The jury returned a verdict in favor of Greer and against PennDOT, Green, and CTS in the amount of $2.5 million. The jury found Greer to be 12% comparatively negligent and PennDOT, Green, CTS, and Devlin each to be 22% negligent.¹ PennDOT and Green filed motions for judgment notwithstanding the verdict, alleging, inter alia, that they were entitled to indemnification by CTS under the terms of the CTS Contract. The trial court denied the motions, finding that CTS did not intend to assume liability for the negligence of PennDOT and Green, absent specific language in the subcontract to that effect. On appeal, the Commonwealth Court reversed the judgment of the trial court as to indemnification, stating:

Clearly, the language in the subcontract limits CTS' indemnification of PennDot and Green only to the extent of CTS' negligence, even if damages were caused in part by PennDot's and Green's negligence. In this case, that meant that PennDot and Green were completely indemnified because the subcontract and the jury's verdict allocating comparative negligence coincided to produce that result. Specifically, the jury awarded Greer $2.5 million. From that verdict, the trial court deducted Devlin's $100,000 settlement and $300,000 for Greer's 12% negligence, and found PennDot, Devlin, Green, and CTS each 22% negligent, thus making their share of the verdict $462,000 each ($2.5 million less than $400,000 x .22). As such, PennDot was liable for 22% of the verdict or $462,000, but because it was entitled to indemnification by CTS for 22% of the verdict, PennDot's liability was offset completely as was Green's for the same reason. As such, the trial court erred by failing to order CTS to indemnify PennDot and Green from damages.

Greer v. City of Philadelphia, Nos. 3047 and 3049 C.D.1998 and No. 378 C.D.1999, Memorandum Op. at 12-13 (Pa. Commw.Ct. April 5, 2000). The Commonwealth Court affirmed the trial court's decision in all other respects. Judge Smith dissented without opinion, and Judge McGinley dissented on the ground that the indemnification agreement was insufficient to entitle PennDOT and Green to indemnification under this Court's holding in Ruzzi v. Butler Petroleum Co., 527 Pa. 1, 588 A.2d 1 (1991). This Court granted allocatur, and we now reverse.

In Ruzzi, the owners of a gas station hired a contractor to, among other things, supply and install gasoline tanks at their station. In the parties' contract, the station owners agreed to indemnify the contractor "from any and all claims for loss, damage, injury or other casualty ... caused or occasioned by any ... explosion... occurring ... by reason of the ... installation and/or repair of" the tanks. 588 A.2d at 3. When one of the tanks to be installed arrived at the site with a hole, a resulting explosion injured a third party who had been hired by the contractor. The contractor was found to be 84% negligent and sought indemnity from the gas station owners pursuant to the contract. In spite of the broad language in the indemnity provision, this Court held that the agreement did not provide indemnity to the contractor for its own negligence, reaffirming the rule previously announced in Perry v. Payne, 217 Pa. 252, 66 A. 553 (1907), that "if parties intend to include within the scope of their indemnity agreement a provision that covers losses due to the indemnitee's own negligence, they must do so in clear and unequivocal language. No inference from words of general import can establish such indemnification." 588 A.2d at 4. As the Ruzzi court explained, assuming liability for the negligence of an indemnified party "is so hazardous, and the character of the indemnity so unusual and extraordinary, that there can be no presumption that the indemnitor intended to assume the responsibility unless the contract puts it beyond doubt by express stipulation." Id. (quoting Perry, 66 A. at 557). Moreover, as this Court noted in Perry, it would be "contrary to experience and against reason" for a contractor to agree to indemnify another for the other's negligence, when such indemnification would subject it to "uncertain and indefinite" liability. Perry, 66 A. at 555.

The instant case clearly implicates the Perry-Ruzzi rule, because it requires this Court to decide whether CTS is liable for the share of the damages which the jury attributed to the negligence of PennDOT and Green, in addition to the damages attributed to its own negligence. Under the Perry-Ruzzi rule, CTS is liable for the damages attributed to PennDOT's and Green's negligence only if the language of the CTS Contract clearly and unequivocally demonstrates that CTS intended to provide such indemnification.²

Here, as stated above, the CTS Contract provides indemnity from claims for damages "only to the extent caused in whole or in part by negligent acts or omissions of the Subcontractor, the Subcontractor's Sub Subcontractors, anyone directly or indirectly employed by them or anyone for whose acts they may be liable," and "regardless of whether or not such claim ... is caused in whole or in part by a party indemnified hereunder." Green argues that these provisions clearly and unequivocally provide it and PennDOT with complete indemnity for their own negligence, as long as CTS is also partially negligent. PennDOT, on the other hand, advocates the approach taken by the Commonwealth Court, contending that the provision unambiguously indemnifies it and Green for their own negligence only up to an amount equal to CTS's liability for its negligence.³

We reject both PennDOT's and Green's interpretations. Contrary to their assertions, the language of the indemnity provision in no way demonstrates an unambiguous intention by CTS to provide indemnification for the negligence of the indemnitees, as required by the Perry-Ruzzi rule. By agreeing to language stating that PennDOT and Green were indemnified for damages "only to the extent that" the damages were caused by the negligence of CTS and its sub-subcontractors, employees and anyone for whom it may be liable, the parties communicated their intent to limit any indemnification to that portion of damages attributed to the negligence of CTS and those under its supervision. The chosen language simply does not evince an intent to provide indemnification for damages due to the negligence of other unspecified parties, including an indemnitee. Moreover, we read the second part of the provision, which states that the indemnity clause will apply "regardless of whether or not such claim... is caused in whole or in part by a party indemnified hereunder," merely to clarify that any contributory negligence by PennDOT and Green will not bar their indemnification for damages due to CTS's negligence.

In coming to this conclusion, we have carefully considered the...