Hartford Fire Ins. v. Pettinaro Const. Co.

• Court: U.S. District Court — District of Delaware
• Citation: Hartford Fire Ins. v. Pettinaro Const. Co., 820 F.Supp. 154 (D. Del. 1993)
• Decision Date: 30 March 1993
• Docket Number: Civ. A. No. 91-702 SLR.
• Parties: HARTFORD FIRE INSURANCE COMPANY, as Subrogee of Middletown Concrete Products, Inc., and BTO, Limited Partnership, Plaintiffs, v. PETTINARO CONSTRUCTION COMPANY, INC., Pettinaro Brothers, Inc., Active Crane Rentals, Inc., Bruce Industrial Company, Inc., Rekers GMBH, Hydrotile Machinery Co., d/b/a B.C. Manufacturing Co., Donald Karr, Jr. and Michael Dooling, Defendants.

820 F. Supp. 154

HARTFORD FIRE INSURANCE COMPANY, as Subrogee of Middletown Concrete Products, Inc., and BTO, Limited Partnership, Plaintiffs, v. PETTINARO CONSTRUCTION COMPANY, INC., Pettinaro Brothers, Inc., Active Crane Rentals, Inc., Bruce Industrial Company, Inc., Rekers GMBH, Hydrotile Machinery Co., d/b/a B.C. Manufacturing Co., Donald Karr, Jr. and Michael Dooling, Defendants.

Civ. A. No. 91-702 SLR.

United States District Court, D. Delaware.

March 30, 1993.

Michael F. Bonkowski, Semmes, Bowen and Semmes, Wilmington, DE (Douglas B. Fox, Cozen and O'Connor, Philadelphia, PA, of counsel), for plaintiffs.

John D. Balaguer, White and Williams, Wilmington, DE (William J. Schmidt, Philadelphia, PA, of counsel), for defendant Pettinaro Const. Co., Inc.

Michael K. Tighe, and James S. Yoder, Berg, Tighe & Cottrell, Wilmington, DE, for defendants Active Crane Rentals, Inc., Donald Karr and Michael Dooling.

James F. Bailey, and Brian Thomas McNelis, Bailey & Wetzel, Wilmington, DE, for defendant Bruce Indus. Co., Inc.

Daniel L. McKenty, Swartz, Campbell & Detweiler, Wilmington, DE, for defendant Hydrotile Mach. Co.

Daniel F. Wolcott, Jr., Potter Anderson & Corroon, Wilmington, DE, for Rekers GmbH.

MEMORANDUM ORDER

SUE L. ROBINSON, District Judge.

This is a diversity action brought by Hartford Fire Insurance Company ("Hartford") as subrogee to the rights of its insureds, Middletown Concrete Products, Inc. and BTO Limited Partnership (collectively referred to herein as "Middletown"), in connection with a crane accident which occurred on January 16, 1990, at Middletown's newly-constructed manufacturing facility in Middletown, Delaware (the "Middletown Facility"). Hartford commenced this action after allegedly making payments to Middletown in the approximate amount of $460,000 for property and interruption of business damages arising from this accident.

Before the Court are various motions for summary judgment.

Factual Background

Middletown contracted with defendant Hydrotile Machinery Co. ("Hydrotile") for the purchase of a hoist system to be installed at the Middletown Facility.¹ Defendant Rekers GMBH ("Rekers") subcontracted with Hydrotile "for the purchase, erection and supervision of installation of the equipment." (D.I. 182, Exhibit A at ¶ 10). Middletown contracted with Pettinaro Construction Company ("Pettinaro") to act as its construction manager in connection with the Middletown construction project. As part of its duties as construction manager, Pettinaro undertook certain responsibilities regarding the installation of the hoist system. Pettinaro in turn contracted with Active Crane Rentals, Inc. ("Active") to provide two cranes and two operators to assist in performing the installation procedure. (D.I. 2 at ¶ 13). Active supplied said cranes and "contracted with and/or otherwise engaged defendants" Michael Dooling ("Dooling") and Donald Karr ("Karr") to operate the cranes. (D.I. 2 at ¶ 14).

As to defendants' negligence and liability for the damages arising from the crane accident at issue in this case, Hartford simply alleges in its bare bones pleading that "during the performance of the hoist system installation procedure, one of the aforesaid cranes tipped over on its side, as a result of the joint and/or several negligence of the defendants, proximately causing" Middletown's damages. (D.I. 2 at ¶ 17). It appears from the record that the crane accident occurred because the cranes selected were of an insufficient size to lift the hoist system for installation. It further appears that there was substantial confusion among the parties involved as to the weight of the hoist system² and that said confusion, coupled with the failure of any of the parties to ascertain the precise weight of the system or to ensure that the cranes selected for the task were sufficient, resulted in this dangerous mishap.

Defendant Active moves for summary judgment as to the claim of plaintiff against it and as to its cross-claim against defendant Pettinaro. Defendant Karr moves for summary judgment as to plaintiff's negligence claim against him. Hydrotile also moves for summary judgment with respect to plaintiff's claim against it. Likewise, Rekers moves for summary judgment as to plaintiff's negligence claim against it. For the following reasons, the Court concludes that the existence of genuine issues of material fact preclude summary disposition of these negligence claims and that the motions accordingly must be denied.

Discussion

The Court will consider each of the pending summary judgment motions seriatim.

Active's Motions for Summary Judgment

As related above, Pettinaro, while acting as Middletown's representative and project manager, contracted with Active Crane for supply of two cranes and two crane operators in order to facilitate lift of the hoist system. The record indicates that Mr. David McCormick ("McCormick") of Pettinaro telephoned Active Crane on the afternoon of January 15, 1990 to discuss rental of two manned cranes for the following day. McCormick had a telephone conversation with Active employee Steve Lloyd Schmeusser ("Schmeusser") regarding lease of the cranes. The record indicates that McCormick and Schmeusser discussed various matters relating to lease of the cranes, including price of the manned cranes, size of the cranes needed, as well as where and when the cranes were to be delivered. It is undisputed that McCormick and Schmeusser did not discuss matters of which party, Active or Pettinaro, would be liable in the event of an accident involving the leased cranes.

On the following day, January 16, 1900, the day of the crane accident, the cranes and their operators arrived at the Middletown Facility. At that time, one of the crane operators presented Mr. Thomas Durnan of Pettinaro with "RENTAL AGREEMENT" documents. Each of these documents contained certain information relating to the crane rental agreement between Active and Pettinaro, including the size of the crane, the date of rental and the place of delivery.³ The "RENTAL AGREEMENT" documents also included a "RELEASE" provision which provides as follows:

Lessor agrees to supply the above equipment and necessary personnel to operate same under direct and sole supervision of the Lessee for an eight (8) hour minimum day (8:00-4:30). Lessee agrees to hold lessor harmless for loss, damage and expense resulting from the operation of the above mentioned equipment either bodily injury or property damage including damage or loss to the equipment leased hereby, and agrees to defend lessor from all suits resulting from above operation. The lessee further agrees to maintain Public Liability insurance in the amount of $500,000 for bodily injuries and $250,000 for property damage in favor of Active Crane Rentals, Inc., covering the operation of the above equipment.

(D.I. 90, Exhibit A).

Active's cross-claim against Pettinaro is grounded on this "RELEASE" provision contained in the "RENTAL AGREEMENT" documents allegedly signed by Pettinaro employee Durnan at the time that Active delivered the two leased cranes to the Middletown Facility. Active claims that said release provision requires Pettinaro to indemnify, provide liability insurance and defend Active "for loss, damage and expense resulting from the operation of the leased equipment," as well as to pay "all litigation expenses of Active ... including attorneys' fees for defending the instant action." (D.I. 90 at ¶¶ 7, 9, 11).

Pettinaro initially responds to Active's contractual indemnity claim by conceding that under the terms of the contract "the lessee here Pettinaro agrees to hold the lessor here Active harmless for loss, damage and expense from property damage resulting from the operation of the cranes" and "further agrees to defend the lessor from all suits resulting from the operation of the cranes." (D.I. 110 at ¶ 10 (emphasis removed)). Likewise, Pettinaro agrees that the indemnity clause requires the lessee "to maintain public liability insurance in favor of the lessor in the amount of $250,000 for property damage covering the operation of the cranes." (D.I. 110 at ¶ 10 (emphasis removed)). Moreover, Pettinaro concedes that one of its employees signed the subject lease agreements containing the indemnity clause at issue. (D.I. 100 at ¶ 8; D.I. 109 at ¶ 3).

Pettinaro nonetheless seeks to avoid potential liability under the indemnity provision by contending that "Pettinaro agreed to lease the two cranes and operators from Active for a stated price; however, Pettinaro never agreed to be bound under the express terms of the release." (D.I. 100 at ¶ 11). Pettinaro further asserts that "there is no record evidence whatsoever that the terms and conditions of the release were in any way discussed, negotiated or agreed to by Pettinaro and Active; and thus, it is a question of fact for the jury whether the parties intended that Pettinaro would be bound by the release when Mr. Thomas Durnan signed the rental agreements." (D.I. 168 at 7 (citing, inter alia, Leeds v. First Allied Connecticut Corp., 521 A.2d 1095 (Del.Ch.1986)).

The Court disagrees. Pettinaro essentially argues that it should not be bound by the terms of the release provision because (1) it did not intend to be so bound and (2) Durnan, its employee, did not read the "RENTAL AGREEMENT" documents containing the release term at the time he signed those papers.

The Court rejects the first argument because the issue here is not whether Pettinaro subjectively intended to be bound by the release provision. Rather, the question is whether Pettinaro manifested an intention to be bound by the release term through its overt acts and statements, i.e., whether there was an "objective manifestation of assent" on the part of Pettinaro. See Leeds, 521 A.2d at 1101. Pettinaro's argument apparently is that there was not an "objective manifestation of assent" to the release provision because the parties did not discuss this...