Healey v. J.B. Sheet Metal, Inc.
| Decision Date | 22 March 1995 |
| Docket Number | No. 940039-CA,940039-CA |
| Citation | 892 P.2d 1047 |
| Parties | Richard HEALEY, Plaintiff, v. J.B. SHEET METAL, INC., a Utah corporation, Defendant, Appellee, and Cross-Appellee, and Clark Mechanical Contractors, Inc., Defendant, Appellee, and Cross-Appellant. A.B.P. ENTERPRISES, INC., a Utah corporation, dba ABP Development Company, Third-Party Plaintiff, Appellant, and Cross-Appellee, v. Gene PETERSON, dba Gene Peterson Concrete, Third-Party Defendant. |
| Court | Utah Court of Appeals |
Paul S. Felt, Mark M. Bettilyon and George S. Adondakis, Salt Lake City, for appellant.
Glenn C. Hanni and H. Burt Ringwood, Salt Lake City, for cross-appellant.
Robert R. Wallace and John N. Braithwaite, Salt Lake City, for appellee.
Before BENCH, BILLINGS and WILKINS, JJ.
Appellant A.B.P. Enterprises, Inc. (ABP) seeks review of the district court's summary judgment in favor of appellees Clark Mechanical Contractors, Inc. (Clark) and J.B. Sheet Metal, Inc. (JB) on ABP's claim for indemnity against Clark and JB. In addition, cross-appellant Clark seeks review of the district court's summary judgment in favor of cross-appellee JB. We affirm.
Richard Healey and a coworker were preparing to pour concrete on the second level of a building. When they attempted to move a large section of heating duct that was covering an opening in the floor, Healey fell through the opening and was seriously injured.
Healey brought suit against the general contractor, ABP, the mechanical subcontractor, Clark, and the sheet metal sub-subcontractor, JB. ABP cross-claimed for indemnification from Clark and JB, and Clark cross-claimed for judgment over against JB. Healey's claims were subsequently settled and dismissed with prejudice. The district court did not apportion fault among the parties.
This appeal involves the remaining cross-claims. ABP claimed Clark had agreed to indemnify it based on specific indemnity provisions in the contract between itself and Clark (the ABP/Clark Agreement). On cross-motions for summary judgment, the district court granted summary judgment for Clark, dismissing the cross-claim. The district court determined that the ABP/Clark Agreement did not indemnify ABP for ABP's own negligence.
ABP based its cross-claim against JB on certain indemnity provisions in the subcontract between Clark and JB (the Clark/JB Agreement). The district court also dismissed this cross-claim, granting partial summary judgment in favor of JB. Finally, the district court dismissed Clark's cross-claim against JB, which was based on indemnity language in the Clark/JB Agreement, and granted summary judgment in favor of JB.
ABP appeals and Clark cross-appeals. Because we uphold the district court's summary judgment in favor of Clark, we do not reach the merits of Clark's cross-appeal.
Summary judgment, by definition, does not resolve factual issues; summary judgment is proper only when the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c). Thus, "a challenge to summary judgment presents for review only questions of law." Transamerica Cash Reserve v. Dixie Power, 789 P.2d 24, 25 (Utah 1990). We review those conclusions for correctness, according no particular deference to the trial court. Id.
ABP argues that the district court erred as a matter of law in determining that the ABP/ Clark Agreement did not indemnify ABP for ABP's own negligence. Both parties rely on Freund v. Utah Power & Light Co., 793 P.2d 362 (Utah 1990).
In Freund, the Utah Supreme Court revisited the longstanding rule that "[a] party is contractually obligated to assume ultimate financial responsibility for the negligence of another only when that intention is 'clearly and unequivocally expressed.' " Id. at 370 (quoting Shell Oil Co. v. Brinkerhoff-Signal Drilling Co., 658 P.2d 1187, 1189 (Utah 1983)). Noting "a growing trend to relax some of the strictness of the rule of construction when the indemnity arises in a commercial context," the court focused on a case in which a New York appellate court applied a "somewhat liberalized" version of the strict construction rule to an indemnification agreement " 'negotiated at arm's length between ... sophisticated business entities.' " Id. (quoting Niagara Frontier Transp. Auth. v. Tri-Delta Constr. Corp., 107 A.D.2d 450, 487 N.Y.S.2d 428, 430 (1985)). The court agreed with the New York court's holding that "[i]n such circumstances it is not necessary that the exculpatory language refers expressly to the negligence of the indemnitee, so long as the intention to indemnify can be 'clearly implied from the language and purposes of the entire agreement, and the surrounding facts and circumstances.' " Id. (quoting Niagara Frontier, 487 N.Y.S.2d at 430 (citation omitted)). The court concluded that "in strictly construing the contractual language, evaluating the indemnification agreement according to the objectives of the parties and the surrounding facts and circumstances is entirely appropriate." Id.
Thus, Freund announced a "liberalized" rule of strict construction: to constitute a clear and unequivocal expression of intent to indemnify for a party's own negligence, an indemnity agreement need not contain specific language to that effect; rather, the language and purpose of the entire agreement, together with the surrounding facts and circumstances, may provide a sufficiently clear and unequivocal expression of the parties' intent. Id. We construe the language of indemnity in the ABP/Clark Agreement accordingly. 1
The ABP/Clark Agreement contains the following indemnity provision:
(a) General Liability: Sub-Contractor shall indemnify and save General Contractor, its officers or agents harmless from and against any and all loss, damage, injury, liability, and claims thereof for injuries to or death of persons, and all loss of or damage to property of others, resulting directly or indirectly from Sub-Contractor's performance of this contract.
ABP argues that the provision's use of the broad language "any and all" in conjunction with "liability" clearly and unequivocally covers liability arising out of ABP's own negligence. Clark counters that the language at the end of the ABP/Clark indemnity provision, "resulting directly or indirectly from [Clark's] performance of this contract," limits the claims for which Clark would be responsible to those arising out of Clark's own negligence.
In Freund, the court analyzed a one-paragraph indemnification provision sentence by sentence, concluding that the paragraph "as a whole expresses a clear and unequivocal intent by the parties that the licensee will indemnify the licensor from any and all liabilities, including the liability that arises because of the licensor's negligence." Id. at 371. The court emphasized the breadth of the language the parties employed, indemnifying against " 'any and all claims, demands, causes of action, costs or other liabilities' " that might arise out of the use of the indemnitor's equipment on or in the vicinity of the indemnitee's utility poles. Id. The use of the word "liabilities," the court stated, "is particularly significant since it covers those instances where the licensor is legally liable for damages, including those where liability arises because of the licensor's negligence." Id.
We see no meaningful distinction between the indemnity language in the instant case and that in Freund. The indemnity provision in the ABP/Clark Agreement, like the indemnity provision at issue in Freund, employs the all-inclusive terms "any and all" to modify the term "liability." 2 Id. It therefore clearly expresses the parties' intention that ABP be indemnified for liability arising out of its own negligence, and we so hold. Further, we think the language "resulting directly or indirectly from [Clark's] performance of this contract," merely designates the subject matter of the indemnification coverage, similar to language in the indemnity provision at issue in Freund, which extended coverage to any and all liability "which may arise out of or be connected with the erection, maintenance, presence, use or removal of Licensee's equipment." Id.
Our conclusion is in accord with well-reasoned cases from other jurisdictions. The court in Public Service Co. v. United Cable, 829 P.2d 1280 (Colo.1992), held all-inclusive indemnification "in any way arising out of, connected with or resulting from the exercise by Licensee of the rights granted to it hereunder," to be a sufficiently "clear and unequivocal" expression of the parties' intent to indemnify the indemnitee for its own negligence. Id. at 1282-83 (emphasis omitted). Similarly, in Fischbach-Natkin Co. v. Power Process Piping, Inc., 157 Mich.App. 448, 403 N.W.2d 569 (1987), the court held that all-inclusive indemnification against liability "arising out of or resulting from or in any way connected with the work covered by this Subcontract" to be a sufficient expression of the parties' intent to indemnify the indemnitee for its own negligence. Id. 403 N.W. at 570, 572.
As further support for our construction, Utah's Liability Reform Act, enacted four years before ABP and Clark entered into the ABP/Clark Agreement, renders useless indemnification for any tort liability other than one's own. See Liability Reform Act, ch. 199, §§ 1-7, 1986 Utah Laws 470, 470-71 (codified at Utah Code Ann. §§ 78-27-37 to -43 (1992)). 3 Thus, because ABP only required indemnification for its own negligence, in order for the indemnity provision to have any meaning, it must have been intended to indemnify ABP for its own negligence. 4
In sum, if ABP's liability in the present case arose out of Clark's performance of the ABP/Clark Agreement, the indemnity language provides ABP coverage for its own negligence. Section B.1. (d) of the ABP/Clark Agreement provides:
Safety Measures: Sub-Contractor shall take all...
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