Indemnity Insurance Co. v. Koontz-Wagner Electric Co., 11567.

• Decision Date: 21 May 1956
• Docket Number: No. 11567.,11567.
• Citation: 233 F.2d 380
• Parties: INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, Plaintiff-Appellee, v. KOONTZ-WAGNER ELECTRIC CO., Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

233 F.2d 380 (1956)

INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, Plaintiff-Appellee, v. KOONTZ-WAGNER ELECTRIC CO., Inc., Defendant-Appellant.

No. 11567.

United States Court of Appeals Seventh Circuit.

May 21, 1956.

Hugh E. Reynolds, Indianapolis, Ind., John W. Niemiec, South Bend, Ind., Locke, Reynolds, Boyd & Weisell, Indianapolis, Ind., for defendant-appellant.

Roland Obenchain, Jr., Roland Obenchain, Sr., Jones, Obenchain & Butler, South Bend, Ind., for plaintiff-appellee.

Before DUFFY, Chief Judge, and FINNEGAN and SCHNACKENBERG, Circuit Judges.

DUFFY, Chief Judge.

On May 17, 1948, defendant submitted to plaintiff's assured, the Studebaker Corporation, its quotation of a price on a job for removal of electric light fixtures, wiring, etc., from a plant owned by said Corporation. On May 20, 1948 defendant was awarded the job by the Studebaker Corporation under a written and printed purchase order. Defendant commenced work on May 20th, and on the following day one Roy Todd, an employee of defendant, while in the performance of his duties, was injured due to the negligence of an employee of the Studebaker Corporation.

Todd commenced an action for damages against the Studebaker Corporation in an Indiana State court and recovered damages in excess of $5,000. Thereafter plaintiff Insurance Company, as subrogee of the Studebaker Corporation, commenced the instant action based on a provision of the purchase order pursuant to which defendant was working at the Studebaker plant at the time Todd was injured.

Plaintiff bases its right of recovery on Paragraph 13 of the Purchase Order which provided, in part:

"If this order covers the performance of labor at the Buyer\'s (Studebaker\'s) plants or if the performance of labor by Seller (defendant) at the Buyer\'s plants results from or is incident to Seller\'s supplying the articles, material and/or work covered by this order, the Seller agrees to indemnify and protect the Buyer against the liabilities, claims or demands for injuries or damages to any person or property growing out of the performance of this order whether such liabilities, claims or demands grow out of the negligent act of the Buyer or the Buyer\'s agent, or otherwise. Seller further agrees to furnish a certificate from its insurance carriers showing that it carries adequate Workmen\'s Compensation, public liability, and property damage insurance. * * *" (Emphasis supplied.)

The case was tried to the court which filed findings of fact and conclusions of law favorable to the contentions of the plaintiff. There are no disputed issues of fact in the case at bar, and whether plaintiff is entitled to recover depends, as a matter of law, upon the interpretation of the socalled indemnity agreement construed in the light of Indiana law.

On this appeal defendant argues first, the District Court improperly construed the following language in Paragraph 13: "* * * growing out of the performance of this order * * *"; and secondly, that the contract provision for indemnification against the negligence of Studebaker Corporation is void under Indiana law because it is contrary to public policy.

By the terms of the contract defendant agreed to indemnify and protect Studebaker against all liabilities, claims or demands for injuries or damages to any person or property growing out of the performance of the contract, whether such liabilities, claims or demands grew out of the negligent act of Studebaker or Studebaker's agent, or otherwise. It being undisputed that Todd suffered injuries due to the negligence of an employee of Studebaker over whom defendant had no direction or control, the question to be resolved is — did the injuries grow out of the performance of defendant's contract with Studebaker?

The contract between Studebaker and defendant contemplated that defendant would erect scaffolding in the Studebaker plant and that some of defendant's employees would work thereon. Todd was working on the scaffolding when a Studebaker employee drove a finger lift truck against it. Todd was on the scaffold by reason of the existence of the contract between defendant and Studebaker. We must ascertain the intent of the parties to this contract by the words which they used. In determining whether Todd's injuries grew out of the performance of the contract ("growing out of the performance of this order") we should, if possible, give the words their ordinary and usual meaning. Pittsburgh, C., C. & St. L. Ry. Co. v. Mahoney, 148 Ind. 196, 46 N.E. 917, 47 N.E. 464, 40 L.R.A. 101; Jenkins v. King, 224 Ind. 164, 65 N.E.2d 121, 163 A.L.R. 397. We think the critical words heretofore quoted are equivalent to the words "`resulting from or arising in connection with any of contractor's operations'" which were construed in Russell for Use of Continental Casualty Company v. Shell Oil Company, 339 Ill.App. 168, 89 N.E.2d 415, 417.

Although we do not find any Indiana decisions directly in point, we think the general rule stated in Aluminum Company of America v. Hully, 8 Cir., 200 F. 2d 257 is applicable. The contract there provided that the contractor should save and hold the owner harmless from any and all liability, claims and demands on account of personal injuries, including death, or property...