Industrial Indem. Co. v. Columbia Basin Steel & Iron Inc., 10260

• Decision Date: 16 June 1970
• Docket Number: No. 10260,10260
• Citation: 471 P.2d 574,93 Idaho 719
• Court: Idaho Supreme Court
• Parties: INDUSTRIAL INDEMNITY COMPANY, a corporation, Plaintiff, v. COLUMBIA BASIN STEEL & IRON INC., a corporation, Defendant, Third-Party Plaintiff and Cross Claimant-Respondent, v. Mark B. GARFF, Ryberg & Garff Construction Company, Third-Party Defendant- Appellant.

Page 574

471 P.2d 574

93 Idaho 719

INDUSTRIAL INDEMNITY COMPANY, a corporation, Plaintiff, v. COLUMBIA BASIN STEEL & IRON INC., a corporation, Defendant, Third-Party Plaintiff and Cross Claimant-Respondent, v. Mark B. GARFF, Ryberg & Garff Construction Company, Third-Party Defendant- Appellant.

No. 10260.

Supreme Court of Idaho.

June 16, 1970.

Merrill & Merrill, Pocatello, for appellant.

Hawley, Troxell, Ennis & Hawley, Boise, for Industrial Indemnity Co., plaintiff.

Givens & Givens, Boise, for Columbia Basin Steel & Iron Inc., respondent. SPEAR, Justice.

This appeal arose out of an action originally initiated by Industrial Indemnity Company, an inactive party to this appeal, against Columbia Basin Steel & Iron Inc. These two companies will hereafter be referred to as 'Industrial' and 'Columbia' respectively. Pursuant to an agreement guaranteeing reimbursement, Industrial negotiated a settlement with an injured employee of Columbia. When Columbia refused to reimburse Industrial in full, the latter company initiated an action against it. Columbia then joined Mark B. Garff, Ryberg & Garff Construction Company, hereafter referred to as 'Garff,' which is the appellant herein, as a third party defendant, seeking indemnity or reimbursement on the ground that Garff's negligence was the cause of the injuries suffered by Columbia's employee. The court awarded judgment to Industrial against Columbia and presented the question of negligence to the jury. The jury found by special verdict that Garff's negligence was the sole proximate cause of the employee's injuries, and the court awarded judgment against Garff. It is from the latter verdict and judgment only that this appeal was taken.

In the spring of 1964 Garff was the general contractor for construction of a concrete silo at Lincoln, Idaho. At that time Garff entered into an oral contract with Columbia to perform the iron and steel work on the silo. Prior to this time, Garff had constructed a similar structure in the State of Washington and Columbia, as subcontractor, had done the steel and iron work on that silo. Columbia began work on the construction job at Lincoln about June 15, 1964, and on June 29th, Garff executed and forwarded to it a written 'purchase order' requiring Columbia, among other things, to provide Workmen's Compensation insurance coverage and a Performance Bond. Columbia signed the purchase order contract on August 11, 1964. Early in July, Columbia made application to the State Insurance Fund, State of Idaho, For workmen's compensation which was not granted because a $300.00 deposit did not accompany the application. The deposit was not paid until after the accident involved in the suit herein, and no Workmen's Compensation Insurance coverage was acquired by Columbia until August 29, 1964.

On August 11, 1964, James C. Anderson was employed by Columbia to work on the silo. Approximately at midnight of that day, the first day of his employment, Mr. Anderson was ascending the scaffold that had been erected to go to his place of work. The workmen of Columbia in placing reinforcing steel in the silo worked from a scaffold which consisted of an open, rectangular, lattice work tower, one-half of which constituted ladders and landings enabling the men to reach their work station. The other half, which was immediately adjacent and connected thereto, constituted the shaft for the raising and lowering of a concrete bucket. The bucket was operated by Garff and was a free-fall type of operation. As Anderson was climbing the ladder of the scaffold, Columbia's foreman called to him. Anderson turned, put his head through the lattice work and looked down, at which time he was struck on the head by the descending concrete bucket.

The Industrial Accident Board was notified of the injuries of Anderson and, finding that Columbia was uninsured at the time of the accident, made demand upon Garff as general contractor to take over the compensation payments. Garff was insured for Workmen's Compensation claims by Industrial and, after some correspondence between Industrial and Columbia, the latter accepted the responsibility for the workmen's compensation payments. Columbia paid Industrial $3,000 and asked it to negotiate a settlement with Anderson for which full reimbursement would be made. Industrial settled the claim for $6,745 and presented a bill to Columbia for the balance of the amount due. When Columbia refused to pay, Industrial initiated this action alleging the foregoing facts. Columbia answered, denying the authority of its employee to request the settlement, and also filed a third party complaint against Garff alleging a right to indemnity from Garff for all amounts paid or required to be paid to Industrial, for the reason that the injuries to Columbia's employee were the result of the negligence of Garff. After certain preliminary motions, Garff filed its answer, denying negligence, asserting that no claim was stated upon which relief could be granted and alleging contributory negligence, that the claim was barred by I.C. § 72-811, breach of contract and estoppel. The defense that the claim was barred by I.C. § 72-811 was stricken on motion by Columbia. The case was subsequently tried before a jury, the court reserving to itself the determination of the action between Industrial and Columbia, and entering judgment for Industrial. No appeal was taken from the action of the court in awarding judgment to Industrial, and thus, Garff and Columbia are the only parties to this appeal.

In the action between Garff and Columbia, the court submitted to the jury interrogatories for the rendering of a special verdict. The jury found that Anderson's injuries were caused solely by the negligence of Garff, and thus, that Columbia was not contributorily negligent. The court thereupon entered its Findings of Fact and Conclusions of Law granting judgment to Columbia against Garff in the amount of $6,745.00 together with interest and costs.

From that judgment, Garff initiated this appeal.

In its first assignment of error, Garff contends that no legal cause of action existed in favor of Columbia against it, and that the trial court erred in denying Garff's motion to dismiss, and in granting judgment to Columbia. Garff argues that I.C. § 72-102 abolished all common law rights, remedies, and cause of action between employers of an injured employee, and therefore, that the common law remedy of indemnity or reimbursement was not available to Columbia to initiate and successfully conclude this action.

In I.C. § 72-102 ¹ the legislature set out the purpose for the enactment of the Workmen's Compensation laws which was to provide workmen with a rapid, guaranteed remedy for the recovery of compensation from their employer for injuries arising out of and in the course of their employment. To offset the additional burden imposed upon the employer by guaranteed compensation to an injured employee, I.C. § 72-102 abolished 'all civil actions and civil causes of action for such personal injuries' by employees against employers. Contrary to the contentions of Garff, the statute did not abolish all common law causes of action between the actual employer (subcontractor) and the statutory employer (general contractor) of an injured workman. In 1940 the court interpreted the language of I.C. § 72-102 (codified in 1940 as I.C.A. § 43-902) in the case of Lebak v. Nelson, 62 Idaho 96, 107 P.2d 1054, stating:

'What common law remedy only was thereby intended to be abolished? The statute answers: 'The remedy of workmen against employers for injuries received in industrial and public work' (italics ours). And why was the common law remedy of the worker for personal injuries against his employer abolished? Again the statute answers: Because 'the remedy of the workman has been uncertain, slow and inadequate.' The provisions of the statute are expressly confined to those occupying the relationship of employee and employer.' 62 Idaho at p. 111, 107 P.2d at p. 1060.

See also O'Niel v. Madison Lumber & Mill Co., 61 Idaho 546, 105 P.2d 194 (1940), and Liberty Mutual Insurance Co. v. Adams, 91 Idaho 151, 417 P.2d 417 (1966).

In the latter case this court recognized that the common law defense of concurrent negligence was not abolished by the Workmen's Compensation law, but held it was available to an employee against his employer when the latter sought reimbursement of workmen's compensation payments from the employee who had recovered sums for his injuries from a negligent third party where the negligence of the employer, along with the negligence of the third party, concurrently contributed to the injuries of the employee. The court also denied reimbursement of the employer against the third party and quoted from Witt v. Jackson, 57 Cal.2d 57, 17 Cal.Rptr. 369, 366 P.2d 641 (1961) the reasoning of the North Carolina cases relied upon:

'In the Brown case, supra (Brown v. Southern Ry. Co., 204 N.C. 668, 169 S.E. 419), it was stated that 'when the employee or his estate has been satisfied, and the employer seeks to recover the amount paid by him, from such third party, his hands ought not to have the blood of the dead or injured workman upon them, when he thus invokes the impartial powers and processes of the law.' (169 S.E. at p. 420). The Lovette case, supra, (Lovette v. Lloyd, 236 N.C. 663, 73 S.E.2d 886, 892) reiterated the same argument in more moderate language: 'It is contrary to the policy of the law for the employer, or his subrogee, the insurance carrier, to profit by the wrong of the employer.'' 17 Cal.Rptr. at 377, 366 P.2d at 649.

Garff cited the case of Gifford v. Nottingham, 68 Idaho 330, 193 P.2d 831 (1948), as authority for his contention that I.C. § 72-102 abolished all common law remedies between employers of an injured employee. An examination of Gifford reveals that it does not support such proposition, but on the contrary, provides authoritative support for our...