Ivey Plants, Inc. v. FMC Corp.

• Decision Date: 29 August 1973
• Docket Number: No. 72--95,72--95
• Citation: 282 So.2d 205
• Parties: IVEY PLANTS, INC., et al., Appellants, v. FMC CORPORATION, a Delaware corporation, Appellee.
• Court: Florida District Court of Appeals

Page 205

282 So.2d 205

IVEY PLANTS, INC., et al., Appellants, v. FMC CORPORATION, a Delaware corporation, Appellee.

No. 72--95.

District Court of Appeal of Florida,

Fourth District.

Aug. 29, 1973.

Rehearing Denied Oct. 9, 1973.

Thomas B. Tart, of Gurney, Gurney & Handley, Orlando, for appellants.

Larry Sands, of Sands, Smalbein, Eubank, Johnson, Rosier & Bussey, Orlando, for appellee.

MAGER, Judge.

This is an appeal from a final summary judgment entered in favor of defendant-appellee, FMC Corporation. This action was instituted by Ivey Plants, Inc. and Osceola Fruit Distributors, plaintiffs, and sought damages for defendant's breach of contract on an equipment lease and damages for defendant's negligence.

The complaint alleged, inter alia, that the parties entered into a written contract on April 23, 1953, to be renewed year by year whereby defendant agreed to lease to plaintiff a piece of equipment known as a 'Flavorseal' machine. Ivey Plants, Inc. was the owner of a citrus food processing plant operated by Osceola Fruit Distributors. The Flavorseal equipment was to be utilized in connection with the processing of the citrus fruit during which process the fruit is apparently treated with a waxing agent.

The lease was in existence on July 25, 1964, when a fire occurred causing extensive damage to plaintiff's building, machinery and other property.

Under the terms of the lease agreement the defendant was to deliver and install the machine in plaintiff's packing house; instruct plaintiff's employees in the use of the equipment and maintain said equipment in good repair and working condition. Plaintiffs allege that as part of the servicing and maintenancing of such equipment, defendant was responsible for maintaining a container to gather excess wax material flowing from such equipment. Plaintiffs also allege that the defendant's breach of contract and negligent conduct arose by virtue of defendant's failure to place and maintain a wax catching container in the machine prior to the date of the fire; that by virtue of defendant's breach and omission, highly explosive material spilled onto the floor and foundation of plaintiff's place of business creating a dangerous condition which resulted in the fire and damage.

Defendant responded by alleging that the fire was caused by plaintiff's negligent and careless use of a welding torch or other flame-producing instrument causing the flame or heating material to drop on the premises; and furthermore, the container in question was placed in the Flavorseal equipment for the purpose of collecting any material that might drip and that it was plaintiff's removal and failure to replace said container that caused the dangerous condition. In addition to defendant's denials and the affirmative defenses of contributory negligence on the part of plaintiffs, defendant cited paragraph 16 of the lease which defendant contends absolved it of any liability resulting from the conduct and acts alleged. Based upon the provisions of paragraph 16 the trial court entered summary judgment.

Paragraph 16 of the lease provides as follows:

'16. Damages. FMC shall not be liable to Lessee for loss, damage or injury to persons (including death) or to property (including citrus fruit) occasioned by or arising from the installation, replacement, maintenance, operation and/or use of said equipment, or any part thereof, and/or any method, process, or material for or with which the same may be employed, nor for damages so sustained, directly or indirectly, or alleged to have been so sustained, by Lessee so occasioned or arising, and whether such damages result from the act or neglect of an officer, agent, or employee of FMC or a third person; And Lessee shall indemnify, defend, and save harmless FMC from and against all liability, cost, or expense which may be sustained by or imposed by law upon FMC on account of any such loss, damage, or injury. FMC, in order to more fully effectuate these provisions, shall have the full benefit of any insurance that may be effected or carried by Lessee or any third person.'

The trial court specifically found as follows:

'That there is no genuine issue as to any material fact bearing upon the defense raised by the Defendant in paragraph 5 of its Answer and Counterclaims and that the aforesaid undisputed matters before the Court establish as a matter of law that under the terms of paragraph 16 of the 'Flavorseal' Equipment Lease, together with the other pertinent provisions of that lease and the provisions of the Plaintiffs' Complaint and the Defendant's Answer, the Defendant is not legally liable to the Plaintiffs for the loss or damage claimed in this action, or in the event of any such liability, the Defendant would be entitled to indemnity from the Plaintiffs for any such liability that might be imposed upon the Defendant. The Court finds that the pertinent provisions of this lease are not ambiguous and paragraph 16 of the lease clearly and unequivocally limits the liability of the Defendant to the Plaintiffs for claims such as those made in this action even where such claims arise out of the negligence or fault of the Defendant. Therefore, such limitation of liability and indemnity agreement is valid and enforceable under the law of Florida and should be applied and enforced under the undisputed facts of this case.'

In our opinion the trial court's interpretation and application of paragraph 16 and the subsequent entry of the summary judgment was erroneous.

A determination of the applicability of paragraph 16 requires an analysis of its language in relation to the Subject matter of the lease as well as to the Different causes of action.

Paragraph 16 contains two separate and distinct clauses. The first clause (not italicized) is referred to as an Exculpatory clause; the second clause (italicized) is in the nature of an Indemnity provision. There is a marked and significant distinction between the two clauses. The function of the exculpatory clause is to deprive one of the contracting parties of his right to recover damages suffered due to the negligent act of the other. The indemnity clause or contract simply affects a Change in the person who ultimately has to pay for the damages, i.e., the promisor (indemnitor) in an indemnity contract undertakes to protect the promisee (indemnitee) against loss or damage through a liability on the part of the latter To a third person. 175 A.L.R. 8, 21; Royal Indemnity Co. v. Knott, 1931, 101 Fla. 1495, 136 So. 474; cf. University Plaza Shopping Center v. Stewart, Fla.1973,272 So.2d 507; Middleton v. Lomaskin, Fla.App.1972, 266 So.2d 678; Poche v. Leon Motor Lodge, Inc., Fla.App.1973, 275 So.2d 55. ¹ Under both the exculpatory clause and the indemnity provision, the party seeking the limitation of liability or the indemnity may well be the party whose Own negligence gave rise to the damages. See Middleton v. Lomaskin, supra, and University Plaza Shopping Center v. Stewart, supra.

Plaintiffs alleged that under the terms of the lease agreement defendant was required to maintain and service the equipment in question. If plaintiffs can prove A breach of this contractual obligation, the provisions of paragraph 16 should not act as a bar to the maintenance of a breach of contract action. If such was the case then the contract would be lacking both in mutuality of obligation and mutuality of remedy, rendering it unenforceable. ² Insofar as plaintiffs' action is predicated upon Breach of contract the language of paragraph 16 does not operate to exculpate or exonerate defendant from performing under the terms of the lease agreement nor would indemnification bar such action between the parties.

The considerations are somewhat different when construing paragraph 16 in light of plaintiffs' action predicated upon the Negligent acts of defendant.

In regard to the application of the exculpatory clause which is intended to relieve the party of liability for his Own negligence, such clauses while generally considered as valid and enforceable are not looked upon with favor. Middleton v. Lomaskin, supra; ³ 175 A.L.R. 8--157; Danna v. Con Edison Co., Inc., 71 Misc.2d 1029, 337 N.Y.S.2d 722 (1972). Cf. Aloia v. Carrier Corporation, Fla.App.1971, 244 So.2d 445. No clear-cut rule can be adduced from the various decisions of the courts of this state or our sister states as to the circumstances when exculpatory clauses will Not be enforced. Public policy as well as the relationships of the parties to each other have been considered as significant determining factors. For example, where the relative bargaining power of the contracting parties is not equal and the clause seeks to exempt from liability for negligence the party who occupies a superior bargaining position, enforcement of the exculpatory clause has been denied. 175 A.L.R., supra, p. 16; Danna v. Con Edison Co., Inc. supra. ⁴ Ascertaining the relative bargaining...