J. A. Payton v. Kuhn-Murphy, Inc.

• Decision Date: 07 August 1967
• Docket Number: KUHN-MURPH,INC
• Citation: 253 Cal.App.2d 278,61 Cal.Rptr. 575
• Court: California Court of Appeals Court of Appeals
• Parties: J. A. PAYTON, a general partnership, George Herz & Co., a corporation, Clyde W. Wood and Sons, Inc., a corporation, and Travelers Insurance Company, a corporation, Plaintiffs and Respondents, v., a corporation, and Pacific Indemnity Company, a corporation, Defendants and Appellants. Civ. 8287.

Page 575

61 Cal.Rptr. 575

253 Cal.App.2d 278

J. A. PAYTON, a general partnership, George Herz & Co., a corporation, Clyde W. Wood and Sons, Inc., a corporation, and Travelers Insurance Company, a corporation, Plaintiffs and Respondents, v. KUHN-MURPHY, INC., a corporation, and Pacific Indemnity Company, a corporation, Defendants and Appellants.

Civ. 8287.

Court of Appeal, Fourth District, Division 2, California.

Aug. 7, 1967.

[253 Cal.App.2d 279] Gillespie, Hartley & Flory, by Donald S. Gillespie, San Bernardino, for defendants and appellants.

Wilson, Wilson & Borror, by William H. Wilson, San Bernardino, for plaintiffs and respondents.

OPINION

McCABE, Presiding Justice.

Contrary to the position of defendants, we determine that the subcontract was executed by one of the plaintiff joint venturers and an officer of the defendant Subcontractor, with knowledge on the part of the Subcontractor at the time that there was a joint venture between the signatory and others and with knowledge of the terms and conditions of the prime contract between Contractor and the State of California. Thus the subcontract inured to the benefit of all of the joint venturers comprising the prime Contractor. With such determination, the indemnification agreement being in general terms and in the absence of active negligence on the part of Contractor, the Contractor is entitled to indemnification from Subcontractor.

J. A. Payton, a copartnership, George Herz & Company, a corporation, and Clyde W. Wood & Sons, Inc., a corporation, jointly submitted a bid and were awarded the prime contract by the State of California to construct a portion of the San Bernardino Freeway. This joint venture will hereinafter be referred to as Contractor. Kihn-Murphy, Inc. entered into a subcontract with the Contractor for work on the project generally described as 'dirt hauling.' Although in dispute, the court found upon substantial evidence that the prime contract had been entered into before the subcontract was executed. J. A. Payton signed the subcontract agreement as Contractor.

The subcontract agreement recited that the Subcontractor (Kuhn-Murphy, Inc.) had examined the plans, specifications and the prime contract and knew the contents and requirements of it; Subcontractor had examined the work site and Subcontractor assumed toward the Contractor all obligations and responsibilities the Contractor, as the Contractor, assumed toward the State of California insofar as applicable to the work to be performed by the Subcontractor. By the subcontract, Subcontractor agreed to furnish, before commencement of work, evidence of adequate protection by public liability and property damage insurance. Further, Subcontractor agreed in the subcontract 'to indemnify and save Contractor harmless from any and all claims, damages or liability of whatever nature which might result from performance of' the work under the subcontract and 'to pay a reasonable attorney's fee, to be fixed by court, in the event litigation is necessitated for the settlement of any such claims or liens.'

Separate policies of public liability insurance were issued insuring Contractor and Subcontractor.

In performing the work contractually required by the Subcontractor, a dirt hauler owned by Subcontractor and operated by an employee of the Subcontractor collided with a vehicle operated by one Vera Wise. The collision occurred at an intersection of a public highway and a temporary dirt construction road. As a result of this collision, Vera Wise died. Her heirs brought a wrongful death action at law against Subcontractor, the joint venturers, the operator of the dirt hauler and others, which action resulted in a recovery of $31,171.55. Without waiver of and by reserving any rights, the Contractor and Subcontractor agreed to pay the judgment by each contributing one-half of the judgment towards its satisfaction. To determine the extent of the indemnification to the Contractor for the amount it paid toward settlement of the Wise judgment, an action was commenced by plaintiffs. The judgment in the action is now being considered on this appeal.

When the subcontract provided that the Subcontractor had examined the prime contract as above recited, it could not fail to know that the Contractor was comprised of joint venturers and that J. A. Payton, a copartnership, was one of the partners in the venture and that the work to be done by the Subcontractor was a part of the work to be done by the Contractor under the terms of the prime contract. It follows that when the subcontract providing for work to be done as required in the prime contract and J. A. Payton signed the subcontract, the Subcontractor knew that signature bound and inured to the benefit of the joint venture. Under the facts of this case where one contract specifically refers to the provisions of another contract, the two...