John E. Branagh and Sons v. Witcosky

• Decision Date: 17 June 1966
• Citation: 51 Cal.Rptr. 844,242 Cal.App.2d 835
• Court: California Court of Appeals Court of Appeals
• Parties: JOHN E. BRANAGH & SONS, Cross-Complainant and Respondent, v. George E. WITCOSKY, doing business as Tara Manufacturing Company, Cross-Defendant and Appellant. Civ. 22255.

Page 844

51 Cal.Rptr. 844

242 Cal.App.2d 835

JOHN E. BRANAGH & SONS, Cross-Complainant and Respondent, v. George E. WITCOSKY, doing business as Tara Manufacturing Company, Cross-Defendant and Appellant.

Civ. 22255.

District Court of Appeal, First District,

Division 1, California.

June 17, 1966.

Hearing Denied Aug. 24, 1966.

Bronson, Bronson & McKinnon, San Francisco, for appellant.

Russ & Benson, San Francisco, Wilbur J. Russ, San Francisco, of counsel, for respondent.

SIMS, Justice.

Cross-defendant George E. Witcosky, doing business as Tara Manufacturing Company, a subcontractor, hereinafter referred to as Tara, has appealed from a judgment which awarded cross-complainant John E. Branagh & Sons, a general contractor, hereinafter referred to as Branagh, indemnification for the sum of $24,142.28 which was paid by Branagh in satisfaction of one-half the amount of judgments obtained against Tara and Branagh by an employee of another subcontractor and the latter's workmen's compensation insurance carrier, and for the additional sum of $10,480.68 for attorneys' fees, court costs and other expenses necessary and incidental to Branagh's defense of the principal action. ¹

The trial court found: 'That it is true that pursuant to the express terms of the aforesaid subcontract agreement, which terms were clear, definite and certain, that cross-defendant Tara did agree to fully indemnify and save cross-complainant Branagh harmless from any and all loss, damage, liability, claim, demand, suit or cause of action resulting from injury or harm to any person arising out of or in any way connected with the performance of work under the subcontract except such injury or harm caused solely and exclusively by the fault or negligence of the contractor Branagh; ² that it is further true that it was the intention of Branagh and Tara, that Tara would indemnify and hold harmless Branagh from any and all loss, damage, liability, claim, demand suit or cause of action resulting from injury or harm to any person arising out of or in any way connected with the performance of work under the subcontract except such injury or harm caused solely and exclusively by the fault or negligence of the contractor Branagh; that it is true that the agreement by Tara to indemnify and hold Branagh harmless was not contrary to public policy.'

The court further found: 'That it is true that the plaintiff, Fay Clifton Ray, was injured on the 1st day of March, 1961; that it is further true that said injury arose out of and was connected with the performance of the work of the cross-defendant Tara pursuant to its subcontract agreement with cross-complainant Branagh; it is further true that the active negligence of cross-defendant Tara was a proximate cause of the injury and damages suffered by plaintiff; it is further true that cross-complainant Branagh was itself actively negligent in that it violated electrical safety orders of the Division of Industrial Safety of the State of California and its negligence concurred with the active negligence of cross-defendant Tara in proximately causing the injury and damages to plaintiff.'

Tara's sole contention on appeal is that Branagh is precluded from recovery under the indemnity agreement because an agreement of a private party (as distinguished from an insurance company) to indemnify another for a liability predicated upon negligence which consists of a violation of a state safety order is against public policy and unenforceable. It attacks the last clause of the finding first quoted, a similar conclusion of law, and the judgment insofar as they express and are dependent upon the principle that such an agreement is not contrary to public policy. An examination of the applicable authorities leads to a determination that the learned trial judge correctly found and concluded that the agreement was valid, and that the judgment should be affirmed.

Tara, in reliance upon Tunkl v. Regents of University of California (1963) 60 Cal.2d 92, 32 Cal.Rptr. 33, 383 P.2d 441 and Hanna v. Lederman (1963) 223 Cal.App.2d 786, 36 Cal.Rptr. 150, contends that the provisions of section 1668 of the Civil Code ³ preclude enforcement of the indemnity agreement. In the former case the opinion contains an extensive review of the precedents dealing with the application of the provisions of that section to situations where the promisee seeks to avoid liability to the promisor who has executed an exculpatory or indemnifying agreement. (60 Cal.2d at pp. 95--98, 32 Cal.Rptr. at p. 35, 383 P.2d at p. 443.) The rule distilled is stated as follows: 'In one respect, * * * the decisions are uniform. The cases have consistently held that the exculpatory provision may stand only if it does not involve 'the public interest." (id., p. 96, 32 Cal.Rptr. 33, 383 P.2d 441 fn. omitted). In the latter case the court stated: 'Each lease contained an exculpatory provision which has been set forth hereinabove. The effect of that provision must be determined in the light of section 1668 of the Civil Code. * * * Since the claim for damages because of negligence embodied in the first cause of action of each tenant was predicated upon the alleged violation of section 94.30312 of the Municipal Code, the exculpatory provision could not be a defense to that cause of action if the evidence showed such violation to be a proximate cause of the tenant's loss. (See Mills v. Ruppert, 167 Cal.App.2d 58, 62--63, 333 P.2d 818.)' (223 Cal.App.2d at p. 792, 36 Cal.Rptr. at p. 154.)

This approach fails to consider the distinction between what may be termed a true exculpatory agreement whereby the promisee seeks to avoid liability to the promisor who has suffered damage because of the former's negligence, and an indemnity agreement whereby the promisee seeks to enforce the promisor's agreement to indemnify him if and when a claim is asserted against the promisee. (Cf. Civ.Code § 1668 and Ins.Code § 533; 2 Rest., Contracts (1932) §§ 574 and 575 and § 572; 6 Williston, Contracts (rev. ed. 1938) §§ 1751A--1751D, pp. 4964--4976 with § 1751, pp. 4960--4964; 1 Witkin, Summary of Cal.Law (1960) Contracts, §§ 200--203, pp. 226--232, with id., 1965 Supp., Torts, § 22D, p. 343; Annotation, 175 A.L.R. 8, pp. 13--20, with id., pp. 20--38; and see Conley and Sayre, Rights of Indemnity, 13 Hastings L.J. (1961) 214, 222; Smith, Contractual Controls of Damages in Commercial Transactions, 12 Hastings L.J. (1960) 122, 140; Meriam and Thornton, Indemnity Between Tort-Feasors, 25 N.Y.U.L.Rev. (1950) 845--862; and Potamkin and Plotka, Indemnification Against Tort Liability, 92 Pa.L.Rev. (1944) 347.) This distinction was recognized in Goldman v. Ecco-Phoenix Elec. Corp. (1964) 62 Cal.2d 40, 41 Cal.Rptr. 73 396 P.2d 377, wherein the opinion recites: 'Assuming that the agreement provided that Ecco indemnity Clovis from its own negligence, we cannot, however, accept Ecco's contention that such indemnification would violate public policy and therefore fail under the reasoning of Tunkl v. Regents of the University of California (1963) 60 Cal.2d 92, 32 Cal.Rptr. 33, 383 P.2d 441, and Hanna v. Lederman (1963) 223 Cal.App.2d 786, 792, 36 Cal.Rptr. 150. Clovis does not seek Exculpation from liability to Butlar but rather Indemnification from Ecco for such potential liability. The indemnification agreement resembles an insurance agreement; indeed, the real situation here appears to be that Clovis maintains insurance against liability to Butlar and Clovis' insurer now attempts to transfer that liability to Ecco and Ecco's insurer.' (62 Cal.2d at p. 48, 41 Cal.Rptr. at p. 78, 396 P.2d at p. 382, and see Baldwin Contracting Co. v. Winston Steel Works, Inc. (1965) 236 Cal.App.2d 565, 577, 46 Cal.Rptr. 421; Pacific Tel. & Tel. Co. v. Chick (1962) 202 Cal.App.2d 708, 716, 21 Cal.Rptr. 326.)

In Goldman the court concluded that an indemnification agreement calling for financial protection against one's own negligence could not rest upon language 'so loose and obscure' as that of the contract before it. (62 Cal.2d at p. 48, 41 Cal.Rptr. 73, 396 P.2d 377.) Implicit in that holding was recognition of the principle that one may provide for indemnification against his own negligence by a clear and explicit agreement. (Id., p. 44, 41 Cal.Rptr. 73, 396 P.2d 377; accord: Harvey Mach. Co. v. Hatzel & Buehler, Inc. (1960) 54 Cal.2d 445, 449, 6 Cal.Rptr. 284, 353 P.2d 924; Rosendahl Corp. v. H. K. Ferguson Co. (1962) 211 Cal.App.2d 313, 316--317, 27 Cal.Rptr. 56; Pacific Tel. & Tel. Co. v. Chick, supra, 202 Cal.App.2d 708, 712--715, 21 Cal.Rptr. 326; Safeway Stores, Inc. v. Massachusetts Bonding & Ins. Co. (1962) 202 Cal.App.2d 99, 111--113, 20 Cal.Rptr. 820; County of L.A. v. Cox Bros. Constr. Co. (1961) 195 Cal.App.2d 836, 842, 16 Cal.Rptr. 250; and see Vinnell Co. v. Pacific Elec. Ry. Co. (1959) 52 Cal.2d 411, 414--416, 340 P.2d 604; and Baldwin Contracting Co. v. Winston Steel Works, Inc., supra, 236 Cal.App.2d 565, 573--575, 46 Cal.Rptr. 421.) In this case the trial court found the agreement was 'clear, definite and certain,' and no attack has been made upon the finding that the defendant agreed to indemnify the plaintiff under the circumstances of the loss which occurred.

The subcontractor seeks to avoid the application of the foregoing principles on several grounds. He properly notes that the statement first quoted from Goldman is dictum in view of the finding that the terms of the agreement did not cover indemnification if the negligence of the general contractor contributed to the injury, and would only apply if the injury resulted from the sole negligence of the subcontractor (62 Cal.2d at p. 49, 41 Cal.Rptr. 73, 396 P.2d 377). The statement for whatever weight it may bear, and despite lack of discussion of the public policy involved, must be read in its context, and does apply on the facts of that case to a situation, similar to that herein, which involves negligence predicated upon violation of a...