Johnson v. Modern Continental Constr.

• Decision Date: 13 March 2000
• Docket Number: P-1145
• Citation: 731 N.E.2d 96,49 Mass.App.Ct. 545
• Parties: (Mass.App.Ct. 2000) BRUCE JOHNSON & others, <A HREF="#fr1-1" name="fn1-1">1 vs. MODERN CONTINENTAL CONSTRUCTION CO., INC., & another <A HREF="#fr1-2" name="fn1-2">2 ; MOHAWK CONSTRUCTION CO., INC., third-party defendant. No.: 98- Argued:
• Court: Appeals Court of Massachusetts

Page 96

731 N.E.2d 96 (Mass.App.Ct. 2000)

BRUCE JOHNSON & others,¹ vs. MODERN CONTINENTAL CONSTRUCTION CO., INC., & another²;

MOHAWK CONSTRUCTION CO., INC., third-party defendant.

No.: 98-P-1145.

Massachusetts Court of Appeals, Suffolk

Argued: March 13, 2000.

Decided: July 6, 2000

Brian M. Cullen for Modern Continental Construction Co., Inc., & another.

Richard J. Riley (Margaret M. Abruzese with him) for Mohawk Construction Co., Inc.

Present: Porada, Dreben, & Duffly, JJ.

PORADA, J.

The principal issues in this case are whether the indemnity clause of a construction subcontract required the subcontractor to indemnify the general contractor for its tort liability to the subcontractor's employee and whether the subcontractor was entitled to recover attorneys' fees and the fee paid an expert witness under the attorneys' fees and cost provisions of the subcontract. We affirm the judgment as modified herein.

We summarize the facts which are not in dispute. The plaintiff, Bruce Johnson, sustained serious injuries while working for the subcontractor, Mohawk Construction Co., Inc. (Mohawk), in the construction of a tunnel at the Bird Island Flats in East Boston. Mohawk was hired by the general contractor, Modern Continental Construction Co., Inc. (Modern), to do iron work on the tunnel. The subcontract executed by Mohawk and Modern contained the following provision, which is the subject of this appeal:

"The Subcontractor shall fully indemnify to the extent permitted by law and save the General Contractor wholly harmless from any and all claims, liabilities, liens, demands, and causes of action for or on account of any injury to persons or damage to property arising out of or in consequence of the performance of any work hereunder in accordance with this provision."

Modern settled the plaintiffs' claims against it for negligence for the sum of $550,000 and sought to recover this sum from Mohawk under the indemnity clause in the subcontract. A Superior Court judge found that Modern could not recover this sum from Mohawk under the indemnity clause of the subcontract because Mohawk had not caused Johnson's injuries. He also found that Mohawk was entitled to recover attorneys' fees and the fee paid an expert witness in defense of Modern's claim against it under the parties' subcontract.

On appeal Modern contends that the judge's decision should be reversed because Mohawk is required to indemnify Modern under the indemnity clause for the sum paid to the plaintiffs and Mohawk is not entitled to be reimbursed for its legal fees and expenses incurred as a result of this action. We affirm the judgment as modified herein.

We address the issues.

1. Indemnity. A subcontractor's obligation to indemnify any person for injury to persons or property in a construction contract is subject to the provisions of G. L. c. 149, 29C, which limits the subcontractor's liability to injury to persons or property "caused by" the subcontractor, its employees, agents, or subcontractors. Under its subcontract, Mohawk was required to indemnify Modern for any claim for injuries "arising out of or in consequence of the performance of any work" by Mohawk under the subcontract. The parties do not dispute that the words "arising out of or in consequence of" are the equivalent of "caused by." See M. DeMatteo Constr. Co. v. A.C. Dellovade, Inc., 39 Mass. App. Ct. 1, 3-4 (1995) (there is no difference between the language in an indemnity provision "arising out of or in consequence of" or "the performance . . . of the work performed" and the statutory language "caused by" under G. L. c. 149, 29C). At issue is whether Mohawk caused the injuries of its employee, Bruce Johnson.

Modern claims that the judge applied the wrong legal standard in determining Mohawk's indemnification obligation. Specifically, Modern claims that the judge wrongly applied negligence principles to determine the causation issue, in particular the concept of proximate causation. Instead Modern asserts that the judge should have used a lesser standard of causation which simply would have required the judge to determine if there was a nexus between Mohawk's performance of its work under the subcontract and the resultant harm to Johnson.

We will not set aside a judge's ultimate conclusion unless it is clearly erroneous or inconsistent with the relevant legal standard. Freyermuth v. Lutfy, 376 Mass. 612, 615 (1978). The language of G. L. c. 149, 29C, no longer requires a finding of the subcontractor's negligence in order to trigger a subcontractor's liability under an indemnity provision in a construction subcontract. M. DeMatteo Constr. Co. v. A.C. Dellovade, Inc., 39 Mass. App. Ct. at 4. A subcontractor's indemnity obligation is now determined by deciding whether the subcontractor's action or inaction brought about or provoked the mishap. Miley v. Johnson & Johnson Orthopaedics, Inc., 41 Mass. App. Ct. 30, 33 (1996). While Modern is correct that the judge's findings are replete with reference to negligence concepts, we do not think that the result reached by him is clearly erroneous or inconsistent with the applicable legal standard set forth in Miley, for the reasons stated herein.

Relying on Merchants Ins. Co. of N.H. v. United States Fid. & Guar. Co., 143 F.3d 5, 10 (1st Cir. 1998), Modern argues that the indemnity provision is triggered when the injury to the subcontractor's employee occurs during the course of his employment and contemporaneously with his performance of work for the subcontractor under his subcontract with the general contractor. In the Merchants case, the First Circuit held that even though the injury to the subcontractor's employee was the result of the general contractor's employee's negligence, the general contractor would be covered as an additional insured under the subcontractor's general liability policy which provided coverage to the additional insured for liability "arising out of" the subcontractor's work. Id. at 9-10. Recognizing that the Supreme Judicial Court and the Appeals Court have held that "arising out of" denotes a level of causation that is much broader than the concept of proximate causation in tort law, Rischitelli v. Safety Ins. Co., 423 Mass. 703, 704 (1996); New England Mut. Life Ins. Co. v. Liberty Mut. Ins. Co., 40 Mass. App. Ct. 722, 724, 726 (1996), the First Circuit held that, where the injury to the subcontractor's employee occurred while he was working for the subcontractor in the performance of the subcontractor's work for the general contractor under the parties' contract, the injury "arose out of" the subcontractor's work. Merchants Ins. Co. of N.H. v. United States Fid. &...