Kroger Co. v. Giem

• Decision Date: 12 November 1964
• Citation: 215 Tenn. 459,387 S.W.2d 620,19 McCanless 459
• Court: Tennessee Supreme Court
• Parties: , 215 Tenn. 459 The KROGER COMPANY, Plaintiff in Error, v. Seth E. GIEM, Individually and dba Seth E. Giem & Associates, and John E. Bouchard & Sons Co., Inc., Defendants in Error.

Page 620

387 S.W.2d 620

19 McCanless 459, 215 Tenn. 459

The KROGER COMPANY, Plaintiff in Error, v. Seth E. GIEM, Individually and dba Seth E. Giem &amp Associates, and John E. Bouchard & Sons Co., Inc. Defendants in Error.

Supreme Court of Tennessee.

Nov. 12, 1964.

Rehearing Denied Feb. 4, 1965.

William J. Harbison, Trabue, Minick, Sturdivant & Harbison, Miller Mainer, Manier, Crouch, White & Herod, Nashville, for plaintiff in error.

Goodpasture, Carpenter, Woods & Courtney, Nashville, Carl N. Stokes, Memphis, for Seth E. Giem.

Boult, Hunt, Cummings & Conners, Glasgow & Adams, Nashville, for John E. Bouchard & Sons Co., Inc.

WHITE, Justice.

The Court of Appeals affirmed the trial court in approving the verdict of the jury which found all issues against the plaintiff and in favor of the defendants. We granted certiorari and the case has been argued at the bar of this Court.

The Kroger Company commenced an action for unliquidated damages against the defendants, wherein it sought to recover upon two theories, one sounding in tort and the other in contract, upon the following state of facts:

The Kroger Company (Kroger) let a written contract to Seth Giem and Associates, of Memphis (Giem) for certain additions and remodeling to Kroger's Nashville warehouse.

Giem sub-contracted part of the work to John E. Bouchard & Sons Company, Inc. (Bouchard).

A few days before the actual signing of the contract with Kroger, there was a conference between the officials of Giem and Kroger at its home office in Cincinnati. In this conference Giem requested that he and his sub-contractors be named on Kroger's insurance certificate and receive 'protection like Kroger'. In response to this request a letter was written to Giem, under date of August 26, 1957, in which it was said:

'Attached hereto, Certificate of Insurance naming your company as an additional insured under The Kroger Company's blanket fire and extended coverage insurance. This insurance will cover your interest at our warehouse location in Nashville, Tennessee.

'Although our contractual agreement does not specify that the general contractor will be named as an additional insured under the builders risk policy, we do protect the contractor when requested to do so by naming him as an additional insured. It is not our policy, however, to extend this coverage to the sub-contractors.

'I trust that you will find the attached certificate satisfactory.'

The above letter was signed by an official in the insurance department of Kroger. There is no dispute about this letter having been sent to and received by Giem.

Giem sub-contracted part of the work to Bouchard and in performing its contract two of Bouchard's employees, while in the process of cutting a hole through the roof of the warehouse to install a vent pipe, in which they were using an acetylene torch, allowed molten metal sparks to fall upon some highly flammable insulation material which caught fire and burned intensely, or as some witnesses said 'exploded' like gasoline. Two large stacks of this material had been stored inside the warehouse to be used in insulating freezer and banana rooms. The fire, water and smoke damage to the Kroger warehouse and grocery stock was quite extensive.

The first count of the declaration is a common law count against both defendants, alleging that both were negligent in the storting and igniting of large quantities of insulation material resulting in damage to the plaintiff's warehouse in the amount of $775,000.00.

The declaration specifically charged that the defendants were guilty of gross negligence in that (1) they did not properly supervise the work; (2) they did not remove flammable material from the area where the work was to be done; (3) they neglected to cover the flammable material to keep sparks from the cutting operation from falling on it; (4) they failed to have a watchman close by; and (5) they did not properly coordinate the work with the result that the flammable insulation material had to be stored in the warehouse while the work was going on.

The second count of the declaration is against Giem only, and is for an alleged violation of Article 30 of the building contract between Giem and Kroger, which reads:

'The contractor shall continuously maintain adequate protection of all his work from damage and shall protect the owner's property from injury arising in connection with this contract. He shall make good and hold the owner harmless from any such damage or injury.'

Giem filed a general plea of not guilty and then by special plea alleged that Kroger was guilty of contributory negligence. By amended plea and replication Giem contended that Kroger had agreed to maintain insurance for his benefit to the value of the property involved. Giem claimed that since he was a named insured in the policy there could be no recovery against him because this would permit the insurance company, Lloyds of London, to be subrogated against its own insured. Giem was thus taking the position that he occupied the same relationship with Lloyds of London as Kroger did under its general insurance policy issued by this insurance company.

Giem contended that the indemnity provision relied on in the second count of the declaration could not be construed so as to indemnify Kroger because its negligence contributed to the loss.

Bouchard filed pleas of not guilty and then by special pleas contended that Kroger was guilty of contributory negligence in storing the flammable insulation material where work was to be done and further that as a sub-contractor it was entitled, under the contract, to the benefit of Giem's agreement with Kroger with respect to being included as an additional insured under Kroger's insurance policy with Lloyds of London.

After an extended period of proof the case was submitted to a jury under instructions to find a general verdict and also to report in respect to certain special issues. Upon consideration thereof the jury returned a general verdict in favor of both defendants and reported the special issues as follows:

That both defendants were guilty of negligence proximately causing the damages and losses as set out in the declaration. The jury found that Kroger was guilty of negligence proximately causing the losses and damages set out in the declaration. In other words the jury found the plaintiff and both defendants guilty of negligence which proximately caused or contributed to the damages and under the general charge of the court, and the general verdict of the jury, this merely meant that the plaintiff could not recover and that its suit was dismissed.

The jury also reported on certain matters with respect to the contract between Kroger and Giem by which it found that Kroger was required to carry insurance to protect the defendant Giem from loss by negligent destruction by fire of the partially completed improvement; that Kroger was required to carry insurance to protect the defendant Giem from having to pay Kroger for the negligent destruction by fire of the part of the warehouse in which the new renovation was being performed; that Kroger was required to carry insurance to protect the defendant Giem from having to pay Kroger for negligent loss by fire of merchandise, equipment, supplies stored in said warehouse; and that Kroger was required to carry insurance to protect the defendant Giem from having to pay extra expense incurred by Kroger as a result of the negligently caused fire.

The jury was also asked to respond to a special issue of whether or not it found from a preponderance of all of the evidence that the Kroger Company, its servants, agents or employees, was in actual charge and control of the construction work. In response to this interrogatory, the jury answered yes.

From a recitation of the foregoing, it can be seen that we are confronted with two questions. First, is there material evidence in the record to sustain the verdict of the jury, the judgment of the trial court thereon, and the judgment of the Court of Appeals in finding and holding that Kroger was guilty of such contributory negligence as would bar recovery. The second question is whether said Article 30 of the general contract, whereby Giem agreed to indemnify Kroger, entitles Kroger to recover from Giem as a matter of law.

In considering the question of contributory negligence of Kroger, we do so with the knowledge that the jury returned an affirmative reply to the special issue submitted to it as to whether or not Kroger, its agents or employees, were guilty of negligence proximately causing the losses and damages complained of in the declaration.

In making this determination we must construe the evidence most favorably to the defendants here and allow all reasonable inferences which tend to uphold the verdict of the jury. It is the duty of the jury to consider all of the evidence and to settle the differences that may develop therefrom. Upon appeal here we assume that all such differences have been settled by such verdict, and we have only to decide whether the circumstances of the case were sufficient in point of law and reason to permit the jury to find and reach such a verdict. Spivey v. St. Thomas Hospital, 31 Tenn.App. 12, 211 S.W.2d 450 (1948).

In judging whether there is sufficient material evidence to support the verdict of the jury, the reviewing court is required to look to all the evidence, construe it most strongly in favor of the successful party below; take as true that which has a tendency to support the verdict of the jury; and to discard all countervailing evidence and allow all reasonable inferences to be drawn from such evidence in favor of the defendants here. City of Winchester v. Finchum, 201 Tenn. 604, 301 S.W.2d 341 (1957); Smith et al. v. Sloan, 189 Tenn. 368, 225 S.W.2d 539, 227 S.W.2d 2 (1949); Rose & Co. v. Snyder, 185 Tenn. 499, 206 S.W.2d 897 (1947); Osborn v. City of Nashville, 182 Tenn. 197, 185 S.W.2d 510 (1945); ...