Mason v. Callas Contractors, Inc., Civ. A. No. J-78-1743.

• Citation: 494 F. Supp. 782
• Decision Date: 07 July 1980
• Docket Number: Civ. A. No. J-78-1743.
• Parties: Wendell MASON, Plaintiff, v. CALLAS CONTRACTORS, INC., et al., Defendants.
• Court: U.S. District Court — District of Maryland

494 F. Supp. 782

Wendell MASON, Plaintiff, v. CALLAS CONTRACTORS, INC., et al., Defendants.

Civ. A. No. J-78-1743.

United States District Court, D. Maryland.

July 7, 1980.

James M. Gabler and S. Woods Bennett, Baltimore, Md., for plaintiff.

R. Roger Dreshsler and J. Paul Mullen, Baltimore, Md., for defendants, Elwin G. Smith Division Cyclops Corp.

Read McCaffrey, Baltimore, Md., for Rust-oleum Corp.

Benjamin R. Goertemiller, Baltimore, Md., for Callas Contractors.

Emanuel H. Horn and Mark I. Cantor, Baltimore, Md., for Southwestern Materials & Supply, Inc.

Jack L. Hardwick, Baltimore, Md., for Burrey/Kindsvatter, Inc.

MEMORANDUM AND ORDER

SHIRLEY B. JONES, District Judge.

This case arises out of an accident in which plaintiff was seriously injured while removing metal siding from a building. It is alleged that Rust-oleum Corporation contracted in 1977 with Bushey-Burrey, Inc. (now Burrey-Kindsvatter, Inc. and herein-after Burrey) to expand its factory building. Burrey, in turn, subcontracted with Southwestern Materials and Supply, Inc. (hereinafter Southwestern) to perform a number of tasks including removal of metal siding from the building. On June 15, 1977, plaintiff, in the course of his employment for Southwestern, was engaged in removing siding from the building when a piece of siding fell injuring him.

Plaintiff filed suit against Rust-oleum, the owner of the building, as well as Callas Contractors and Cyclops Corporation, both of whom were alleged to have some responsibility for the original installation of the siding which was the cause of the accident in question. Rust-oleum subsequently filed third-party complaints against Burrey and Southwestern alleging that both were obligated by virtue of certain contractual provisions to indemnify Rust-oleum for damages arising out of this suit.

Both Southwestern and Burrey have moved this Court to vacate the orders permitting Rust-oleum to file third-party complaints against them. Southwestern asserts that as plaintiff's employer, it is protected from the third-party claim by virtue of Maryland's Workmen's Compensation Law. Burrey also claims employer status relative to plaintiff pursuant to Md.Ann. Code Art. 101 § 62 and accordingly claims the same protection from suit. Both Burrey and Southwestern further claim that the respective contractual provisions which require them to indemnify Rust-oleum are void and unenforceable under Maryland law.

Workmen's Compensation

Both Southwestern and Burrey claim that they are not subject to suit because as employers of plaintiff their liability to him is limited by the Workmen's Compensation Act. The argument follows that if plaintiff's exclusive remedy against these third party defendants is Workmen's Compensation, then Rust-oleum cannot recover indirectly what plaintiff could not recover directly. This is an appealing argument on its face. An examination of Maryland authority, however, leads to a contrary conclusion.

Md.Ann. Code Art. 101 § 15 specifically provides that an employer's liability under the Maryland Workmen's Compensation Act to his employee shall be exclusive. The Act, however, preserves the right of the employee to bring suit against any negligent third party to recover damages. Md. Ann. Code Art. 101 § 58.

The Maryland Court of Appeals has held that a third party who was liable to the employee could not proceed against the employer for contribution as a joint tortfeasor. Baltimore Transit Co. v. State, 183 Md. 674, 39 A.2d 858 (1944). That case, however, does not address the present issue of whether the third party can recover from the employer by reason of an indemnity clause. The issue in the instant case is whether there is a right to indemnity by contract rather than one implied in law.

The Maryland Court of Appeals indicated in American Radiator and Standard Sanitary Corporation v. Mark Engineering Co., 230 Md. 584, 187 A.2d 864 (1962), that the Workmen's Compensation Act would not bar recovery against the third party by virtue of an indemnity agreement. In that case, the third party argued that an implied right of indemnity existed between it and the employer. The Court rejected the argument that there existed an implied right of indemnity between the third party and the employer and went on to state:

Since 1948, when Rukert Standard Wholesale Phosphate & Acid Works v. Rukert Terminal Corp., 193 Md. 20, 65 A.2d 304 (1948) was decided, employers in Maryland have been entitled to rely on the assumption that they would not be liable for or on account of an injury to an employee, beyond payment of compensation, unless they expressly waived immunity by agreeing to assume an obligation for contribution or indemnity.

230 Md. at 590, 187 A.2d at 867 (emphasis added). The Court of Appeals appears to have been quite clear in American Radiator that an employer may waive immunity under the Workmen's Compensation Act by entering into an indemnity agreement. Indeed, this is precisely the interpretation of American Radiator made by Judge Kaufman of this Court in McCross v. Ratnaker Shipping Co., 265 F.Supp. 827 (D.Md.1967). Accordingly, the Workmen's Compensation Act will not bar recovery from either of the third party defendants by Rust-oleum.

The next question which must be answered is whether the specific indemnity clauses involved would be enforced under Maryland law. Because the chronology and indemnity provisions are somewhat different as to both Burrey and Southwestern, each must be separately examined.

Southwestern

The accident in question took place on June 15, 1977. The subcontract between Burrey and Southwestern was signed on June 28, 1977. It must first be determined what effect the signing of the subcontract after the accident has on Southwestern's liability.

The general rule in Maryland is once parties enter into a written contract, into that written contract will merge all prior negotiations and oral agreements, and the written contract will be viewed as the exclusive medium for determining the right and liabilities of the respective parties. Housing Authority of College Park v. Macro, 275 Md. 281, 340 A.2d 216 (1975); Saliba v. Arthur F. Charlotte, Inc., 259 Md. 588, 270 A.2d 656 (1970). Therefore, the indemnity clause will be given effect regardless of the fact that the agreement was signed after the accident occurred.

The specific...