Oddo v. Speedway Scaffold Co.

• Decision Date: 28 July 1989
• Docket Number: No. 87-875,87-875
• Citation: 233 Neb. 1,443 N.W.2d 596
• Parties: Bernard ODDO, Appellee, v. SPEEDWAY SCAFFOLD COMPANY, Appellee, Contractor Associates, Inc., Appellant.
• Court: Nebraska Supreme Court

Page 596

443 N.W.2d 596

233 Neb. 1

Bernard ODDO, Appellee, v. SPEEDWAY SCAFFOLD COMPANY, Appellee, Contractor Associates, Inc., Appellant.

No. 87-875.

Supreme Court of Nebraska.

July 28, 1989.

Syllabus by the Court

1. Agency: Words and Phrases. An agency is a fiduciary relationship, resulting from one person's manifested consent that another may act on behalf and subject to the control of the person manifesting such consent, and, further, resulting from another's consent to so act.

2. Principal and Agent. The scope of an agent's authority is a question of fact.

3. Principal and Agent: Words and Phrases. In the relationship of principal and agent, an agent's actual authority is the power to act on the principal's behalf in accordance with the principal's consent to the agency.

4. Contracts. One who signs a document without reading it cannot later avoid the effect of the signed document by claiming lack of knowledge concerning the document's contents.

5. Workers' Compensation: Liability: Contracts. When an employer, liable to an employee under the Nebraska Workers' Compensation Act, agrees to indemnify a third party for a loss sustained as the result of the third party's payment to the indemnitor's employee, the employer's exclusion from liability accorded by the Workers' Compensation Act does not preclude the third party's action to enforce the indemnity agreement with the indemnitor-employer.

6. Contracts: Words and Phrases. An indemnity agreement is a contract to be construed according to the principles generally applied in construction or interpretation of other contracts.

7. Contracts: Negligence: Intent. An indemnitee may be indemnified against his own negligence if the contract contains express language to that effect or contains clear and unequivocal language that that is the intention of the parties.

8. Contracts: Negligence. Neb.Rev.Stat. § 48-425 (Reissue 1988) does not preclude indemnification against a breach of the statutory duty concerning scaffolding.

9. Contracts: Damages: Trial. A factual question concerning damages recoverable in an action on an indemnity agreement, whether such question involves causation or amount of damages, is a matter for the fact finder.

Richard L. Walentine and Betty L. Egan, of Walentine, O'Toole, McQuillan & Gordon, Omaha, for appellant.

Michael F. Kinney, of Cassem, Tierney, Adams, Gotch & Douglas, and Michael E. Waldeck, Omaha, and Randa Rawlins, of Niewald, Waldeck, Norris & Brown, Kansas City, Mo., for appellee Speedway Scaffold.

HASTINGS, C.J., WHITE, SHANAHAN, and FAHRNBRUCH, JJ., and McGINN, District Judge.

SHANAHAN, Justice.

As the result of a bench trial, Speedway Scaffold Company (Speedway) recovered a judgment against Contractor Associates, Inc. (Contractor), for $1,114,989.10 based on an indemnity agreement. Contractor appeals and claims that the district court erred in finding that Speedway was entitled to contractual indemnity, and in finding that Contractor was liable to pay an attorney fee for counsel representing the insurance carrier for Speedway's excess coverage.

STANDARD OF REVIEW

In a bench trial of a law action, a trial court's factual findings have the effect of a verdict and will not be set aside unless clearly erroneous. Alliance Nat. Bank v. State Surety Co., 223 Neb. 403, 390 N.W.2d 487 (1986). In reviewing a judgment awarded in a bench trial of a law action, the Supreme Court does not reweigh evidence but considers the evidence in a light most favorable to the successful party and resolves evidentiary conflicts in favor of the successful party, who is entitled to every reasonable inference deducible from the evidence. Zeller v. County of Howard, 227 Neb. 667, 419 N.W.2d 654 (1988); Alliance Nat. Bank v. State Surety Co., supra; McKinstry v. County of Cass, 228 Neb. 733, 424 N.W.2d 322 (1988).

FACTS

Since 1979, Contractor, a masonry contractor, periodically leased scaffolding equipment from Speedway. When Contractor needed scaffolding, its president, Jesse Sutton, contacted Speedway and ordered scaffolding, which was delivered to the site of Contractor's work. On delivery of scaffolding, Speedway required the signature of a Contractor employee on a written lease and retained the signed original of the lease. Contractor received a copy of the signed lease. Although Speedway sometimes erected scaffolding for other customers, Contractor usually erected the scaffolding by itself.

If Contractor failed to return all the scaffolding at the end of the lease, Speedway continued to charge Contractor rent for the unreturned equipment. However, if Contractor informed Speedway that Contractor would keep the equipment, Speedway billed Contractor for the price of the equipment retained.

In October 1980, Speedway revised the form of its standard lease and used the new form in all lease transactions from that time. The front of the lease form reflected the lessee's name, the type and amount of scaffolding involved, the date when the scaffolding was ordered, and the location where the scaffolding was delivered. The front of the form also had a place for a signature underneath the words "Received Equipment In Good Order and Subject to Conditions of Rental By [blank line]." Immediately beneath the signature line the following was printed in bold uppercase letters: "NOTE: SEE REVERSE SIDE FOR TERMS AND CONDITIONS OF LEASE. ALL WARRANTIES DISCLAIMED." The reverse side of Speedway's revised form contained 18 numbered paragraphs expressing conditions of the lease. Most of the paragraphs were in standard type, with conventional upper and lowercase letters. However, at the center of the reverse side, in uppercase bold print, the following appeared:

11. INDEMNIFICATION: LESSEE SHALL INDEMNIFY AND DEFEND LESSOR AGAINST AND HOLD LESSOR HARMLESS FROM ANY AND ALL CLAIMS, ACTIONS, SUITS, PROCEEDINGS, COSTS, EXPENSES, DAMAGES AND LIABILITIES, INCLUDING ATTORNEY'S FEES WHICH:

(1) RELATE TO INJURY OR TO DESTRUCTION OF PROPERTY, OR BODILY INJURY, ILLNESS, SICKNESS, DISEASE OR DEATH OF ANY PERSON (INCLUDING EMPLOYEES OF LESSEE), AND;

(2) ARE CAUSED, OR CLAIMED TO BE CAUSED, IN WHOLE OR IN PART BY THE EQUIPMENT LEASED HEREIN OR BY THE LIABILITY OR CONDUCT (INCLUDING ACTIVE, PASSIVE, PRIMARY OR SECONDARY) OF LESSOR, ITS AGENTS OR EMPLOYEES, OR ANYONE FOR WHOSE ACTS ANY OF THEM MAY BE LIABLE. THE PARTIES AGREE THAT LESSOR SHALL ONLY BE LIABLE OR RESPONSIBLE FOR ACTIONS OF WILFUL MISCONDUCT.

LESSEE SHALL, AT ITS OWN COST AND EXPENSE, DEFEND LESSOR AGAINST ALL SUITS OR PROCEEDINGS COMMENCED BY ANYONE IN WHICH LESSOR IS NAMED A PARTY FOR WHICH LESSOR IS ALLEGED TO BE LIABLE OR RESPONSIBLE AS A RESULT OF OR ARISING OUT OF THE EQUIPMENT OR ANY ALLEGED ACT OR OMISSION BY LESSOR, AND LESSEE SHALL BE LIABLE AND RESPONSIBLE FOR ALL COST, EXPENSES AND ATTORNEY'S FEES INCURRED IN SUCH DEFENSE AND/OR SETTLEMENT, JUDGMENT OR OTHER RESOLUTION. IN THE EVENT THAT SUCH ACTION IS COMMENCED NAMING LESSOR AS A PARTY, LESSOR MAY ELECT TO DEFEND ACTION ON ITS OWN BEHALF AND LESSEE AGREES THAT IT

SHALL BE LIABLE FOR ALL COSTS, EXPENSES AND ATTORNEY'S FEES INCURRED BY LESSOR IN SUCH DEFENSE.

PURPOSE OF THIS CLAUSE: IT IS THE PURPOSE OF THIS CLAUSE TO SHIFT THE RISK OF ALL CLAIMS RELATING TO THE LEASED PROPERTY TO THE LESSEE DURING THE ENTIRE TERM OF THIS LEASE.

Contractor kept all its copies of Speedway leases in a folder at Contractor's office, where the leases were available for review if needed or desired. On various occasions, Sutton had seen the Speedway leases and read some of the provisions on the back of the lease forms, although he did not recall having read the indemnity provision contained in paragraph 11 on the reverse side of each Speedway lease. However, Sutton understood the concept and consequences of indemnity. All Contractor employees at the jobsite were authorized to sign the lease form which accompanied scaffolding deliveries from Speedway. Sutton never informed Speedway that Contractor would not accept the indemnity provision in Speedway's leases and never limited the authority of Contractor employees to sign a lease, which always accompanied scaffolding deliveries from Speedway.

After 2 years of periodic leasing from Speedway pursuant to the lease form revised in 1980, Sutton called Speedway on November 17, 1982, and ordered scaffolding under a lease, which was to be delivered by Speedway and erected by Contractor at its jobsite. Speedway delivered the scaffolding as requested. Although the signature on the lease form which accompanied the order is somewhat illegible, Sutton acknowledged that the signature "looks like it was Harvey Cowan," a mason tender for Contractor, who signed the lease bearing the acknowledgment that Cowan had received the scaffolding subject to the conditions on the reverse side of the form.

On November 18, 1982, some of Speedway's scaffolding, which was delivered on November 17, collapsed on account of a failure in the material brackets for the scaffolding and injured Bernard Oddo, one of Contractor's employees. Evidence indicated that Contractor, sometime after November 18, purchased from Speedway the material brackets which were found to be defective. Oddo sued Speedway for negligence and joined Contractor pursuant to Neb.Rev.Stat. § 48-118 (Reissue 1988) to determine Contractor's subrogation interest as the result of workers' compensation benefits paid to Oddo. On the basis of the indemnity agreement in the scaffolding lease, Speedway cross-petitioned against Contractor and sought indemnification for any loss sustained as the result of Oddo's claim.

Two law firms participated in Speedway's defense to Oddo's action. Cassem, Tierney, Adams, Gotch & Douglas of Omaha represented Speedway's primary liability insurance carrier, Western Insurance Company, which supplied coverage with a $500,000 limit. Niewald, Waldeck, Norris & Brown of Kansas City, Missouri, represented Speedway's excess insurance carrier, Stonewall...