Osborne v. Vulcan Foundry, Inc.

• Decision Date: 14 March 1991
• Docket Number: No. 90-CA-0995,90-CA-0995
• Citation: 577 So.2d 318
• Parties: Thomas J. OSBORNE, Jr., et al. v. VULCAN FOUNDRY, INC., et al. 577 So.2d 318
• Court: Court of Appeal of Louisiana — District of US

Page 318

577 So.2d 318

Thomas J. OSBORNE, Jr., et al. v. VULCAN FOUNDRY, INC., et al.

No. 90-CA-0995.

577 So.2d 318

Court of Appeal of Louisiana, Fourth Circuit.

March 14, 1991.

Thomas G. Buck, Metairie, for The Board of Comm'rs for the Port of New Orleans, third party plaintiff/appellee.

Gerard T. Gelpi, John T. Lewis, Gelpi, Sullivan, Carroll & Laborde, New Orleans, for Baton Rouge Marine Contractors, Inc., third party defendant/appellant.

Before KLEES, BYRNES and WILLIAMS, JJ.

WILLIAMS, Judge.

The trial court sustained a motion for summary judgment filed by third party plaintiff, Board of Commissioners for the Port of New Orleans (Dock Board), against third party defendant, Baton Rouge Marine Contractors, Inc. (BRMC), ¹ requiring it to defend and indemnify the Dock Board for claims asserted against it in this suit. The trial court's reasons for judgment indicate the ruling is based upon "the clear language of the contract between the parties." Through this appeal, BRMC claims the trial court erred in granting the motion because unresolved issues of material fact remain and, as a matter of law, the exculpatory and liability shifting provisions of the contract of lease violate the Shipping Act of 1916, the Shipping Act of 1984, LSA-R.S. 38:2216, LSA-R.S. 9:3221 and LSA-C.C. art. 2695, and/or otherwise contravene public policy. As we agree with BRMC's contention that issues of material fact remain unresolved, we reverse the trial court's summary judgment. We pretermit review of the issues of law.

FACTUAL AND PROCEDURAL HISTORY

On March 19, 1987, Thomas J. Osborne, Jr., and his wife, Phyllis Osborne, filed suit against Vulcan Foundry, Inc. ² and the Dock Board for damages arising out of a work-related accident which occurred on October 26, 1986. The Osbornes' petition alleges that, while in the course and scope of his employment with BRMC, Mr. Osborne was "injured when the top loader he was driving fell through a drainage grating on property owned and maintained by the Board," and leased to BRMC. The petition asserts the Dock Board "specifically had a duty to maintain said gratings and property so that top loaders of the type plaintiff was driving at the time of his accident could traverse them without incident." The petition further asserts the Dock Board was "negligent by failing to properly install and maintain the drainage grating" and this negligence "caused or contributed to plaintiff's injuries." In the alternative, plaintiffs' third supplemental petition avers the Dock Board negligently failed to warn plaintiff that the drainage grating might not be sufficient to withstand the weight of the BRMC machinery used at the accident site.

The Dock Board's answer to the petition denies its assertions and pleads Osbornes's comparative and contributory negligence. The answer also contains a cross claim against Vulcan for indemnity and contribution and an allegation that, by virtue of its lease with plaintiff's employer BRMC, the duty to maintain the drainage grating and property belonged to BRMC.

BRMC and its worker's compensation insurer intervened on August 28, 1987, for reimbursement for the medical and compensation benefits paid to Osborne, from any settlement or judgment which plaintiffs might receive from this suit. ³ Thereafter, on October 8, 1987, the Dock Board assumed the position of third party plaintiff and made BRMC third party defendant. The third party petition avers that the Dock Board is named as a direct defendant based upon allegations "that certain defects in the premises at his employment caused him injuries." But, at "all relevant times, third party defendants were lessees of the premises, and the ... lease requires the lessee to assume all responsibility for maintenance, to provide insurance, and to indemnify and defend third party plaintiffs in this action." Therefore, the Dock Board prays for judgment in its favor and against BRMC, requiring BRMC to cover its expenses in the defense of this matter and to indemnify it if judgment is ultimately rendered against it.

BRMC's answer to the third party demand asserts seven defenses. BRMC 1) claims the third party demand fails to set forth a claim upon which relief can be granted, 2) denies the petition's assertions, 3) avers it complied with any and all lawful obligations imposed upon it by the lease, 4) avers in the alternative that all of plaintiffs' damages were caused by the active fault and/or negligence of the Dock Board, 5) avers in the alternative that if plaintiff was injured by a vice or defect in the premises, the Dock Board knew or should have known of the defects and had reasonable notice of same, 6) avers in the alternative that the liability shifting and indemnity provisions of Section 34 of the lease agreement are unlawful and, hence, are inapplicable to this suit and 7) avers in the alternative that the trial court is without subject matter jurisdiction to construe and rule upon the provisions of the Dock Board and BRMC's lease.

On July 13, 1989, the Dock Board motioned for summary judgment claiming its entitlement to a complete defense and for indemnity from BRMC in accordance with the terms of their lease, and claiming its right of dismissal as plaintiff is the Dock Board's statutory employee. Its memorandum in support declares,

[i]t is undisputed that the accident occurred on property which had been leased to and was in the complete control, custody and possession of BRMC since 1979, over seven years prior to the accident. Although specifically listed in the lease as a "light duty" area, BRMC made various uses of this portion of the property, including storing extremely heavy loaded containers directly on top of the grating, and had no regular maintenance or inspection program. After more than seven years of constant use, the grating broke ...

In any event, no matter what the cause of the accident, the Dock Board is entitled to indemnity and defense from its lessee.

The lease ... was for ten years, and included the area where plaintiff's accident occurred.

Under Section 8, the properties were to "be taken by lessee in their present condition, without any obligation on Board to make any changes or improvements therein"; the lessee agreed to "assume sole responsibility for the condition of the leased premises"; and the lessee had "fully inspected the leased premises, and on the basis of such inspection lessee accepts the leased premises in their present condition as being suitable for the purposes for which they are hereby leased ...".

Under Article 14, BRMC agreed to "pay all costs and assume all risks in doing work, or carrying on operations, now or hereafter permitted or required under the terms and conditions of this lease ...".

Under Article 15, BRMC had the right to build whatever they wanted on the leased premises, as long as the Board had the right to approve the plans.

Article 16 provided that:

Lessee agrees to be responsible for and shall at its own cost, risk and expense perform and pay all costs of maintenance, repairs, renewals and replacements, whether attributable to use and operations or to deterioration of materials, of the herein leased premises and any facilities and equipments situated or to be situated thereon ... Board shall have no responsibility whatsoever to perform any maintenance work on the herein leased premises ...

Article 18 provided that BRMC "shall, at its own cost, risk and expense, promptly and with due dilligence repair, replace or restore or cause the repair, replacement or restoration of any and all such property which may become the subject of loss, damage or destruction, however caused or whether such loss, damage or destruction be partial or total"; and further that "Board shall have no responsibility to repair, replace or restore any property herein leased which may be the subject of loss, damage or destruction ...".

Finally, and most specifically, Article 34, titled "Indemnity" provides that BRMC "shall protect, defend, indemnify and keep and save forever harmless Board from and against any and all loss, cost, claims, charges, expenses, penalties, damages, fines, suits, demands and actions of any kind in (sic) nature whatsoever growing out of, in connection with, or by reason of any and all lessee's operations ... not directly and solely caused by any act of fault or negligence of Board, its employees or agents."

Clearly, under this contract, BRMC accepted the premises as is, assumed complete responsibility for all maintenance and repair, and agreed to indemnify and hold harmless the Board from claims such as are now presented by the plaintiff.

* * * * * *

... [T]he undisputed facts show that with regard to the the improper installation claim, the Dock Board did not install the grating. It was installed by a previous lessee. With regard to the failure to properly maintain claim, the Dock Board had no obligation to maintain the grating, said obligation being assumed by the lessee. Finally, with regard to the failure to warn claim, the lessor could not have a legal duty to lessee's employee to warn of something about which it had no knowledge and which was presumably an undetectible problem. Therefore, under these circumstances, defendant is clearly entitled to a judgment in its favor, against lessee, ordering them to repay defense costs incurred to date and to provide in defense and indemnity with regard to plaintiff's claims.

Both Vulcan and the Osbornes' oppositions to the motion are limited to the Dock Board's claim that it is Osborne's statutory employer and, therefore, immune in tort under LSA-R.S. 23:1021 et seq. BRMC's opposition, however, favors the Dock Board's assertion of its statutory employer status, while it declares the Dock Board's arguments on indemnity are meritless. BRMC urges the prematurity of its responding to the Dock Board's indemnity argument as plaintiffs have not responded to Dock Board's allegations of uncontested facts. ...