Otis Elevator Co. v. Midland Red Oak Realty, Inc.
| Decision Date | 24 April 2007 |
| Docket Number | No. 04-6327.,04-6327. |
| Citation | 483 F.3d 1095 |
| Parties | OTIS ELEVATOR COMPANY, Plaintiff-Appellant, v. MIDLAND RED OAK REALTY, INC.; MRO Properties, Inc. and Knox Glass Company, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Stacey Haws Felkner (Robert E. Manchester with her on the briefs) of Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, OK, for Plaintiff-Appellant.
Robert W. Nelson (Derrick T. DeWitt with him on the briefs) of Whitten, Nelson, McGuire, Terry & Roselius, and Daniel K. Zorn (Stephen R. Palmer with him on the briefs) of Colins, Zorn & Wagner, Oklahoma City, OK, for Defendants-Appellants.
Before BRISCOE, ANDERSON and O'BRIEN, Circuit Judges.
On August 26, 1999, Defendant Knox Glass Company (Knox), with the assistance of Plaintiff Otis Elevator Company (Otis), attempted to transport a large piece of glass on top of an elevator car ("a car top move") in a building owned and managed by MRO Southwest (MRO).1 During the transport, the glass broke, injuring Raymond Atkinson, a Knox employee. Atkinson sued Otis, claiming its negligence caused his injuries. Otis settled with Atkinson for $425,000. On March 18, 2003, Otis filed the instant lawsuit seeking indemnity from Knox and MRO in the amount of the settlement plus the costs and attorney fees Otis incurred in defending the Atkinson lawsuit. Its indemnity claim was based on a written indemnity provision contained in a "Repair Order" which Knox and MRO employees signed immediately prior to the car top move. The district court concluded the indemnity provision did not apply to the car top move and awarded judgment in favor of Knox and MRO. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse and remand for further proceedings consistent with this opinion.
On August 26, 1999, Knox was scheduled to deliver a large thin piece of glass to the Oklahoma Society of CPA's, a tenant on the Ninth Floor of a building located at 50 Penn Place in Oklahoma City, Oklahoma.2 The building was owned by MRO. Because the glass was too large for the elevator car, Knox planned to deliver it on top of the car. Otis was called to assist with the move.3
On the morning of August 26, 1999, four Knox employees, Jess Hunt, Ray Atkinson, David Brown and Bill Hunt, arrived at 50 Penn Place with the glass. A few minutes later, they were met by two Otis employees, Steve Newport and Jeff Williams. Upon arrival, Newport presented a "Repair Order" to Jess Hunt and Raymond White, an MRO employee and the building's Chief of Security. In addition to identifying the customer's address and the equipment's location, manufacturer and machine number, the Repair Order contained the following language:
Make the repairs described below to equipment indicated above, at Otis' customary billing prices, for account of the undersigned, subject exclusively to the provisions on the reverse side hereof:
The undersigned hereby assumes complete responsibility for, and agrees to indemnify and save harmless Otis Elevator Company, its agents and employees from any and all damages or claims for damages for which they or any of them may sustain by reason of injury or death to persons or damage to property growing out of or connected with the performance of the work under this order whether caused by the negligence of Otis Elevator Company, its agents or employees or otherwise.4
(R. Vol. I at 107.) Newport did not explain the indemnity provision to either Jess Hunt or White; he merely informed them the Repair Order needed to be signed. Both Hunt and White signed the Repair Order without reading it.5
Subsequently, the glass was loaded on top of the elevator car. Atkinson and Bill Hunt, accompanied by Newport and Williams, rode on top of the elevator car with the glass, while Jess Hunt and Brown rode another elevator car to the Ninth Floor. Newport and Williams stopped the elevator car with the glass several feet below the Ninth Floor so the glass could be removed. Williams stepped from the top of the elevator on to the Ninth Floor. Newport, however, hoisted himself out. The glass broke and a shard of glass hit Atkinson's right arm, almost severing it.6 According to the Knox employees on scene, Newport kicked the glass as he was hoisting himself out of the elevator shaft, causing it to break. Newport denies kicking the glass. Williams testified he did not see Newport kick the glass and believed the glass was broken when Bill Hunt pulled on the glass and attempted to straighten it. However, he conceded Newport could have kicked the glass.
On July 17, 2001, Atkinson sued Otis in Oklahoma state court for negligence. A settlement conference was held on August 20, 2001; no settlement was reached. On March 15, 2002, Otis removed the case to federal court. On December 12, 2002, Otis drafted letters to Knox and MRO, describing the facts of the case and demanding they defend and indemnify Otis under the indemnity provision contained within the Repair Order.7 Otis also requested their participation in a mediation scheduled for December 23, 2002. Otis warned Knox and MRO that if they refused to accept its demand for indemnity or the tender of its defense, it intended to proceed with the mediation and make every effort to settle with Atkinson. Otis mailed these letters on December 16 or 18, 2002; Knox and MRO received them on December 20, 2002. On that date, MRO drafted a letter to Otis, denying liability under the Repair Order's indemnity provision and informing Otis it would not attend the settlement conference or assume Otis' defense. It also questioned Otis' failure to provide notice sooner, given that the Atkinson lawsuit had commenced seventeen months earlier. Upon its receipt of the letter, Knox forwarded it to its insurance company, Zurich North America (Zurich). Zurich informed Otis that before it could respond to its request for defense and indemnity, it would need to determine whether it owed this coverage to Otis. It requested Otis to send it copies of pleadings and depositions and Atkinson's medical information. It requested this information be sent "[a]t a suitable time." (R. Vol. I at 226.) Neither Knox nor MRO attended the mediation and no settlement was reached. Consequently, on December 30, 2002, the district court placed the case on the February 2003 trial docket and later scheduled a settlement conference before a magistrate judge for January 28, 2003.
On January 16, 2003, Otis drafted a second letter to MRO again demanding indemnity and tendering its defense. It also informed MRO the case was set on the February 4, 2003 trial docket call and a settlement conference was scheduled for January 28, 2003. On January 20, 2003, Otis wrote a similar letter to Knox, who again forwarded it to Zurich. On January 23, 2003, Zurich confirmed receipt of the demand and again requested information from Otis, including Atkinson's medical records and copies of pleadings and depositions, as well as any contracts between Otis and MRO. It also informed Otis that due to the untimeliness of the demand, it could not undertake Otis' defense. It further requested that Otis seek a continuance of the settlement conference and trial. On January 24, 2003, Otis responded to Zurich, stating it would mail the requested information via overnight mail. It also stated it would file an application for a continuance but doubted it would be granted. Otis filed a request for a continuance of the settlement conference and trial on January 27, 2003. That same day, a magistrate judge denied Otis' request for a continuance of the settlement conference and referred its request for a continuance of the trial to the district judge. Otis sent Zurich the information it requested on January 28, 2003, the date of the settlement conference. At the settlement conference, Otis settled with Atkinson for $425,000. Neither Knox nor MRO attended the settlement conference.8
On March 18, 2003, Otis filed the instant lawsuit against Knox and MRO (hereinafter Appellees) seeking indemnification pursuant to the indemnity provision contained within the Repair Order. On March 26, 2004, Otis filed a motion for summary judgment arguing the indemnity agreement was valid and enforceable and Appellees' decision not to accept the tender of its defense or participate in the settlement negotiations statutorily precluded them from challenging the reasonableness of the Atkinson settlement or whether it was entered in good faith. On June 10, 2004, Appellees filed responses to Otis' motion, claiming summary judgment was inappropriate because questions of material fact existed regarding the validity of the indemnity agreement, the timeliness of Otis' notice to them of the Atkinson lawsuit, the reasonableness of the settlement and whether the settlement was made in good faith.9 On August 17, 2004, the district court denied Otis' summary judgment motion. It found genuine issues of material fact as to the timeliness of the notice Otis provided to Appellees of the Atkinson lawsuit, the reasonableness of the settlement, and the validity of the indemnity provision. As to the indemnity provision, it questioned whether its presence in a Repair Order rendered it ambiguous, whether it resulted from an arm's-length transaction between parties of equal bargaining power and whether White had the authority to execute the indemnity agreement on MRO's behalf.
Thereafter, the parties filed trial briefs and a trial docket call and pretrial conference were held. At the trial docket call and pretrial conference, the parties agreed the validity of the indemnity provision in the Repair Order was a matter of law to be decided by the court. Consequently, the court allowed the parties to supplement their trial briefs and to file responses.
After briefing, the district court issued another order, this time concluding the indemnity provision contained within the Repair Order did not cover...
To continue reading
Request your trial
-
In re North Am. Petroleum Corp.. Usa
...and the Court's analysis under each State's law would result in the same holdings. 15. Oklahoma: Otis Elevator Co. v. Midland Red Oak Realty, Inc., 483 F.3d 1095, 1102 (10th Cir.2007) (“To determine whether a contract is ambiguous, a court must look to the language of the entire agreement, ......
-
Zwygart v. Bd. of County Com'Rs of Jefferson Cnty.
... ... Adair Group, Inc. v. St. Paul Fire & Marine Ins. Co., 477 F.3d 1186, 1187 ... ...
-
Lawlis v. Moore Iron & Steel Corp.
...be divined from extrinsic evidence but rather from a four-corners examination of the instrument. Otis Elevator Co. v. Midland Red Oak Realty, Inc., 483 F.3d 1095, 1101-02 (10th Cir. 2007). Whether a contract is ambiguous and requires extrinsic evidence to resolve its ambiguity is also a que......
-
Aliron Intern. v. Cherokee Nation Industries
...is ambiguous and interpretation of an unambiguous contract are questions of law" for the court. Otis Elevator Co. v. Midland Red Oak Realty, Inc., 483 F.3d 1095, 1101 (10th Cir.2007); see Palace Exploration Co. v. Petroleum Dev. Co., 374 F.3d 951, 953 (10th Cir.2004) (citing Lewis v. Sac & ......
-
Evidence
...a collateral order agreement falling outside the ambit of the parol evidence rule. Otis Elevator Co. v. Midland Red Oak Realty, Inc. , 483 F.3d 1095, 1101 (10th Cir. 2007). Since the contract in question was ambiguous, extrinsic evidence was permitted to determine the parties’ intent. Using......