Parks v. Union Carbide Corp., 61468

• Decision Date: 10 June 1980
• Docket Number: No. 61468,61468
• Citation: 602 S.W.2d 188
• Parties: Melvin PARKS and Louise Parks, Plaintiffs, v. UNION CARBIDE CORPORATION, Defendant-Third-Party-Plaintiff-Appellant, v. CHEMLIME CORPORATION, Third-Party-Defendant-Respondent.
• Court: Missouri Supreme Court

Page 188

602 S.W.2d 188

Melvin PARKS and Louise Parks, Plaintiffs, v. UNION CARBIDE CORPORATION, Defendant-Third-Party-Plaintiff-Appellant, v. CHEMLIME CORPORATION, Third-Party-Defendant-Respondent.

No. 61468.

Supreme Court of Missouri, En Banc.

June 10, 1980.

Rehearing Denied July 15, 1980.

Kemper R. Coffelt, Roberts, Heneghan & Coffelt, Inc., St. Louis, for Union Carbide Corp.

Eugene K. Buckley, Gerre S. Langton, Evans & Dixon, St. Louis, for Chemline Corp.

PER CURIAM.

This appeal presents a question of contractual, as opposed to non-contractual, indemnity.

Plaintiffs sued Union Carbide Corporation for damages for injuries sustained by Melvin Parks while performing work for his employer, Chemlime Corporation, a transporter of lime, on Carbide's premises. Parks charged that while he was on his truck parked adjacent to Carbide's storage tanks and sewer lines, Carbide negligently injected water into a sewer line so that water pressure entered a storage tank and caused hot water and lime to erupt from the storage tank and drop on him. Carbide denied negligence and filed a third-party petition against Chemlime alleging a right to be indemnified by Chemlime for all sums awarded plaintiffs under an agreement in which Chemlime agreed to warn and supervise its employees in operations on Carbide's premises. Chemlime obtained judgment on the pleadings by an order made final for purposes of appeal. ¹

The court of appeals said it was constrained by McDonnell Air. Corp. v. Hartman-Hanks-Walsh P. Co., 323 S.W.2d 788 (Mo.1959) to hold that the third-party petition should be permitted, but transferred the case because it was not certain as to the interpretation of McDonnell Air. Corp. v. Hartman-Hanks-Walsh P. Co., supra, in light of Missouri Pac. R. Co. v. Whitehead & Kales Co., 566 S.W.2d 466 (Mo. banc 1978). The dispositive question is whether the agreement between Union Carbide Corporation and Chemlime Corporation contains clear and unequivocal terms of an intent of Chemlime to indemnify Union Carbide for liability for personal injuries to plaintiffs caused by Union Carbide's negligence. This Court holds that it does not, and affirms the judgment in denial of the third-party petition.

At the time of its transfer of this appeal, the court of appeals did not know how this Court would rule the question whether § 287.120.1, RSMo 1978, of the Workmen's Compensation Law would operate to release an employer subject to the law from other tort liability in light of Missouri Pac. R. Co. v. Whitehead & Kales Co., supra. State ex rel., etc. v. Ferriss, 588 S.W.2d 489 (Mo. banc 1979), subsequently held that because the question was answered by the statute the court "need not examine the breadth and scope of Whitehead and Kales ". As to McDonnell Air. Corp. v. Hartman-Hanks-Walsh P. Co., supra, the court said that there "the Court allowed the non-employer defendant to maintain an indemnity action against the employer of the injured employee but only on the basis that the employer defendant (Hartman) had breached a duty it expressly agreed (contracted) to perform with the non-employer (McDonnell). The rationale of the McDonnell Air. Corp. case, supra, supports the conclusion that, aside from the exception noted therein, the employer is not liable to the non-employer defendant for any sums that non-employer party is liable for to the injured plaintiff-employee in tort." 588 S.W.2d at 490.

Missouri Pac. R. Co. v. Whitehead & Kales Co., supra, dealt with non-contractual indemnity and relative fault: "A principled right to indemnity should rest on relative responsibility and should be determined by the facts as applied to that issue. * * * The two concurrent tortfeasors should be treated according to their respective fault or responsibility." ² 566 S.W.2d at 472. It did not change the right of a plaintiff to settle with one or more joint tortfeasors as provided in § 537.060, RSMo 1978, the liability of a workmen's compensation employer as provided in § 287.120.1, RSMo 1968, or the employer's right of subrogation as provided in § 287.150, RSMo 1978. It did not impair the right of contract with respect to any such matters. It expressly excluded any application to "indemnity which comes about by reason of contracts . . . ." Id. at 468, n. 2.

Carbide asserts that it is not "pursuing any theory of indemnity sounding in tort"; that its third-party petition "is based upon a contractual indemnity theory."

Neither McDonnell Air. Corp. v. Hartman-Hanks-Walsh P. Co., supra, nor Missouri Pac. R. Co. v. Whitehead & Kales Co., supra, touches the problem of what language is necessary in a contract to permit the would-be indemnitee (Union Carbide) to be indemnified against its own negligence, a situation differing from the usual case where the would-be indemnitee seeks to be indemnified for damages sustained by it from the indemnitor's negligence.

Union Carbide relies upon the following from its agreement with Chemlime:

"9. THE CO-PRODUCT LIME WILL BE SOLD TO YOU 'AS IS'. NO WARRANTIES BY US (OTHER THAN WARRANTY OF TITLE AS PROVIDED IN THE UNIFORM COMMERCIAL CODE) WILL BE IMPLIED OR OTHERWISE CREATED UNDER THE UNIFORM COMMERCIAL CODE, INCLUDING BUT NOT LIMITED TO WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. You acknowledged that you may obtain procedures which have the capability of analyzing the co-product lime. No claim of any kind with respect to the co-product lime, whether or not based on negligence shall be greater than the price of the co-product lime in respect to which such claim is made.

"10. You acknowledge that there are precautions which should be followed in the handling and use of the co-product lime. You agree that your personnel associated with the co-product lime are aware of the precautions and assume all responsibility for the warning of your employees, independent contractors and customers in this respect. You agree to have your personnel use due care in all matters relating to any persons or property on our premises. You assume responsibility for the results of use or resale of the co-product lime.

"11. You will be responsible for inspecting your operations at our plants to ascertain that they comply with proper safety and environmental practices and the requirements of this Agreement. However, we reserve the right, should we consider it appropriate at any time, to inspect your operations at our plants to ascertain for ourselves whether you are conducting your operations in accord with proper safety and environmental practices and the requirements of this Agreement. If we believe that you are not conducting your operations at any of our plants in accord with proper safety and environmental practices or the requirements of this Agreement, and we notify you in writing of said practices at such plant specifying a reasonable time within which such practices are to be corrected, and such practices are not corrected within the time specified, then by giving you written notice we may forthwith terminate your right to purchase and pick-up co-product lime at such plant."

Kansas City Power & Light Co. v. Federal Construction Corp., 351 S.W.2d 741 (Mo.1961), held that in a commercial setting, "where parties stand on a substantially equal footing, one may legally agree to indemnify the other against the results of the indemnitee's own negligence." 351 S.W.2d at 745. The court also stated that "a contract of indemnity will not be construed so as to indemnify one against loss or damage resulting from his own negligent acts unless such intention is expressed in clear and unequivocal terms." Id. The rationale for this rule was stated, Missouri District Telegraph Co. v. Southwestern Bell Telephone Co., 338 Mo. 692, 93 S.W.2d 19, 28 (1935):

" 'Contracts of indemnity . . . are usually intended to provide against loss or liability of one party, through the operations of the other, or caused by physical conditions that are under the control of the other over which the party indemnified has no control. Indeed, it would take clear language to show that a contract of indemnity was intended to cover conditions or operations under the control of the party indemnified . . . such, for instance, as accidents, the proximate cause of which is the negligence of the party indemnified.' "

(quoting North American Ry. Construction Co. v. Cincinnati Traction Co., 172 F. 214, 216 (7th Cir. 1909)). "(I)n the absence of such clear expression or where any doubt exists as to the intention of the parties," courts in Missouri will not construe a contract of indemnity to indemnify against the indemnitee's own negligence. Southwestern Bell Telephone Co. v. J.A. Tobin Construction Co., 536 S.W.2d 881, 885 (Mo.App.1976).

No such clear and unequivocal terms expressed an intent by Chemlime to indemnify Carbide for its own acts of negligence. Carbide contends that the last line in paragraph No. 10 of its agreement with Chemlime, presents sufficient evidence of such intent: "You assume responsibility for the results of use or resale of the co-product lime." This provision does not mention personal injuries caused by Carbide's own negligence, and such broad and general terms will not be construed to indemnify Carbide for its own acts of negligence.

Carbide contends in the alternative that Chemlime's agreement to warn and supervise its employees in their employment activities on Carbide's premises in paragraph Nos. 10-11 is sufficient to imply a promise to indemnify Carbide for liability to employee Parks. This contention fails for the same reason that Carbide's reliance on paragraph No. 10 of the agreement to establish an express promise to indemnify fell short. The basis of Parks' claim was Carbide's alleged negligence in causing an eruption in a storage tank. Just as paragraph No. 10 did not contain the requisite clear and unequivocal terms demonstrating an intention to indemnify liabilities due to the indemnitee's own...