Phillippe v. Jerome H. Rhoads, Inc.

Decision Date31 March 1975
PartiesGeraldine B. PHILLIPPE and Earett G. Phillippe, her husband, Appellants, v. JEROME H. RHOADS, Inc.
CourtPennsylvania Superior Court

Fred T. Cadmus, III, Kenneth R. Werner, West Chester, for appellants.

Robert C. Steiger, Philadelphia, for appellee.

Before WATKINS, President Judge, and JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.

VAN der VOORT, Judge.

This is an appeal from an Order granting defendants' motion for judgment on the pleadings, 1 entered on January 23, 1974, by Trial Judge John M. Wajert. Appellants' cause of action was grounded in trespass and alleged that appellee's negligent installation and maintenance of underground fuel storage tanks, gasoline pumps, and plumbing fixtures associated therewith caused three separate gasoline explosions. Appellee answered and raised by new matter the indemnity provision 2 of the contract, viz., an 'Equipment Loan Agreement', by which appellants contracted with appellee for installation of certain equipment necessary to the selling of gasoline. Appellee then filed an amendment to his new matter, adding only a 'Dealer Contract', which contained a similar indemnity clause, thus placing upon the record both documents relative to the parties' contractual obligations. Appellee moved for judgment on the pleadings pursuant to Pennsylvania Rule of Civil Procedure 1034, 12 P.S. Appendix, which was granted.

Appellants urge us to declare the indemnity clause invalid. We must begin with the 'rule that a covenant against liability for acts of negligence is valid and enforceable when entered into by private individuals in furtherance of their personal affairs.' Galligan v. Arovitch, 421 Pa. 301, 304, 219 A.2d 463, 465 (1966). Our Supreme Court recognizes a caveat to this rule by the holding in Dilks v. Flohr Chevrolet, 411 Pa. 425, 192 A.2d 682 (1963) that such contractual provisions must not contravene public policy. Thus, a contract between individuals cannot void an interest which the Legislature has deemed worthy of regulation for the public health and safety. See Boyd v. Smith, 372 Pa. 306, 94 A.2d 44 (1953). We do not find nor have appellants pointed us to legislative pronouncements on the subject of the instant installation and maintenance. In their brief appellants argue that they were foreclosed from amending so as to add statutes and regulations regarding storage and use of inflammables, and thus to show public policy. This the court in its discretion refused. See Pennsylvania Rule of Civil Procedure 1033 and Pugh v. Bankers Mutual Insurance Co., 206 Pa.Super. 136, 211 A.2d 135 (1965). We believe that the hearing judge did not abuse his discretion in this refusal, as the issues might more properly have been raised in answer to appellee's motion or at argument. 3 Having found no statute or regulation, we do not accept appellants' argument that the instant indemnity clause contravenes public policy.

The further caveat is placed upon the general rule as expressed in Galligan, supra, to the effect that an exculpatory clause, to be enforceable, must be part of a contract between parties who are free bargaining agents or mutual beneficiaries of the bargain in their individual capacities. Warren City Lines, Inc. v. United Refining Co., 220 Pa.Super. 308, 287 A.2d 149 (1971). While appellants aver that they were in an inferior bargaining position with this appellee, they do not allege that they could not deal with another in the business of installing and maintaining the instant fixtures. Further, appellants fail to aver that either they or appellee had not benefitted from the contract relations which had existed one with the other.

Galligan, supra, further stands for the proposition that 'an agreement or instrument which reduces legal rights which would otherwise exist is strictly construed against the party asserting it and must spell out with the utmost particularity the intention of the parties.' (at p. 303 of 421 Pa., at p. 465 of 219 A.2d) Reading the present indemnity clause (see footnote 2, above) in a light most favorable to appellants we find it in no way ambiguous or unclear. Its language manifests a clear intention to release only appellee from any negligence of which it might be a part in the performance of certain enumerated duties upon specified matter. We conclude that the instant indemnity clause is a clear release.

Order granting judgment affirmed.

HOFFMAN, J., files dissenting opinion in which CERCONE and SPAETH, JJ., join.

HOFFMAN, Judge (dissenting).

In this appeal, we must determine whether the trial court erred in granting appellee's motion for judgment on the pleadings pursuant to Rule 1034 of the Pennsylvania Rules of Civil Procedure.

Appellants operate a general store and gasoline service station in Unionville, Chester County. On May 1, 1970, the parties entered into an 'Equipment Loan Agreement' under which appellee agreed to lend appellants four gasoline curb pumps and underground tanks. In return, appellants agreed to use the equipment exclusively for the handling, storage, and dispensing of appellee's products. On three separate occasions, gasoline explosions occurred on appellants' property, causing extensive damage. As a result, appellants instituted a suit in trespass, alleging that the explosions were caused by appellee's negligent construction and installation of the fuel storage tanks. On December 1, 1972, appellee filed an answer to appellants' complaint, and attached new matter pursuant to Rule 1045: 'The said written contract . . . is attached hereto . . . and under the terms of paragraph five of said agreement, the plaintiff, . . . does agree to indemnify and save harmless defendant from any liability for any loss, damage or injury in any way caused by the equipment system leased and waives and releases said defendant from any claim for damages . . .' In their reply to new matter, appellants averred that no answer was required. On April 25, 1973, appellee filed an amended answer and amended new matter, again referring to the indemnity clause. In reply to the amended new matter, appellants stated: '. . . The plaintiffs are advised, believe and therefore aver that the said (indemnity clause) was not in force at the time of the times relevant to this cause of action, was not legally binding in the premises, Was contrary to law and public policy, and was otherwise legally inoperative.' (Emphasis added.)

Appellee filed a motion for judgment on the pleadings pursuant to Rule 1034 on September 19, 1973. After oral argument, and after denying appellants' request for leave to amend their complaint to include Pennsylvania statutes and regulations concerning the installation of fuel tanks, the lower court granted appellee's motion. This appeal followed.

It is well-settled that a motion for judgment on the pleadings can only be granted in cases where the moving party's right to prevail is so clear that a trial would be a fruitless exercise. Karns v. Tony Vitale Fireworks Corp., 436 Pa. 181, 259 A.2d 687 (1969); Bata v. Central-Penn National Bank of Philadelphia, 423 Pa. 373, 224 A.2d 174 (1966); Bureau for Child Care v. United Fund of Philadelphia Area, 416 Pa. 617, 207 A.2d 847 (1965). Furthermore, then passing on a motion under Rule 1034, the trial court can consider only the pleadings themselves and any documents properly attached thereto. Hammermill Paper Co. v. Rust Engineering Co., 430 Pa. 365, 243 A.2d 289 (1968); Aughenbaugh v. North American Refractories Co., 426 Pa. 211, 231 A.2d 173 (1967).

A motion for judgment on the pleadings is in the nature of a demurrer, and thus all of the opposing party's well-pleaded allegations are assumed to be true, and only specifically admitted facts may be used against him. See e.g., Goldman v. McShain, 432 Pa. 61, 68, 247 A.2d 455 (1968). In the present case, appellee new matter averred that the contract contained an indemnity clause, which, If valid, would be a complete defense to appellants' suit. The existence of the indemnity clause is obviously a factual averment requiring a response: "New matter' pleading is designed to compel a plaintiff to answer the defendant's affirmative defenses during the pleading stage to avoid an unnecessary trial. If the plaintiff answers inadequately, a motion for judgment on the pleadings may be filed.' Chivers v. School District of Mt. Lebanon, 6 Pa.Comwlth. 622, 625, 297 A.2d 187 (1972), quoting Goodrich-Amram, Standard Pennsylvania Practice (1972 Supplement), § 1030--1 at 308. Thus, had appellants failed to reply to appellee's new matter, the lower court's ruling would have been proper because a lawful indemnity clause would be a complete defense and the pleadings would not have indicated any dispute as to its validity. But appellants specifically denied that the indemnity clause was controlling. At this juncture,...

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