Pickens-Bond Const. Co. v. North Little Rock Elec. Co.

• Decision Date: 09 November 1970
• Docket Number: PICKENS-BOND,No. 5--5352,5--5352
• Citation: 249 Ark. 389,459 S.W.2d 549
• Parties: CONSTRUCTION COMPANY and Aetna Casualty & Surety Company, Appellants, v. NORTH LITTLE ROCK ELECTRIC COMPANY, Appellee.
• Court: Arkansas Supreme Court

Page 549

459 S.W.2d 549

249 Ark. 389

PICKENS-BOND CONSTRUCTION COMPANY and Aetna Casualty & Surety Company, Appellants, v. NORTH LITTLE ROCK ELECTRIC COMPANY, Appellee.

No. 5--5352.

Supreme Court of Arkansas.

Nov. 9, 1970.

Smith, Williams, Friday & Bowen by William H. Sutton and Max C. Mehlburger, Little Rock, for appellants.

Wright, Lindsey & Jennings by James D. Storey, Little Rock, for appellee.

FOGLEMAN, Justice.

Appellant Pickens-Bond Construction Company and its liability insurance carrier Aetna Casualty & Surety Company sought to recover from appellee North Little Rock Electric Company all sums paid by the carrier in settlement of personal injury claims of an employee of appellee. Pickens-Bond was the general contractor on a construction job, and appellee was the electrical subcontractor. The employee was injured while performing work for this subcontractor on the job site. He was burned by explosion of liquid fuel obtained for a heating stove. The fuel, its container and the stove all belonged to Pickens-Bond. The can of fuel was near the heating stove when the explosion occurred. The only persons in the vicinity of the stove and fuel can at the time were North Little Rock Electric Company employees, although Pickens-Bond employees were working on the job site on that day. While specified employees of Pickens-Bond had the responsibility of refueling the stove from time to time, employees of other subcontractors occasionally put fuel in the stove. The identity of neither the person who last filled the stove before the explosion, nor of the one who placed the fuel can in proximity to the stove, is known.

Appellants' suit was based upon an indemnity clause contained in the contract between Pickens-Bond and North Little Rock Electric Company. The circuit court granted appellee's motion for summary judgment. It found the agreement too broad in its terms. That court held that the clause should not be construed to indemnify against the negligence of the indemnitee because this intention is not expressed in unequivocal words. We reverse the judgment because we feel that a question of fact must be determined before the question of coverage of the negligence of Pickens-Bond can be considered. The clause in question follows:

Party of the second part shall be responsible for his own work and every part thereof, and all of the work of every description used in connection therewith. He shall specifically and distinctly

APPELLANTS' VERSION

He shall specifically and distinctly assume all risks

(1) of damage or injury from whatever cause to property or persons used or employed (a) on or (b) in connection with his work,

and

(2) of all damage or injury from any cause to property wherever located, resulting from any action or operation under this subcontract or in connection with his work,

and undertake and promise to protect and and defend the (general contractor) against all claims on account of any such damage or injury. assume, and does assume, all risks of damage or injury from whatever cause to property or persons used or employed on or in connection with his work, and of all damage or injury from any cause to property wherever located, resulting from any action or operation under this sub-contract or in connection with his work, and undertake and promise to protect and defend the party of the first part against all claims on account of any such damage or injury.

Appellants contend that the subcontractor, by this clause assumed all risk of injury to his employees from any cause whatever, including the negligence of the general contractor. Appellee contends that the indemnity does not cover injuries resulting from negligence of the general contractor. It contends that the indemnity is only effective against injuries to employees resulting from any action or operation under the subcontract in connection with the work thereon. In order to demonstrate these conflicting constructions we set out the two versions of appellee's undertaking.

APPELLEE'S VERSION

He shall specifically and distinctly assume all risks

(1) of damage or injury from whatever cause to property or persons used or employed on or in connection with his work

and

(2) of all damage or injury from any cause to property wherever located

resulting from any action or operation under this subcontract or in connection with his work, and undertake and promise to protect and defend the (general contractor) against all claims on account of any such damage or injury.

It will readily be seen that if appellee's construction is adopted there are many unnecessary words in the clause. A contract of indemnity is to be construed in accordance with the rules for the construction of contracts generally. Anthony v. Louisiana and Arkansas Railway Co., 316 F.2d 858 (8th Cir. 1963), cert. denied, 375 U.S. 830, 84 S.Ct. 74, 11 L.Ed.2d 61 (1963), aff'g 199 F.Supp. 286 (W.D.Ark.1961) (involving Arkansas contract and Arkansas law); 41 Am.Jur.2d 697, Indemnity § 13; 42 C.J.S. Indemnity § 8, p. 574. In construing a contract, the courts must endeavor to give meaning and effect to every word and may discard words as surplusage only when the intention of the parties clearly makes them such. Miller v. Dyer, 243 Ark. 981, 423 S.W.2d 275; Fowler v. Unionaid Life Ins. Co., 180 Ark. 140, 20 S.W.2d 611. Repetition of the preposition 'of' in the two 'damage' clauses clearly indicates a parallel of two separate and distinct types of damage or injury: first, to persons or property used on or in connection with the subcontractor's work, from whatever cause; and second, to property, wherever located, from any cause resulting from any action or operation under the subcontract or in connection with the work of the subcontractor. Then, if appellee is correct, there would have been no necessity for repetition of the words damage or injury. Furthermore, it word 'property' need not have been repeated. If there be any doubt about the surplusage of the above words, we are sure that the words 'in connection with his work' would not have been repeated if the parties intended the result appellee urges.

Surely if the parties had intended to contract according to appellee's version the opening clause would have read:

He shall specifically and distinctly assume all risks of damage or injury to persons used or employed on the work or to property, wherever located, from any cause resulting from any action or operation under this subcontract or in connection with his work * * *

The contrast between the words 'from whatever cause' and 'from any cause' also indicates that the modifying clause 'resulting from any action or operation under this subcontract or in connection with his work' is intended to limit the latter phrase only and serves as a contrast of 'whatever cause' where persons and property 'used or employed on or in connection with his work' are concerned with 'any cause' where 'property wherever located' is involved.

We cannot agree with appellee's construction of the contract. It seems clear to us that appellants' version is the correct construction. We find no ambiguity in the language of the contract, which would cause us to resort to rules of construction to ascertain the meaning of its words. Thus, for example, we are not called upon to construe the contract most strictly against Pickens-Bond, who apparently prepared it. Miller v. Dyer, 243 Ark. 981, 423 S.W.2d 275; Coffelt v. Decatur School District, 212 Ark. 743, 208 S.W.2d 1; Stoops v. Bank of Brinkley, 146 Ark. 127, 225 S.W. 593.

Our construction of the contract, however, does not completely foreclose appellee's argument that, in the absence of specific words requiring indemnification of Pickens-Bond against liability for its own negligence, the contract cannot bind appellee to this liability. There is an important factual problem confronting us before we can reach this argument of appellant. In this case, the language 'damage or injury from whatever cause' is about as broad and comprehensive language as is likely to appear in such a contract. A literal construction of it would certainly include the negligence of the indemnitee. We have stated our position on a contract such as this in Paul Hardeman, Inc. v. J. I. Hass Company (April 7, 1969), Ark., 439 S.W.2d 281. We said:

The precise question is whether this indemnity provision obligates the subcontractor to indemnify the prime contractor for damages arising out of the negligence of prime contractor which was the proximate cause of Turpin's injuries. The intention of Hass to so obligate itself must be expressed in clear and unequivocal terms and to the extent that no other meaning can be ascribed. 41 Am.Jur.2d, Indemnity § 15. Where an injury is caused by the sole negligence of the indemnitee many courts, in interpreting the indemnity contract, predicate their interpretation on the theory that such a liability would be unusual and harsh; consequently, the courts endeavor to relieve the indemnitor of liability to the negligent indemnitee. 175 A.L.R. p. 32, § 18.

The burden of demonstrating the nonexistence of questions of fact lay upon appellee. Mason v. Funderburk (November 3, 1969), Ark., 446 S.W.2d 543. It has failed to discharge this burden. In determining this point the evidence must be liberally construed in favor of the party opposing the motion, all doubts resolved against the judgment and all presumptions and inferences resolved against the movant. Wilson v. McDaniel (January 26, 1970), Kar., 449 S.W.2d 944; Mason v. Funderburk, supra.

We cannot say as a matter of law that the injuries of the employee were caused, either wholly or in part, by negligence of Pickens-Bond. If the negligence of Pickens-Bond was not a proximate cause of these injuries, then it seems clear that the resulting damages came within the coverage of the indemnity clause. In that event, it would be unnecessary to determine whether the agreement is as comprehensive as appellants contend...