Potts v. Dow Chemical Co.

• Decision Date: 18 June 1980
• Citation: 415 A.2d 1220,272 Pa.Super. 323
• Parties: Henry POTTS and Norma G. Potts, his wife v. DOW CHEMICAL COMPANY, Appellant v. UNITED STATES STEEL CORPORATION. Robert POTTS and Charlene Potts, his wife v. DOW CHEMICAL COMPANY, Appellant v. UNITED STATES STEEL CORPORATION. Michael BAKER and Helen Baker, his wife v. DOW CHEMICAL COMPANY, a corporation, Appellant v. UNITED STATES STEEL CORPORATION, a corporation. John FLATT and Margaret Flatt, his wife v. DOW CHEMICAL COMPANY, a corporation, Appellant v. UNITED STATES STEEL CORPORATION, a corporation.
• Court: Pennsylvania Superior Court

Page 1220

415 A.2d 1220

272 Pa.Super. 323

Henry POTTS and Norma G. Potts, his wife v. DOW CHEMICAL COMPANY, Appellant v. UNITED STATES STEEL CORPORATION.

Robert POTTS and Charlene Potts, his wife v. DOW CHEMICAL COMPANY, Appellant v. UNITED STATES STEEL CORPORATION.

Michael BAKER and Helen Baker, his wife v. DOW CHEMICAL COMPANY, a corporation, Appellant v. UNITED STATES STEEL CORPORATION, a corporation.

John FLATT and Margaret Flatt, his wife v. DOW CHEMICAL COMPANY, a corporation, Appellant v. UNITED STATES STEEL CORPORATION, a corporation.

Superior Court of Pennsylvania.

Argued April 12, 1979.

Filed Dec. 5, 1979.

Petition for Allowance of Appeal Denied June 18, 1980.

George Buckler, Pittsburgh, for appellant.

Richard F. Lerach, Pittsburgh, for U. S. Steel Corp., appellee.

Before CERCONE, President Judge, and PRICE, VAN der VOORT, SPAETH, HESTER and WIEAND, JJ. WIEAND, Judge:

Henry Potts, Robert Potts, Michael Baker, and John Flatt, employees of United States Steel Corporation, sustained injuries as a result of inhaling chemical fumes released while Dow Chemical Company was cleaning the water system of United States Steel Corporation's plant in Ambridge. The employees filed separate complaints in trespass against Dow, in which they alleged negligent handling of cleaning chemicals. Dow filed complaints in all actions joining U. S. Steel as an additional defendant on the grounds that it was solely liable to each plaintiff on the cause of action alleged or jointly liable thereon with Dow, or liable over to Dow under the terms of the contract between the parties. U. S. Steel filed preliminary objections in the nature of a demurrer to each complaint, which the trial court sustained. Dow appealed. We affirm.

Section 303(b) of The Pennsylvania Workmen's Compensation Act, ¹ as amended by the Act of December 5, 1974, P.L. 782, No. 263, § 6, 77 P.S. § 481(b) provides as follows:

"In the event injury or death to an employe is caused by a third party, then such employe, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to receive damages by reason thereof, may bring their action at law against such third party, but the employer, his insurance carrier, their servants and agents, employes, representatives acting on their behalf or at their request shall not be liable to a third party for damages, contribution, or indemnity in any action at law, or otherwise, unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract entered into by the party alleged to be liable prior to the date of the occurrence which gave rise to the action."

In Hefferin v. Stempkowski, 247 Pa.Super. 366, 372 A.2d 869 (1977), this court held that Section 303(b) of the Workmen's Compensation Act bars the joinder of an employer as an additional defendant in an action by an employee against a third party. That decision is controlling of Dow's attempted joinder of U. S. Steel in the instant case.

Dow argues that Hefferin has no application where the third party's claim against the employer is based upon an express contract of indemnity. We agree that Section 303(b) of the Workmen's Compensation Act specifically creates an exception in favor of liability of an employer when it is based on an express agreement of indemnity. In the instant case, however, Dow's pleadings demonstrate clearly that there was no contract of indemnity. The provisions which are alleged to be a part of Dow's contract with U. S. Steel and upon which Dow relies are as follows:

"5. The liability of (Dow) for injury to persons or damage to property, including . . . injury to third parties or employees of (U. S. Steel) . . . shall be limited to that directly resulting from the sole negligence of (Dow) in the performance of this contract.

6. (Dow) shall not be liable for any special incidental, indirect, punitive or consequential damages, including, but not limited to, loss of use or loss of profit, for breach of contract, negligence or any other cause of action."

An agreement to indemnify is an obligation resting upon one person to make good a loss which another has incurred or may incur by acting at the request of the former, or for the former's benefit. 18 P.L.E. Indemnity § 1. A contract will not be construed to indemnify a party for his or her own negligence unless the contractual language and surrounding circumstances clearly indicate an intention of the parties to do so. Westinghouse Electric Company v. Murphy, Inc., 425 Pa. 166, 172, 228 A.2d 656, 660 (1967); Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., 404 Pa. 53, 57, 171 A.2d 185, 187 (1961). The language relied on by Dow does not impose upon U. S. Steel an obligation to indemnify Dow against liability resulting from Dow's negligence. On the contrary, the terms of the agreement clearly impose upon Dow the responsibility for injury negligently inflicted upon employees of U. S. Steel during the course of Dow's work.

Because the pleadings negative the existence of an agreement of indemnity, we do not consider whether the 1969 amendments to Pa.R.C.P. 2252(a) have changed the prior rule which prohibited the joinder of an express indemnitor as an additional defendant in an action of trespass. See: Wampler v. F. C. Haab Co., Inc., 401 Pa. 178, 162 A.2d 389 (1960).

The dissenting opinion argues that joinder can be sustained because the written contract contains by "necessary implication", an agreement whereby U. S. Steel will make "contribution" in the event that injury to an employee is caused in whole or in part by its own negligence. This argument is made for the first time by the writer of the dissent. It was not considered by the court below and has not been made by the appellant in its brief or during argument in this court. It is an argument, in any event, which is untenable. The written contract clearly contains no language by which U. S. Steel has agreed to become liable for contribution to Dow in the event that Dow's negligence causes injury to an employee of U. S. Steel. To insert such a provision in the instant contract by implication is to rewrite the parties' agreement. Moreover, the statute (77 P.S. § 481(b)) specifically bars an employer's liability to a third person, e. g., Dow, "unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract . . . ." An "express" provision, as the dissent concedes, is not present in the written contract between Dow and U. S. Steel.

The attempted joinder of U. S. Steel was improper, and the trial court correctly sustained preliminary objections thereto.

Affirmed and remanded for further proceedings.

SPAETH, J., files a dissenting opinion.

SPAETH, Judge, dissenting:

The majority, I believe, misses entirely a central issue that is raised on this appeal. The majority states:

The language relied on by Dow does not impose upon U.S. Steel an obligation to indemnify Dow against liability resulting from Dow's negligence. On the contrary, the terms of the agreement clearly impose upon Dow the responsibility for injury negligently inflicted upon employees of U.S. Steel during the course of Dow's work.

at 1222.

The issue raised by Dow, however, is not limited to whether its contract with U.S. Steel provided that U.S. Steel would indemnify Dow against liability resulting from Dow's negligence. The issue also extends to whether Dow's contract with U.S. Steel preserved from the force of section 303(b) of the Workmen's Compensation Act, 77 P.S. § 481(b) (Supp. 1978-79), Dow's right to contribution from U.S. Steel for liability resulting from U.S. Steel's negligence.

In its Summary of Argument, Dow frames its argument as follows:

By the terms and conditions of the contract entered into between Dow Chemical Company and U.S. Steel Corporation on June 2, 1975, confirmed by the Dow Industrial Service Order and Receipt of July 15, 1975, signed by U.S. Steel, the additional defendant (U.S. Steel) agreed that Dow Chemical Company would not be liable for any damages for breach of contract, negligence or any other cause of action. Further, under the terms of this contract, the liability of Dow Chemical Company for injury to persons or injury to employees of United States Steel Corporation was limited to that directly resulting for the sole negligence of Dow Chemical Company in the performance of the service contract. Appellant's Principal Brief at 9 (original emphasis). ¹

Dow's argument is based on paragraph seven of its amended complaint, which alleges:

Further, under the terms of said contract, it was specifically set forth that the liability of Dow Chemical Company for injury to persons (or) injury to employees of U.S. Steel Corporation shall be limited to that directly resulting from the sole negligence of Dow Chemical Company in the performance of said contract. That under the terms of said provision U.S. Steel Corporation, employer of the Plaintiff, has agreed that it may be liable to Dow Chemical Company for damages or contribution or indemnity and such liability is expressly provided for under the terms of said contract entered into prior to the date of the occurrence giving rise to this action. (Emphasis added.)

Given Dow's argument, I believe that the majority was compelled to consider whether Dow's complaint adequately alleged an action for contribution against U.S. Steel. I further believe that if the majority had considered this issue, it would have been compelled to reverse the order of the lower court dismissing Dow's complaint. ²

77 P.S. § 481(b) states:

(b) In the event injury or death to an employe is caused by a third party, then such employe, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to receive damages by reason thereof, may bring their action at law against such third party, but the employer, his insurance carrier,...