Progressive Const. and Engineering Co., Inc. v. Indiana and Michigan Elec. Co., Inc.

• Decision Date: 15 February 1989
• Docket Number: No. 77A01-8805-CV-161,77A01-8805-CV-161
• Citation: 533 N.E.2d 1279
• Parties: PROGRESSIVE CONSTRUCTION AND ENGINEERING CO., INC., Appellant, v. INDIANA AND MICHIGAN ELECTRIC CO., INC., Appellee.
• Court: Indiana Appellate Court

Page 1279

533 N.E.2d 1279

PROGRESSIVE CONSTRUCTION AND ENGINEERING CO., INC., Appellant, v. INDIANA AND MICHIGAN ELECTRIC CO., INC., Appellee.

No. 77A01-8805-CV-161.

Court of Appeals of Indiana First District.

Feb. 15, 1989.

Eric A. Frey, Frey, Hunt, Hassler & Lorenz, Terre Haute, James R. Monk, Sullivan, for appellant.

R. Steven Johnson, Sacopulos, Johnson & Hahn, Terre Haute, E.D. Powell, Powell, Springer & Elmore, Sullivan, for appellee.

RATLIFF, Chief Judge.

STATEMENT OF THE CASE

Progressive Construction and Engineering Co., Inc. appeals the judgment of the trial court granting summary judgment in favor of Indiana and Michigan Electric, Co., Inc. We affirm in part, reverse in part, and remand for proceedings consistent with this opinion.

FACTS

On April 14, 1976, Indiana and Michigan Electric Co., Inc. (I and M) and Progressive Construction and Engineering Co., Inc. (Progressive) entered into a contract which provided that Progressive would furnish labor, equipment, material, supervision, insurance coverage and other items required to perform miscellaneous services requested by I and M's construction manager or other authorized personnel at I and M's Breed Precipitator Project near Fairbanks, Indiana. Incorporated into this contract was an indemnity clause requiring Progressive to indemnify, hold harmless, and defend I and M from all actions, claims, demands, liability, loss, damage or expense of any kind including attorney's fees incurred by I and M by reason of bodily injury to any person arising out of the work to be performed under the contract.

George Timothy Kruse was on Progressive's payroll. He was assigned to work on the I and M project by Progressive after I and M requested that a teamster driver be available at the site. On April 4, 1978, Kruse was driving an I and M truck when he struck the vehicle of James and Dorothy Whitaker from behind. Dorothy was injured in the accident. In a separate action Dorothy and James Whitaker filed suit against Kruse, American Electric Power Service Corporation, I and M, and Progressive. Prior to trial I and M and the Whitakers entered into a covenant not to sue. The jury entered a verdict in favor of Progressive. However, on appeal this court reversed and remanded the cause for a new trial. See, Whitaker v. Kruse (1986), Ind.App., 495 N.E.2d 223. Subsequently, Progressive entered into a settlement agreement with Whitaker, and the action was concluded.

Prior to the original trial, I and M had filed a cross-claim against Progressive based on the indemnification clause contained in the contract between I and M and Progressive, seeking idemnification for any sums it was obligated to pay to Whitaker. In response to this claim, Progressive contended that Kruse was acting as an agent of I and M and was not under Progressive's control at the time of the collision. Progressive also claimed that the indemnification clause was void and unenforceable and in violation of public policy as articulated in Indiana Code section 26-2-5-1. Progressive further claimed that the contract was one of adhesion and was unconscionable, and therefore, was unenforceable. On July 13, 1982, I and M filed a motion for summary judgment on its indemnity claim. On November 17, 1987, the trial court entered findings of fact and conclusions of law and entered judgment granting summary judgment in favor of I and M. Further facts will be recited as necessary to the following discussion.

ISSUES

Progressive raises four issues for review.

1. Did an issue of fact exist precluding the entry of summary judgment regarding the employment relationship, if any, between I and M and Kruse?

2. Did an issue of law and fact exist precluding summary judgment regarding the enforceability of the indemnity clause under the provisions of Indiana Code section 26-2-5-1(4)?

3. Did an issue of fact exist precluding the entry of summary judgment regarding the unconscionability of the indemnification agreement?

4. Did an issue of fact exist precluding the entry of summary judgment regarding the voluntariness and reasonableness of I and M's payment to Whitaker?

DISCUSSION AND DECISION

In reviewing the granting of a motion for summary judgment, our standard of review is well settled. We consider the contents of the pleadings, affidavits, answers to interrogatories, responses to requests for admission, and depositions in a light most favorable to the non-moving party to determine whether any genuine issue of material fact exists, and whether the moving party is entitled to judgment as a matter of law. Ayres v. Indian Heights Volunteer Fire Dept., Inc. (1986), Ind., 493 N.E.2d 1229, 1234; Chambers v. Cent. School Dist. (1987), Ind.App., 514 N.E.2d 1294, 1296; Kahf v. Charleston South Apartments (1984), Ind.App., 461 N.E.2d 723, 729, trans. denied. When a motion for summary judgment is granted, the non-moving party is denied his day in court; therefore, the trial court's decision must be carefully scrutinized on appeal. Ayres, 493 N.E.2d at 1234. In reviewing the granting of a motion for summary judgment this court stands in the shoes of the trial court and applies the same applicable standard. Chambers, 514 N.E.2d 1294, 1296; Jones v. City of Logansport (1982), Ind.App., 436 N.E.2d 1138, 1143, trans. denied.

Issue One

Progressive first contends that a genuine issue of fact exists in the present case regarding the employment relationship, if any, between Kruse and I and M. Progressive notes that while the affidavits offered in support of I and M's motion for summary judgment indicate that Kruse was in the employ and under the control of Progressive at the time of the accident, the affidavit of V.G. Potter, Jr., the secretary/treasurer of Progressive, recited facts indicating that I and M exerted direct and ultimate control over Kruse while Kruse was assigned to the I and M site. Therefore, according to Progressive the trial court erred in granting summary judgment in favor of I and M.

I and M claims that the affidavit of V.G. Potter was not properly before the court in the summary judgment proceedings and that therefore, given the absence of any conflicting factual allegations, the trial court's only option was to grant I and M's motion. I and M further contends that the opinion of the Court of Appeals in Whitaker v. Kruse (1986), Ind.App., 495 N.E.2d 223, precludes Progressive from arguing that Kruse was not an employee of Progressive at the time of the collision. I and M is mistaken on both claims.

V.G. Potter's affidavit was properly before the trial court in the summary judgment proceedings. I and M filed its motion for summary judgment against Progressive on July 13, 1982. On July 23, 1982, Progressive moved for summary judgment against Dorothy Whitaker and, in support of that motion, attached the affidavit of V.G. Potter, Jr. On July 27, 1982, the trial court ordered that the I and M summary judgment proceedings be severed from the action between Whitaker and Progressive. As part of that order the court stated "... all allied documents and pleadings filed are now made a part of the supplemental cause of action C-79-299-A, all as per stipulation, copy stipulation." Record at 41. ¹

I and M argues that the holding in Larr v. Wolf (1983), Ind.App., 451 N.E.2d 664, trans. denied, is applicable to the present situation. In Larr, an affidavit opposing a motion for summary judgment was tendered on the day of the hearing on that motion. The trial court held and this court agreed that the affidavit was not timely filed under the provisions of Indiana Rules of Procedure, Trial Rule 56(C) which allows adverse parties to serve opposing affidavits prior to the day of the hearing. Id. at 665. Clearly I and M's proposition that V.G. Potter's affidavit is subject to the same determination as the affidavit tendered in Larr is erroneous. Potter's affidavit filed July 13, 1982, was one of the "allied documents" made a part of the summary judgment proceedings by the court order of July 27, 1982. The hearing on I and M's motion for summary judgment was held on September 23, 1987. Therefore, V.G. Potter's affidavit was timely filed and was properly before the trial court during the summary judgment proceedings.

I and M next claims that this court's decision in Whitaker v. Kruse (1986), Ind.App., 495 N.E.2d 223, prevents Progressive from now claiming that Kruse is not an employee of Progressive because, "the Court of Appeals upheld liability against Progressive and Kruse which liability necessarily had to be imposed by virtue of the doctrine of respondeat superior." Appellee's brief at 16. We note that the court of appeals reversed a jury verdict in favor of Progressive and Kruse rather than "upholding liability against them." The basis for reversing the jury's verdict was a jury instruction which misstated the law regarding the original tortfeasor's liability in the face of subsequent inadequate or negligent medical care. The issue of Kruse's employment relationship was not, nor could it have been appealed by Progressive at this juncture in the proceedings. Therefore, I and M's argument that Progressive is now precluded from claiming that Kruse was under the sole control of I and M at the time of the accident is without merit.

I and M also claims that a certain statement made in Progressive's brief admitting that Kruse was negligent should prevent Progressive from maintaining that I and M was liable for the damages suffered by Whitaker. I and M is mistaken. The statement which I and M attempts to characterize as an admission reads as follows:

"Progressive submits that there existed a genuine issue of material fact regarding the agency status of Kruse who was admittedly negligent in the operation of I and M's truck at the time of the Whitaker accident."

Appellant's brief at 33-34. Progressive is admitting only that Kruse was negligent, nothing more. The statement does not go so far as to admit liability for that...