Ramos v. Browning Ferris Industries of South Jersey, Inc.

• Decision Date: 29 May 1984
• Parties: Jose RAMOS and Carmen Ramos, Plaintiffs-Respondents, v. BROWNING FERRIS INDUSTRIES OF SOUTH JERSEY, INC., Defendant-Third-Party Plaintiff-Appellant, v. LAMINATING CORPORATION OF AMERICA, Third-Party Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 96

194 N.J.Super. 96

476 A.2d 304

Jose RAMOS and Carmen Ramos, Plaintiffs-Respondents, v. BROWNING FERRIS INDUSTRIES OF SOUTH JERSEY, INC., Defendant-Third-Party Plaintiff-Appellant, v. LAMINATING CORPORATION OF AMERICA, Third-Party Defendant-Respondent.

Superior Court of New Jersey,

Appellate Division.

Argued April 2, 1984.

Decided May 29, 1984.

Thaddeus J. Hubert, III, New Brunswick, for defendant-third-party plaintiff-appellant (Hoagland, Longo, Oropollo & Moran, New Brunswick, attorneys; William E. Russell, Atlantic Highlands, on the brief).

Seymour Margulies, Jersey City, for plaintiffs-respondents Jose Ramos and Carmen Ramos (Margulies, Margulies & Wind, Jersey City, attorneys; Seymour Margulies and Jack Jay Wind, Jersey City, on the brief).

Robert F. Colquhoun, Morristown, for third-party defendant-respondent Laminating Corp. of America (Colquhoun & Colquhoun, Morristown, attorneys; Robert F. Colquhoun, Morristown, on the brief).

Before Judges BISCHOFF, PETRELLA and BRODY.

The opinion of the court was delivered by

BRODY, J.A.D.

Plaintiff was injured in the course of his employment while wheeling a 400-pound drum of solid waste to a large "roll-off" container in his employer's yard. The drum fell against his leg when he tripped over a deep rut in the soil near the container. Recently fallen snow covered the rut.

In plaintiff's personal injury action a jury attributed 25% negligence to him and 75% to defendant Browning Ferris Industries, Inc. (BFI), a solid waste hauler that leased the container to plaintiff's employer, third-party defendant Laminating Corporation of America (LCA). Under its lease agreement with LCA, BFI regularly sent a truck to the yard to empty the container. A mechanism on the truck pulled the container along the ground and onto the truck. A jury could have found that during this operation the wheels of BFI's truck or the wheels and guidetracks on the bottom of its container created the rut that caused the accident. Judgment was entered against BFI in the amount of $307,500.

In its third-party complaint BFI claimed the benefit of an indemnification provision in its lease agreement wherein LCA agreed to defend and hold BFI harmless from a claim such as plaintiff's. Before trial BFI and LCA moved for summary judgment regarding the enforceability of the indemnification provision. The trial court denied BFI's motion but granted LCA's.

BFI appeals from that judgment and the judgment recovered against it by plaintiff. Its principal arguments regarding plaintiff's judgment are that there was no evidence of its negligence, it owed plaintiff no duty and the trial judge should have had the jury include in its apportionment a percentage for the negligence of LCA. Plaintiff's judgment is affirmed. LCA's judgment is reversed.

We turn first to the indemnification issue. The provision in question reads in pertinent part as follows:

[LCA] acknowledges that it has care, custody and management of [the container] owned by [BFI] and accepts responsibility for [it] and its contents except when it is being physically handled by employees of [BFI]. Therefore, [LCA] expressly agrees to defend, indemnify and hold harmless [BFI] from and against any and all claims for loss of or damage to property, or injury to or death of person or persons resulting from or arising in any manner out of [LCA's] use, operation or possession of the [container] furnished under this Agreement.

The trial judge interpreted this provision "as intended only to require [LCA] to indemnify [BFI] against those losses which result from [LCA's] negligence in connection with the possession or use" of the container. We disagree.

In a commercial setting parties are free to negotiate the allocation of tort liability risks regardless of fault. Berry v. V. Ponte & Sons, 166 N.J.Super. 513, 517-518, 400 A.2d 114 (App.Div.1979), certif. den. 81 N.J. 271, 405 A.2d 816 (1979). While a court will look closely at such an agreement when it purports to indemnify the indemnitee for his own negligence, the agreement will be enforced if that is what it unequivocally provides. Cozzi v. Owens Corning Fiber Glass Corp., 63 N.J.Super. 117, 121, 164 A.2d 69 (App.Div.1960). ¹ There is no ambiguity or uncertainty here. LCA agreed to indemnify BFI in all instances but one: where the harm is caused "when the [container] is being physically handled by the employees of [BFI]." The present case does not fall within the exception. Indeed the circumstances of this case prove the merit of resolving by agreement whether BFI or LCA should bear the risk. The creation of dangerous ruts appears to be an inherent part of the operation whenever a container is placed on soil. The indemnification provision eliminates uncertainty between the contracting parties over whether ultimate liability between them will rest on BFI for creating the hazard, on LCA for not correcting it or on both.

LCA contends that even if the indemnification agreement is generally enforceable, it should not be enforced where the injured party is its employee because of its immunity from tort liability under the Workers' Compensation Act. N.J.S.A. 34:15-8 provides that coverage under the act "shall be a surrender" by an employee of his "rights to any other method, form or amount of compensation or determination thereof than as provided in this article...." An employer may be made to respond indirectly for the damages recoverable by an injured employee beyond his workers' compensation liability, on principles of express or implied indemnification. Hagen v. Koerner, 64 N.J.Super. 580, 584, 166 A.2d 784 (App.Div.1960). That view prevails in nearly every state that has considered the question. See, e.g., Whittle v. Pagani Bros. Const. Co., Inc., 383 Mass. 796, ---, 422 N.E.2d 779, 781-782 (Sup.Jud.Ct.1981), and other cases collected at Annotation, "Modern status of effect of state workmen's compensation act on right of third-person tortfeasor to contribution or indemnity from employer of injured or killed workman," 100 A.L.R.3d 350, 380 (1980).

LCA urges that we remand plaintiff's tort claim for a new trial if we reverse the summary judgment it obtained against BFI in the third-party action. According to LCA, it was "precluded" from defending plaintiff's claim at trial. Far from being precluded, LCA was sued by BFI for the express purpose of compelling LCA to defend plaintiff's claim. LCA wrongfully rejected its obligation and right to do so. Plaintiff need not risk losing his judgment because of LCA's breach. The judgment is conclusive against LCA. In Scaglione v. St. Paul-Mercury Indemnity Co., 28 N.J. 88, 104-105, 145 A.2d 297 (1958), the Court said:

[U]nder the doctrine of res judicata a judgment may be conclusive against one who is liable over to the judgment debtor in respect to the cause of action adjudicated, or one derivatively responsible to the judgment creditor, at least when there has been notice to the third party of the prior action and an opportunity to defend afforded. The principal applies to indemnitors, sureties and guarantors.

This common-law "vouching-in" rule is codified in Evid.R. 63(21). We also note that plaintiff's claim has been fully and vigorously defended by BFI.

We next turn to plaintiff's negligence claim. BFI argues that there was no evidence of its negligence, it had no duty to plaintiff and the judge erred in refusing to have the jury specifically assess the comparative negligence of LCA. We find no merit to these arguments.

The jury could have found that BFI knew or reasonably should have known that placing its container on soil would create ruts near the container that would be a tripping hazard for LCA employees who were using it. BFI's assistant operations manager testified that before the accident he inspected the site because his driver complained that his truck tended "to sink" in mud around the container. There was a safer "large concrete pad" that could have been used but LCA did not want to clear a path in the yard so that BFI trucks could reach it.

The manager testified that "due to the placement of the drums, pallets, and so on, I determined there really, practically, was no other place we would send it except where it was." He acknowledged that if a customer asked him to move a container, he would refuse to do so if the new location was not safe. The jury could have found that BFI acted unreasonably in not insisting on a safer location for the container or in failing to reduce the risk of dangerous ruts by spreading and compacting or advising LCA to spread and compact "quarry blend bluestone" over the soil near the container. Plaintiff's expert testified that bluestone is used for that purpose.

In Goldberg v. Housing Auth. of Newark, 38 N.J. 578, 186 A.2d 291 (1962), the question was whether the owner of an extensive housing project had a duty to provide police protection to a deliveryman who was beaten and robbed while delivering milk to a tenant. The Court explained the concept of duty as follows:

The question is not simply whether a criminal event is foreseeable, but whether a duty exists to take measures to guard against it. Whether a duty exists is ultimately a question of fairness. The inquiry involves a weighing of the relationship of the parties, the nature of the risk, and the public interest in the proposed solution. [Id. at 583, 186 A.2d 291 (emphasis in original) ]

Applying the Goldberg test, we concluded that the installer of telephone equipment in an office complex owed a duty to its customers' employees to take reasonable precautions against installing wires in a way that created a tripping hazard. Essex v. New Jersey Bell Telephone Company, 166 N.J.Super. 124, 399 A.2d 300 (App.Div.1979).

After Essex was...