Redford v. City of Seattle
| Decision Date | 21 August 1980 |
| Docket Number | No. 46769,46769 |
| Citation | 94 Wn.2d 198,615 P.2d 1285 |
| Court | Washington Supreme Court |
| Parties | Ronald G. REDFORD and Patricia Redford, husband and wife; Stephanie Redford Paxton; Lois Redford; and Patricia Redford, as guardian ad litem for Charles V. Redford and Timothy West Redford, Plaintiffs, v. CITY OF SEATTLE, a municipal corporation; Seattle City Light; Flohr & Co. Metal Fabricators, Inc., a corporation, Defendants. JORGENSEN STEEL CO., a corporation, Respondent, v. Wayne and Jane Doe JACOBSON, d/b/a Jacobson & Sons, Petitioners. |
Reed, McClure, Moceri & Thonn, P. S., William Robert Hickman, Seattle, for petitioners.
Stafford, Frey & Mertel, A. Richard Dykstra, Seattle, for respondent.
This case concerns an action brought on a written indemnity agreement in which a contractor agreed to indemnify a third party landowner from liability not caused by the third party's negligence or wilful misconduct. When the contractor's employee was injured while working on the third party's property and the third party settled and paid a money judgment on the employee's claims against it, the contractor denied liability under the indemnity agreement. We hold the third party can enforce the indemnity agreement against the contractor.
Jacobson & Sons (Jacobson) contracted with Jorgensen Steel Co. (Jorgensen) to paint pollution control devices on the roof of Jorgensen's plant. In accepting the contract to perform services, Wayne Jacobson, owner of Jacobson, signed a "Release Agreement" which had been prepared and presented to him by Jorgensen. The release provided, in relevant part, that:
1. Contractor assumes the risk of all damage, loss, cost and expense, and agrees to indemnify and hold harmless Jorgensen . . . from and against any and all liability . . . which may accrue to or be sustained by Jorgensen . . . on account of any claim, suit or action made or brought against Jorgensen . . . for the death of or injury to persons or destruction of property involving Contractor, its employees . . . sustained in connection with performance of the Purchase Order . . . except negligence and willful misconduct of Jorgensen or its employees acting within the scope of their employment . . . .
(Italics ours.)
While performing the contract in the employ of Jacobson, painter Ronald Redford was shocked and severely injured because the long-handled aluminum paint roller he was using came in contact with a high-voltage electrical line overhanging the pollution control devices on the roof of Jorgensen's plant.
Redford, his wife, and his children sued Jorgensen Steel and several other entities, including the City of Seattle. As to Jorgensen, Redford alleged that the firm had failed to warn Redford of the extremely dangerous condition created by the relationship of the pollution control devices and the power line.
Jorgensen joined Jacobson as third-party defendant, relying on the Release Agreement and on common law indemnity concepts. Jacobson denied the applicability of the agreement and raised the bar of the Washington Industrial Insurance Act, RCW 51, which limits the liability of employers to their employees and takes jurisdiction from the courts in worker's compensation cases.
Redford's claim was settled by payment to him of $690,000, of which $490,840.63 was contributed by Jorgensen and the balance by the City of Seattle and Seattle City Light. Jorgensen then moved for partial summary judgment on the issue of whether the Release Agreement made Jacobson liable to Jorgensen for the damages to Redford not caused by Jorgensen's sole negligence. For purposes of summary judgment, several basic facts were stipulated by the parties:
Jorgensen was negligent, which negligence was a proximate cause of Redford's injuries.
Jacobson was negligent, which negligence was a proximate cause of Redford's injuries.
The indemnity agreement set forth above was in existence between Jorgensen and Jacobson and was applicable to the incident causing Redford's injuries.
Redford was acting within the scope of his employment with Jacobson at the time of his injury.
The King County Superior Court granted partial summary judgment, holding the Release Agreement gave Jorgensen a right of indemnity against Jacobson except for that portion of Redford's damages attributable to Jorgensen's negligence or wilful misconduct. The trial court further ordered the case to jury trial only to determine "what portion of the causal negligence is Jorgensen's and is to be deducted" from the amount due from Jacobson under the indemnity agreement. The Court of Appeals, Division I, 24 Wash.App. 484, 602 P.2d 717, affirmed the partial summary judgment. We granted Jacobson's petition for review.
The question raised is whether a negligent third party can obtain indemnity from an injured employee's employer under a written indemnification agreement between the third party and the employer. Jacobson's objections to enforcement of the Release Agreement present the following issues:
1. Is indemnification by the employer prohibited by exclusive remedy provisions of the Washington Industrial Insurance Act?
2. Is indemnification by the employer prohibited by the common law limitations on contribution between joint tortfeasors?
We consider first the general law of indemnity agreements before taking up the specific issues raised by its application to this case.
Indemnity agreements of the sort entered into by Jorgensen and Jacobson are enforced as a matter of course in most factual situations. In this state, the legislature has limited the permissible reach of such contracts by preventing an indemnitee such as Jorgensen from recovering damages resulting from its "sole negligence" in construction cases. RCW 4.24.115. However, the Release Agreement considered here excepts from its provisions Jorgensen's "negligence and willful misconduct" and thus is not violative of the statute.
Jacobson argues, however, the Release Agreement, when considered in light of RCW 4.24.115, must be interpreted in a manner which prevents indemnification in any case in which Jorgensen's negligence has in any way contributed to the loss. Although Jacobson makes a persuasive argument that such a limited agreement would not be without effect because of potential liability for breach of nondelegable duties, hazardous activity or products liability which would fall within its provisions, the language of the agreement itself does not support his analysis. Jorgensen has adequately exempted its own "negligence and willful misconduct" from the agreement.
The Release Agreement is therefore enforceable unless its application is prohibited by some aspect of worker's compensation or common law damages law that as a matter of public policy would prevent this court from enforcing the agreement.
A. Indemnification by an Employer. As Redford's employer, Jacobson is immune from suit in the courts by Redford. As stated in RCW 51.04.010:
(A)ll civil actions and civil causes of action for such personal injuries (to workers) and all jurisdiction of the courts of the state over such causes (between workers and employers) are hereby abolished, except as in this title provided.
These "exclusive remedy" provisions of the workers' compensation law are supplemented by the "no waiver" requirements of RCW 51.04.060:
No employer or worker shall exempt himself or herself from the burden or waive the benefits of this title by any contract, agreement, rule or regulation, and any such contract, agreement, rule or regulation shall be pro tanto void.
The courts of this state, however, correctly allow an employer to be bound by an indemnification agreement with a third party. Tucci & Sons, Inc. v. Carl T. Madsen, Inc., 1 Wash.App. 1035, 467 P.2d 386 (1970) (); Montoya v. Greenway Aluminum Co., 10 Wash.App. 630, 519 P.2d 22 (1974). The Washington Industrial Insurance Act does not preclude third parties from enforcing written agreements by an employer, to indemnify the third party from liability occasioned by injury to the employer's employee.
First, when a written indemnification agreement is enforced the liability is based on a contractual, and not on an employment relationship between the employer and the third party. The overwhelming majority of courts that have considered the validity of indemnity agreements in light of exclusive remedy provisions of state worker compensation acts agree that this distinction prevents the compensation schemes from prohibiting such voluntary agreements. " (T)he indemnity claim is by definition a separate legal cause, and, unlike the employer's contributory negligence, is not intertwined with the tortious incident itself". Thus, these express contractual obligations have created the "clearest exception to the exclusive-liability clause." 2A A. Larson, Workmen's Compensation § 76.41, p. 14-328 (1976).
Second, as the Court of Appeals concluded in Tucci, RCW 51.04.060, "the statute prohibiting waiver of benefits was not intended to prevent an employer from making special provisions for an injured employee." Tucci & Sons, Inc. v. Carl T. Madsen, Inc., supra 1 Wash.App. at 1042, 1043, 467 P.2d at 390. That the act was not intended to prevent an employer from making "special provisions" for his employee can be seen from the policies of the act, which are set forth in RCW 51.04.010. The statute mentions the "cost of the employer" at one point. However, it does so only with regard to the need for protection of workers :
The remedy of the worker...
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