Ruzzi v. Butler Petroleum Co.

• Decision Date: 15 March 1991
• Docket Number: Nos. 49,s. 49
• Citation: 588 A.2d 1,527 Pa. 1
• Parties: Gary RUZZI and Sharon Ruzzi, his wife, v. BUTLER PETROLEUM COMPANY, Appellant, v. George SHOCKEY and Edmund Zinsser. (Two Cases) BUTLER PETROLEUM COMPANY, Appellant, v. Edmund J. ZINSSER, III and Janice P. Zinsser, his wife, and Zincon, Inc., d/b/a/ Zinsser Service. Gary RUZZI and Sharon Ruzzi, his wife, v. Edmund J. ZINSSER, III and Janice Zinsser, his wife, Zincon, Inc., George Shockey, and Brenda Shockey, t/d/b/a Shockey Excavating. (Two Cases) Appeal of BUTLER PETROLEUM COMPANY. Gary RUZZI and Sharon Ruzzi, his wife, v. BUTLER PETROLEUM COMPANY v. George SHOCKEY and Edmund Zinsser. (Two Cases) Appeal of George SHOCKEY and George Shockey and Brenda Shockey, t/d/b/a Shockey Excavating. (Four Cases) BUTLER PETROLEUM COMPANY v. Edmund J. ZINSSER, III and Janice P. Zinsser, his wife, and Zincon, Inc., d/b/a Zinsser Service. W.D. Appeal 1989 to 56 W.D. Appeal 1989.
• Court: Pennsylvania Supreme Court

Page 1

588 A.2d 1

527 Pa. 1

Gary RUZZI and Sharon Ruzzi, his wife, v. BUTLER PETROLEUM COMPANY, Appellant, v. George SHOCKEY and Edmund Zinsser. (Two Cases)

BUTLER PETROLEUM COMPANY, Appellant, v. Edmund J. ZINSSER, III and Janice P. Zinsser, his wife, and Zincon, Inc., d/b/a/ Zinsser Service.

Gary RUZZI and Sharon Ruzzi, his wife, v. Edmund J. ZINSSER, III and Janice Zinsser, his wife, Zincon,

Inc., George Shockey, and Brenda Shockey, t/d/b/a

Shockey Excavating. (Two Cases)

Appeal of BUTLER PETROLEUM COMPANY.

Gary RUZZI and Sharon Ruzzi, his wife, v. BUTLER PETROLEUM COMPANY v. George SHOCKEY and Edmund Zinsser. (Two Cases)

Appeal of George SHOCKEY and George Shockey and Brenda

Shockey, t/d/b/a Shockey Excavating. (Four Cases)

BUTLER PETROLEUM COMPANY v. Edmund J. ZINSSER, III and Janice P. Zinsser, his wife, and Zincon, Inc., d/b/a Zinsser Service.

Nos. 49 W.D. Appeal 1989 to 56 W.D. Appeal 1989.

Supreme Court of Pennsylvania.

Argued Sept. 24, 1990.

Decided March 15, 1991.

James B. Cole, Stokes, Lurie & Cole, Pittsburgh, for Gary & Sharon Ruzzi.

George M. Weis, Weis & Weis, Pittsburgh, for Edmund Zinsser.

Arthur J. Murphy, Jr., Murphy, Taylor & Adams, Pittsburgh, for George Shockey, et al.

Louis C. Long, Meyer, Darragh, Buckler, Bebenek, Eck & Hall, Pittsburgh, for Butler Petroleum Co.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA, PAPADAKOS and CAPPY, JJ.

OPINION OF THE COURT

PAPADAKOS, Justice. ^*

In March of 1984 Edmund and Janice Zinsser entered into an agreement with Butler Petroleum Company which provided that Butler Petroleum would refurbish Zinsser's gasoline station, fitting it, among other things, with gasoline tanks, appropriate plumbing and pumps for the tanks, a Texaco credit card imprinter, a Texaco sign, and a complete exterior painting scheme following the Texaco pattern. In return, the Zinssers would purchase petroleum products from Butler Petroleum for a certain length of time. Additionally, the agreement contained an indemnity clause which provided:

[The Zinssers] ... exonerate, discharge, and agree to protect and save harmless and indemnify [Butler Petroleum] ... from any and all liability for claims for loss, damage, injury or other casualty to persons or property ... caused or occasioned by any leakage, fire, explosion or other casualty occurring through any imperfection in, injury or damage to, or by reason of the installation, use, operation and/or repair of the said equipment or of the premises.

In keeping with its obligation under the agreement Butler Petroleum called AMG Sign Company to erect a new sign. On March 29, 1984 Gary Ruzzi, who worked for AMG, appeared at the Zinsser's station to remove the old sign and install a new one.

Butler Petroleum had also arranged with George Shockey for the purchase and transportation of four used fiberglass gasoline tanks, three of which were to be installed below ground at Zinsser's station, but which at the time Ruzzi arrived, were sitting on the ground near the sign. Unknown to Ruzzi, one of the tanks had a hole in the top and contained 50 to 100 gallons of gasoline.

Neither Ruzzi nor Zinsser, who was also present, saw the hole or realized that the tank contained gasoline. Ruzzi was injured when a torch he was using to cut rusted bolts from the existing sign ignited fumes escaping from the fiberglass tank, causing an explosion and fire and knocking Ruzzi from his ladder.

Thereafter, Gary and Sharon Ruzzi filed suit against Butler Petroleum Company in the Court of Common Pleas of Allegheny County, seeking damages for personal injuries Mr. Ruzzi received because of the explosion. Butler Petroleum, in turn, filed a complaint joining George Shockey and Edmund Zinsser as additional defendants. The Ruzzis subsequently filed their own complaint against Edmund and Janice Zinsser, Zincon (a corporation owned by the Zinssers), and George and Brenda Shockey d/b/a Shockey Excavating Co. A third action, filed by Butler Petroleum against the Zinssers, was based on the indemnification agreement. These actions were consolidated for trial.

The jury returned a verdict in favor of the Ruzzis and against Butler Petroleum and Shockey in the amount of $321,000.00, assigning 84% of the negligence to Butler Petroleum and 16% to Shockey. The trial court also awarded delay damages of $67,981.85 and the verdict was molded to include delay damages for a total award of $388,981.85.

Post-trial motions were filed by Butler Petroleum and Shockey and were denied. Judgments were entered on the verdict and in favor of the Ruzzis, the Zinssers and Zincon. Butler Petroleum and Shockey filed timely appeals from these judgments. Superior Court affirmed but remanded for a hearing on the question of pre-judgment delay. 385 Pa.Super. 664, 555 A.2d 254. ¹ Butler Petroleum and George Shockey filed cross-petitions for allowance of appeal and this court granted allocatur on both petitions. The issue raised in Butler Petroleum's appeal is whether the indemnity clause in the Butler Petroleum-Zinsser agreement is legally binding and, in Shockey's appeal, whether the trial court erred in admitting the testimony of an expert witness.

Butler Petroleum claims that the indemnity clause was enforceable as a matter of law. The trial court disagreed, relying on our decision in Perry v. Payne, 217 Pa. 252, 66 A. 553 (1907). Superior Court affirmed the trial court on the grounds that Butler Petroleum was found to be 84% negligent, and was, therefore, not entitled to indemnity, citing DiPietro v. City of Philadelphia, 344 Pa.Superior Ct. 191, 496 A.2d 407 (1985). ²

The law has been well settled in this Commonwealth for 87 years that if parties intend to include within the scope of their indemnity agreement a provision that covers losses due to the indemnitee's own negligence, they must do so in clear and unequivocal language. No inference from words of general import can establish such indemnification. Perry v. Payne, 217 Pa. 252, 66 A. 553 (1907). See also, Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., 404 Pa. 53, 171 A.2d 185 (1961); Tidewater Field Warehouses, Inc. v. Fred Whitaker Co., 370 Pa. 538, 88 A.2d 796 (1952); Darrow v. Keystone 5, 10, 25, $1.00 Stores, Inc., 365 Pa. 123, 74 A.2d 176 (1950); Schroeder v. Gulf Refining Co. (No. 2), 300 Pa. 405, 150 A. 665 (1930).

In Perry v. Payne, supra, Payne and Company were hired to construct a building for Perry. Payne agreed to indemnify Perry:

... from all loss, cost or expense ... arising from accidents to mechanics or laborers employed in the construction of said work, or to persons passing where the work is being constructed ...

Additionally, Payne agreed to:

... protect and keep harmless the said Edward Perry of and from all loss, costs and damages, for non-fulfillment of same, or by reason of any liens, claims or demands for material for labor furnished for the construction of said work, or from damages arising from accidents to persons employed in the construction of, or passing near the said work, or for damages done to adjacent properties by reason of the construction of said work, or by depositing material in such a manner as to damage either the city or the individual.

Perry's employee negligently lowered an elevator and crushed to death one of Payne's employees, who was painting the bottom of the elevator shaft. The estate of the employee recovered a judgment against Perry who then sought indemnification from Payne based on their agreement. We ruled that "a contract of indemnity against personal injuries should not be construed to indemnify against the negligence of the indemnitee, unless it is so expressed in unequivocal terms. The liability on such indemnity is so hazardous, and the character of the indemnity so unusual and extraordinary, that there can be no presumption that the indemnitor intended to assume the responsibility unless the contract puts it beyond doubt by express stipulation. No inference from words of general import can establish it." Perry, at page 262, 66 A. 553.

The indemnification clause included in the agreement between the Zinssers, as indemnitors, and Butler Petroleum, as indemnitee, provided in pertinent part:

[The Zinssers] ... exonerate, discharge, and agree to protect and save harmless and indemnify [Butler Petroleum] ... from any and all liability for claims for loss, damage, injury or other casualty to persons or property ... caused or occasioned by any leakage, fire, explosion or other casualty occurring through any imperfection in, injury or damage to, or by reason of the installation, use, operation and/or repair of the said equipment or of the premises.

Because Perry was the law in this jurisdiction when Butler Petroleum and the Zinssers entered into their indemnification agreement we must assume that they knew that the law would not recognize as effective their agreement concerning the negligent acts of the indemnitee (Butler Petroleum) unless an express stipulation concerning negligence was included in the document. This rule of contract interpretation like the law applicable to any contract is a part of this agreement as if expressly incorporated in its terms. De Paul v. Kauffman 441 Pa. 386, 272 A.2d 500 (1971); Northwestern National Bank v. Commonwealth, 345 Pa. 192, 27 A.2d 20 (1942).

We must assume that the parties knew that the law gives to the words used herein a specific meaning and that the words, therefore, must be interpreted in their legal sense. We must also assume that the parties wrote this agreement in conformity to these well established rules of contract construction. That being the case, we conclude that the only intent that can be gleaned from this document is that the parties did not intend to indemnify for acts of the indemnitee's negligence, since words of general import are used. We can discern no reason to abandon the Perry rule of contract interpretation which is still a valuable rule of construction, rooted in...