Scott & Jobalia Const. Co., Inc. v. Halifax Paving, Inc. for Use and Benefit of U.S. Fidelity and Guar. Co.

• Decision Date: 02 February 1989
• Docket Number: No. 87-1052,87-1052
• Parties: 14 Fla. L. Weekly 357 SCOTT & JOBALIA CONSTRUCTION CO., INC., Appellant, v. HALIFAX PAVING, INC., for Use and Benefit of UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellee.
• Court: Florida District Court of Appeals

Page 76

538 So.2d 76

14 Fla. L. Weekly 357

SCOTT & JOBALIA CONSTRUCTION CO., INC., Appellant, v. HALIFAX PAVING, INC., for Use and Benefit of UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellee.

No. 87-1052.

District Court of Appeal of Florida,

Fifth District.

Feb. 2, 1989.

Terrence E. Kehoe of Haas, Boehm, Brown, Rigdon, Seacrest & Fischer, P.A., Orlando, and Richard W. Prospect of Haas, Boehm, Brown, Rigdon, Seacrest & Fischer, P.A., Daytona Beach, for appellant.

Terence R. Perkins of Cobb & Cole, Daytona Beach, for appellee.

SHARP, Chief Judge.

Scott & Jobalia Construction Company, Inc., appeals from a final judgment following a jury trial which established its liability to Halifax Paving, Inc., f/u/b/o United States Fidelity and Guaranty (Halifax's insurer) for $95,586.86. Scott & Jobalia was doing construction work on a site in Volusia County. To accomplish this task, it borrowed a crane and its operator from Halifax. Between Halifax and Scott & Jobalia there was no lease (oral or written) and Scott & Jobalia owed no rent or other compensation for use of the crane. While the crane was in operation, a pipe fell from the sling and struck and injured one of Scott & Jobalia's employees, Grier.

There are three issues in this appeal. The first is whether Halifax is barred by the statute of limitations from suing Scott & Jobalia for recovery of its costs, attorney's fees and a $67,500 settlement it paid to Grier. The second is whether, based on this record, Halifax established its right of common law indemnity against Scott & Jobalia. The third is whether statutory immunity granted to Scott & Jobalia pursuant to the worker's compensation act (§ 440.11(1)) prevents it from being liable as Halifax's indemnitor, and whether immunity pursuant to the worker's compensation act, should have barred any liability on Halifax's part to Grier.

The record in this case established that at the time of the accident on December 31, 1981, the Halifax crane was being operated at a construction site where Scott & Jobalia was the contractor. Scott & Jobalia had previously borrowed the crane from Halifax on other jobs and, as in this case, there was no lease or rental agreement between Scott & Jobalia and Halifax regarding payment for use of the crane. It was a matter of "courtesy."

Operating the crane was Lampp, an employee of Halifax. However, on this job, he worked solely at Scott & Jobalia's direction and control. He obeyed the hand-signals of Scott & Jobalia's foreman as to when to make the crane lift and where to place its load.

At the time of the accident, Scott & Jobalia's employees were attaching pipe to a sling, which was lifted by the crane. The foreman signaled to Lampp to lift. When the sling rose to Lampp's level of sight, Lampp saw the pipe had slipped slightly out of the sling. He pointed that out to the foreman. The foreman signaled to continue to lift. Lampp did, and from twenty-five feet up, a forty-foot section of pipe fell out of the sling. It crashed below, severely injuring Grier, Scott & Jobalia's employee, who was working at the job site.

Grier recovered worker's compensation payments from Scott & Jobalia. He then filed suit against Halifax, as owner of the crane, on July 16, 1984. Scott & Jobalia were aware of the lawsuit, but they did not participate in it. On September 10, 1985, Halifax settled the lawsuit by paying Grier $67,500.

Halifax then brought this suit against Scott & Jobalia for common law indemnity. The suit was filed on January 15, 1986. Halifax's theory, as expressed in its pleadings and throughout the lawsuit, was that Scott & Jobalia should indemnify it for any liability it owed to Grier because that liability was based solely on its ownership of the crane--a vicarious, derivative kind of liability--and any active negligence which caused the accident was solely attributable to Scott & Jobalia.

With regard to actual fault and responsibility for any active negligence which caused Grier's injury, the jury was instructed that it should not return a verdict for Halifax if Halifax actively participated in causing the accident. Only if Halifax was vicariously liable due to ownership of the crane, could they find for Halifax. Further, the jury was instructed that it could only find for Halifax if it found that Lampp was at the time of the accident, a "borrowed servant" of Scott & Jobalia's (i.e., temporarily under Scott & Jobalia's control and direction).

The jury returned a verdict against Scott & Jobalia and in favor of Halifax. It specifically found that Scott & Jobalia was negligent in causing Grier's injuries; and it found that Lampp, at the time of the accident, was Scott & Jobalia's borrowed servant. It also found that the $67,500 paid by Halifax to Grier was a reasonable amount to compensate Grier for his injuries. ¹

Scott & Jobalia argue that Halifax's suit against it is barred by the four-year statute of limitations (95.11(3)(a)), which began to run at the time of the accident and would have expired on December 31, 1985. This suit was filed on January 15, 1986. Scott & Jobalia rely upon Don Reid Ford, Inc. v. Feldman, 421 So.2d 184 (Fla. 5th DCA 1982) and Allstate Ins. Co. v. Metropolitan Dade County, 436 So.2d 976 (Fla. 3d DCA 1983), rev. den., 447 So.2d 885 (Fla.1984). Both of those cases, however, deal with subrogation rights, not indemnity. Although closely interrelated, the two concepts are different. ² In subrogation, the subrogee acquires all of the rights of the subrogor (the potential plaintiff), but is subject to all the available defenses the defendant could assert against the subrogor, including the running of the statute of limitations. Allstate at 978. The subrogee "steps into the shoes" of the subrogor.

With regard to indemnity, a joint or possible defendant may discharge another's liability to a plaintiff and then seek to shift the loss to the other party whose active negligence actually caused the injury or damage. In order to seek indemnity, the indemnitee (here, Halifax) must have a legal liability to a plaintiff (here Grier); the liability must be paid; the indemnitor (here Scott-Jobalia) must have a coextensive liability to the plaintiff; and in Florida, the indemnitee must be free from any active negligence or fault. ³ The fact that the real party in interest here is Halifax's liability insurer does not make this a subrogation case. USF & G is subrogated to Halifax's rights, which are in this case, to seek indemnity against Scott & Jobalia. See Truck Discount Corp. v. Serrano, 362 So.2d 340 (Fla. 1st DCA 1978).

It is well established that the statute of limitations does not begin to run in indemnity cases until the indemnitee has paid a judgment, or has made a voluntary payment of its legal liability to an injured party. Mims Crane Service, Inc. v. Insley Manufacturing Corp., 226 So.2d 836 (Fla. 2d DCA), cert. denied, 234 So.2d 122 (Fla.1969); Castle Construction Co. v. Huttig Sash & Door Co., 425 So.2d 573 (Fla. 2d DCA 1982). Therefore, the statute of limitations in this case only began to run against Halifax on the settlement date--September 10, 1985. Its suit against Scott & Jobalia was therefore timely.

The second issue raised by Scott & Jobalia is whether Halifax sufficiently established its right to common law indemnity with respect to its lack of active negligence and the reasonableness of its settlement with Grier. In light of the jury's finding that Lampp was Scott & Jobalia's borrowed servant, ⁴ and the total absence of any allegation or claim that the crane and its lifting mechanism were defective, ⁵ we can only conclude that Halifax's liability to Grier was solely based on its ownership of the crane.

Ownership of a dangerous instrumentality, such as a crane, is a basis upon which to posit vicarious liability to a person injured by the mechanism. It is well established that a crane being used on a construction site is a "dangerous instrumentality" which can subject its owner to vicarious liability. Geffrey v. Langston Construction Co., 58 So.2d 698 (Fla.1952); Grove Manufacturing Co. v. Storey, 489 So.2d 780, 782 (Fla. 5th DCA), rev. denied, 500 So.2d 546 (Fla.1986); Mann v. Pensacola Concrete Constr. Co., Inc. (Mann I ) 448 So.2d 1132 (Fla. 1st DCA), rev. den., 461 So.2d 115 (Fla.1984), appeal after remand, (Mann II ) 527 So.2d 279 (Fla. 1st DCA), rev. denied, 534 So.2d 400 (Fla.1988) ; General Portland Land Development Co. v. Stevens, 395 So.2d 1296 (Fla. 4th DCA 1981) (buckhoist, like a crane, is an inherently dangerous activity); Atlantic Coast Development Corp. v. Napoleon Steel Contractors, 385 So.2d 676 (Fla. 3d DCA 1980). See also Serrano; LeSuer v. LeSuer, 350 So.2d 796 (Fla. 1st DCA 1977). Such liability is characterized as "vicarious" or "derivative," as required by Houdaille Industries, Inc. v. Edwards, 374 So.2d 490 (Fla.1979) (lack of active negligence or fault necessary in an indemnity suit). See Mortgage Corp. of America v. Vorndran, 334 So.2d 88 (Fla. 3d DCA 1976); Burton v. Diamond Sand & Stone Co., 327 So.2d 95 (Fla. 2d DCA 1976); Atlantic Coast; Serrano; Wetherington, Tort Indemnity in Florida, 8 F.S.U. 383, 397, 410 (1980).

Secondly, we think Halifax sufficiently established that it settled with Grier for a reasonable amount of damages. The testimony at trial provided a sufficient basis to support the jury's specific finding on this point. However, since the record also established that Scott & Jobalia had notice of Grier's suit against Halifax and therefore had an opportunity to appear and defend, proofs and findings on the issue of fairness and reasonableness may not have been necessary. Atlantic Coast; Cf. Hall & Company, Inc. v. McGetrick, 414 So.2d 243 (Fla. 3d DCA 1982); Crystal River Enterprises, Inc. v. N.A.S.I., Inc., 399 So.2d 77 (Fla. 5th DCA 1981).

The third issue in this case is more complex. What is the effect of Florida's worker's compensation law on a statutory employer's immunity rights...