Sellers v. Owens-Illinois Glass Co.

• Decision Date: 06 September 1972
• Docket Number: OWENS-ILLINOIS,No. 12907,12907
• Citation: 156 W.Va. 87,191 S.E.2d 166
• Court: West Virginia Supreme Court
• Parties: Ralph SELLERS et al. v.GLASS COMPANY, a corporation, et al.

Page 166

191 S.E.2d 166

156 W.Va. 87

Ralph SELLERS et al. v. OWENS-ILLINOIS GLASS COMPANY, a corporation, et al.

No. 12907.

Supreme Court of Appeals of West Virginia.

Submitted April 25, 1972.

Decided Sept. 6, 1972.

Syllabus by the Court

1. Contracts of indemnity against one's own negligence do not contravene public policy and are valid.

2. In construing a contract of indemnity and determining the rights and liabilities of the parties thereunder, the primary purpose is to ascertain and give effect to the intention of the parties.

3. Generally, contracts will not be construed to indemnify one against his own negligence, unless such intention is expressed in clear and definite language.

Herschel Rose, James D. Nash, Jr., Fairmont, for appellants.

Steptoe & Johnson, Willis O. Shay, Clarksburg, for appellees.

KESSEL, Judge:

This case is before the Court upon an appeal from a final judgment of the Circuit Court of Marion County which, by an order entered on April 24, 1969, rendered judgment in favor of Earp & Shriver, Inc., the appellee, and against Timothy McCarthy Construction Company, Inc., the appellant, upon the cross-claims of the appellant asserted in each of six cases which had been consolidated for trial. The issue raised by the cross-claims and presented for decision in this case is whether Earp & Shriver, Inc., hereinafter referred to in this opinion as Earp or as the appellee, is required to indemnify Timothy McCarthy Construction Company, Inc., hereinafter referred to in this opinion as McCarthy or as the appellant, under the terms of an indemnity agreement for the amounts which McCarthy was found liable to the plaintiffs for damages to their real estate.

The plaintiffs in these consolidated civil actions are the owners of six separate parcels of improved real estate adjacent to the northwestern side of Speeddway, a public street in Fairmont, Marion County, West Virginia. On the southeastern side of Speedway, opposite the parcels of land owned by the plaintiffs, Timothy McCarthy and William F. Hyland owned a parcel of land, fronting 607.58 feet, more or less, on said street and containing 145,981.33 square feet. McCarthy and Hyland, as individuals, entered into 'an agreement and lease' with Owens-Illinois Glass Company for the construction of a warehouse on the parcel of real estate owned by them. The warehouse was to be constructed according to the preliminary plans and specifications attached to and made a part of the lease agreement. McCarthy and Hyland, as individuals, engaged the appellant, McCarthy, as the general contractor for the construction of the warehouse. The appellant, McCarthy, entered into a written subcontract with Earp the appellee, for the grading and excavation connected with the erection of the warehouse. This written agreement between McCarthy and Earp contained the following provision:

'Subcontractor shall indemnify Contractor against all claims for damages arising from accidents to persons or property occasioned by the Subcontractor, his agents or employees: and Subcontractor shall defend all suits brought against the Contractor on account of any such accidents and shall reimburse Contractor for any expense including reasonable attorneys' fees sustained by Contractor by reason of such accidents.'

The excavation work was commenced by Earp on August 31, 1964. The plaintiffs alleged in their complaints that, as a result of the negligent excavation of the real estate, the plaintiffs were deprived of the natural lateral support to their real estate which resulted in damages to the real estate and the improvements situated thereon.

In each of these six civil actions, McCarthy asserted a cross-claim against the defendant Earp, alleging that Earp was liable to McCarthy under the indemnity provision, previously quoted in this opinion, of the excavation and grading subcontract, for any sums which McCarthy might be found liable to pay the plaintiffs plus costs and expenses, including reasonable attorneys' fees.

Named as defendants in each of the six civil actions instituted by the plaintiffs on June 7, 1966, were Owens-Illinois Glass Company, a corporation, to whom the warehouse was leased with an option to purchase; Timothy McCarthy and William F. Hyland, the owners for whom the warehouse was constructed; Timothy McCarthy Construction Company, Inc., the general contractor and the appellant in this case; Earp & Shriver, Inc., the excavating subcontractor and the appellee in this case; and New England Mutual Life Insurance Company, a corporation, which financed the project by a construction loan which was secured by a lien on the parcel of real estate.

Timothy McCarthy and William F. Hyland, the owners of the real estate, were dismissed as defendants for the reason that they were nonresidents of the State of West Virginia and the court had no jurisdiction over their persons. New England Mutual Life Insurance Company, a corporation, was awarded judgment on the pleadings in its favor and was dismissed as a defendant.

By an order entered on November 20, 1967, the trial court ordered that the six cases be consolidated for trial and that they first be tried on the issue of liability. At the conclusion of the evidence in behalf of the plaintiffs, the court directed a verdict in favor of the defendant Owens-Illinois Glass Company. Upon the trial of the case, the jury returned verdicts in favor of each of the plaintiffs, and against McCarthy, and found Earp not guilty. No appeal was taken by McCarthy from the judgment of the trial court entered upon the jury verdicts.

Thereafter, the claims of the plaintiffs for damages in five of the cases were settled and paid by McCarthy. The sixth case was tried with a jury on the issue of damages alone, and the amount of the resulting verdict for the plaintiff was paid by McCarthy.

On the 24th day of April, 1969, the trial court, by an order entered on that date, dismissed the cross-claim upon the ground that McCarthy was not entitled to indemnification from Earp. In its opinion, dated April 1, 1969, and made a part of the record, the trial court stated as follows: '* * * that in order to be in a position to collect indemnity from another for one's own negligence, such a contract must be clear and unambiguous, and without a doubt to the effect that the parties agree to such an arrangement. I find that the agreement in this case falls far short of meeting this requirement, and so fails to meet this test.'

Under the terms of the subcontract between Earp and McCarthy for the excavation of the real estate, Earp agreed to perform the contract according to plans and specifications submitted to Earp by McCarthy. The evidence shows that Earp executed the contract and performed all the excavation and earth moving on the building site. Counsel for the appellant concede in their brief that Earp performed the excavation contract in a proper and workmanlike manner and in strict accordance with the plans and specifications, with the exception of certain changes which were dictated by the general contractor.

The record in this case discloses that during the excavation of the warehouse site, McCarthy had knowledge of the fact that the excavation was causing the land to slide. The evidence further shows that, after an actual rotational slide failure was noticed on the building site, McCarthy employed experts from the Pittsburgh Testing Laboratory, who inspected the area and recommended correctional measures. McCarthy did not adopt the recommendations of the experts nor did McCarthy take any other steps to prevent further damage to the plaintiffs' properties; nor did McCarthy tell or order Earp to proceed in any way other than according to the original plans and specifications.

Counsel for the appellant contend that, although the verdicts of the jury absolved Earp from any negligence in the performance of the excavation contract, Earp was the 'active agency' which precipitated the plaintiffs' damages and should be required to reimburse McCarthy. Counsel for the appellant further maintain that the indemnity agreement between McCarthy and Earp was not restricted to incidents where 'accidents' were intentionally caused by the subcontractor or where the 'accidents' were negligently caused by the subcontractor. Counsel for the appellant contend that the indemnity agreement made Earp liable even though McCarthy was the negligent party, for the reason that plaintiffs' damages were caused by the acts of Earp in excavating under the terms of the subcontract. Counsel for appellant agree that Earp was not negligent in performing the excavation subcontract.

Counsel for the appellee take the position that Earp assumed liability for 'accidents to persons or property occasioned by' Earp and did not agree to indemnify McCarthy for acts which resulted from McCarthy's own negligence.

The question before the Court in this case is whether the language in the contract known as the indemnifying paragraph is sufficiently broad to require the subcontractor to reimburse the contractor for the judgments, costs, attorneys' fees, and other expenses sustained by him in the consolidated suits by the landowners.

Contracts of indemnity against one's own negligence do not contravene public policy and are valid in West Virginia. Borderland Coal Company v. Norfolk & Western Railway Company, 87 W.Va. 339, 104 S.E. 624.

The rules governing the requisites and validity of contracts generally apply to contracts of indemnity and the language of such a contract must clearly and definitely show an intention to indemnify against a certain loss or liability; otherwise it is not a contract of indemnity. In construing a contract of indemnity and determining the rights and liabilities of the parties thereunder, the primary purpose is to ascertain and give effect to the...