Sink & Edwards, Inc. v. Huber, Hunt & Nichols, Inc.

• Decision Date: 11 January 1984
• Docket Number: No. 1-583A160,1-583A160
• Citation: 458 N.E.2d 291
• Parties: SINK & EDWARDS, INC., Appellant (Third-Party Defendant Below), v. HUBER, HUNT & NICHOLS, INC., Appellee (Third-Party Plaintiff Below).
• Court: Indiana Appellate Court

Page 291

458 N.E.2d 291

SINK & EDWARDS, INC., Appellant (Third-Party Defendant Below), v. HUBER, HUNT & NICHOLS, INC., Appellee (Third-Party Plaintiff Below).

No. 1-583A160.

Court of Appeals of Indiana,

First District.

Jan. 11, 1984.

Alvin E. Meyer, Stephen J. Peters, Christine F. Royce, Stewart, Irwin, Gilliom, Fuller & Meyer, Indianapolis, for appellant.

Hugh Watson, Locke, Reynolds, Boyd & Weisell, Indianapolis, Melville E. Watson, Greenfield, for appellee.

ROBERTSON, Judge.

Sink & Edwards, Inc. (Sink), a subcontractor, appeals the summary judgment entered on behalf of the contractor, Huber, Hunt, & Nichols, Inc. (Huber) pursuant to the indemnification provision contained in their construction contract.

We affirm in part, reverse in part, and remand.

Huber contracted with the Allison Division of General Motors on April 4, 1966, to perform construction. Huber then entered a subcontract agreement with Sink on October 3, 1967. The subcontract contained an indemnity clause. On January 15, 1968, Robert Allison, an employee of Sink, sustained injuries when he fell from the roof of the construction project. Allison brought suit against General Motors, Huber, and the project architect. Huber filed a third party complaint against Sink for indemnity. The trial court granted Sink's motion to sever the third party complaint from Allison's action. Allison's trial resulted in a directed verdict being entered on behalf of Huber on the theory that Huber did not owe Allison a duty of care. Allison appealed the trial court decision, which was reversed. Allison v. Huber, Hunt, & Nichols, Inc., (1977) 173 Ind.App. 41, 362 N.E.2d 193.

The case was set for retrial in 1978. The parties began settlement negotiations and Sink was informed of the pending retrial. Three days prior to the scheduled retrial, Huber received a settlement offer of $150,000. Sink was notified of Huber's intention to settle and given the opportunity to take over the defense of the action. The record does not reveal any correspondence from Sink. Huber settled with Allison and the action was dismissed with prejudice on February 16, 1978.

Sink filed its motion for summary judgment on Huber's third party complaint on July 8, 1982. Huber also filed a motion for summary judgment. The trial court granted Huber's motion and ordered Sink to pay Huber $150,000 and interest calculated from the date of release of Allison's claim until the entry of summary judgment.

Sink alleges the trial court erred by granting Huber's motion for summary judgment because the contract did not explicitly state that Sink would indemnify Huber for Huber's negligence. The indemnification provisions of the contract state:

Subcontractor further specifically obligates himself to contractor in the following respects:

(a) To indemnify contractor against and save harmless from any and all claims, suits, liability, expense or damage for any alleged or actual infringement or violation of any patent or patent right arising in connection with this Subcontract and anything done thereunder;

(b) To indemnify contractor and save it harmless from any and all claims, suits or liability resulting from any act or omission of subcontractor, or contractor or their officers, agents, employees, or servants in any manner related to the subject matter of this Subcontract, including, without implied limitation, claims, suits or liability for injury to, or death of, persons, including the employees of either contractor or subcontractor and for damage to property;

(c) To pay for all materials furnished and work and labor performed under this Subcontract, and to satisfy Contractor and Owner thereupon whenever demand is made to the end that Contractor, Owner and the premises shall be saved harmless from any and all claims, suits, or liens therefor by others than the subcontractor.

Sink argues these provisions lack sufficient explicitness to require it to indemnify Huber.

Contracts providing indemnification for indemnitee's own negligence, if "knowingly and willingly" made, are valid and enforceable in Indiana. ¹ Loper v. Standard Oil Co., (1965) 138 Ind.App. 84, 211 N.E.2d 797. However, such provisions are strictly construed and were not held to provide indemnification unless expressed in clear and unequivocal terms. It has been said in reference to the clear and unequivocal test, that "as a general rule, it is not required to be an express reference to the negligence of the indemnitee". Norkus v. General Motors Corp. (S.D.Ind.1963) 218 F.Supp. 398.

Sink bases its argument primarily upon the decision of Indiana State Highway Commission v. Thomas, (1976) 169 Ind.App. 13, 346 N.E.2d 252. In Thomas, the court examined the clear and unequivocal test and concluded:

We find it difficult to envision an indemnity provision which defines 'the cause [of the injury] in terms of physical or legal responsibility ... specifically, not generally ...', and in terms which are 'clear and unequivocal', which does not contain an express stipulation as to indemnity against the indemnitee's own negligence. The improbability of finding such a provision might alone compel the conclusion that an express stipulation is required. But we need not rest upon our own logic. Analysis of the principal case upon which the court in Norkus relied, Batson-Cook Co. v. Industrial Steel Erectors, (5th Cir.1958), 257 F.2d 410, and the decisions, in other jurisdictions, to which Batson-Cook has led, reveal that explicit reference to the indemnitee's negligence is a pre-requisite to his indemnification therefor.

346 N.E.2d at 261.

Sink argues Thomas requires an explicit statement that it shall indemnify Huber for Huber's negligence. Since the contract does not contain an explicit statement, Sink contends that the trial court erred by not entering summary judgment on behalf of Sink.

We agree with Sink that Thomas now requires an explicit statement. However, we do not agree with Sink's argument that it is entitled to summary judgment. Huber correctly asserts that in interpreting contracts, courts will attempt to determine the intent of the parties at the time the contract was made as disclosed by the language used to express their rights and duties. Jones v. City of Logansport, (1982) Ind.App., 436 N.E.2d 1138. In general, pronouncements of common law made in rendering judicial opinions of civil cases have retroactive effect unless such pronouncements impair contracts made or vested rights acquired in reliance on an earlier decision. Texas Eastern Transmission Corp. v. Seymour National Bank, (1983) Ind.App., 451 N.E.2d 698. Huber argues that its contract rights will be impaired if the Thomas standard is applied to the present case.

We agree with Huber that the Thomas standard will impair their contract rights. Sink and Huber entered their contract in 1967, nine years prior to Thomas. ² Thomasrelied greatly on Norkus v. General Motors Corp., supra and Loper v. Standard Oil Co., supra. These cases established the general rule that it was not necessary to have an express reference to the negligence of the indemnitee, but that in order to require the indemnitor to indemnify the indemnitee for its own negligence, the obligation must be expressed in clear and unequivocal terms.

In applying the above standard to the present case, the trial court properly concluded that Sink must indemnify Huber. The relevant portion of the contract requires indemnification from:

Any and all claims, suits, or liability resulting from any act or omission of subcontractor or contractor or their officers, agents, employees or servants in any manner related to the subject matter of this subcontract, including, without implied limitation, claims, suits or liability for injury to or death of, persons, including the employees of either contractor or subcontractor ...

Although, the indemnification clause does not expressly mention the term negligence, the agreement clearly requires Sink to indemnify Huber for acts or omissions by officers, agents, employees, or servants of the contractor or subcontractor including suits for injury or death of employees of the contractor or subcontractor. This clause precisely covers the operative facts of this case because Allison, an employee of Sink, was injured as a result of Huber's omission of adequate barricades, fences, or guards to prevent Allison from falling off the roof. The trial court did not err in concluding that Sink must indemnify Huber because the language clearly contemplates indemnification for the type of injury that Allison suffered.

Sink alternatively argues the trial court erred by entering summary judgment even if the clear and unequivocal test is used. Sink specifically challenges whether it knowingly and voluntarily entered an indemnification agreement.

Summary judgment is appropriate only when there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Stuteville v. Downing, (1979) Ind.App., 391 N.E.2d 629. If any doubt remains regarding the existence of a genuine issue of material fact, such doubt must be resolved against the movant. Even if the facts are not in dispute, summary judgment is inappropriate when the information before the court reveals a good faith dispute as to the inferences to be drawn from those facts. Hayes v. Second Nat. Bank of Richmond, (1978) 176 Ind.App. 299, 375 N.E.2d 647. However, despite conflicting facts and inferences on some elements of a claim, summary judgment may be proper where there is no dispute or conflict regarding a fact that is dispositive of litigation. Stuteville v. Downing, supra. The party opposing summary judgment need not divulge his entire case, but must come forward with specific facts which show there is a genuine issue as to the material facts. Moll v. South Central Solar Systems, Inc., (1981) Ind.App., 419 N.E.2d 154.

Sink argues Huber failed to establish that Sink "knowingly and willfully"...