Slater v. Central Plumbing & Heating Co.

• Decision Date: 21 October 1999
• Docket Number: No. 97-625.,97-625.
• Citation: 1999 MT 257,993 P.2d 654,297 Mont. 7
• Court: Montana Supreme Court
• Parties: Billy A. SLATER, Plaintiff and Respondent, v. CENTRAL PLUMBING & HEATING COMPANY and Edsall Construction Company, Inc., (American States Insurance Company, Subrogee), Defendants and Appellant. Edsall Construction Company, Inc., (American States Insurance Company, Subrogee), Cross-Plaintiff and Appellant, v. Central Plumbing & Heating Company, Cross-Defendant and Respondent.

993 P.2d 654

1999 MT 257

297 Mont. 7

Billy A. SLATER, Plaintiff and Respondent, v. CENTRAL PLUMBING & HEATING COMPANY and Edsall Construction Company, Inc., (American States Insurance Company, Subrogee), Defendants and Appellant.

Edsall Construction Company, Inc., (American States Insurance Company, Subrogee), Cross-Plaintiff and Appellant, v. Central Plumbing & Heating Company, Cross-Defendant and Respondent.

No. 97-625.

Supreme Court of Montana.

Submitted on Briefs January 7, 1999.

Decided October 21, 1999.

Rehearing Denied November 18, 1999.

James R. Walsh, Smith, Walsh, Clark & Gregoire; Great Falls, Montana, for Appellants.

George D. Goodrich, Garlington, Lohn & Robinson, P.L.L.P.; Missoula, Montana, for Respondents.

Justice JIM REGNIER delivered the opinion of the Court.

¶ 1 Cross-Plaintiff and Appellant, Edsall Construction Company, Inc. (American States Insurance Company, Subrogee) [hereinafter Edsall] appeals from the August 30, 1996 Order Granting Request for Entry of Judgment and for Attorney Fees Costs entered by the District Court for the Eighth Judicial District, Cascade County. In its order, the District Court denied Edsall's request for a scheduling conference and dismissed Edsall's pending cross-claims with prejudice; and at the same time, granted Cross-Defendant and Respondent, Central Plumbing & Heating Company's, request for entry of judgment against Edsall and request for an award of attorney fees and costs. The rationale behind the District Court's order was its belief that our decision in Slater v. Central Plumbing & Heating Co. (1996), 275 Mont. 266, 912 P.2d 780 [hereinafter Slater I], closed all Edsall's doors of recovery from Central under any theory.

¶ 2 Edsall asks us to consider whether there are remaining cross-claims to be litigated which were not disposed of in this Court's earlier reversal of summary judgment in Slater I. We reverse the District Court's dismissal of Edsalls pending crossclaims.

FACTUAL BACKGROUND

¶ 3 We previously considered the merits of the District Court's May 3, 1993, ruling on summary judgment in Slater I. In that opinion, we provided a statement of the relevant facts. In summary, we note that Edsall was the general contractor on a project to construct a commissary building on Malmstrom Air Force Base. Edsall subcontracted with Central to perform the plumbing work, which included the installation of floor drains. Central then subcontracted with Building Sprinkler Company to perform the sprinkler installation. Billy Slater, an employee of Building Sprinkler Company, was injured in a fall from motorized scaffolding that tipped over when its wheel broke through a drain cover and lodged in the floor drain. Slater sued both Edsall and Central.

¶ 4 This case involves a unique situation in that both the general contractor and the subcontractor were sued by an injured employee and, in turn, the general contractor has cross-claimed against the subcontractor for indemnity. The injured employee's employer, a sub-subcontractor, is not involved in this action because recovery against the injured worker's employer for damages, indemnification, or contribution is not permitted under Montana law. See § 39-71-411, MCA; Howard S. Wright Constr. Co. v. F.E. DeBeer Mechanical Constr. Co., (1979) 185 Mont. 47, 50, 604 P.2d 323, 325. Section 39-71-411, MCA, states:

[A]n employer is not subject to any liability whatever for the death of or personal injury to an employee covered by the Workers' Compensation Act or for any claims for contribution or indemnity asserted by a third person from whom damages are sought on account of such injuries or death.

¶ 5 The record establishes that Slater filed a motion for partial summary judgment against Edsall in the Eighth Judicial District Court, Cascade County, on February 16, 1990. In his motion, he asked the District Court to declare that Edsall was strictly liable for his injuries pursuant to §§ 50-77-101 and -104, MCA, of the Montana Scaffolding Act and to declare that Edsall had violated its own safety standards. On January 11, 1991, the District Court entered an order and opinion granting Slater partial summary judgment against Edsall, leaving the issues of causation and damages for the jury.

¶ 6 On March 28, 1991, Slater filed a similar motion for partial summary judgment against Central, alleging that Central also was liable under the Scaffolding Act because of its contractual obligations with Edsall. On this motion, Slater made reference to the contract between Edsall and Central, which made Central responsible for meeting all O.S.H.A. requirements and required Central to furnish all necessary scaffolding. However, Slater noted that whether the contract required Central to indemnify Edsall would have to be deliberated between the separate parties and was of no relevance to his case. On April 26, 1991, the District Court rejected Slater's attempt to make Central liable for his injuries, stating that Edsall had a nondelegable duty to provide for the safety of workers and to comply with the Scaffolding Act. Slater later settled with Central.

¶ 7 In the events that followed, Slater obtained a judgment on a jury verdict against Edsall in the amount of $675,000, plus costs. Slater's judgment eventually was offset in the amount of $49,182 as the result of a pretrial settlement between Slater and Central. Upon Slater's motion, the District Court certified the judgment as final pursuant to Rule 54(b), M.R.Civ.P., and Edsall filed a cross-claim against Central alleging that Central breached its contract in regard to its own safety obligations. ¶ 8 Edsall then was granted leave to file an amended cross-claim against Central on September 19, 1991, which delineated four separate claims. In its First Claim, Edsall alleges Central breached the first paragraph of their contract. In the Second Claim, Edsall makes a claim against Central for indemnity for Central's negligence based on the ninth paragraph of their contract. In the Third Claim, Edsall asserts that based on the District Court's grant of summary judgment against Edsall and in favor of Slater, Central is liable to Edsall for the relief requested in its cross-claim as a matter of law. In its Fourth Claim, Edsall makes a claim for reasonable attorney fees and litigation expenses in the event of breach based on the third paragraph of the contract.

¶ 9 Central moved the District Court for summary judgment on Edsall's Amended Cross-Claim. Edsall filed a motion for partial summary judgment under the First Claim of its amended cross-claim involving breach of contract, recognizing that the claim based on Central's negligence would require a finding of fact that was inappropriate for summary judgment. In its brief in opposition to Central's motion for summary judgment, Edsall distinguished the duties Central owed Slater pursuant to the Scaffolding Act from the duties Central owed Slater based on other theories of liability and the duties Central owed Edsall under the contract. In response, Central simply argued that since the District Court had already decided the issue of Edsall's negligence in the proceeding involving Slater, negligence was no longer an issue.

¶ 10 On April 18, 1992, the District Court granted partial summary judgment in Edsall's favor on the basis that Central had breached its contract with Edsall. The District Court rejected Edsall's argument based on the indemnity clause of the parties' contract, concluding that it did not cover Edsall's negligent acts. Central's motion for summary judgment was denied.

¶ 11 Upon Edsall's subsequent motion for summary judgment as to damages, the District Court awarded Edsall $630,044.31 in damages, as well as attorney fees and costs for Central's breach of contract. Final judgment as to damages was entered on June 13, 1995, from which Central appealed. During these proceedings, American States Insurance Company, Edsall's insurer, was included as a Defendant along with Edsall, as its subrogee. Therefore, reference to either Edsall or American States necessarily includes the other.

¶ 12 We reversed the District Court's May 3, 1993, summary judgment on the issue of breach of contract in Slater I. After our reversal, Central filed a motion for judgment to be entered against Edsall as to attorney fees and costs and filed a memorandum of costs on appeal. Edsall opposed Central's motion, contending that other issues raised in its cross-claim were still pending, and filed a motion for a scheduling conference. In its September 12, 1996 order, the District Court entered judgment in favor of Central, awarded Central its fees and costs, and dismissed any of Edsalls additional cross-claims. The District Court later denied Edsall's motion to reconsider its decision. Now, Edsall appeals the District Court's September 12, 1996 order.

STANDARD OF REVIEW

¶ 13 The standard of review for a district court's conclusions of law is whether the court's interpretation of the law was correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686(citations omitted). We have previously stated the reasoning behind this standard of review to be as follows:

The reasoning for simply determining if the court's conclusions are correct is that no discretion is involved when a tribunal arrives at a conclusion of law the tribunal either correctly or incorrectly applies the law. For that reason, this Court concludes that our standard of review relating to conclusions of law, whether the conclusions are made by an agency, workers' compensation court, or trial court, is whether the tribunal's interpretation of the law is correct.

Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.

DISCUSSION

¶ 14 Edsall included four claims in its amended cross-claim. In the first of these claims, it asserted that Central should fully indemnify Edsall for its loss because Central breached the first...