Stamp Tech v. Lydall/Thermal Acoustical

• Decision Date: 04 September 2009
• Docket Number: No. 07-494.,07-494.
• Citation: 2009 VT 91,987 A.2d 292
• Court: Vermont Supreme Court
• Parties: STAMP TECH, INC., By and Through Its Assignee, Peter H. Blair v. LYDALL/THERMAL ACOUSTICAL, INC.

987 A.2d 292

2009 VT 91

STAMP TECH, INC., By and Through Its Assignee, Peter H. Blair v. LYDALL/THERMAL ACOUSTICAL, INC.

No. 07-494.

Supreme Court of Vermont.

September 4, 2009.

Steven A. Adler and James M. LaMonda of Axelrod & Adler, PLLC, St. Johnsbury, for Plaintiff-Appellant.

John Paul Faignant of Miller & Faignant, P.C., Rutland, for Defendant-Appellee.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

JOHNSON J.

¶ 1. Plaintiff Peter Blair, an injured worker, appeals from two decisions of the Caledonia Superior Court in favor of his employer Lydall/Thermal Acoustical, Inc. Plaintiff's arm was crushed by an industrial press while he was working as a temporary employee at Lydall's St. Johnsbury plant. His suit against Lydall was based on two theories. First, plaintiff sought to collect from Lydall a $750,000 stipulated judgment entered in his favor against Stamp Tech, Inc., a firm that Lydall had hired to install safety devices on the press, claiming that Lydall had expressly agreed to indemnify Stamp Tech for such a liability. Second, plaintiff alleged that Lydall intentionally injured him by, among other acts, removing a hard guard on the machine, which made plaintiff's continued use of the machine certain to result in injury. The superior court's first decision granted Lydall's motion for partial summary judgment on the contractual indemnity issue. In the second decision, the superior court granted Lydall's motion for summary judgment on the intentional tort issue, holding that plaintiff's common law tort claim against Lydall was barred by the exclusivity provisions of Vermont's Workers' Compensation Act. We conclude that, in both of its decisions, the superior court prematurely resolved disputed issues of material fact; therefore, we reverse and remand.

¶ 2. The record before the superior court on these summary judgment motions revealed the following facts. Lydall purchased a Komatsu 200-ton press machine and hired Stamp Tech, a Connecticut corporation, to install safety guards, known as light curtains, required for Lydall to operate the press in accordance with applicable worker-safety regulations. According to the record, light curtains project an infrared beam that, if penetrated, will stop the press to avoid injury to those operating the machine. Stamp Tech's technicians made two visits to Lydall's facility in St. Johnsbury to assess the press and to install the light curtains. The parties dispute whether Lydall installed an additional hard guard on the press between Stamp Tech's visits and whether the hard guard was in place at the time of plaintiff's accident.

¶ 3. After being injured, plaintiff initially sued Stamp Tech, alleging that Stamp Tech's negligence in installing the light curtains resulted in his injuries. Stamp Tech reached a settlement with plaintiff. There appears to be no dispute that, before plaintiff and Stamp Tech reached a settlement, Lydall received notice of the suit and the settlement negotiations. Lydall declined to participate in the settlement negotiations because it disputed the validity of the indemnification agreement of which Stamp Tech claimed to be the beneficiary. Pursuant to the settlement agreement, Stamp Tech accepted a judgment of $750,000 against it. Stamp Tech was apparently judgment-proof; therefore, plaintiff agreed not to execute the judgment against Stamp Tech. In return, Stamp Tech assigned to plaintiff its right to seek contractual indemnification from Lydall.

¶ 4. In March 2005, plaintiff sued Lydall, seeking indemnification on Stamp Tech's behalf. Plaintiff also alleged that Lydall intentionally created the dangerous condition that caused his injury by, among other acts, removing a hard guard from the press intended to safeguard workers. According to plaintiff, Vermont's Workers' Compensation Act did not preclude him from suing Lydall, his employer, on the latter claim.

¶ 5. In May and July 2006, respectively, plaintiff and Lydall filed cross-motions for partial summary judgment on the indemnification claim. We describe the parties' cross-motions in turn.

¶ 6. Lydall advanced two principal arguments in support of its motion for partial summary judgment. First, Lydall acknowledged that it had entered into a contract with Stamp Tech for the installation of light curtains to safeguard its press; however, Lydall also argued that it did not receive Stamp Tech's "Terms and Conditions," which contained both the indemnification clause here at issue and a choice of law provision stating that the laws of Connecticut would apply to the contract.¹ According to Lydall, this latter factual issue was immaterial; notwithstanding the choice of law provision, Connecticut law could not apply to the indemnification clause because, assuming plaintiff's characterization of Connecticut case law to be true, courts in Connecticut have interpreted similarly broadly worded clauses to allow an indemnitee to be indemnified for its own negligence. Lydall argued that such an interpretation of the indemnification clause would violate Vermont public policy, which requires such clauses to be specific and precise, and could not, therefore, be enforced by a Vermont court. As a second ground for granting its motion, Lydall asserted that Stamp Tech's settlement with plaintiff was collusive and unenforceable because, according to Lydall's theory of the case, Stamp Tech faced no liability and voluntarily accepted the entry of a $750,000 judgment against it—which sum plaintiff could only collect by pursuing an indemnification claim on behalf of Stamp Tech against Lydall.

¶ 7. Plaintiff, in opposition to Lydall's motion, attempted to refocus the superior court's inquiry on summary judgment. Specifying a variety of disputed factual issues that, in his view, precluded the superior court from deciding the entirety of the indemnification issue on summary judgment, plaintiff sought a limited determination that the indemnification clause conceivably could be enforced in either Vermont or Connecticut. In plaintiff's view, neither state's laws could support a conclusion that the indemnification provision was void as against public policy. Plaintiff addressed Lydall's allegation of collusion by noting that (1) the party whose actions caused his injuries remained a disputed issue of material fact; (2) Stamp Tech tried, in good faith, to involve Lydall in its settlement negotiations with plaintiff; and (3) Stamp Tech settled— notwithstanding its belief that it should not be held liable—only after consulting with third-party counsel regarding its potential liability exposure.

¶ 8. The superior court ruled on the parties' cross-motions approximately a year later, in June 2007, without a hearing or supplemental briefing. The superior court did not address the choice of law and validity issues raised by the parties. Instead, the court concluded that plaintiff abandoned his claim against Stamp Tech by filing an independent lawsuit against Lydall based largely on Lydall's alleged removal of the hard guard from the machine. At the same time, the court noted that Stamp Tech had settled the earlier case—conceding its own liability—while maintaining, for purposes of this case, that Lydall also bore responsibility for plaintiff's injuries. The superior court interpreted this series of events, in conjunction with plaintiff's agreement to not seek to execute its judgment against Stamp Tech, as suggesting that Stamp Tech had colluded with plaintiff to settle the case when it had no actual liability. Therefore, the superior court held that plaintiff must show Stamp Tech's liability in full to avoid summary judgment. Because plaintiff failed to do so, it dismissed the indemnification claim.

¶ 9. Lydall then moved for summary judgment on the remaining issue of whether Vermont's Workers' Compensation Act rendered it immune from common law tort claims brought by its statutory employees, such as plaintiff. The superior court granted the motion, holding that plaintiff had not put forth any evidence suggesting that Lydall acted with the requisite mental state required to remove the case from the exclusivity provisions of Vermont's Workers' Compensation Act.

¶ 10. Plaintiff appeals, contending that the indemnification provision was part of the contract between Stamp Tech and Lydall and is valid and enforceable pursuant to both Vermont and Connecticut law. Plaintiff further argues that both of the superior court's decisions on summary judgment resolved disputed issues of material fact. Finally, plaintiff claims that the superior court erred in denying plaintiff's motion for reconsideration of the court's decision on indemnification in light of facts discovered in the time between the filing of the parties' motions and the issuance of the decision.

¶ 11. We review motions for summary judgment de novo, and we have consistently held that "summary judgment is appropriate only when the record clearly shows that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law." Bacon v. Lascelles, 165 Vt. 214, 218, 678 A.2d 902, 905 (1996); see also V.R.C.P. 56(c)(3). In reviewing a ruling on a summary judgment motion, we consider "the entire setting of the case, including the affidavits, depositions, admissions, . . . and similar material on file to determine the existence of a genuine issue of material fact." Pierce v. Riggs, 149 Vt. 136, 138, 540 A.2d 655, 657 (1987). In conducting this review, we afford the nonmoving party "the benefit of all reasonable doubts and inferences." Carr v. Peerless Ins. Co., 168 Vt. 465, 476, 724 A.2d 454, 461 (1998) (citation omitted).

I.

¶ 12. We turn first to the superior court's decision on indemnification. The superior court erred because the linchpin of its decision—that Stamp Tech faced no liability—was a disputed issue of fact. It was apparent on the face of the papers before the court that the question of fault...