Stroud v. Dorr-Oliver, Inc.

• Decision Date: 13 November 1975
• Docket Number: DORR-OLIVE,INC,No. 11735,11735
• Citation: 542 P.2d 1102,112 Ariz. 403
• Parties: Morris A. STROUD and Marjorie Stroud, husband and wife, Appellants, v., a Delaware Corporation, and E. L. Farmer Construction Company, Inc., an Arizona Corporation, Appellees and Appellants, v. ALLISON STEEL MANUFACTURING CO., a corporation, Appellee.
• Court: Arizona Supreme Court

Page 1102

542 P.2d 1102

112 Ariz. 403

Morris A. STROUD and Marjorie Stroud, husband and wife, Appellants, v. DORR-OLIVER, INC., a Delaware Corporation, and E. L. Farmer Construction Company, Inc., an Arizona Corporation, Appellees and Appellants, v. ALLISON STEEL MANUFACTURING CO., a corporation, Appellee.

No. 11735.

Supreme Court of Arizona, In Division.

Nov. 13, 1975.

Rehearing Denied Jan. 13, 1976, with Supplemental Opinion, Jan. 16, 1976, see 544 P.2d 1089.

Langerman, Begam & Lewis, by Robert G. Begam, Samuel Langerman and William T. Keane, Phoenix, for appellants Stroud.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, by John H. Westover, Phoenix, for appellee and appellant Dorr-Oliver.

Maupin & Wilson, by Donald R. Wilson and William G. Fairbourn, Phoenix, for appellee and appellant E. L. Farmer.

Moore & Romley, by Kenneth J. Sherk and Roger T. Hargrove, Phoenix, for appellee Allison Steel.

Robert K. Park, Chief Counsel, by J. Victor Stoffa, Phoenix, for State Compensation Fund, amicus curiae.

CAMERON, Chief Justice.

Appellants, plaintiffs below, Morris A. Stroud and Marjorie Stroud, brought suit against the defendants below, Dorr-Oliver, Inc. and E. L. Farmer Construction Company, Inc., for industrial injuries sustained by Morris A. Stroud during construction of a sewage treatment plant for the City of Phoenix. From a defense verdict plaintiffs appeal, contending errors in the conduct of the trial.

Defendant Dorr-Oliver filed a third party complaint seeking indemnity from Allison Steel Manufacturing Company. E. L. Farmer Construction filed a cross-claim against Allison Steel for indemnity. Allison filed a motion for summary judgment which was denied. Allison then filed a petition for special action in the Court of Appeals, see Allison Steel Manufacturing Co. v. Superior Court, 20 Ariz.App. 185, 511 P.2d 198 (1973). As a result of that opinion, the trial court granted summary judgment in favor of Allison and against Farmer and Dorr-Oliver. From this summary judgment Dorr-Oliver and Farmer Construction appeal.

Allison Manufacturing Company filed an answering brief to the appeal of Farmer Construction Company and Dorr-Oliver, as well as a motion to dismiss. ¹

We must answer the following questions on appeal:

1. Do Dorr-Oliver, Inc. and E. L. Farmer Construction Company have a right of indemnity or contribution from Allison Steel Manufacturing Company?

2. Does Allison Steel have a lien on any judgment that Stroud might obtain against Dorr-Oliver or Farmer?

3. Did the trial court err in admitting into evidence certain photographs?

4. Did the trial court err in admitting certain evidence and testimony which tended to show fault on the part of Allison Steel Manufacturing Company and in giving the following:

a. instruction on proximate and intervening cause,

b. instruction on strict liability,

c. special interrogatories to the jury.

5. Did the court err in admitting evidence of the second successful erection of the dome?

6. Did the trial court err in admitting portions of E. L. Farmer's deposition which contained statements from an investigative report not in evidence?

7. Did the defense counsel commit reversible error in inferring the existence to workmen's compensation as a remedy for the plaintiff?

The facts necessary for a determination of this matter on appeal are as follows. The City of Phoenix awarded a contract to build a sewage treatment plant to E. L. Farmer Construction Company. Farmer subcontracted with Dorr-Oliver, Inc., to design and fabricate the metal parts of the top of a gas digester unit. Farmer then subcontracted with Allison Steel Company to do the actual erection of the unit. The gas digester unit consisted of a cylindrical concrete building approximately 45 feet high and 100 feet in diameter. It was topped by a domed metal cap which looked somewhat like an opened umbrella resting on top of the concrete cylinder. A metal tension ring was at the bottom of the cap while a compression ring, about 12 feet in diameter, was at the top. Heavy metal arms spaced every ten degrees were connected at the bottom to the large ring and at the top to the smaller one. There was considerable dispute as to whose errors and mistakes led to the accident. Dorr-Oliver and Farmer contend that Allison, by negligently placing the compression ring upside down on the top of the unit, caused the cap to fall. Allison as well as plaintiffs contends that the plans and specifications given to Allison by Farmer and Dorr-Oliver were not the final and corrected plans, but were preliminary shop drawings for the purpose of bidding only and that the defective plans thus caused Allison to place the compression ring on the structure upside down. It is also contended that the compression ring was not adequately marked. The metal tension ring was almost 100 feet in diameter and metal gusset plates were welded to the ring at 10 degree intervals. There is some testimony that because the compression ring was placed upside down, the metal beams would not fit and the gusset plates on the compression ring were partially cut to allow proper fit.

There is no denying that while under construction the parts of the cap came crashing down and Morris Stroud, an employee of Allison, was severely injured. Stroud recovered from his employer, Allison, under workmen's compensation, and brought suit against Farmer and Dorr-Oliver. The jury found for the defendants Farmer and Dorr-Oliver.

RIGHT OF INDEMNITY

Dorr-Oliver filed a third party complaint against Allison seeking indemnity from Allison for any judgment that might be entered against it in the Stroud litigation. Farmer sought indemnity from Allison by way of a cross-claim. Allison filed a motion for summary judgment, both as to the third party complaint of Dorr-Oliver and as to the cross-claim of Farmer. This motion was denied by the trial court and Allison took a petition for special action to the Court of Appeals which, on 26 June 1973, decided in favor of Allison stating, first as to Dorr-Oliver:

'The liability of Dorr-Oliver to Stroud was based upon its alleged negligence in designing the cover, improper preparation of specifications for installation of the cover and improper fabrication of the steel. In turn, Dorr-Oliver's claim of indemnity against Allison was based upon Allison's alleged negligence in failing to follow drawings and plans prepared by Dorr-Oliver and the negligent installation and erection of the structure. In addition to the complete indemnity sought by Dorr-Oliver against Allison, Dorr-Oliver also sought contribution. In summary then, Dorr-Oliver's liability to Stroud turns upon its alleged active negligence in causing Stroud's injuries, and there is no relationship existing, either contractual or arising as a matter of law, between Dorr-Oliver and Allison, which would impose liability upon Dorr-Oliver to Stroud for Allison's negligent acts alone.' Allison Steel Manufacturing Co. v. Superior Court, supra, 20 Ariz.App. at 188--189, 511 P.2d at 201--202.

The Court of Appeals then held that the facts do not support liability by Allison on the basis of the 'active negligence-passive negligence' doctrine of Busy Bee Buffet v. Ferrell, 82 Ariz. 192, 310 P.2d 817 (1957); Transcon Lines v. Barnes, 17 Ariz.App. 428, 498 P.2d 502 (1972).

But Dorr-Oliver contends that Allison's negligence was so gross that Allison should be compelled to indemnify Dorr-Oliver pursuant to the Restatement of Restitution, § 97. We believe the Court of Appeals correctly answered this contention as follows:

'Dorr-Oliver contends, however, that the rule against indemnity or contribution among joint tortfeasors is not applicable in the situation where one joint tortfeasor was grossly negligent, citing Restatement of Restitution, § 97. In this regard, the negligence alleged by Dorr-Oliver against Allison was twofold, first that Allison was using shop drawings rather than completed plans for the installation of the compressor ring and that they should have known that the shop drawings were not the final specifications for this job. Secondly, Dorr-Oliver contends that if Allison had not been negligent and had read the shop plans correctly, it would not have installed the compression ring holding the cover upside down. While Dorr-Oliver classifies these alleged acts of negligence as gross, they do not, in our opinion, reach the standard set in § 97, Restatement of Restitution, which requires that the conduct be 'reckless or intentionally wrongful' to enable a negligent tortfeasor to obtain the indemnity from a concurrent tortfeasor.' Allison Steel Manufacturing Co. v. Superior Court, supra, 20 Ariz.App. at 189, 511 P.2d at 202.

As to Farmer, the Court of Appeals stated:

'Farmer's cross-claim against Allison was in two counts. The second count sought indemnity from Allison based upon the allegation that it was Allison and not Farmer who was actively and primarily negligent. Farmer did not allege any vicarious liability by reason of Allison's acts. However, the complaint against Farmer by Stroud contended that Farmer was negligent in improperly supervising the work and failing to design and install adequate safety devices. These allegations, if true, would impose liability upon Farmer for its 'active participation in the liability creating event' and what we have stated concerning Dorr-Oliver's claim of indemnity against Allison would be equally applicable to Farmer's claim.' Allison Steel Manufacturing Co. v. Superior Court, supra, 20 Ariz.App. at 190, 511 P.2d at 203.

The Court of Appeals also noted that there was a contract of indemnification between Allison and Farmer, but the Court of Appeals correctly noted that this did not give Farmer the right to indemnification for Farmer's negligence. Royal Properties, Inc. v. Arizona Title Ins. and Trust Co., 13 Ariz.App. 376, 476 P.2d 897 (1970).

The Court of Appeals then reaffirmed its previous order directing the...