Trim v. Clark Equipment Co.

• Decision Date: 28 November 1978
• Docket Number: 77-3489,Docket Nos. 77-3488
• Citation: 274 N.W.2d 33,87 Mich.App. 270
• Parties: Lee TRIM and Julie Trim, Plaintiffs, v. CLARK EQUIPMENT COMPANY, Defendant-Third Party Plaintiff-Appellant, v. B. L. HARROUN & SON, INC., Third Party Defendant-Appellee. Nancy Ann FORD, as Administratrix of the Estate of Robert Lee Ford, Deceased, Plaintiff, v. CLARK EQUIPMENT COMPANY, Defendant-Third Party Plaintiff-Appellant, v. B. L. HARROUN & SON, INC., Third Party Defendant-Appellee. 87 Mich.App. 270, 274 N.W.2d 33
• Court: Court of Appeal of Michigan — District of US

Page 33

274 N.W.2d 33

Lee TRIM and Julie Trim, Plaintiffs, v. CLARK EQUIPMENT COMPANY, Defendant-Third Party Plaintiff-Appellant, v. B. L. HARROUN & SON, INC., Third Party Defendant-Appellee.

Nancy Ann FORD, as Administratrix of the Estate of Robert

Lee Ford, Deceased, Plaintiff, v. CLARK EQUIPMENT COMPANY, Defendant-Third Party Plaintiff-Appellant, v. B. L. HARROUN & SON, INC., Third Party Defendant-Appellee.

Docket Nos. 77-3488, 77-3489.

87 Mich.App. 270, 274 N.W.2d 33

Court of Appeals of Michigan.

Nov. 28, 1978.

Released for Publication Jan. 25, 1979.

[87 MICHAPP 272] Cholette, Perkins & Buchanan by Edward D. Wells, Hillman, Baxter & Hammond by Robert N. Hammond and Joel M. Boyden, Grand Rapids, for defendant-third party plaintiff-appellant.

Hillman, Baxter & Hammond by Robert N. Hammond and Joel M. Boyden, Grand Rapids, James, Dark & Craig by J. William Dark, Kalamazoo, for third party defendant-appellee.

Before D. E. HOLBROOK, Jr., P. J., and T. M. BURNS and VanVALKENBURG, ^* JJ.

T. M. BURNS, Judge.

The important questions in these consolidated cases relate to the effect of M.C.L. § 691.991; M.S.A. § 26.1146(1) on the indemnity contract between third-party plaintiff, Clark Equipment Company (Clark) and third-party defendant, B. L. Harroun & Son, Inc. (Harroun) and, if the statute does not void the entire indemnity portion of a contract, did the trial court properly instruct the jury on the showing Clark was required to make to recover under the indemnity agreement. Clark also seeks review of two evidentiary questions.

Harroun contracted with Clark to install an overhead sprinkler system in one of Clark's facilities. One clause of the contract provided that Harroun indemnify Clark as follows:

"It is understood and agreed that the seller will [87 MICHAPP 273] indemnify and save harmless the buyer from and against any and all claims for injury or death to persons or damage to property (including costs of litigation and attorney's fees) in any manner caused by, arising from, incident to, connected with or growing out of the work to be performed under this contract, regardless of whether such claim is alleged to be caused, in whole or in part, by negligence or otherwise, on the part of the buyer or its employees. Seller will promptly notify buyer in writing of any such claim, setting forth all details thereof known to seller."

On September 7, 1971, three Harroun employees were continuing the work which had begun several weeks earlier. Robert Ford and Lee Trim were working near the ceiling on a platform provided by Harroun. This platform apparently rested on the steel beam superstructure of the building, but was not secured to it in any way. As the work progressed, the Harroun employees would skid the platform along the steel to the next connection point. This skidding of the platform eventually brought Trim and Ford directly over one of the main aisleways of the plant.

In performing their work, Ford and Trim brought sections of pipe from the floor to the platform. To accomplish this, one end of a rope was tied to the platform and the opposite end lowered to the third employee who would tie it to the pipe. The men on the platform would then pull the rope, with the pipe, up to the platform. Unfortunately, the rope was not coiled on the platform as it was brought up, but was allowed to dangle down and form a loop.

Clark had not discontinued its operation while the sprinkler system was being installed. While the Harroun employees were on the platform pulling up the pipe, a hi-lo driver entered the building [87 MICHAPP 274] and proceeded down the aisle. ¹ The protective overhead cage of the hi-lo caught the loop which was formed by the rope and severely jerked the platform. Both Trim and Ford lost their balance and fell to the floor. Ford was killed in the fall and Trim was knocked unconscious. ²

Ford's estate and Trim brought separate actions against Clark. Upon receipt of the complaint, Clark wrote to Harroun demanding that it assume the defense and indemnify Clark under the contract. The demand was refused. Clark then started the third-party actions involved in this appeal alleging both the contractual right to be indemnified and a claim of common law indemnity.

After substantial discovery was completed, Clark and the original plaintiffs reached a tentative settlement of the original suits. Clark informed Harroun that unless Harroun agreed to assume the defense on behalf of Clark and agreed to hold Clark harmless under the contract, Clark would consent to judgments of $50,000 in the Ford case and $3,500 in the Trim case. Harroun again refused to take over the defense because it believed the contractual indemnity agreement was void and because it believed that Clark could prevail on the merits at trial.

After the refusal to take over the defense, Clark consented to judgments in the amounts noted above and these judgments have been satisfied. The third-party action then proceeded to trial. Under the court's instructions, the jury found for [87 MICHAPP 275] Harroun. Clark appeals in each case and we have consolidated the cases for review.

I

The first problem we must deal with is the effect of M.C.L. § 691.991; M.S.A. § 26.1146(1) on the contractual indemnity provision quoted above. The statute provides:

"A covenant, promise, agreement or understanding in, or in connection with or collateral to, a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenance and appliance, including moving, demolition and excavating connected therewith, purporting to indemnify the promisee against liability for damages arising out of bodily injury to persons or damage to property caused by or resulting from the sole negligence of the promisee or indemnitee, his agents or employees, is against public policy and is void and unenforceable."

The court below, by its ruling and instruction, adopted Clark's argument that the policy of the act could be enforced by merely striking so much of the contractual provision as would require Harroun to indemnify Clark for Clark's sole negligence. The agreement would, therefore, provide indemnity if Clark and Harroun were concurrently negligent, or if Clark were held liable because of Harroun's negligence. Harroun argues that the entire indemnity provision of the contract is void and unenforceable.

The precise scope of this contract invalidating provision has never been stated. Compare, Brda v. Chrysler Corp., 50 Mich.App. 332, 213 N.W.2d 295 (1973), with Nanasi v. General Motors Corp., 56 Mich.App. 652, 224 N.W.2d 914 (1974). After considering the arguments raised by the parties, we [87 MICHAPP 276] conclude the more appropriate rule is that applied in Robertson v. Swindell-Dressler Co., 82 Mich.App. 382, 400, 267 N.W.2d 131 (1978). The rule is concisely stated in 17 C.J.S. Contracts § 289(a), p. 1220: "A lawful promise based on good consideration is not invalid because an unlawful promise is made for the same consideration."

In this case Harroun, in effect, made two promises in the indemnity clause; to indemnify for Clark's sole negligence and to indemnify if the injury was caused "in part" by Clark's negligence. Both promises are supported by the same consideration. Only the first promise is made illegal by the construction statute. The promise to indemnify Clark even if Clark was partially responsible for the accident or injury is not voided by the statute and may be enforced. It does no violence to either the contracting party's intent or the statute to sever this independent unenforceable promise from the rest of the indemnity clause on the facts of this case. See, Robertson v. Swindell-Dressler Co., supra.

II

Having concluded that Clark may have indemnity under the contract in a proper case, unless it was solely responsible for the accident, we must next determine if the trial court correctly instructed the jury concerning what Clark must show in order to recover. The parties have stated the dispute to be over whether the indemnitee, Clark, must show "actual" or "potential" liability to Trim and Ford. Neither party has directed our attention to specific Michigan authority which covers this situation, and we have found none.

The trial court, by its instruction, required a [87 MICHAPP 277] showing of actual liability from Clark to Ford and Trim. In other words, Clark was forced to prove, under its contractual indemnity theory, that it was negligent and that Ford and Trim were free from contributory negligence and additionally, to satisfy the construction statute, it was required to...