Tucci & Sons, Inc. v. Carl T. Madsen, Inc.

• Decision Date: 02 March 1970
• Docket Number: No. 33,33
• Citation: 467 P.2d 386,1 Wn.App. 1035
• Court: Washington Court of Appeals
• Parties: TUCCI & SONS, INC., a Washington corporation, Appellant, v. CARL T. MADSEN, INC., a Washington corporation, Respondent. (40530) II.

Page 1035

1 Wn.App. 1035

467 P.2d 386

TUCCI & SONS, INC., a Washington corporation, Appellant, v. CARL T. MADSEN, INC., a Washington corporation, Respondent.

No. 33 (40530) II.

Court of Appeals of Washington, Division 2.

March 2, 1970.

Rush, Lynch & Wolf, W. Gerald Lynch, Tacoma, for appellant.

Hager & Young, Wallace B. Hager, Tacoma, for respondent.

PETRIE, Judge.

Plaintiff Tucci & Sons, Inc., (Tucci) held a general contract for certain construction work at Fort Lewis, Washington. On May 3, 1963 defendant Carl T. Madsen, Inc., (Madsen) entered into a subcontract with plaintiff whereby defendant was to perform certain electrical installations. This subcontract was on a form generally used by the Tacoma Chapter of Associated General Contractors.

As a part of the general terms of this subcontract, defendant (subcontractor) agreed:

'(k) To indemnify and save harmless the CONTRACTOR from and against any and all suits, claims, actions, losses, costs, penalties, and damages, of whatsoever kind or nature, including attorney's fees, arising out of, in connection with, or incident to the SUBCONTRACTOR'S performance of this SUBCONTRACT.'

On December 6, 1963, one of defendant's workmen, John G. McEwen, Jr., sustained an injury in the course of his employment on the Fort Lewis project when an electrical utility pole on which he was working fell to the ground. McEwen filed an action against plaintiff herein alleging that his injury had been caused by plaintiff's negligence. Relying upon the indemnity provision of the subcontract set forth above, Tucci tendered the defense of the McEwen action to defendants herein, Madsen. Madsen refused to defend the McEwen action; and, although initially joined as an additional party, Madsen was subsequently dismissed without prejudice.

McEwen obtained a judgment against Tucci which was affirmed on appeal to the Supreme Court. McEwen v. Tucci & Sons, Inc., 71 Wash.2d 539, 429 P.2d 879 (1967). Tucci thereupon brought this action against Madsen seeking indemnity for the total amount of the judgment and costs it had been required to pay as a result of the McEwen action and appeal. Tucci does not contend that Madsen was negligent. We must interpret this contract under the acknowledged fact that only Tucci, the indemnitee, negligently caused McEwen's injury. Madsen defended the case at bar by denying that, under the facts set forth, the indemnity language of the subcontract imposed an obligation upon him, and also by asserting, that, inasmuch as McEwen was one of his employees entitled to workmen's compensation (and therefore prohibited from suing his employer directly), he, McEwen, should not be permitted to do indirectly what he is prohibited from doing directly.

Under this state of the record, both parties filed motions for summary judgment. The trial court denied plaintiff's motion, but granted defendant's motion and dismissed the action with prejudice on the grounds that the indemnity clause 'does not impose an obligation on defendant to indemnify plaintiff as prayed for in the complaint, or at all, under the facts of this case.' Plaintiff has appealed, assigning error to the court's denial of his motion, the granting of defendant's motion and dismissing the action.

We examine first the trial court's determination that the indemnity clause did not impose an obligation upon the defendant under the agreed facts.

Defendant's first contention in support of non-liability is based upon his understanding of the meaning of the phrase 'arising out of, in connection with, or incident to the subcontractor's Performance * * *'. He contends that since this is a 'construction contract' under which the plaintiff general contractor is responsible to the owner for all work, including that of the subcontractor, the above phraseology limits his indemnity to quality of the work performed. We prefer to interpret the contract so as to give effective operation of all the language in the ordinary and usual meaning of the words used. Union Pacific R.R. v. Ross Transfer Co., 64 Wash.2nd 486, 392 P.2d 450 (1964). Defendant's employee at the time of injury was engaged in performing work under the subcontract. He was atop a utility pole installing the electrical system. Had he not been so engaged, he would not have been injured. His injuries, and plaintiff's subsequent loss arose out of, in connection with, or incidental to defendant's performance of the subcontract.

Defendant contends that, in any event, there is no language used in the contract to warrant a conclusion that he has agreed to indemnify with respect to plaintiff's Sole negligence. It is in this sense that he would distinguish this case from Cope v. J. K. Campbell and Associates, Ltd., 71 Wash.2d 453, 429 P.2d 124 (1967). However, we need not explore whether the distinction is truly valid or merely superficial. As we view this indemnity clause, it would be most difficult to assemble words which describe a more comprehensive and all-inclusive intent by the indemnitor to indemnify the indemnitee for all losses suffered by the indemnitee, 'of whatsoever kind or nature,' so long as they had some connection with the indemnitor's performance of the subcontract. An intent to indemnify for the indemnitee's negligence need not be explicitly set forth in a contract.

Interpreting a similarly 'sweeping and all-embracing' clause, the Supreme Court has held:

In our opinion, there can be no doubt but that a loss, damage or injury occasioned by negligence is clearly within the following language of the indemnity provision of the management contract; '* * * all loss, damage or injury to any person * * * arising from any cause or for any reason * * * in or about said premises.'

Griffiths v. Henry Broderick, Inc., 27 Wash.2d 901, 906, 182 P.2d 18, 20 (1947).

Absent some recognized public policy prohibiting such indemnification clauses, we hold that a subcontractor may, and in this case he did, voluntarily and enforceably agree to indemnify a contractor for losses sustained by his indemnitee even though such loss be occasioned solely by the negligence of such indemnitee.

Defendant has called our attention to such a declaration of public policy embraced in RCW 4.24.115. This legislatively declared prohibition was enacted in 1967, several years after the parties executed the agreement herein being examined. Laws of 1967, Ex.Ses., ch. 46, § 2, p. 1602. It is substantive in nature and clearly cannot be applied retroactively, at least in the absence of a clearly expressed intent to the contrary. In re Cascade Fixture Co., 8 Wash.2d 263, 111 P.2d 991 (1941).

We turn now to defendant's other major contention--whether or not the workmen's compensation act prevents plaintiff from maintaining his present cause of action. The argument appears to be that the workmen's compensation act abolished all civil causes of action for personal injuries by a workman against his employer; hence to permit recovery over by plaintiff herein would require the employer to respond in civil damages for injuries sustained by one of his workmen, which is specifically proscribed by statute. In order to approach this aspect of the appeal, some limited discussion of the history of workmen's compensation laws seems appropriate.

Prior to the enactment of workmen's compensation laws a workman could sue his employer for injuries resulting from the employer's negligence; but the employer had recourse to the common law affirmative defenses of contributory negligence, assumption of risk, and the fellow servant rule. This balancing of 'fault' provided a neat set of rules well-suited to an essentially agricultural economy. The advent of the industrial revolution--and its consequent increase in work-connected injuries whose true causes were frequently unascertainable--soon rendered intolerable such an attempted balancing of fault in an ordered society. Legislative restructing of the law became mandatory. Workmen's compensation laws required employers to compensate employees for all non-intentional injuries regardless of fault, prohibited employees from seeking common law damages from their employers, but substituted what hopefully had been described as speedy and certain compensation to injured workmen. Thus, both employer and employee received some benefits and lost some rights under the new system.

When each state adopted a workmen's compensation program, an 'exclusive jurisdiction' clause was inserted in the act so as to ensure that the employer's liability would be limited within the confines of the newly created...