Utility Service and Maintenance, Inc. v. Noranda Aluminum, Inc., No. ED 82504 (MO 7/13/2004), ED 82504
| Decision Date | 13 July 2004 |
| Docket Number | No. ED 82504,ED 82504 |
| Parties | UTILITY SERVICE AND MAINTENANCE, INC., and TIG INSURANCE COMPANY, Plaintiffs/Respondents, v. NORANDA ALUMINUM, INC., and ZURICH INSURANCE COMPANY, Defendants/Appellants. |
| Court | Missouri Supreme Court |
Appeal from the Circuit Court of the County of St. Louis, Honorable Carolyn C. Whittington.
Noranda Aluminum, Inc. ("Owner") and Zurich Insurance Company ("Owner's Insurer") appeal the judgment entered following a bench trial in favor of Utility Service and Maintenance, Inc. ("Painter") and TIG Insurance Company ("Painter's Insurer") in their action to recoup amounts they expended in defending and settling a lawsuit filed against Owner by Painter's employee. We affirm.
The facts as found by the trial court are as follows. Owner and Painter entered into a contract in which Painter agreed to paint certain substation structures for Owner. In the course of performing the work specified in the contract, Gary Murphy ("Employee") one of Painter's employees, was seriously injured while working at the substation. Employee filed suit alleging that he was injured due to Owner's negligence and carelessness and seeking damages for bodily injury.
Owner requested that Painter provide a defense to the lawsuit pursuant to paragraph 13 of Exhibit C to the contract. Painter forwarded the request to Painter's Insurer and requested that it provide a defense to Owner pursuant to the contractual liability provisions of the insurance policy Painter's Insurer had issued to Painter.
Painter's Insurer hired attorneys to defend Owner and requested the attorneys to obtain a copy of Exhibit C from Owner. The attorneys requested the document but Owner, which received the request, did not forward Exhibit C to the attorneys. Painter's Insurer's adjuster authorized the attorneys to accept the defense and indemnification of Owner and directed them to unconditionally answer and defend the case.
One of Painter's Insurer's attorneys later wrote to Owner and advised that Painter was defending Owner based on Owner's representation that Painter was obligated to defend pursuant to the provisions of Exhibit C. He also advised Owner that Painter's Insurer did not have a copy of Exhibit C and asked for a copy. Owner promptly responded that it would forward a copy of the contract together with exhibits under separate cover. However, Owner did not forward a copy of Exhibit C at that time.
Two months later, Painter's Insurer again wrote to Owner reiterating that Painter was defending Owner based on Owner's representation that Exhibit C contained an enforceable indemnity agreement between Owner and Painter. The letter further informed Owner that Painter's Insurer had reason to believe that Exhibit C was not a part of the contract.
Owner promptly responded and forwarded what Owner considered to be a complete copy of the contract between Owner and Painter, including Exhibit C. Owner asserted that "by dint of paragraph 19 of the Terms and Conditions of Purchase and paragraph 13, Exhibit C-General Conditions of Contract," Painter agreed to indemnify Owner.
Employee's attorney later made a demand to settle the lawsuit against Owner for $30 million. Owner demanded that Painter's Insurer settle the lawsuit within its available limits and further demanded that mediation be scheduled. Painter's Insurer responded and informed Owner that there was a dispute about whether Exhibit C ever became part of the contract and that Owner's right to a defense and indemnity depended upon the validity and presence of an enforceable indemnity agreement between Owner and Painter. Painter's Insurer informed Owner that reimbursement of the cost of defense and indemnity would be sought if a determination was made that the indemnity agreement was not a part of the contract. Owner was further informed that Painter's Insurer would expand every effort to defend, settle, or successfully litigate Employee's lawsuit. Painter's Insurer further informed Owner that in the event of a judgment or settlement that exceeded policy limits, Owner would be obligated for an amount in excess of the policy limit.1 Because of that possibility, Painter's Insurer advised Owner that it could, at its own expense, have its attorney associate with the attorneys hired to defend the lawsuit.2
During mediation of Employee's suit, Painter's Insurer agreed to settle the suit for an amount within its policy limits. The trial court found that the amount paid to settle the suit was fair and reasonable.
Painter and Painter's Insurer filed the underlying suit to obtain reimbursement for the amounts expended to defend and settle the suit against Owner. The trial court found that there was no certain evidence that, during the course of negotiation of the contract between Painter and Owner, Exhibit C or paragraph 13 thereof was attached to the documents under discussion. The trial court specifically found that Exhibit C was not part of the contract between Painter and Owner.
The trial court further found that there was no certain evidence that either party knew with specificity what contract terms were considered under negotiation at any given moment. However, the trial court did find that, after receiving a proposal from Painter, Owner did fax a purchase order to Painter with different terms and supplemented the purchase order with general Terms and Conditions. Painter accepted the purchase order and the Terms and Conditions supplied by Owner through its commencement of performance. However, the trial court further found that paragraph 19 of the Terms and Conditions relied upon by Owner did not obligate Painter to indemnify Owner for Owner's own negligence. Accordingly, the trial court found that Painter and Painter's Insurer were entitled to reimbursement. This appeal follows.
On appeal of a judgment in a court-tried case, we must affirm the judgment of the trial court unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W. 2d 30, 32 (Mo. banc 1976); Spradlin v. City of Fulton, 982 S.W.2d 255, 263 (Mo. banc 1998). We must give due regard to the trial court's opportunity to judge the credibility of witnesses. Prewitt v. Hunter, 105 S.W.3d 874, 876 (Mo. App. 2003). The trial court is free to believe all, part, or none of the testimony of any witness. Harris v. Desisto, 932 S.W.2d 435, 443 (Mo. App. 1996). In determining the sufficiency of the evidence, we will accept as true all facts and permissible inferences in favor of the prevailing parties and disregard all contrary evidence. Id. We will consider any fact issue upon which no specific finding was made as having been determined in accordance with the result reached. Landvatter Ready Mix, Inc. v. Buckey, 963 S.W.2d 298, 304 (Mo. App. 1997).
On appeal, Owner asserts nine points of error which can be grouped into three categories: (1) contentions that Painter and/or Painter's insurer should be estopped from denying coverage and/or seeking reimbursement on various grounds; (2) contentions that the trial court erred in finding that Exhibit C was not part of the contract between Owner and Painter and/or in interpreting paragraph 19 of the general terms and conditions not to require Painter to indemnify Owner for Owner's own negligence; and (3) a contention that the trial court erred in allowing Painter and Painter's insurer to recover attorney's fees expended in defense of Owner. We will address the second category of alleged errors first because they are potentially dispositive of the remaining points on appeal.
In its seventh point, Owner claims that the trial court erred in holding that Exhibit C, containing a clause that Owner contends required Painter to indemnify Owner for Owner's negligence, was not part of the contract because under Missouri law, matters incorporated by reference are as much a part of the contract as if set out in haec verba. The difficulty with this contention is that the trial court found as a fact that there was no certain evidence that during the course of negotiation Exhibit C was ever attached to the documents exchanged. Painter's President, Mr. Dunnaway, testified that Exhibit C was not part of the bid package he received and Owner's purchasing manager, Mr. Lape, testified that although it was Owner's normal practice to include Exhibit C in bid packages, he had no personal recollection as to what contract documents were in this particular bid package. It is the province of the trial court to resolve such questions of credibility. McAllister v. McAllister, 101 S.W.3d 287, 291 (Mo. App. 2003).
Even if there was evidence that would have supported a finding that Exhibit C was attached to Owner's request for quotation, the request for quotation stated in bold type: "THIS IS NOT AN ORDER." It was not an offer by Owner but a solicitation of offers. The proposal forwarded by Painter to Owner was an offer. Painter's proposal made no reference to Exhibit C, which was not a standard document used in the industry, was prepared by Owner, and was unknown to Painter. Thus, regardless of whether Exhibit C was referenced in or even attached to Owner's request for quotation, it was not part of the offer made by Painter to Owner.
Moreover, Owner did not accept Painter's offer as submitted. Instead, Owner issued a purchase order containing different Terms and Conditions than those set forth in Painter's proposal, thus constituting a counteroffer. See Nelson v. Baker, 776 S.W. 2d 52, 53 (Mo. App. 1989) . Among the variants was paragraph 19 of the...
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