Walls, Inc. v. Atlantic Realty Co., 75561
| Citation | 367 S.E.2d 278,186 Ga.App. 389 |
| Decision Date | 16 March 1988 |
| Docket Number | No. 75561,75561 |
| Parties | WALLS, INC. v. ATLANTIC REALTY COMPANY et al. |
| Court | Georgia Court of Appeals |
Michael S. Huff, Marietta, Reagan W. Dean, Atlanta, for appellant.
Guy J. Notte, Stone Mountain, Harris C. Bostic, James B. Hiers, Meade Burns, Donald F. Daugherty, John A. Christy, Atlanta, for appellees.
Appellee-third-party plaintiff Atlantic Realty Company (Atlantic) hired Beers Construction Company (Beers) as the general contractor for the renovation of a building that it owned. The general contract between Atlantic and Beers provided that the latter would indemnify and hold the former harmless as to all claims arising out of or in connection with the performance of the contract. The general contract also specified that, from each subcontractor, Beers would procure, as additional protection for Atlantic, an independent indemnification and hold harmless agreement, whereby the subcontractor would agree to indemnify Atlantic. In addition to this provision requiring Beers to secure an independent indemnity agreement from each subcontractor, the general contract also provided that "[a]ll work performed for [Beers] by a Subcontractor shall be pursuant to an appropriate written agreement between [Beers] and the Subcontractor which contains provisions ... indemnifying [Atlantic] in accordance with [the indemnity provisions] hereof."
Beers subcontracted with appellant-third-party defendant Walls, Inc. (Walls) for the installation of drywall in the renovated building. Allen Jones, an employee of Walls, was killed in a fall during the renovation of the building. Jones' widow brought suit against Atlantic and another defendant, alleging that their negligence was the proximate cause of her husband's death. Atlantic then filed this third-party action against Walls. The third-party complaint alleged that Walls had agreed to indemnify and to hold Atlantic harmless as to claims arising out of Walls' performance of the drywall work in the renovated building. Walls answered the third-party complaint, denying the existence of any agreement on its part to indemnify Atlantic. Cross-motions for summary judgment were filed. The trial court denied Walls' motion, but granted summary judgment in favor of Atlantic. Walls appeals from the trial court's order granting summary judgment in favor of Atlantic and denying its motion for summary judgment.
1. The facts are undisputed and the only issue involved is one of contractual interpretation. Beers never procured an agreement from Walls, independent of the subcontract, whereby Walls made an express and direct promise as to the indemnification of Atlantic. The only express promise as to the direct indemnification of Atlantic is that which was made by Beers in the general contract. Accordingly, with regard to the procurement from Walls of an indemnification agreement independent of the subcontract, Beers may have breached a contractual obligation owed to Atlantic. However, the subcontract that was entered into between Beers and Walls does contain Walls' express agreement to "perform all work" in the restoration of the building "in accordance with" the general contract between Beers and Atlantic, which general contract "hereby become[s] a part" of Walls' subcontract with Beers. Atlantic urged and the trial court found that this provision of the subcontract was sufficient to incorporate all of the provisions of the general contract into the subcontract and that the legal effect of this incorporation by reference was to obligate Walls to indemnify Atlantic directly, just as Beers had agreed to do in its general contract with Atlantic.
Binswanger Glass Co. v. Beers Constr. Co., 141 Ga.App. 715, 717(2), 234 S.E.2d 363 (1977). See also Hartline-Thomas v. Arthur Pew Constr. Co., Inc., 151 Ga.App. 598, 599, 260 S.E.2d 744 (1979). Here, the clear intent was that the general contract, in its entirety, be incorporated into and become a part of the subcontract which Walls agreed to enter. Accordingly, incorporated by reference into that subcontract was the provision of the general contract which had specified that a subcontract was itself to contain a provision whereby Atlantic would be indemnified by the subcontractor. Accordingly, the subcontract itself contained, as one of its provisions, Walls' agreement that "[a]ll work" that it was to perform on the renovated building "shall be pursuant to an appropriate written agreement ... which contains provisions ... indemnifying [Atlantic] in accordance with [the idemnity provisions of the general contract, which indemnity provisions are themselves incorporated by reference into the subcontract]." Thus, the subcontract itself evinces both Walls' agreement to indemnify Atlantic and the terms of that indemnification agreement. Undoubtedly, an intent as to the imposition upon and the assumption by Walls, as the subcontractor, of an obligation to indemnify Atlantic, as the owner, could have been more clearly evinced by the assertion of an express provision to that effect into the subcontract. That, from the perspective of hindsight, however, it is possible to conclude that a contractual intent could have been more clearly expressed is not a basis for holding that the manifestation of that intent cannot be accomplished through resort to incorporation by reference. Accordingly, the trial court correctly held that, through incorporation by reference, the parties to the subcontract accomplished their intended purpose of including in their subcontract a provision whereby Walls agreed to the indemnification of Atlantic.
However, incorporation by reference would show only that the subcontract contained such an indemnity provision. It would not necessarily show the legal entitlement of Atlantic, who was not an immediate party to the...
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