Weaver v. American Oil Company

• Citation: 261 N.E.2d 99
• Decision Date: 13 August 1970
• Docket Number: No. 1,No. 1268A206,1268A206,1
• Parties: Howard WEAVER, Appellant, v. AMERICAN OIL COMPANY and Homer Hoffer, Appellees
• Court: Indiana Appellate Court

Page 99

261 N.E.2d 99

Howard WEAVER, Appellant, v. AMERICAN OIL COMPANY and Homer Hoffer, Appellees.

No. 1268A206.

Appellate Court of Indiana, Division No. 1.

Aug. 13, 1970.

Opinion on Rehearing Oct. 13, 1970. See 262 N.E.2d 663.

Rehearing Denied Nov. 9, 1970.

Opinion Superseded 276 N.E.2d 144.

Byron C. Kennedy, Herbert H. Bent, Warsaw, for appellant.

Arthur A. May, Crumpacker, May Levy & Searer, South Bend, for appellees.

SULLIVAN, Judge.

The issue presented is whether the exculpatory portion of a hold harmless clause in an adhesion contract is valid under the circumstances here presented. Appellees, American Oil Company and its employee Homer Hoffer, (hereinafter referred to as American Oil) brought an action for declaratory judgment requesting the trial court to determine whether the exculpatory portion of a hold harmless clause of a lease executed by American Oil and appellant, Howard Weaver, required Weaver to defend, indemnify, and reimburse American

Oil for any liability in a personal injury action previously instigated by Weaver against American Oil. Trial was had to the court and the court ruled that Weaver was required to defend, indemnify and reimburse American Oil. This appeal was initiated from such determination on the ground that it is contrary to law and is not sustained by sufficient evidence.

APPELLANT WEAVER HAS NOT WAIVED ANY SPECIFICATION OF ERROR

Before discussing the merits of this appeal, brief mention must be made of American Oil's contention that appellant has waived certain specifications of error because of his failure to specify in the argument section of his brief either the assigned error urged or the specification of a motion for new trial upon which he relies, in violation of Rule 2-17 of the Rules of the Indiana Supreme Court. ¹ Pursuant to the principle that we will, whenever possible, dispose of appeals upon their merits, we conclude that appellant's brief substantially complies with Rule 2-17, as well as with Indiana Rule of Procedure, AP.8.3. Fairwood Bluffs Conservancy District V. Imel (1970), Ind.App., 255 N.E.2d 674, 20 Ind. Dec. 362.

STATEMENT OF FACTS

At the time of trial Weaver was 54 years old residing in Mishawaka, Indiana. He left high school after one and one-half years and went to work as a farm laborer. In 1940, he attended an arc welding school for three months and from 1942 until 1956 worked at automobile plants as an arc welder. In 1956, Weaver learned that a particular filling station lease might be available from American Oil. With his wife, he went to the American Oil office in South Bend. They talked to a salesman, Campbell, concerning such lease. Weaver told Campbell that he (Weaver) had worked part-time in three filling stations, and that he had the money to finance the inventory. Shortly thereafter, Campbell advised Weaver that he could have the station. Weaver next saw Campbell a few days later when they met at the filling station for the purpose of taking inventory. After inventory was taken, Campbell took a lease from his pocket, laid it on a desk and said, 'sign'. Weaver signed. This was the only conversation relative to the lease. There is nothing in the record to indicate that Weaver read the lease; that Campbell asked Weaver to read it; or that Campbell in any manner attempted to call Weaver's attention to the hold harmless clause in the lease. Weaver next saw the lease when a fully executed copy arrived in the mail approximately one week later. The lease period was for one year. In 1957, a salesman for American Oil brought another lease to Weaver at the filling station, and Weaver signed it. This procedure reoccurred each year through 1961.

American Oil owned certain equipment located upon the leased premises, including an air compressor, a lift, grease equipment, gasoline pumps, and underground storage tanks. On occasion the equipment needed repair, in which case Weaver would call American Oil. They would send a repairman to repair the equipment for which no charge was ever made. Appellee, Homer Hoffer, was a repairman working for American Oil, and was one of the men who came to repair equipment. On April 27, 1962, during the pendency of the 1961 lease, Hoffer, as agent and employee of American Oil came onto the leased premises for the purpose of repairing certain gasoline pumps. Following the repair of the gas pumps and during the demonstration thereof by Hoffer, gas was sprayed about and over the person of Weaver and his employee, Miller. The gasoline ignited burning Weaver and his employee. Weaver and the employee filed suit in the St. Joseph Circuit Court seeking recovery of damages from American Oil for personal injuries allegedly suffered because of the negligence of Hoffer. Thereafter, American Oil initiated the suit which resulted in this appeal.

The pertinent clause of the lease in question reads as follows:

'3. Lessor, its agents and employees shall not be liable for any loss, damage, injuries, or other casualty of whatsoever kind or by whomsoever caused to the person or property of anyone (including Lessee) on or off the premises, arising out of or resulting from Lessee's use, possession or operation thereof, or from defects in the premises whether apparent or hidden, or from the installation, existence, use, maintenance, condition, repair, alteration, removal or replacement of any equipment thereon, whether due in whole or in part to negligent acts or omissions of Lessor, its agents or employees; and Lessee for himself, his heirs, executors, administrators, successors and assigns, hereby agrees to indemnify and hold Lessor, its agents and employees, harmless from and against all claims, demands, liabilities, suits or actions (including all reasonable expenses and attorneys' fees incurred by or imposed on the Lessor in connection therewith) for such loss, damage, injury or other casualty. Lessee also agrees to pay all reasonable expenses and attorneys' fees incurred by Lessor in the event that Lessee shall default under the provisions of this paragraph.'

THE BURDEN IMPOSED BY AN EXCULPATORY CLAUSE

Exculpatory clauses and indemnity clauses are to be distinguished. An exculpatory clause covers the risk of harm sustained by the exculpator that might be caused by the exculpatee. It acts to deprive the exculpator of his right to recover damages for such harm. That is to say, an exculpatory clause acts to release the exculpatee from liability for any future acts of negligence by the exculpateee which might result in harm to the exculpator.

On the other hand, an indemnity clause covers the risk of harm sustained by third persons that might be caused by either the indemnitor or the indemnitee and acts to effect a shift of the financial burden...