Summary
In Engel v. Bindel, 27 Wis.2d 456, 134 N.W.2d 404 (1965), the court recognized its own established exclusive remedy rule under the Wisconsin Act, but also recognized that it did not apply to an employer in case of an express agreement for indemnification.
Summary of this case from Bagrowski v. American Export Isbrandtsen LinesOpinion
April 2, 1965 —
April 27, 1965.
APPEAL from an order of the circuit court for Milwaukee county: LEO B. HANLEY, Circuit Judge. Affirmed.
For the appellants there was a brief by Gibbs, Roper Fifield of Milwaukee, and oral argument by Richard S. Gibbs.
For the respondents there was a brief by Stupar Enich and Steve Enich and Reginald M. Hislop, Jr., all of Milwaukee, and oral argument by Steve Enich.
The trial court sustained the demurrer of the impleaded defendants, Mr. and Mrs. Joseph Deschaine, to the cross complaint of the defendants Antczak.
The plaintiff, Rose Ann Engel, was employed by the Deschaines as a waitress in a restaurant. The restaurant business was owned and operated by the Deschaines. The building in which the restaurant was located was owned by the defendant, Rosemary Bindel, and leased to the Deschaines. The Deschaines, with knowledge and consent of Bindel, undertook a project to remodel and repair the restaurant premises. Plans and specifications were prepared by the architectural firm of the defendant, Roy-Al Incorporated [its participation is not at issue on this appeal]. The Deschaines entered into a contract with the defendants Antczak, a partnership, to do the repair and remodeling work. The plans and directions of the Deschaines to Antczak provided that a door to the basement was to open in toward the basement stairway. The door installed in this manner is, for purpose of this demurrer, considered to be in violation of industrial commission orders and negligence as a violation of the safe-place statute.
The plaintiff, Engel, in the course of her employment, was injured because of the improperly hung basement door. In an independent proceeding plaintiff applied for and received workmen's compensation benefits from the Deschaines, she having been injured while in the scope of her employment.
The plaintiff, Engel, then started this third-party tort action against the owner, Bindel, the architect, Roy-Al, and the contractor, Antczak.
The defendants Antczak cross-complained against the impleaded defendants, Deschaines, with this allegation:
"1. That the placement of the door referred to in paragraph 6 (a) of the plaintiff's Complaint, and particularly the manner in which the said door was hung to swing inwardly, was at the express request, direction and insistence of the impleaded defendant, Joseph Deschaine, who insisted that the same be so installed; that the said impleaded defendant Deschaine thereby undertook control of the details of such installation and impliedly assumed the full responsibility therefor. That by reason thereof and for these purposes, these answering defendants became the agent of the impleaded defendant, Joseph Deschaine, acting precisely in accord with his directions, and he is therefore obligated to indemnify them against any sums which they may be obligated to pay to the plaintiff or any other person by reason of the matters alleged in the Complaint of the plaintiff, or otherwise."
The Deschaines demurred to the cross complaint upon the ground that it does not state facts sufficient to constitute a cause of action. The trial court sustained the demurrer and dismissed the cross complaint. The defendants Antczak appeal.
The issue is: Can the impleaded defendants Deschaine be held liable to the defendants Antczak, for any liability the Antczaks may have to the plaintiff, under an implied contract to indemnify?
It is conceded that there is not an express contract between the Antczaks and the Deschaines whereby the Deschaines agreed to indemnify the Antczaks for any liability the Antczaks might sustain arising by virtue of the work done by the Antczaks for the Deschaines.
The Antczaks disavow that their cross complaint against the Deschaines is based upon a joint tort-feasor relationship.
The contention of the Antczaks is that the door was improperly installed at the direction and insistence of the Deschaines and that the relationship of principal and agent was thus established, and that under the agency theory the principal should indemnify the agent for liability he sustains to third persons arising because they as agents followed the directions of their principal.
The trial court agreed with the Deschaines in their contention that the Workmen's Compensation Act relieved them of all liability for an injury to an employee other than that provided for the employee in the act and that there can be no indemnification liability without express contract.
The Antczaks cite authority for the general proposition that where an agent is employed and directed by a principal to do an act for the benefit of the principal, the law implies a promise of indemnity by the principal for damages sustained by the agent caused by carrying out the directions of the principal.
Restatement, 2 Agency 2d, p. 329, sec. 439; 2 Am. Jur., Agency, p. 231, sec. 294; State v. Yellow Baggage Transfer Co. (1933), 211 Wis. 391, 396, 247 N.W. 310.
The rule and the authorities cited do apply generally to the principal-agent relationship, but here we are dealing with a special and limited situation that requires a limitation of the general rule.
The Deschaines were liable to the plaintiff under the terms of the Workmen's Compensation Act.
In A. O. Smith Corp. v. Associated Sales Bag Co. (1962), 16 Wis.2d 145, 113 N.W.2d 562, the court considered several prior cases and text authorities dealing with employer's liability to the employee and third-party tort-feasors, and stated at page 149:
Albert v. Regal Ware (1959), 6 Wis.2d 519, 95 N.W.2d 240; Beck v. Hamann (1953), 263 Wis. 131, 56 N.W.2d 837; Guse v. A. O. Smith Corp. (1952), 260 Wis. 403, 51 N.W.2d 24; State v. Maas (1944), 246 Wis. 159, 16 N.W.2d 406; City of Milwaukee v. Milwaukee County (1940), 236 Wis. 7, 294 N.W. 51.
2 Larson, Law of Workmen's Compensation, p. 230, sec. 76.21.
"What we have held in these cases is that the sole liability of an employer because of the injury of an employee in the course of his employment, either to the employee or to anyone else, is under the Workmen's Compensation Law."
We have, however, recognized that the rule of no liability of the employer over and above that imposed by the Workmen's Compensation Act does not apply in case of an express agreement for indemnification. See Hintz v. Darling Freight, Inc. (1962), 17 Wis.2d 376, 117 N.W.2d 271; Huck v. Chicago, St. P., M. O. R. Co. (1958), 5 Wis.2d 124, 92 N.W.2d 349.
We are urged to extend the common-law obligation to indemnify to implied contracts as well as express agreements upon the ground that no sound reason appears to distinguish them. After considering the arguments and authorities cited by the Antczaks, we are not persuaded to do so for the reason that we have concluded the legislature intended to limit the liability of the employer in exchange for his absolute liability under the Workmen's Compensation Act. If the liability of the employer is to be extended beyond the limits intended by the legislature it should not be by a legally implied agreement to indemnify.
The rule as announced is not unduly harsh to the third party. He can, as a prerequisite, insist upon an express indemnity agreement or refrain from doing a prohibited act or an act which he knows or should know might subject him to liability.
By the Court. — Order affirmed.
FAIRCHILD, J., dissents.