Summary
In Massachusetts Bonding Insurance Co. v. Dingle-Clark Co., 142 Ohio St. 346, 357, 52 N.E.2d 340, 345, the Court said: "The steel company was charged in Henzi's petition in the original action with... failure to barricade the pit and failure to light the premises.
Summary of this case from Builders Supply Co. v. MccabeOpinion
Nos. 29559 and 29571
Decided December 15, 1943.
Negligence — Person subjected to liability entitled to indemnity from another, when — Insurer satisfying judgment against insured has reimbursement right against person primarily liable — Employer not entitled to indemnity from contractor for latter's negligence, when — No contribution where two persons jointly or concurrently injure third person, when.
1. The right to recover indemnity for proper expenditures made by a person who has become vicariously and secondarily liable for the unauthorized and wrongful conduct of another is limited to a person who has not actively participated in such conduct.
2. An insurer which pays and satisfies a judgment obtained against its insured has the right, but no greater right than its insured, to reimbursement from third persons who are primarily liable for the wrong resulting in the judgment against its insured.
3. An employer is entitled to indemnity from his independent contractor for an injury sustained because of the contractor's negligence unless the employer not only knew of the dangerous situation brought about by the work of his contractor but acquiesced in its continuance; or unless the employer was concurrently or jointly with the contractor guilty of the negligence which caused the injury.
4. Where two persons acting jointly or concurrently have negligently injured a third person for which injury both become liable in tort to a third person, one of them who has made expenditures in discharge of their liability is not entitled to contribution from the other.
APPEALS from the Court of Appeals of Cuyahoga county.
In 1938 the Carnegie-Illinois Steel Corporation, which, for convenience, will hereafter be designated as the steel company, was engaged in the construction of an addition to its steel mill at North Braddock. Pennsylvania. The superstructure of the building had been completed some time prior to June 21, 1938. On and prior to that date, the interior construction work and the installation of equipment and machinery in the building were being carried on simultaneously through multiple operations by a number of independent contractors, from the various trades, directly employed by the steel company, there being no general contractor employed. In several instances, portions or all of the work contracted to be performed by the contractors was sublet by them to others who in turn actually performed the work.
The installation of certain electrical equipment in the new building was in charge of the Westinghouse Electric Manufacturing Company which subcontracted a part of the work to The Dingle-Clark Company which in turn subcontracted to the defendant The W. H. Fay Moving Company the work of moving certain heavy machinery from railroad cars to foundations in the basement of the building. Another part of the electrical installation work to be done in the same basement was subcontracted to the firm of Fishback Moore, one of whose workmen on this job was Ernest Henzi.
The dark and poorly lighted basement of the building where the installation work was being done had a sump pit 15 to 20 feet long and about 12 feet deep in the cement floor. There had been erected and placed around this sump pit a substantial wooden barricade to prevent the workmen and others using the basement in question from falling into the pit. It was claimed by Henzi, but denied by the steel company, that the basement was insufficiently lighted and was in darkness.
In order to move the large units of electrical machinery from the cars to the foundation beds in the basement, it was necessary for the Fay company to move this machinery across the sump pit on heavy timbers, and in so doing the Fay company removed a section of the barrier which had been erected about the pit.
On the morning of June 21, 1938, Ernest Henzi, while working in this basement, fell into the unguarded pit and sustained serious injuries for which he later brought suit against the steel company in the District Court of the United States at Pittsburgh. His complaint in that suit charged that the steel company was the owner and in control of the premises at the time of his injury and that his injury was due to the sole negligence of the steel company, its servants, agents and employees in leaving the sump pit unguarded and without a guardrail, in failing to provide lights on the sump pit and in the east end of the motor room basement, and in failing to give warning of the presence of the sump pit.
The defense of that suit was made on behalf of the steel company by the Massachusetts Bonding Insurance Company, the liability insurance carrier for the steel company. An agreed verdict was returned by the jury in favor of the plaintiff and against the steel company in the sum of $6,824, for which amount judgment was entered.
The Massachusetts Bonding Insurance Company, having paid the judgment in the case above described, brought the present action as plaintiff in the Common Pleas Court of Cuyahoga county against The Dingle-Clark Company and The W. H. Fay Moving Company as defendants to recover the amount of the judgment paid by it on behalf of the steel company.
The petition alleged that the basement of the building of the steel company, where the equipment was being installed at the time of Henzi's accident, was very dark; that the defendants failed to have the basement lighted; that they had removed the guardrails from around the sump pit, all resulting in injury to Henzi, who fell into the pit; that Henzi had, on account of the negligence of the defendants as aforesaid, obtained the judgment above referred to against the steel company, which the plaintiff had paid; and that the plaintiff was thereby subrogated to the rights which the steel company had against the defendants as its subcontractors whose negligence was the proximate cause of the personal injuries suffered by Henzi.
Upon the trial of this case, the insurance indemnity contract between the plaintiff and the steel company was introduced and payment of the judgment as a claim under it was shown. There was also introduced and made a part of the record, without objection, a transcript of the record of the case of Henzi v. Carnegie-Illinois Steel Corporation in the District Court of the United States for the Western District of Pennsylvania, including the pleadings and record of the judgment against the steel company in that court. The evidence in this case tended to show that the barrier about the sump pit had been removed by the employees of the defendant The W. H. Fay Moving Company and had remained down for several days before the accident to Henzi; and that there was no permanent lighting in the basement. The court excluded the proffered testimony of Henzi to the effect that the accident to him occurred on the property of the steel company and that he was injured by falling into a sump pit in the basement of the property, which pit had been left unguarded; and that he had brought suit against the corporation on account of such injuries and had recovered a judgment against the corporation, which the Massachusetts Bonding Insurance Company, the plaintiff in this case, had paid.
At the close of plaintiff's case the court sustained motions of both defendants to arrest the testimony from the jury and to enter judgment in their favor.
A motion for new trial was overruled. An appeal was perfected to the Court of Appeals on questions of law, which court reversed the judgment of the Common Pleas Court "for error of law in excluding the evidence of E.A. Henzi, and in directing a verdict for defendants." The cases are now in this court for review following the allowance of motions to certify the records.
Mr. Sherman L. Heckman, for appellee.
Messrs. MeKeehan, Merrick, Arter Stewart and Mr. C.M. Horn, for appellant The Dingle-Clark Company.
Messrs. Hauxhurst, Inglis, Sharp Cull, for appellant The W. H. Fay Moving Company.
The question to be determined under the facts of this case is whether the plaintiff, as insurance indemnitor of the steel company, is entitled to recover from the defendants, as subcontractors of the steel company, the amount of a judgment rendered against the steel company in favors of a third person for injuries suffered because of the alleged negligent operations of the defendants while performing their subcontracts on the premises of the steel company. The answer depends upon the application of certain phases of the law of subrogation and indemnity.
It is conceded that the plaintiff, having paid the judgment rendered against the steel company, is subrogated to all rights of the latter against the defendants growing out of the cause of action as a result of which the judgment was obtained. On the other hand, the rights of the plaintiff, in this respect, are limited to the rights of the steel company and cannot be superior to them. Royal Indemnity Co. v. Becker, 122 Ohio St. 582, 173 N.E. 194, 75 A. L. R., 1481; Travelers' Ins. Co. v. Great Lakes Engineering Works Co., 184 F., 426, 36 L.R.A. (N.S.), 60.
The plaintiff claims that the steel company, its subrogor, was without active fault as to Henzi's injury, and that the liability of the steel company was incurred through the active negligence and fault of the defendants in their operations while on the premises of the steel company. The plaintiff therefore claims that it, succeeding to the rights of its subrogor, the steel company, stands in such relation to the defendants as entitle it to be indemnified by them.
The trial court was confronted with a question of the admissibility of evidence to supplement and possibly to contradict the record in the former action, when the plaintiff sought to show by the oral testimony of Henzi that the defendant steel company became liable resulting in a judgment against it solely because of the negligence of the defendants in this case in the performance of their subcontracts involving dangerous operations while on the property of the steel company. The trial court took the position that such evidence would tend to contradict the record of the case to which the steel company, plaintiff's subrogor, was a party, and excluded the evidence. The plaintiff below, appellee here, claims, and the Court of Appeals supports the claim, that the trial court erred in such exclusion.
It is to be noted that in the course of the trial, a witness who was an employee of the defendant The W. A. Fay Moving Company in June 1938, and who worked for that company at the plant of the steel company at the time Henzi was injured, testified by deposition, without objection on both direct examination and cross-exmaination, as to the physical surroundings in the basement of the steel company plant; as to the location of the sump pit and the moving of machinery over it; that there was a barrier at one end of the pit when the Fay company started to work there, but that in order to move the machinery over the pit the barrier was taken down; that it was down from three days to a week before and at the time Henzi was injured and was not replaced at the conclusion of a day's work; that there was no permanent lighting in the basement at the time; and that The Dingle-Clark Company, for the protection of its men, did string a temporary light here and there so their men could work in the basement. This testimony was not disputed.
An examination of the nature and scope of the testimony of this witness will disclose that it substantially covered and supported the facts which were the subject matter of the offer of testimony proffered through the witness Henzi and excluded by the court. This being true, the exclusion lacked prejudicial effect.
However, there is, in the opinion of the court, a more basic reason why the exclusion of the proffered testimony of Henzi was not material. Irrespective of the admission or exclusion of Henzi's testimony, the court was warranted under the evidence admitted in directing a verdict for the defendants. An employer becomes vicariously liable to third persons injured because of the negligence of his independent contractor in performing work for the employer which is dangerous in itself or dangerous because of the manner in which it is done. Under such circumstances the employer is entitled to indemnity from the contractor for loss sustained because of the contractor's negligence unless the employer not only knew of the dangerous situation brought about by the work of the contractor, but acquiesced in its continuance (Restatement of Restitution, Section 95; Alabama Power Co. v. Curry, 228 Ala. 444, 153 So. 634; City of Nashville v. Singer Johnson Fertilizer Co., 127 Tenn. 107, 153 S.W. 838; Acheson v. Miller, 2 Ohio St. 203, 59 Am. Dec., 663; Horrabin v. City of Des Moines, 198 Iowa 549, 199 N.W. 988, 38 A.L.R., 554); or, unless the employer was concurrently or jointly with the contractor guilty of negligence which caused the injury. Restatement of Restitution, Section 102; Dow, v. Sunset Telephone Telegraph Co., 162 Cal. 136, 121 P. 379; Penna. Co. v. West Penn Rys. Co., 110 Ohio St. 516, 144 N.E. 51; United States Casualty Co. v. Indemnity Ins. Co. of North America, 129 Ohio St. 391, 195 N.E. 850.
But where one of two concurrent or joint tort-feasors, as distinguished from related tort-feasors, has been compelled to pay damages for the concurrent or joint tort, he cannot maintain an action against the other for indemnity. Northern Ohio Ry. Co. v. Akron Canal Hydraulic Co., 7 C. C. (N.S.), 69, 18 C. D., 51, affirmed without opinion, 75 Ohio St. 620. 80 N.E. 1130; City of Louisville v. Louisville Ry. Co., 156 Ky. 141, 160 S.W. 771, 49 L.R.A. (N.S.), 350; Doles, Admr., v. Seaboard Air Line Ry. Co., 160 N.C. 318, 75 S.E. 722, 42 L.R.A. (N.S.), 67; Union Stock Yards Co. of Omaha v. C. B. Q. Rd. Co., 196 U.S. 217, 49 L.Ed., 453, 25 S. Ct., 226. Likewise, where an insurer of one concurrent or joint tort-feasor fully pays and satisfies a judgment obtained against his insured for damages resulting from the concurrent or joint negligence of the insured and another, such insurer has no greater right than his insured against the other tort-feasor and cannot enforce payment of the whole or any part of the judgment from such other tort-feasor. Royal Indemnity Co. v. Becker, supra.
The general principles here involved are discussed in Restatement of Restitution. Section 95 defines the rights of a person who has become liable in damages because of the failure of another to protect his interests, as follows:
"Where a person has become liable with another for harm caused to a third person because of his negligent failure to make safe a dangerous condition of land or chattels, which was created by the misconduct of the other or which, as between the two, it was the other's duty to make safe, he is entitled to restitution from the other for expenditures properly made in the discharge of such liability, unless after discovery of the danger, he acquiesced in the continuation of the condition."
The comment under this section is to the effect that this rule is "applicable to situations in which a person has a non-delegable duty with respect to the condition of his premises but has entrusted the performance of this duty to a third person, either a servant or an independent contractor. The rule also applies to cases where both parties are under an absolute liability for the condition of premises and where, as between the two, one of them has a prior duty of performance.
"In all these situations the payor is not barred by the fact that he was negligent in failing to discover or to remedy the defect as a result of which the harm was occasioned; in most of the cases it is because of this failure that he is liable. On the other hand, if the condition was such as to create a grave risk of serious harm to third persons or their property and the payor was or, from his knowledge of the facts, should have been aware that such a risk existed, his failure to make the condition safe is reckless and he is not entitled to restitution. * * * If * * * the payor not only knew of the condition but acquiesced in its continuance, he becomes in effect, a joint participant with the other in the tortious conduct and hence is barred from indemnity."
Section 102 of Restatement of Restitution states the law with reference to indemnity or contribution between concurrent or joint tort-feasors as follows:
"Where two persons acting independently or jointly, have negligently injured a third person or his property for which injury both became liable in tort to the third person, one of them who has made expenditures in the discharge of their liability is not entitled to contribution from the other." See, also, 27 American Jurisprudence, 467, Section 18. This rule is illustrated by certain cases hereafter noted.
In Gregg v. Page Belting Co., 69 N.H. 247, 46 A. 26, the plaintiff, a building owner, had paid a judgment against himself on account of a personal injury to a passenger resulting from the collapse of a defective elevator installed in his building. The plaintiff then sought indemnity from the manufacturer which defectively repaired belts furnished for the elevator, which gave way causing the elevator to collapse. In the personal injury action the building owner was charged with negligence in two respects, namely, in using a cemented belt instead of a wire cable, and in failing to provide the elevator with certain safety devices. A general verdict was rendered in favor of the injured passenger and against the owner. In the indemnity action, the plaintiff building owner introduced the record in the former case supplemented by evidence of negligence of the manufacturer in the repair of the belt. A verdict was directed for the defendant belt manufacturer and the resulting judgment was affirmed by the Supreme Court which held that the judgment in the first suit based upon a general verdict was conclusive upon the issue that the building owner had been negligent in failing to install safety devices on the elevator and that he was a joint tort-feasor with the manufacturer of the belt, and as such, could not recover indemnity.
In the case of City of Puyallup v. Vergowe, 95 Wn. 320, 163 P. 779, a municipality had been held liable to a pedestrian who in the night season fell into an unguarded and unlighted street excavation. The petition of the pedestrian charged that a street lamp near the excavation was out and that the excavation was unguarded. There was a general verdict against the municipality. It then sued the contractor who had made the excavation and had failed to guard it. The Supreme Court of Washington reversed a judgment in favor of the municipality in the idemnity action upon the ground that the general verdict against the municipality in the negligence action established an independent act of negligence against it in the failure to maintain a light near the excavation for the protection of the injured pedestrian, and that, since it and the contractor were concurrent wrongdoers, there was no right of indemnity between them. See, also, City of Tacoma v. Bonnell, 65 Wn. 505, 118 P. 642, Ann. Cas. 1913B, 934; City of Seattle v. Peterson Co., 99 Wn. 533, 170 P. 140; North Carolina Electric Power Co. v. French Broad Mfg. Co., 180 N.C. 597, 105 S.E. 394; New York Queens Transit Corp. v. Brooklyn Union Gas Co., 12 N.Y. Supp. (2d), 1, affirmed, 283 N.Y., 732, 28 N.E.2d 722.
Reverting again to the record in this case, it will be noted that in the action of Henzi against the steel company, the defendant was charged not only with failure to guard and barricade the sump pit, which default, under the record, was undoubtedly chargeable to The W. H. Fay Moving Company in the first instance as the party primarily liable for damages arising from such failure, but with failure to properly light the basement of its own building where Henzi was obliged to work, as to which the responsibility would seem to fall upon the steel company itself. The Fay company might have had some responsibility as a contractor to light up the area surrounding the field of its own operations for the protection of its own employees, but in the absence of a contract to undertake further responsibility it could hardly be held to be responsible for the lighting of the basement for the benefit of third persons generally.
The steel company was charged in Henzi's petition in the original action with two distinct defaults, namely, failure to barricade the pit and failure to light the premises. There was a general verdict by the jury which constituted a finding against the defendant steel company on both issues. Jones v. Erie Rd. Co., 106 Ohio St. 408, 414, 140 N.E. 366; H. E. Culbertson Co. v. Warden, 123 Ohio St. 297,303, 175 N.E. 205; Swoboda v. Brown, 129 Ohio St. 512, 515, 196 N.E. 274.
This finding against it is conclusive as to its negligence being concurrent with that of The W. H. Fay Moving Company as the proximate cause of Henzi's injury, and the plaintiff in this action stands in the position of the steel company. Since the steel company, under the record, must be found to have been a concurrent tort-feasor with the defendants, the plaintiff as its insurer, is not entitled to indemnity against the defendants in this action.
The judgment of the Court of Appeals is reversed and that of the Common Pleas Court affirmed.
Judgment reversed.
WEYGANDT, C.J., MATTHIAS, ZIMMERMAN, WILLIAMS and TURNER, JJ., concur.
BELL, J., concurs in paragraphs two, three and four of the syllabus and in the judgment.