Opinion
No. 78-690
Decided February 14, 1979.
Contracts — Construction — Indemnity provision against damage liability, void — R.C. 2305.31 — Legislation not applied retroactively.
CERTIFIED by the Court of Appeals for Cuyahoga County.
On October 24, 1973, defendant-appellee, Hope's Windows Co., Div. of Roblin Industries, Inc., contracted with defendant-appellant, the Warner Swasey Co., to furnish and install new windows in Warner Swasey's office building and plant. As part of the contract, Hope's agreed to indemnify Warner Swasey for any liability arising out of the installation. In particular, the contract provided:
"If this order covers work to be performed on our premises where we have any responsibility you agree that such work will be performed in a careful and proper manner and that you will indemnify and hold us harmless from all liability, damage and expense which we may sustain by reason of any claim, demand or action based upon injury or death to any person or damage to property directly or indirectly arising out of or attributable to the performance of such work. * * *"
Hope's began performance on the contract on December 1, 1973. On January 8, 1974, plaintiff William Jennyo, an employee of Hope's, was injured while working on the premises of Warner Swasey. Apparently, by May 1974, the work under the contract was completed and Hope's was paid in full.
On June 28, 1974, plaintiff Jennyo asserted a claim for personal injuries against Warner Swasey. Warner Swasey then made a written demand for indemnification upon Hope's on July 31, 1974. On November 19, 1975, R.C. 2305.31 became effective declaring indemnity agreements as part of construction contracts void.
R.C. 2305.31 provides:
"A covenant, promise, agreement, or understanding in, or in connection with or collateral to, a contract or agreement relative to the design, planning, construction, alteration, repair, or maintenance of a building, structure, highway, road, appurtenance, and appliance, including moving, demolition, and excavating connected therewith, pursuant to which contract or agreement the promisee, or its independent contractors, agents or employees has hired the promisor to perform work, purporting to indemnify the promisee, its independent contractors, agents, employees, or indemnitees against liability for damages arising out of bodily injury to persons or damage to property initiated or proximately caused by or resulting from the negligence of the promisee, its independent contractors, agents, employees, or indemnitees is against public policy and is void. Nothing in this section shall prohibit any person from purchasing insurance from an insurance company authorized to do business in the state of Ohio for his own protection or from purchasing a construction bond."
On December 26, 1975, plaintiffs, William and Ann Jennyo, filed this action against Warner Swasey, alleging injuries sustained by William Jennyo as a result of that company's negligence and failure to provide a safe place to work. Warner Swasey answered and impleaded Hope's as a third-party defendant on March 31, 1978. The third-party complaint stated that Hope's was contractually obligated to indemnify Warner Swasey and prayed for judgment over against Hope's.
On June 9, 1976, the Court of Common Pleas granted Hope's motion to dismiss the third-party complaint on the ground that it failed to state a claim upon which relief could be granted as a matter of law. The Court of Appeals affirmed the order of the trial court holding that R.C. 2305.31 applied retroactively to void the indemnification covenant.
The Court of Appeals certified the record of the case to this court for review and final determination for the reason that its judgment is in conflict with the determination of the Court of Appeals for Summit County in Linkowski v. General Tire Co. (1977), 53 Ohio App.2d 56.
Messrs. Thompson, Hine Flory and Mr. Michael M. Hughes, for appellant.
Davis Young Co., L.P.A., and Mr. Robert L. Baker, for appellee.
The issue before this court is whether R.C. 2305.31 applies retroactively to void an indemnity provision for liability arising from a contract entered into prior to the effective date of the legislation.
R.C. 1.48 provides that "[a] statute is presumed to be prospective in its operation unless expressly made retrospective." Additional weight must be accorded this interpretive mandate from the General Assembly where contractual obligations might be impaired by retroactive change to substantive law. Section 28, Article II of the Ohio Constitution.
There is no express language in R.C. 2305.31 indicating that the statute was intended to retroactively invalidate indemnity provisions in contracts lawfully formed. At the time this contract was entered into by the parties and fully executed by appellant Warner Swasey Co., there existed no legislative or judicial declaration that such provisions contravened the public policy of this state. A contract thus conforming to public policy when made is not normally rendered unlawful by a subsequent change in state policy. Accordingly, this court finds, in compliance with R.C. 1.48, that R.C. 2305.31 does not apply retroactively so as to invalidate an indemnification agreement lawfully entered into prior to the effective date of the legislation.
Additionally, appellee, Hope's, argues that the third-party complaint should have been dismissed for failure of appellant to allege the necessary facts — specifically the date on which appellant made a demand for indemnity. Suffice it to say that we agree with the Court of Appeals that, under the notice pleading rules, appellant's complaint was legally sufficient to withstand a motion for dismissal.
For reasons stated herein, the judgment of the Court of Appeals is hereby reversed and the cause remanded to the Court of Common Pleas for further proceedings consistent with this opinion.
Judgment reversed and cause remanded.
CELEBREZZE, C.J., HERBERT, W. BROWN, P. BROWN, SWEENEY and WHITESIDE, JJ., concur.
HOLMES, J., not participating.
WHITESIDE, J., of the Tenth Appellate District, sitting for LOCHER, J.