Summary
In Robert Co. Assoc. v. Pinkerton Laws, 120 Ga. App. 29, 33, 169 S.E.2d 360, 364 (1969), the indemnitee, suing on an indemnity contract, recovered sums which it had paid out in settlement of a case.
Summary of this case from Brown v. Seaboard Coast Line R. Co.Opinion
44239.
ARGUED FEBRUARY 5, 1969.
DECIDED JUNE 10, 1969. REHEARING DENIED JULY 3, 1969.
Complaint. Fulton Civil Court. Before Judge Camp.
Woodruff, Savell, Lane Williams, Edward L. Savell, for appellants.
Swift, Currie, McGhee Hiers, Glover McGhee, Lokey Bowden, Glenn Frick, for appellees.
The petition states a claim against the general contractor within in the terms of the indemnification agreement.
ARGUED FEBRUARY 5, 1969 — DECIDED JUNE 10, 1969 — REHEARING DENIED JULY 3, 1969.
Robert Company Associates, for itself and the use of Citizens Casualty Company, commenced this action to recover for costs incurred in settling litigation, alleging that the Pinkerton Laws Company is liable under a "hold harmless" indemnity agreement, or in the alternative, that Pinkerton and the Murphey Equipment Company, Inc., are jointly and severally liable under the principles of common law indemnity.
The petition shows that Robert Company prepared the plans and specifications for a project known as White's Mill Pumping Station, that in 1964 Pinkerton was the general contractor for the project, and that Murphey was the subcontractor for plumbing. On April 30, 1964, a T-joint which Murphey installed without any bracing "slipped off" and 3,000,000 gallons of water escaped and damaged houses belonging to Levy Hagan, Billy Covil, and Anthony Adames. These persons brought actions against Robert Company, as to which this company gave the defendants in the present action notice of avouchment and notice that unless the defendants took over the defense of the actions the company would seek indemnity for the expenses of litigation, including attorney's fees. The defendants filed to take over the defense, and Robert Company did defend the actions, including appearances in the lower court, the Court of Appeals, and the Supreme Court of Georgia ( Covil v. Robert Co. Associates, 112 Ga. App. 163 ( 144 S.E.2d 450); Robert Co. Associates v. Covil, 113 Ga. App. 387 ( 147 S.E.2d 825); Hagan v. Robert Co. Associates, 222 Ga. 469 ( 150 S.E.2d 663)). After a second jury trial in the lower court resulted in a mistrial, Robert Company settled with the plaintiffs in these actions "for 33 1/3% of the damage" which, together with attorneys' fees and court costs, allegedly totals $12,850.83, the amount sought from the defendants in the present action. By amendment Robert Company asserted that under the decision in Covil v. Robert Co. Associates, 112 Ga. App. 163, supra, it was legally liable to the property owners, and that the settlements were reasonable and were made under the compulsion of legal liability.
The contract executed by Pinkerton is set forth in the petition in part as follows:
"The general contractor shall be responsible from the time of signing the contract or from the time of the beginning of the first work, whichever shall be the earlier, for all injury or damage of any kind resulting from this work, to persons or property. The contractor shall exonerate, indemnify and save harmless the county [DeKalb] and Robert Company Associates, from and against all claims or actions, and all expenses incidental to the defense of any such claims, litigation and actions, based upon or arising out of damage or injury (including death) to persons or property caused by or sustained in connection with the performance of this contract or by conditions created thereby or arising out of or any way connected with work performed under this contract and shall assume and pay for, without cost to the county and Robert Company Associates, the defense of any and all claims, litigation and actions, suffered through:
"(1) Any act or omission of the contractor or any subcontractor or anyone directly or indirectly employed by or under the supervision of any of them; or
"(2) Arising out of any act or omission incident to the inspection or supervision by the owner or his representatives of the work included in this contract."
It is also alleged that the specifications required all joints to be braced where necessary, although no bracing for the specific T-joint was detailed in the plans, that Murphey was an experienced installer of pipelines and joints and knew that a T-joint of this kind required bracing and negligently failed to brace it, and that Pinkerton, although not an experienced installer of pipelines, also knew that a T-joint of this kind should be braced, but negligently failed to brace the joint.
The trial judge treated Pinkerton's first defense as a motion to dismiss for failure to state a claim, and considered it together with Murphey's motion to dismiss. The plaintiff appeals from the order sustaining these motions.
1."The cardinal rule of construction is to ascertain the intention of the parties. If that intention be clear, and it contravenes no rule of law, and sufficient words be used to arrive at the intention, it shall be enforced, irrespective of all technical or arbitrary rules of construction." Code § 20-702.
Under the all-inclusive language of the agreement Pinkerton not only agreed to " be responsible from the time of signing the contract, or from the time of the beginning of the first work, whichever shall be earlier, for all injury or damage of any kind resulting from this work, to persons or property" but also agreed specifically to " exonerate, indemnify and save harmless the county and Robert Company Associates, from and against all claims or actions, and all expenses incidental to the defense" thereof in " any way connected with the work performed under this contract" and to " assume and pay for, without cost to the county and Robert Company Associates, the defense of any and all claims, litigation, and actions" suffered through any act or omission of the contractor, subcontractor, or anyone under their supervision, or arising out of any act or omission incident to inspection or supervision by the county or its representatives. We think the language of this agreement can leave no doubt that it was the intention of the parties that Pinkerton should indemnify Robert Company Associates irrespective of whether any claim arose by reason of the negligence of Robert Company Associates, or for other reasons. "If the word negligence had been used then it might be open to question that it was limited to liability only for negligence." General Acc. Fire c. Corp. v. Smith Oby Co., 272 F.2d 581, 585 (77 ALR2d 1134). See Kraft Foods v. Disheroon, 118 Ga. App. 632 ( 165 S.E.2d 189).
The cases of Massee Felton Lumber Co. v. Ga. Fla. R., 143 Ga. 173 ( 84 S.E. 468) and Batson-Cook Co. v. Ga. Marble Setting Co., 112 Ga. App. 226 ( 144 S.E.2d 547) are clearly distinguishable on their facts, including the language of the applicable agreements, which fail to refer to acts or omission of the indemnitee as a basis for liability.
In Massee, an action over by a railway company against a lumber company for damages recovered from the railway company by an engineer of a logging train and a train of the railway company, the Supreme Court recognized that the agreement of the lumber company to protect the railway company from " all damage or loss to all persons or property of all persons caused by the operations of said trains of said lumber company on the track of the said railway company" (emphasis supplied) did not, as interpreted by its own words and its context, include an assumption of liability caused by the negligence of the railway company to persons operating trains of the lumber company.
In Batson-Cook the general contractor had settled an action based on its negligence as the "sole cause of injuries" to an employee of the subcontractor, as sought indemnity from the subcontractor. The subcontractor, as the indemnitor, had agreed to protect the contractor, as the indemnitee, for losses " in connection with or to have arisen out of or resulting from the performance of the work by the subcontractor, his subcontractors, agents, servants and employees." This court, relying on Massee, recognized the absence of any intention to cover losses resulting from the indemnitee's negligence.
Thus, while these cases do stand for the proposition that an action over under a contract cannot be sustained unless the agreement expresses plainly, clearly, specifically, and unequivocally the intention to include indemnification for losses arising from the indemnitee's acts, the contract here involved does disclose such an intent, in clear terms leaving no doubt as the intention of the parties.
The Supreme Court in Terrell v. Stevenson, 97 Ga. 570, 572 ( 25 S.E. 352), recognized that under the facts of that case Terrell had sustained no loss, and stated that this would not occur until "fixed by a judgment against him" because "[t]he rule of law that no person can bring an action until he has been actually damaged is applicable here," but we do not regard that decision of such broad application as to mean that a judgment fixing legal liability is an absolute condition precedent where a contract of indemnity is involved, which by its terms does not fix liability in terms of an antecedent judgment.
In Southern Nitrogen Co. v. Stevens Shipping Co., 114 Ga. App. 581 ( 151 S.E.2d 916) this court was dealing with a situation where the plaintiff did not rely on a warranty or contract of indemnity, and was apparently proceeding ex delicto (p. 585) and the court noted that although the Supreme Court in the Terrell case apparently entertained the view that a judgment against the indemnitee was essential to maintain an action against the indemnitor, the real deficiency in the case then under consideration was the absence of any allegation to afford a basis to prove an actual legal liability. In the present case the indemnitor agreed to save the indemnitee harmless "from and against all claims" and to cover "all expenses incidental to the defense of any such claims, litigation, or actions."
We think that under the terms of this contract the actual legal liability of the indemnitor would be those expenses incurred by the indemnitee in defending actions having a probable basis on which to establish legal liability, plus the cost of settling such actions, if the indemnitee alleges that it did defend and settle such claims, and if it appears by preponderance of evidence to the satisfaction of a trior of fact, that the expenses incurred thereby were reasonable, and that the amounts paid in settlement of the actions were reasonable and not in excess of what the claimants could have reasonably expected to obtain, under the facts and applicable law, had the cases been allowed to proceed to verdict and judgment.
While the ruling before the court is somewhat analogous to an order sustaining a general demurrer under former practice, the former practice required a strict construction against one purporting to state favorably the essential issues to support a cause of action, whereas the present practice requires a liberal construction in favor of one purporting to give notice of a claim. Viewing the petition under the present practice requirements, we think the allegations are more than ample to state a claim against Pinkerton under the provisions of the alleged indemnification agreement.
2. Nothing appears in the alleged indemnity agreement to place Murphey in the same contractual status as Pinkerton, however, but Robert Company contends that it has a claim against Murphey, as well as Pinkerton, under an implied contract of indemnity. While we distinguish the Terrell and Southern Nitrogen cases, supra, because of the actual contract of indemnity in the present case, we do consider the principles recognized in these cases as controlling to defeat an action over under an implied contract of indemnity, and thus support the action of the trial court in respect to Murphey, because it is manifestly clear from the petition that Robert Company, in settling the claim against it did not act under the compulsion of a judgment fixing actual legal liability, and which, in relation to Pinkerton and Murphey, is of a vicarious nature, thereby affording Robert Company, as the defendant in that action, the basis for a claim against the true tortfeasor or tortfeasors. In addition to the cases above cited, see Central of Ga. R. Co. v. Macon R. c. Co., 9 Ga. App. 628 ( 71 S.E. 1076).
3. It follows from the above that the trial judge erred in dismissing the petition as to the defendant Pinkerton.
Judgment reversed as to the appellee, Pinkerton Laws Company, but otherwise affirmed. Hall and Whitman, JJ., concur.