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Larsen v. J. I. Case Co.

Supreme Court of Wisconsin
Jan 30, 1968
37 Wis. 2d 516 (Wis. 1968)


In Larson v. J.I. Case Co., 37 Wis.2d 516, 155 N.W.2d 666 (1968), the supreme court reversed a summary judgment dismissing a general contractor's cross complaint against his subcontractor seeking indemnity based on a contract provision.

Summary of this case from Fuentes v. Federal Insurance Company


January 2, 1968. —

January 30, 1968.

APPEAL from a judgment of the county court of Racine county: JOHN C. AHLGRIMM, Judge. Reversed.

For the appellant there were briefs by La France, Thompson, Greenquist, Evans Dye and Alfred E. La France and Adrian P. Schoone, all of Racine, and oral argument by Mr. Schoone.

For the respondent there was a brief by Heft, Coates, Boggs Heft and Carroll R. Heft and Robert H. Bichler, all of Racine, and oral argument by Mr. Carroll R. Heft and Mr. Bichler.

Actions for common-law negligence and for violation of the safe-place statute commenced by Reinholt Larsen for injuries sustained from a fall into an open pit in a building under construction.

Korndoerfer Construction Company (hereinafter Korndoerfer) was the general contractor of a building being erected for the J.I. Case Company. Magaw Electric Company (hereinafter Magaw) was a subcontractor of Korndoerfer pursuant to a contract containing the following provision:

"The sub-contractor agrees to indemnify and hold the contractor harmless against all claims against the subcontractor or the contractor arising out of injuries to any person by reason of the negligence or violation of applicable safety regulations by the sub-contractor."

The plaintiff, an employee of Magaw, sustained injuries when he fell into an open pit in the building under construction. The workmen's compensation insurer of his employer, Great American Insurance Company, Inc., paid him certain sums because of his injuries and joined in the instant suit, a third-party suit against Korndoerfer and the J.I. Case Company. The allegations of negligence were as follows:

"That at the time of and immediately prior to, said accident the said defendants and each of them in disregard of their duty so negligently constructed and maintained said premises as to render the same unsafe to persons lawfully coming thereon and the said defendants and each of them failed to exercise ordinary care to protect the plaintiff or any other person lawfully using said premises from the dangers and hazards inherent thereto under said conditions; that said defendants and each of them in disregard of their duties permitted this open pit to remain unguarded and without any warnings or other safeguards and to permit this hazardous condition of said premises to remain without employing any remedial measures to render the same safe.

". . .

"That said premises as hereinabove described were at all times herein mentioned a place of employment within the intendment of the Safe Place, Chapter 101 of the Wisconsin Statute; that it was the duty of said defendants and each of them to keep said premises so being constructed and maintained as to render the same safe pursuant to the provisions of the Wisconsin Statute, Chapter 101; that under and by virtue of the Workmen's Compensation Statutes of the State of Wisconsin said open pit was required to have a cover or some form of safe guard and said defendants and each of them failed to provide the same and their failure constituted a violation of the safety provisions and orders of the Industrial Commission of the State of Wisconsin."

Korndoerfer impleaded Magaw as a third-party defendant and sought indemnification pursuant to the above-quoted provision of the contract for any liability it might incur to the plaintiff. The answer of Magaw to the third-party complaint admitted the execution of the contract. Magaw moved for summary judgment based on an affidavit of its counsel alleging that whatever liability Magaw incurred as a result of negligence or the violation of applicable safety standards has been discharged by its payment of workmen's compensation, which, according to sec. 102.03 (2), Stats., is the exclusive remedy against the employer and alleging further that the contract language quoted above does not require the indemnification of Korndoerfer because in the instant situation Korndoerfer cannot be held liable for Magaw's negligence.

The affidavit in opposition to Magaw's motion alleged that whether Magaw's negligence caused the plaintiff's injuries was a question of fact to be determined at trial because if such negligence was causal, the contract would require Korndoerfer's indemnification.

The trial court granted Magaw's motion for summary judgment and Korndoerfer appeals from the judgment.

Additional facts will be stated in the opinion.

The court has repeatedly held 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. Algrem v. Nowlan, ante, p. 70, 154 N.W.2d 217; Engel v. Bindel (1965), 27 Wis.2d 456, 134 N.W.2d 404; A. O. Smith Corp. v. Associated Sales Bag Co. (1962), 16 Wis.2d 145, 113 N.W.2d 562. It has been recognized, however, that the rule of no liability of the employer over and above that imposed by the Workmen's Compensation Act does not apply in the case of an express agreement for indemnification.

Magaw contends that since the Workmen's Compensation Act is the exclusive remedy as to it, if Korndoerfer can be held liable to the plaintiff, it will be because of its own separate negligence and that under the rule of Mustas v. Inland Construction, Inc. (1963), 19 Wis.2d 194, 120 N.W.2d 95, 121 N.W.2d 274, the indemnity contract cannot be construed to require it to indemnify Korndoerfer for the latter's own negligence.

In Mustas the plaintiff, an employee of a subcontractor, sued Froedert-Mayfair, the leaseholder, and Inland Construction, Inc., the general contractor, for injuries he sustained in falling on ice in a building under construction. Inland and Froedert-Mayfair impleaded subcontractors F. Rosenberg Elevator Company and Westinghouse Electric Corporation for indemnification pursuant to a written agreement. The trial court dismissed the suit against Froedert-Mayfair and Rosenberg. Trial was had to a jury on the liability of Westinghouse and Inland to the plaintiff for negligence. The jury found Inland 100 percent negligent. The issue was whether under an express contract of indemnity the indemnitor would be liable if the negligence was solely that of the indemnitee. The court held that it would not because the contract did not specifically provide for indemnification for the indemnitee's sole negligence.

Here, however, there has been no trial. It is not known whose negligence caused the plaintiff's injuries. Magaw in effect is asking the court to declare Mustas applicable in any and all situations where Korndoerfer is negligent. This approach was foreclosed by the decision in Hartford Accident Indemnity Co. v. Worden-Allen Co. (1941), 238 Wis. 124, 297 N.W. 436, at least insofar as the indemnitor's negligence is the only active negligence in the case. There the Seaman Body Corporation let a contract to Permanent Construction Company to construct a building on its premises. Criswell, an employee of Worden-Allen, one of the subcontractors, touched an iron column being erected by his employer and received an electric shock when a metal cable extending from the boom of a derrick used in erecting the column either came in contact with the uninsulated wire of a power line maintained by Seaman on the premises or came so close as to cause an arc to form between the wires and the cable. The court stated as follows at pages 128 and 129:

". . . By the violation of a safety order governing the manner in which its boom was operated in relation to the power wires, Worden was guilty of misconduct having a causal relation to Criswell's injuries, but it sustained no tort liability to Criswell who, as its employee, was entitled only to compensation under the Workmen's Compensation Act. By reason of its failure to move the wires, Seaman sustained a liability to Criswell under the safe-place statute. It is now claimed that plaintiff, which stands in the shoes of Seaman, is not entitled to be indemnified under this contract for any injuries to which Seaman's actual default proximately contributed. We do not consider the contention to be sound. If the indemnity is to mean anything, it must include situations in which Seaman has sustained a liability by reason of the building operations. It may very well be that if the injuries had arisen solely out of Seaman's default in some respect, and were not in any way attributable to Worden, there would be no liability under the indemnity agreement. Here, however, the active negligence was that of Worden . . . ."

While the indemnity provision in that case referred to "acts" and not "negligence," this does not affect its applicability to the case at bar, for the subcontractor there was negligent and the issue raised was the effect of the owner's concurrent negligence on the subcontractor's liability for indemnification.

We conclude that summary judgment must be denied because issues of fact remain as to the negligence of both Korndoerfer and Magaw. If Korndoerfer is found negligent only because he violated a nondelegable duty under the safe-place statute and the negligent acts were those of Magaw, then Magaw must indemnify Korndoerfer.

Recently this court decided Algrem v. Nowlan, supra. There the lessee of certain premises agreed to indemnify the lessor for all damages he became liable for by reason of the lessee's breach of the lease covenants. An employee of the lessee fell on some ice that had accumulated at the rear entrance of the premises and had received a workmen's compensation award from the lessee. He then sued the lessor alleging negligence in the following respects: (a) Failure to remove the ice from the entranceway or to apply abrasive materials to. reduce the slipperiness; (b) failure to construct, maintain and repair the rain gutters so that they failed to carry away water when ice and snow melted, and (c) failure to maintain and repair the gutters so that they leaked water onto the entranceway platform. The lessor impleaded the lessee and claimed indemnity on the basis of the lease agreement. The trial court granted summary judgment to the lessee. The court held that summary judgment should have been denied because it was possible that the lessee breached the repair covenant of the lease and that the plaintiff was injured as a result of his negligence in that respect. The court held that under such a situation the lessee would be required to indemnify the lessor, but the court also stated the following at page 79:

"The allegations of the plaintiff's complaint go beyond allegations of failure to maintain and repair; it is also alleged that there are unsafe structural deficiencies. The rule of strict construction should be applied so as to relieve Cain-Ashcraft from indemnifying the Nowlans for liability that may arise because of the unsafe structural defects of the building or the negligence, if any, of the Nowlans."

We think that Algrem must be interpreted as holding that the lessee must indemnify the owner for any liability the owner sustains as a result of the lessee's failure to maintain and repair because the owner's liability on the facts of that case would be the result of the negligent acts of the lessee in that respect and that the lessee need not indemnify the owner for any damages the plaintiff sustained as a result of structural deficiencies because the owner is the party whose negligence is responsible for those. Further, if the lessor is negligent because of structural deficiencies in addition to being negligent because of his failure to maintain and repair, no indemnification need occur. Thus, in the present case, if the contractor's negligence is at least in part other than that attributed to him as a result of the subcontractor's acts, Magaw need not indemnify him.

We conclude there must be a determination of the issues of negligence before there can be an application of the law of indemnification contracts to the case. These matters should not be determined on summary judgment. The judgment must be reversed.

By the Court. — Judgment reversed and cause remanded for trial.

ROBERT W. HANSEN, J., took no part.

Summaries of

Larsen v. J. I. Case Co.

Supreme Court of Wisconsin
Jan 30, 1968
37 Wis. 2d 516 (Wis. 1968)

In Larson v. J.I. Case Co., 37 Wis.2d 516, 155 N.W.2d 666 (1968), the supreme court reversed a summary judgment dismissing a general contractor's cross complaint against his subcontractor seeking indemnity based on a contract provision.

Summary of this case from Fuentes v. Federal Insurance Company
Case details for

Larsen v. J. I. Case Co.

Case Details

Full title:LARSEN and another, Plaintiffs, v. J. I. CASE COMPANY, Defendant…

Court:Supreme Court of Wisconsin

Date published: Jan 30, 1968


37 Wis. 2d 516 (Wis. 1968)
155 N.W.2d 666

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