Cooper v. HB Owsley & Son, Inc.

258 S.E.2d 842 (1979)

43 N.C. App. 261

Elizabeth B. COOPER, Administratrix of the Estate of Gary Wayne Cooper, Deceased v. H. B. OWSLEY & SON, INC., Baron Brown Russell, Jr., Potain, Inc., and King-Hunter, Inc.

No. 7726SC986.

Court of Appeals of North Carolina.

October 16, 1979.

*845 Womble, Carlyle, Sandridge & Rice by H. Grady Barnhill, Jr., and W. G. Champion Mitchell, Winston Salem, for King-Hunter, Inc.

Daniel W. Donahue and Ronald G. Baker, Greensboro, for H. B. Owsley & Son, Inc.

PARKER, Judge.

APPEAL OF KING-HUNTER, INC.

King-Hunter first contends that the summary judgment in favor of Owsley on its cross-claim for indemnity against King-Hunter was in error because the indemnity agreement embodied in paragraph 11 of the equipment rental contract between Owsley and King-Hunter is void as against public policy. In support of this contention, King-Hunter points out that plaintiff alleged in her amended complaint that Owsley's negligence was one of the proximate causes of her decedent's death. Specifically, she alleged both that Owsley was independently negligent in furnishing an unqualified technician, Russell, who was not adequately trained to dismantle the crane in a safe manner, and that Owsley was derivatively liable for Russell's negligence in dismantling the crane in an unsafe manner in that, in the dismantling process which was followed, one of the crane's connecting parts was left too weak to support the top of the crane and in that Russell negligently rotated the crane while it was in this weakened condition. King-Hunter contends that it is against public policy to permit Owsley to be indemnified against its own negligence or against that of its employee for which it is responsible. We perceive, however, no sound reason why this must be so. In this connection we find the following statement from the opinion of our Supreme Court in Gibbs v. Light Co., 265 N.C. 459, 144 S.E.2d 393 (1965) particularly applicable:

There is a distinction between contracts whereby one seeks to wholly exempt himself from liability for the consequences of his negligent acts, and contracts of indemnity against liability imposed for the consequences of his negligent acts. The contract in the instant case is of the latter class and is more favored in law.

265 N.C. at 467, 144 S.E.2d at 400.

Paragraph 11 of the equipment rental contract did not exempt Owsley from liability to third persons resulting from its negligence or that of its employees, nor did the summary judgment here appealed from have that effect. On the contrary, Owsley remains a party defendant in this action and may ultimately be found liable to plaintiff should plaintiff prevail against it at the trial. By paragraph 11 King-Hunter, as Lessee, did agree, as part of the consideration for the lease of the crane to it by Owsley, to indemnify and hold Owsley harmless from all liabilities "for damages or losses of any kind whatsoever, whether to *846 persons or property or for any other loss arising from the use of, transportation of, or in any way connected with the said equipment or any part thereof, from whatsoever cause arising." We see no reason of public policy why King-Hunter should be excused from honoring this agreement. Agreements achieving much the same result made by insurance companies writing policies of liability insurance have long been enforced by the courts. Enforcement of an indemnity agreement such as is now before us would have no greater tendency to promote carelessness on the part of the indemnitee than would enforcement against the insurer of a policy of liability insurance. "And, although there is some earlier authority to the contrary, it is now the prevailing rule that a contract may validly provide for the indemnification of one against, or relieve him from liability for, his own future acts of negligence provided the indemnity against such negligence is made unequivocally clear in the contract." 41 Am.Jur.2d, Indemnity, § 9, pp. 693-94. This is particularly true where, as here, the parties presumably dealt at arms length and without the exercise of superior bargaining power. See Annot., 68 A.L.R.3rd 7 (1976) § 3, pp. 29-34. We hold that the indemnity agreement in paragraph 11 of the equipment rental agreement between Owsley and King-Hunter is not void as against public policy.

King-Hunter next contends that, even if not void as against public policy, the indemnity agreement in paragraph 11 was not intended by the parties to be operative under the circumstances of this case. In support of this contention King-Hunter asserts in its brief that "[t]he clear intent of the indemnity provision is to protect Owsley from liability arising from its ownership of the crane, not from negligent acts of its agents or of itself." We do not agree with this assertion. Initially, we note that the language employed by the parties in paragraph 11 of their agreement does not lend itself to so narrow a construction. As already noted, by paragraph 11 King-Hunter agreed to indemnify and hold Owsley harmless from all liabilities "for damages or losses of any kind whatsoever, whether to persons or property or for any other loss arising from the use of, transportation of, or in any way connected with the said equipment or any part thereof, from whatsoever cause arising." (Emphasis added.) This language is hardly compatible with the construction for which King-Hunter contends. More importantly, to construe the language of paragraph 11 as King-Hunter contends renders it largely purposeless and deprives it of nearly all meaning. The occasions on which Owsley could be found liable for some claim arising from its ownership of the crane when neither it nor one of its employees was at fault would be rare indeed. What was said in Beachboard v. Railway Co., 16 N.C.App. 671, 193 S.E.2d 577 (1972) is applicable here:

By inserting the provision in their contract the parties obviously contemplated that there might be claims for indemnity, and they must have been cognizant of the fact that in the ordinary case the occasion for [the indemnitee] seeking indemnity would not arise unless it had itself been guilty of some fault, for otherwise no judgment could be recovered against it.

Beachboard v. Railway Co., supra, at 679, 193 S.E.2d at 583; accord, Gibbs v. Light Co., supra; Hargrove v. Plumbing and Heating Service, 31 N.C.App. 1, 228 S.E.2d 461 (1976). We hold that the language of paragraph 11 does require King-Hunter to indemnify Owsley for liability incurred by Owsley for injuries sustained by third persons "arising from the use of, transportation of, or in any way connected with" the leased crane, "from whatsoever cause arising," including the negligence of Owsley or of one of its employees for whose acts it is derivatively liable.

Finally, King-Hunter contends that even if the indemnity agreement contained in paragraph 11 can properly be construed to protect Owsley against the consequences of its own or its employee's negligence in general, it should not be applicable under the peculiar circumstances of this case. In this connection, King-Hunter asserts that Russell, Owsley's technician, was supposed only to give technical advice during the dismantling of the crane and was not to *847 actively operate it, and that King-Hunter was given no notice that the technician claimed the right or would undertake personally to operate the crane. King-Hunter contends that it was not contemplated by the parties that the indemnity provision should be applicable to make King-Hunter liable for the consequences of the completely unforeseeable intervention of a technician whose qualifications it did not know. This contention ignores the facts that paragraph 16 of the equipment rental contract expressly provides that dismantling the crane is the responsibility of King-Hunter, that King-Hunter chose to delegate this responsibility to Carolina Crane and Rigging Corporation, and that, although no King-Hunter employee was present when the fatal accident occurred, the foreman and employees of Carolina were then present and were actively participating with Russell in the dismantling process. Therefore, even if Russell exceeded the limits of the functions he was supposed to perform as the technician furnished by Owsley, a matter which is far from clear and which we do not decide, we perceive no legitimate reason on that score for releasing King-Hunter from its obligation to indemnify Owsley as provided in paragraph 11 of the contract. Delegating its responsibility under paragraph 16 and removing its own employees from the scene would not have that effect. Nor, as we have already noted, would negligence on the part of Russell, if any should be proved, render the indemnity agreement inoperable in this case.

On King-Hunter's appeal we find no error in the summary judgment entered in favor of Owsley.

CROSS APPEAL OF H. B. OWSLEY & SON, INC.

In the judgment appealed from the court directed that Owsley shall have and recover of King-Hunter "indemnity in full for any amount the plaintiff Elizabeth B. Cooper, Administratrix of the Estate of Gary Wayne Cooper, Deceased, is adjudged entitled to recover of the defendant H. B. Owsley & Son, Inc., in this action." In its cross appeal, Owsley contends that the court erred in failing to go further and order that Owsley is entitled to be indemnified by King-Hunter for attorney fees and other expenses incurred by Owsley in connection with the defense of this action. We do not agree. Although broadly written, the indemnity agreement in paragraph 11 does not, in our opinion, extend so far as to cover attorney fees and other expenses incurred by Owsley in the defense of this action.

The judgment appealed from is

Affirmed.

CLARK and ERWIN, JJ., concur.