The plaintiff won a verdict against all four defendants.
The Court found under the facts that the sub-subcontractor was actively negligent, that the bank and the general contractor were only passively negligent, and that the subcontractor was at least passively negligent. Accordingly, the plaintiff was entitled to judgment against all defendants.
The Court discussed the general rule that an owner is not liable for the negligence of an independent contractor unless the duty of care in performing the work is nondelegable.
But here the owner of the building had notice of the dangerous condition which had been created on the sidewalk and so had a nondelegable duty to the plaintiff to correct the condition.
The bank's cross-claim against the general contractor was based on a written contract of indemnity, whereby the contractor agreed to indemnify the bank against loss by reason of 'liability imposed by law' upon the bank for damages resulting from any act or omission of the contractor, his employees, or agents. The Court considered the term 'liability imposed by law' to include 'the total liability imposed by law' on the bank, and said therefore that the indemnity agreement was sufficiently broad to entitle the bank to indemnity 'unless the Bank was guilty of active negligence.'
'While the parties are free to contract as between themselves for the ultimate burden of liability due to negligence, yet in the absence of explicit language to the contrary, courts will not interpret an indemnity agreement as a promise by the indemnitor to save harmless the indemnitee on account of the active negligence of the latter.' 290 N.Y. 145, 154, 48 N.E.2d 299, 303.
The Court held that since the bank was guilty only of passive negligence, it was entitled to indemnity from the contractor on the basis of the indemnity contract.
The Court said that while the owner of a building has a nondelegable duty to protect pedestrians, indemnity would be given, even in the absence of a contract of indemnity, against the principal wrongdoers to one less culpable although both are equally liable to the injured party. For this reason, the bank was held entitled to common-law indemnity from the sub-subcontractor, who had been actively negligent. The bank was not granted indemnity against the subcontractor, since it had failed to show that the subcontractor was guilty of active negligence.
The dissenting judges argued that the indemnity contract did not state that the contractor would indemnity the bank against its own negligence and so should not be effective for that purpose. With regard to the bank's claim for common-law indemnity against the sub-subcontractor, the dissent felt that the dangerous condition on the sidewalk was a nuisance of which the bank had had full knowledge and that accordingly the bank had violated a 'primary, active and non-delegable' duty by not correcting it.
In Semanchuck v. Fifth Ave. & Thirty-Seventh St. Corp., 1943, 290 N.Y. 412, 49 N.E.2d 507, decided six weeks after Schwartz, supra,
the defendant owner of land was engaged in erecting a building thereon, and had engaged the defendant contractor for various phases of the work. The plaintiff, an employee of a subcontractor, was injured because of the failure of the contractor and the owner to comply with a duty imposed by § 241, N.Y. Labor Law, on 'all contractors and owners' to provide certain safety measures for employees.
The contractor had agreed with the owner to provide all necessary safety measures. Judgment was recovered against both defendants. The owner claimed indemnity from the contractor on the basis of the contractor's written obligation to indemnify the owner for all expenses arising from injury resulting from the work.
In a unanimous decision, the New York Court of Appeals applied the Walters rule, supra, and held that there was no right of indemnity. The Court found a statutory intent that correlative obligations of joint wrongdoers based on distinctions between 'active' and 'passive' negligence should not apply, within the field covered by the statute, to a violation of the statutory command. The Court went on to say that the problem, as in Walters, was whether the indemnity agreement 'unequivocally expressed' the intention that one tortfeasor should provide to his fellow tortfeasor indemnity against liability arising from the other tortfeasor's failure to perform a 'positive active duty' imposed by statute. The Court concluded that, under the terms of the indemnity agreement, the owner was not entitled to indemnity from the other "joint active tort feasor."
The Court distinguished the Schwartz case, supra, on the ground that there, although the indemnitee was subject to liability to the injured party for failure to perform a nondelegable duty imposed by law, that nondelegable duty was not a "positive duty" imposed by § 241 of the N.Y. Labor Law. The Court said that its decision in Schwartz was that the rule applied in the Walters case, supra, should not be extended to deny indemnity in those cases in construction and demolition work involving failure to perform a nondelegable duty not arising under the Labor Law. The Court then restated the rule as follows:
'The duty imposed upon both the owner and the contractor under the provisions of section 241 of the Labor Law is an active primary duty and any agreement to provide indemnity for failure to perform such active primary duty must be unequivocally expressed.' 290 N.Y. 412, 423, 49 N.E.2d 507, 410-511.
This language suggests that the general rule for indemnity between concurrent active tortfeasors would be that the intention to provide such indemnity must be unequivocally expressed. That, of course, is the rule announced in Schwartz v. Merola Brothers Construction Corp., supra, and indicated (along with legislative intent) as controlling in Walters v. Rao Electrical Equipment Co., supra.
McFall v. Compagnie Maritime Belge, 1952, 304 N.Y. 314, 107 N.E.2d 463, was the suit of a longshoreman injured by fumes from drums of carbon tetrachloride being loaded onto a vessel. He sued the bareboat charterer, the charterer's booking agent, the manufacturer and shipper of the goods, and the purchaser. There were various cross-claims among the defendants for indemnity, and all four defendants joined the plaintiff's employer as a third-party defendant. The jury found for the plaintiff against the charterer and the manufacturer, and for the charterer against the manufacturer and the plaintiff's employer. The manufacturer's claim against the plaintiff's employer was dismissed.
The New York Court of Appeals considered the claims of the charterer and the manufacturer for indemnity. In interpreting the jury's findings, the Court concluded that the charterer was negligent in failing to warn the longshoremen of the potential danger from the carbon tetrachloride, the manufacturer was negligent in the use of inadequate drums for shipping the cargo, and the plaintiff's employer was negligent in handling the drums. There being no express contracts of indemnity, the Court said there was an implied contract of indemnity in favor of a wrongdoer guilty of passive negligence against the one who has been actively negligent. The Court held that the evidence indicated that the manufacturer and the plaintiff's employer were guilty of active negligence, while the charterer was guilty of only passive negligence. This being the case, there was no right of indemnity between the manufacturer and the plaintiff's employer, but the charterer was entitled to indemnity from both of them.
In Miller v. Pennsylvania R.R., 2 Cir., 1956, 236 F.2d 295, the defendant building owner had contracted with the plaintiff's employer for certain work on the building. The contract provided that the contractor would take all precautions against accidents. There was no indemnity clause as such. The plaintiff was injured on the job and sued the building owner, who joined the employer as a third-party defendant. The trial court found the defendant negligent and the third-party defendant not negligent, so it dismissed the third-party complaint.
The Court of Appeals for the Second Circuit affirmed on the basis of the trial court's finding that the defendant's negligence was a proximate cause of the injury, holding that it was not necessary to consider whether the third-party defendant was free from negligence.
'Even if Spooner (the third-party defendant) was negligent Pennsylvania's negligence in maintaining the equipment would bar it from indemnity. 'Since this is a diversity case New York law is controlling. The New York cases make it quite clear that a party guilty of active negligence has no right of indemnity against another whose concurrent negligence contributed to the injury. E.g. McFall v. Compagnie Maritime Belge, 1952, 304 N.Y. 314, 328-329, 107 N.E.2d 463, (471).' 236 F.2d 295, 297.
The Court referred to the contractor's undertaking to protect against accidents and said:
'Even if this can be construed as a contract to indemnify Pennsylvania for injuries resulting from Spooner's negligence in carrying on its work, it provides no basis for charging to Spooner injuries produced by Pennsylvania's own active negligence. Under New York law a person is not entitled to be indemnified against a liability to which his own active negligence contributed unless the contract expresses that intention beyond all doubt. Semanchuck v. Fifth Avenue & Thirty-Seventh Street Corporation, 1943, 290 N.Y. 412, 49 N.E.2d 507.' 236 F.2d 295, 298.
If we were to apply to the case before us the rule extracted from the New York cases, viz., an indemnity contract will not be construed to provide indemnity for the consequences of joint active negligence unless the contract unequivocally expresses such an intent, we would hold in favor of the third-party defendants, because such intent is not unequivocally expressed in the indemnity clauses. We are not statisfied, however, that this is the appropriate rule. In the case of joint active negligence, the argument that the indemnitor should not be made an unwilling insurer of the indemnitee's negligence
is not so persuasive, since the indemnitor has it within his own power to prevent the loss. But on the other hand, we are not willing to say that the parties here intended that the Township should be indemnified for losses which it could have prevented by the exercise of reasonable care. We conclude that the situation of joint active negligence was not contemplated and does not fall within the scope of the indemnity provisions of the contract before us; that is to say, we cannot infer either that the parties intended indemnity in such circumstances or that they intended that there be no indemnity. We feel, in short, that the contract is silent with regard to indemnity for this accident.
Such being the case, we turn to common-law principles for resolution of the third-party action.
In Pennsylvania, there is no right of indemnity between parties guilty of concurrent active negligence.
Helz v. City of Pittsburgh, 1956, 387 Pa. 169, 127 A.2d 89; Builders Supply Co. v. McCabe, 1951, 366 Pa. 322, 77 A.2d 368, 24 A.L.R.2d 319. There is, however, a right of contribution. Goldman v. Mitchell-Fletcher Co., 1928, 292 Pa. 354, 141 A. 231; Builders Supply Co. v. McCabe, supra, 366 Pa. at page 335, 77 A.2d at page 374 (dictum); see Uniform Contribution Among Tortfeasors Act, 12 P.S. § 2082. The right of contribution against the employer of the injured party is limited, however, to the extent of the employer's workmen's compensation liability.
Brown v. Dickey, 1959, 397 Pa. 454, 155 A.2d 836; Maio v. Fahs, 1940, 339 Pa. 180, 14 A.2d 105.
Accordingly we hold that the defendant is entitled to contribution from the third-party defendants to the extent of their workmen's compensation liability. The Township's motion for judgment n.o.v. against the third-party defendants will be granted to that extent. The Township's motion for a new trial against the third-party defendants will be denied.
As indicated above, defendant Potter's motion for judgment n.o.v. as to plaintiff will be granted.
Counsel will submit a form of order.