extent of the coverage provided. Similarly, the use of the words "but only" with respect, etc., in the endorsement in this case appears to be an attempt by defendant to qualify the extent to which plaintiff is an additional insured under the policy. The similarities between the above-cited cases and the case sub judice coupled with the rule of contract construction that prefers giving meaning to the language cut strongly against construing the endorsement in the manner proposed by plaintiff. It is reasonable to conclude that the most appropriate construction of the subject phrase is that Consolidation was to be an additional insured under the defendant's policy only when the negligent acts or omissions of Long directly caused Consolidation's loss.
The court notes that Bankhead and Kaspar do differ from this case in that they involved the interpretation of the provisions of the indemnity contract between an owner and a general contractor, while in this lawsuit, the owner is attempting to recover on the basis of an endorsement to the contractor's liability insurance policy. Bankhead and Kaspar represent a uniform body of law that requires that an indemnity provision be construed strictly against providing indemnification to the indemnitee for his own negligence. United States v. Seckinger, 397 U.S. 203, 90 S. Ct. 880, 25 L. Ed. 2d 224 (1970); Indemnity, 41 Am.Jur.2d § 15; Indemnity-Contractor's Liability, 27 A.L.R.3d 663.
In this case, Liberty has argued that the endorsement must be considered in conjunction with the indemnity provision of the April 30, 1965 contract. The language of the indemnity provision of that contract would be construed strictly against liability because of the rule of law that a contract that indemnifies the indemnitee against the consequences of its own negligence must be clear and unequivocable. Westinghouse Electric Corp. v. G. C. Murphy Co., 425 Pa. 166, 228 A.2d 656 (1967); Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., 404 Pa. 53, 171 A.2d 185 (1961).
In United States v. Seckinger, supra, 397 U.S. at 211, 90 S. Ct. at 885, the court stated that "a contractual provision should not be construed to permit an indemnitee to recover for his own negligence unless the court is firmly convinced that such an interpretation reflects the intention of the parties. This principle, though variously articulated, is accepted with virtual unanimity among American jurisdictions."
While there is Pennsylvania authority that a private party may validly contract to relieve himself from liability for the consequences of his own negligent act, Siegel Co. v. Philadelphia Record, 348 Pa. 245, 35 A.2d 408 (1944); Cannon v. Bresch, 307 Pa. 31, 160 A. 595 (1932), the intention to indemnify one's self against liability for one's own negligence must be clearly and unequivocally expressed. Perry v. Payne, 217 Pa. 252, 66 A. 553, 11 L.R.A., N.S. 1173 (1907); Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., supra.
Pennsylvania courts have refused to enforce indemnity clauses where their purported intention to insulate the indemnitee from liability for the consequences of his own negligence was expressed in words of general import, such as imposing an obligation to indemnify for all liability or all losses. Perry v. Payne, supra; Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., supra. Only where the contract provisions explicitly refer to losses arising from the negligence of the indemnitee has such indemnification been permitted. Westinghouse Electric Corp. v. G. C. Murphy Co., supra;
Jamison v. Ellwood Consolidated Water Co., 420 F.2d 787 (3d Cir. 1970).
It is apparent that the language of the indemnity provision in the basic contract in this case does not satisfy the standard required by the above cases, and therefore it could not be construed to require Long to indemnify Consolidation for loss due to Consolidation's negligence.
Thus, by operation of law, the indemnity provision of the basic contract would be strictly construed against indemnifying Consolidation for its own negligence. The question arises whether this principle of strict construction should also apply to the court's construction of the endorsement since to construe it in the manner proposed by Consolidation would, in effect, indemnify it for liability occasioned by its own negligence. Different considerations may be appropriate in constructing an indemnity provision which makes the contractor bear the burden of indemnifying the indemnitee for the latter's negligence and a provision that requires this risk to be shifted to the contractor's liability insurer.
The evidence indicates that it may be reasonably inferred that the endorsement was obtained to comply with the requirement of the indemnity clause of the basic contract. On April 30, 1965, Long signed the hauling contract given it by Consolidation. The record also reveals that defendant's liability policy covering Long was in effect as of February 5, 1968 for a period of one year. The Mazjer accident occurred on November 20, 1968. The record does not indicate on what date Long requested the additional insured endorsement from defendant. The record does indicate that the defendant Liberty issued a certificate of insurance on February 12, 1970 to Long "in compliance" with the endorsement. Of course, the date of issuance of this certificate is over two months after the date of the accident. Despite the lateness of the issuance of this certificate, there is no dispute that the endorsement was in effect on the date of the accident, even though the certificate had not yet been issued to Long.
On balance, the court concludes that the endorsement does not provide coverage to the plaintiff under the facts of this case. Primarily, the court is moved to this conclusion by the interpretation given the words "acts or omissions" in the cited cases. The language utilized in those cases is similar to that used in the endorsement in this case. To interpret the endorsement in the manner proposed by plaintiff would require the court to ignore the "but only" phrase and treat the endorsement as falling within the "arising out of" language of the cases cited by plaintiff. This would be an inappropriate construction. The most likely meaning of the subject phrase is that it attempts to limit coverage to those instances where the acts or omissions -- the negligence -- of Long leads to Consolidation's liability.
Secondly, the court concludes that it may be inferred that the additional insured endorsement was intended to provide plaintiff with the coverage required by the indemnity provision of the basic contract. Although this conclusion is a close one, the court is convinced that the inference is a reasonable one under the evidence.
In addition to suing Consolidation, Mazjer filed a claim under the Workmen's Compensation Act of Pennsylvania against his employer, Long, and Long's workmen's compensation insurer, Liberty. It is undisputed that Mazjer was injured while working within the scope of his employment. He therefore was entitled to workmen's compensation benefits in the total amount of $3,402.18, which Liberty paid to him.
Liberty claims that it is subrogated to the right of Mazjer under 77 P.S. § 671
and is entitled to recover from Consolidation or its insurer to the extent it paid workmen's compensation benefits to Mazjer. Liberty contends that Hartford's communication to Liberty was a promise to protect Liberty's subrogation interest. Consolidation, for itself and on behalf of its insurer, Hartford, denies making a promise to Liberty, and suggests that Liberty "slept on their rights" and cannot now complain of its lack of diligence.
Both parties cite Travelers Ins. Co. v. Hartford Accident & Indem. Co., 222 Pa. Super. 546, 294 A.2d 913 (1972),
as outlining the law applicable to this case. In Travelers, the court stated that "reasonable diligence" must be exercised by the subrogee to protect its subrogation interest. The court noted that in Pennsylvania, "reasonable diligence" requires more than mere notice to the third-party tortfeasor and less than actual intervention in the lawsuit against the tortfeasor in order to protect the subrogee's claim. The court noted that in subrogation disputes, the court must inquire into the actions of the parties and the custom within the insurance industry to determine if promissory estoppel is applicable to the case.
Three letters were written by the parties about the subrogation issue. In a letter dated January 10, 1969, Liberty advised Consolidation that it was the workmen's compensation carrier for Long. In the second paragraph of the letter, Liberty requested that Consolidation not discuss settlement with Mazjer without first notifying it, and that the letter be forwarded to Hartford in order that Hartford might contact Liberty if additional information was needed on Mazjer's case.
On October 24, 1969, Hartford sent a letter to Liberty in which it acknowledged Liberty's letter. Hartford requested Liberty's records of medical reports and itemized bills, and the record of compensation payments in order that Hartford could attempt to work out a settlement of Mazjer's lawsuit.
Liberty, in a letter dated October 30, 1969, complied with Hartford's request by sending a copy of the information requested in the previous letter. Liberty's letter makes no reference to Hartford's proposal to settle Mazjer's lawsuit.
Over two and one-half years elapsed before Liberty and Hartford again corresponded over the subrogation issue. In a letter dated June 21, 1972, Liberty, aware of Hartford's settlement with Mazjer, demanded reimbursement from Hartford for its workmen's compensation payments to Mazjer, or an explanation as to why its subrogation lien was unpaid. On July 19, 1972, Hartford, by letter, denied Liberty's subrogation claim and indicated that Consolidation would file suit seeking coverage under Liberty's policy to Long for the Mazjer claim.
According to Travelers, mere notice of the subrogation interest is not enough to protect such interest. Liberty's first letter to Consolidation only gives notice of its subrogation interest. The only action taken by Liberty on its subrogation interest beyond the giving of notice was to provide medical records and other information of Mazjer's compensation benefits to Hartford. There is no evidence in the series of letters of a promise or of representations amounting to a promise.
In its brief, Liberty characterizes the three letters as being the usual custom of the insurance industry and sufficient to give rise to the application of the promissory estoppel doctrine. Unfortunately, Liberty has not presented evidence in this case of the custom of the insurance industry. Statements made by counsel in briefs, even if accurate, are not part of the record and cannot be treated as such unless stipulated to or unless they are matters of public record. Kauffman v. Johnston, 454 F.2d 264, 266 (3d Cir. 1972).
Recovery on the counterclaim will be disallowed.