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URBAN REDEVELOPMENT AUTHORITY PITTSBURGH v. NORALCO CORPORATION (10/03/80)

filed: October 3, 1980.

URBAN REDEVELOPMENT AUTHORITY OF PITTSBURGH
v.
NORALCO CORPORATION, APPELLANT



No. 857 April Term, 1978, Appeal from the Judgment of the Court of Common Pleas of Allegheny County, Civil Division, No. 2748 October Term, 1971.

COUNSEL

W. Arch Irvin, Jr., Pittsburgh, for appellant.

Richard D. Klaber, Pittsburgh, for appellee.

Cercone, President Judge, and Price, Spaeth, Hester, Cavanaugh, Montgomery and Hoffman, JJ. Spaeth, J., files a concurring opinion. Montgomery, J., concurs in the result.

Author: Hoffman

[ 281 Pa. Super. Page 468]

Appellant contends that the lower court erred in concluding that the parties' contract required appellant to indemnify appellee for a loss resulting from appellee's negligence. We disagree and, accordingly, affirm the entry of judgment n. o. v. in favor of appellee.

Appellee, Urban Redevelopment Authority of Pittsburgh (URA), owns a tract of land in the East Liberty section of Pittsburgh. Appellant, Noralco Corporation (Noralco), is engaged in demolition work. In 1965, the URA and Noralco entered into a contract whereby Noralco agreed to perform demolition and site clearance work at the East Liberty site. The contract stated that the URA assumed no responsibility for the condition of existing buildings and other structures. Additionally, the contract obligated Noralco, inter alia, to inspect the premises to acquaint itself with the existing conditions; to provide supervision, technical personnel, labor, and materials; to ask the URA for any additional information which might be needed in planning and performing the work; and to demolish structures in such a manner as to avoid hazards to persons and property. The contract further provided that Noralco "shall exercise proper precautions of persons and property and shall be responsible for all damages to persons or property, either on or off the site, which occur as a result of [its] fault or negligence in connection with the prosecution of the work." Another contract provision required Noralco to "indemnify and save harmless the [URA] from any claims for damages resulting from personal injury and/or death suffered or alleged to have been suffered by any person as a result of any work conducted under this contract."

On August 1, 1968, while Noralco's employees were tearing down a brick wall at the site, the wall collapsed and fell upon one of the employees, resulting in his death. The

[ 281 Pa. Super. Page 469]

    decedent's estate brought an action against the URA and recovered damages in the amount of $172,300.00. The URA then instituted this indemnity action against Noralco.*fn1 The evidence at trial established that although the URA had inspectors at the East Liberty site to enforce compliance with the contract, Noralco had sole control and possession of the premises at the time of the accident. Additionally, the evidence revealed that the Noralco employees believed that the brick wall which they were tearing down at the time of the accident was "tied in" to the wall of an adjoining building. In fact, however, the walls were separate. Consequently, while the employees were removing bricks from the unsupported wall, it collapsed. After the accident, Noralco found plans in an elevator tower on the roof of the adjoining building which showed that the two walls were not connected. Before the accident, however, neither the URA nor Noralco knew that these plans existed or that the walls were separate. The trial court instructed the jury that the URA was entitled to be indemnified by Noralco pursuant to their contract if the URA was free from active negligence and if Noralco did anything which caused the death of the employee. The jury returned a verdict in favor of Noralco. In granting judgment n. o. v. for the URA, the lower court concluded that there was no evidence that the URA was actively negligent and that the parties' contract required Noralco to indemnify the URA for damages resulting from personal injuries caused by the URA's passive negligence. This appeal followed.*fn2

The question of whether an indemnity contract requires a contractor to indemnify an owner against the latter's own

[ 281 Pa. Super. Page 470]

    negligence was first considered by our Supreme Court in Perry v. Payne, 217 Pa. 252, 66 A. 553 (1907). The contract in that case provided that the contractors were to indemnify the owner "from all loss, cost or expense . . . arising from accidents to mechanics or laborers employed in the construction of said work, or to persons passing where the work is being constructed." An employee of a subcontractor was killed when he was struck by an elevator negligently operated by an employee of the owner. At the time of the accident, the owner was in exclusive control of the elevator. The owner brought an indemnity action against the contractors after paying a judgment obtained by the decedent employee's estate. Our Supreme Court considered the surrounding circumstances and the parties' purposes in making the contract and concluded that the parties intended the contractors to indemnify the owner from losses caused by the negligence of the contractors or their employees while performing the construction contract, and the parties did not anticipate imposing liability on the contractors for the negligence of the owner or his employees. The Court stated that if the contractors had to indemnify the owner in this case, they would be insurers, and the extent of their liability would be uncertain, indefinite, and entirely controlled by the owner. Moreover, the Court believed that the profits to be realized by the contractors were inadequate when compared to liability of such unlimited extent.*fn3 After reviewing cases

[ 281 Pa. Super. Page 471]

    in other jurisdictions which had considered the issue, the Court stated:

We think it clear, on reason and authority, that a contract of indemnity against personal injuries should not be construed to indemnify against the negligence of the indemnitee, unless it is so expressed in unequivocal terms. The liability on such indemnity is so hazardous, and the character of the indemnity so unusual and extraordinary, that there can be no presumption that the indemnitor intended to assume the responsibility unless the contract puts it beyond doubt by express stipulation. No inference from words of general import can establish it. The manifest purpose, in such cases, to indemnify against the injury which, under the circumstances, could reasonably be apprehended only from the action of the indemnitor, or his servant, is a weighty consideration in construing indemnity contracts. The circumstances surrounding the parties, the one, the owner for whom the building is to be erected, and the other, the contractor who is to construct the building and hence from whose acts injuries to persons and property may be anticipated, would seem to make the conclusion irresistible, that unless expressly stipulated in the contract the owner is not to be indemnified against his own negligence. In the case at hand the parties have not expressly stipulated against injury occasioned by the indemnitee's own negligence, and we are satisfied, from the terms of the instrument read in light of the circumstances surrounding the parties as well as the manifest purpose inducing the bond, that they did not intend to protect the indemnitee against his own or his servant's negligence.

Id. 217 Pa. at 262-63, 66 A. at 556-57.

In Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., 404 Pa. 53, 171 A.2d 185 (1961), the contractor agreed to "indemnify, save harmless and defend [the owner] from all liability for loss, damage or injury to person or property in any manner arising out of or incident to performance of this

[ 281 Pa. Super. Page 472]

    order . . . ." The contractor in that case had agreed to install a mill on the owner's premises. An employee of a subcontractor was severely injured as a result of the negligent operation of a crane by an employee of the owner.*fn4 After settling the injured employee's claim, the owner sought indemnification from the contractor. Our Supreme Court stated that "the law is well settled that the intention to include within the scope of an indemnification contract, a loss due to the indemnitee's own negligence, must be expressed in clear and unequivocal language." Id., 404 Pa. at 57, 171 A.2d at 187. The Court noted, however, that if the language of the indemnity contract is not explicit, our courts will consider the surrounding circumstances and the parties' object in making the contract. After observing that the facts of this case were almost identical to those in Perry v. Payne, supra, the Court concluded that although the indemnity provision was expressed in broad general terms, it did not contain clearly expressed or unequivocal language to show that the parties intended to indemnify the owner from its own negligence. Additionally, the Court found that the surrounding circumstances did not establish such an intent. Compare Westinghouse Electric Co. v. Murphy, Inc., 425 Pa. 166, 228 A.2d 656 (1967) (contract held to require contractor to indemnify owner from owner's negligence where contract provided that contractor would indemnify owner from all claims ...


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