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LACKIE v. NIAGARA MACH. & TOOL WORKS

March 8, 1983

DAVID C. LACKIE and MARION LACKIE
v.
NIAGARA MACHINE And TOOL WORKS and PORT REALTY and WAREHOUSING CORP. and NATIONAL MACHINERY EXCHANGE, INC.



The opinion of the court was delivered by: TROUTMAN

 TROUTMAN, J.

 In August, 1980, while at work and operating a shear press, plaintiff, David C. Lackie, *fn1" sustained injuries when his right hand became stuck in the machine. Suit was instituted approximately five months later; plaintiff alleges that defendant, National Machinery Exchange, Inc. (National) breached various obligations imposed by § 402A of the Restatement of Torts (Second). National then commenced a third-party action against plaintiff's employer, Cardinal Systems, Inc. (Cardinal), alleging generally that Cardinal had agreed to indemnify it, National, for any claim arising out of the machine's operation. Cardinal, now moving for summary judgment on the third-party complaint, argues that Pennsylvania's Workmen's Compensation Act, 77 P.S. § 1 et seq., (Act) prohibits the third-party action. We agree and grant the motion.

 The relevant provision of Pennsylvania's Workmen's Compensation Act, 77 P.S. § 481(a), provides in pertinent part that the

 
liability of an employer under this act shall be exclusive *fn2" and in place of any and all other liability to such employes . . .

 Moreover,

 
In the event injury or death to an employe is caused by a third party, then such employe . . . may bring their action at law against such third party but the employer . . . shall not be liable to a third party for damages, contribution or indemnity in any action at law . . . unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract . . . .

 77 P.S. § 481(b)(emphasis added).

 In the case at bar, National asserts that its sale to Cardinal of the injury-causing shear press was accompanied by an appropriately worded indemnification agreement and that Cardinal has, therefore, waived the immunity from joinder which an employer generally enjoys by virtue of the Act.

 Countering, Cardinal argues that the indemnification provisions of the agreement are ambiguous and subject to more than one rational interpretation. Since National drafted the language at issue, Cardinal asseverates that the clause must be strictly construed against its author. Moreover, given this construction, Cardinal urges that it has not expressly waived its protection under the Act and that it is, therefore, entitled to judgment.

 Resolution of the issue at bar requires reference to Pennsylvania law regarding the effect and construction of indemnification agreements generally as well as those under § 481(b) of the Act. In undertaking this analysis we begin with the observation that indemnification clauses are generally "not favored by the law" and are subject to a strict construction compelling an interpretation "against the party seeking their protection". Dilks v. Flohr Chevrolet, 411 Pa. 425, 435, 192 A.2d 682 (1963).

 The specific clause at issue provides as follows:

 The above quoted language, by its very terms, broadly purports to require Cardinal to indemnify National and hold it harmless for all claims arising ...


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