St. Paul Fire & Marine Insurance Co. v. Gilpatrick Construction Co.

MACY, Justice. This is an appeal from a district court judgment in favor of Gilpatrick Construction Co., Inc., appellee, on a third-party complaint for indemnification. We are asked to determine whether the indemnification provisions at issue are sufficiently explicit to require indemnification by Gilpa-trick. We find that the provisions are sufficiently explicit, and we reverse. The parties stipulated to the following facts. In June of 1980, C.J. Abbott, Inc. contracted with the Wyoming State Highway Commission to do road work in Carbon County, Wyoming. In July of 1980, Abbott entered into a subcontract with Gilpatrick in which Gilpatrick agreed to perform the rock crushing work associated with the road project. The following provisions of the subcontract are relevant: “V. To save the Owner and the Contractor harmless from all loss, cost or expense resulting either directly or indirectly from the failure of the Sub-Contractor faithfully to carry out any provision of this Sub-Contract. * * * * * * “VII. To adequately and properly protect his work of construction by lights, barriers, supports, signs and guards so as to avoid injury or damage to persons or property and to be directly responsible for damages to persons and property occasioned by failure so to do, or by any negligence of the Sub-Contractor or any of his officers, agents or employees in the performance of his work. The standards of protection shall be not less than those specified in the General Contract or required by law. * * * * * * “IX. To be bound to the Contractor by the terms of the General Contract, to conform to and comply with all of the terms of the General Contract and to assume toward the Contractor all the duties and obligations that the Contractor assumes in the General Contract toward the Owner in so far as they are [1190] applicable to this Sub-Contract unless changed in this Sub-Contract. * sjs * * * * “XII. To comply with all applicable federal, state and municipal laws and/or ordinances and regulations effective where the work is to be performed under this Sub-Contract and to pay all costs and expenses connected with such compliance; to pay all taxes, assessments and premiums under the federal social security act or any applicable unemployment insurance, disability benefit, old age benefit or retirement act, all sales and use taxes, all personal property taxes, all transportation taxes and all other taxes payable by reason of the Sub-Contractor’s work; and to furnish all necessary reports and information to the appropriate federal, state and municipal agencies with respect to all of the foregoing, the same as though the Sub-Contractor was in fact the Contractor.” In October of 1980, Tom Johnson, an employee of Gilpatrick, was injured while working on the road project when he became entangled in a rock crushing machine owned and operated by Gilpatrick. The accident was caused by the absence of a guard on the feed belt of the machine. Johnson filed suit against Abbott and three employees of Gilpatrick. In his claim against Abbott, Johnson alleged that the contract with the State imposed certain safety requirements upon Abbott and that Abbott was negligent and breached its contractual duties in failing to see that the safety requirements were observed. In contrast, Abbott argued that the obligation to comply with the safety requirements was expressly delegated to Gilpatrick in the subcontract, and thus any liability for breach of contract or negligence in failing to provide adequate safety measures must be assumed by Gilpatrick. On that basis, Abbott demanded that Gilpa-trick assume the defense in the action filed by Johnson. When Gilpatrick refused, Abbott filed a third-party complaint naming Gilpatrick as defendant. Prior to trial on the original complaint, Abbott’s insurance carrier, St. Paul Fire and Marine Insurance Company, appellant, offered Johnson $20,000 to settle the claim against Abbott. Johnson accepted, and Abbott was dismissed from the action. St. Paul was then substituted as third-party plaintiff on the third-party complaint against Gilpatrick. The third-party complaint was submitted to the district court for disposition upon stipulated facts in lieu of trial. In denying St. Paul’s claim for indemnification, the district court found this Court’s holding in Wyoming Johnson, Inc. v. Stag Industries, Inc., Wyo., 662 P.2d 96 (1983), to be controlling. We do not find it to be controlling and reverse the district court’s order. In Wyoming Johnson, Inc., we were asked to construe the following contract provision: ‘“FIRST: * * * The subcontractor agrees to be bound to the Contractor by the same terms, as the Contractor’s contract with the Owner and assume toward the Contractor all obligations and responsibilities which the Contractor by contract, assumes toward the Owner. * * ’ [Emphasis omitted.] ‘“SECOND: * * * The Subcontractor further agrees * * * to fully indemnify the Contractor from any liability or suit arising from the acts or omissions of the Subcontractor, including all costs attached to the same. * * * ’ [Emphasis omitted.] “ ‘NINTH: The Subcontractor specifically further obligates himself to the Contractor in the following respect, to-wit: To indemnify Contractor against and save him harmless from any and all claims, suits or liability for injuries to property, injuries to persons including death and from any other claims, suits or liability on account of any act or omission of Subcontractor, or any of his officers, agents, employees or servants.’ [Emphasis omitted.]” Id. at 98. We found the broad language of the first paragraph to be insufficient to impose the [1191] same obligations and responsibilities on the subcontractor as the general contract imposed on the contractor. Absent some more specific provision delegating the contractor’s obligations under the general contract to the subcontractor, we could find no basis for granting the claim for indemnification. We then looked to the remaining provisions to determine the extent of the subcontractor’s liability for indemnification. Under the second and ninth paragraphs, we found that the subcontractor was required to indemnify the contractor only for liability resulting from its own acts or omissions or those of its officers, agents, employees, or servants. Because the complaint alleged liability resulting only from the acts or omissions of the contractor, not the subcontractor, and because we found the all-encompassing language of the first paragraph to be too broad to impose liability on the subcontractor for those acts and omissions, we held that the subcontractor was not required to indemnify the contractor. In the present case, paragraph IX of the subcontract contains the same broad language we found insufficient in Wyoming Johnson, Inc. Absent some more specific provision delegating Abbott’s obligations under the general contract to Gilpatrick, we would be compelled under Wyoming Johnson, Inc. to deny St. Paul’s claim for indemnification. However, as demonstrated previously, the subcontract in the present case goes further and expressly requires Gilpatrick to protect against injury at its work site and to assume responsibility for damages caused by its failure to do so. Among the measures enumerated to protect against injury are lights, barriers, supports, signs, and guards. In addition, the subcontract specifically provides that Gilpatrick will be responsible for any loss resulting from its failure to carry out any provision of the subcontract. Finally, the subcontract specifically provides that Gilpatrick will comply with all applicable federal, state, and municipal laws, ordinances, and regulations effective where the work is performed. Unlike the broad provision construed in Wyoming Johnson, Inc., these provisions express an intent in clear and unequivocal terms to impose liability on Gilpatrick for injuries resulting from the failure to provide adequate safety measures. Having concluded that Wyoming Johnson, Inc. does not require denial of the indemnification claim, the only questions remaining are whether Gilpatrick failed to provide adequate safety measures as required by the subcontract and whether such failure caused the loss to St. Paul. The parties stipulated that there is sufficient evidence to show that the feed belt of the rock crushing machine did not have a guard as required by 30 CFR 56.14-1 and that the absence of the guard was the cause of the accident. Therefore, we reverse the district court’s order denying St. Paul’s claim for indemnification by Gilpa-trick.