Title: Cities Service Co. v. Northern Production Co., Inc.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Cities Service Co. v. Northern Production Co., Inc.1985 WY 119705 P.2d 321Case Number: 84-145Decided: 08/23/1985CITIES SERVICE COMPANY, APPELLANT (THIRD-PARTY PLAINTIFF AND DEFENDANT) 

v. 

NORTHERN PRODUCTION COMPANY, INC., APPELLEE (THIRD-PARTY DEFENDANT), STEVEN D. BAILEY, (PLAINTIFF).
Supreme Court of Wyoming
CITIES SERVICE COMPANY, 
APPELLANT (THIRD-PARTY PLAINTIFF AND DEFENDANT) 

v. 

NORTHERN PRODUCTION 
COMPANY, INC., APPELLEE (THIRD-PARTY DEFENDANT), STEVEN D. BAILEY, 
(PLAINTIFF).

 
 
Appeal from the District 
Court, CampbellCounty, Terrence L. O'Brien, 
J.

 
 
Wade Brorby and 
Randal R. Arp (argued) of Morgan, Brorby, Price & Roberts, Gillette, for appellant.

Michael Golden 
(argued) and Patrick J. Murphy of Williams, Porter, Day & Neville, Casper, for appellee.

Willis C. Geer, 
Gillette, for 
plaintiff.

Before THOMAS, C.J., and 
ROSE, ROONEY, BROWN and CARDINE, JJ.

CARDINE, 
Justice.

[¶1.]     This was a third-party 
action upon a contract providing indemnity. Cities Service Company sought to 
recover from Northern Production Company, Inc., Northern's share of damages 
based upon Northern's percentage of negligence causing injury to Northern's 
employee, Steven Bailey. The district court granted summary judgment in favor of 
Northern Production Company, holding that the contract for indemnity was void 
under the provisions of § 30-1-131, W.S. 1977.

[¶2.]     We 
reverse.

[¶3.]     The question presented 
for our determination, as stated by Cities Service, is as 
follows:

"Is appellant entitled by 
law to enforce its written indemnity agreement with appellee by third-party 
complaint where appellee's employee has received worker's compensation benefits 
and has sued appellant?"

Northern narrows 
the issue further posing the question:

"[Was] the parties' 
written contract * * insufficient, as a matter of law, to impose liability on 
appellee Northern Production for that percentage of negligence attributable to 
appellee Northern Production if the plaintiff Bailey's injuries were caused by 
the concurrent negligence of both appellant Cities Service and appellee Northern 
Production?"

[¶4.]     Plaintiff, Steven 
Bailey, was an employee of Northern Production Company at the time of the 
accident which is the subject of this litigation. Northern Production Company 
was an oil field service company hired by Cities Service pursuant to a written 
contract to perform work on pumping units owned by Cities Service. The contract 
provided that Northern would indemnify Cities Service for all loss it might 
sustain as a result of Northern's work under the contract except such loss as 
might be caused by the sole negligence of Cities Service.

[¶5.]     While servicing a 
Cities Service oil field pumping unit, Northern's employee, Steven Bailey, 
suffered injury. The injury occurred during the course of Bailey's employment 
with Northern. He applied for and was granted worker's 
compensation.

[¶6.]     Bailey then filed suit 
against Cities Service Company to recover damages for the same injuries which 
were the basis of his worker's compensation claim and payment. Cities Service 
Company filed a third-party complaint against Northern upon its contract of 
indemnity praying that Northern be required to indemnify Cities Service against 
any loss it might suffer resulting from the negligence of Northern Production 
Company.

[¶7.]     Northern filed a motion 
to dismiss. The court treated the motion as one for summary judgment and granted 
summary judgment in favor of Northern and against Cities Service upon its 
third-party complaint.

RIGHTS BETWEEN EMPLOYER 
AND EMPLOYEE

[¶8.]     Worker's compensation 
statutes were enacted to provide a mechanism for the settlement of claims for 
injury or death by the worker or his survivors against his employer. It was said 
that:

"'The master, in exchange 
for limited liability, was willing to pay on some claims in the future, where in 
the past there had been no liability at all.  The servant was willing, not only to 
give up trial by jury, but to accept far less than he had often won in court, 
provided he was sure to get the small sum without having to fight for it.  All agreed that the blood of the workman 
was the cost of production; that the industry should bear the charge.'" Zancanelli v. Central Coal & Coke 
Company, 25 Wyo. 511, 542-543, 173 P. 981 (1918) (quoting 
from Stertz v. Industrial Insurance 
Commission of Washington, 91 Wn. 588, 158 P. 256, 258 
(1916)).

The rights and 
remedies afforded under the Worker's Compensation Act and the amount of payment 
provided thereunder, "for an employee and his dependents for injuries incurred 
in extrahazardous employment are in lieu of all other rights and remedies 
against any employer * * *." Section 27-12-103, W.S. 1977. The remedy provided 
the worker as recompense for his injuries is his exclusive remedy, Baker v. Wendy's of Montana, Inc., Wyo., 
687 P.2d 885 (1984), and settles his claim against the employer for all time. 
Jordan v. Delta Drilling Company, Wyo., 541 P.2d 39, 48, 78 
A.L.R.3d 1215 (1975).

"It is clear that the 
language `take the place of any and all rights of action' and `shall be 
exclusive of all other rights and remedies', means just what is said and needs 
no judicial construction. While not strongly in point, it was held in Hart v. Blair, Wyo., 1963, 378 P.2d 677, 
that, as a general proposition, the exclusive remedy of the Wyoming workmen's 
compensation laws is the only remedy available unless the employment was 
unlawful or illegal." (Footnote omitted.)

The same is not 
true with respect to the worker's claims against a third 
party.

RIGHTS OF EMPLOYEE 
AGAINST THIRD PARTIES

[¶9.]     An employee paid 
worker's compensation may still assert his claim against a third party whose 
sole or concurrent negligence caused his injury. Section 27-12-104, W.S. 1977, 
provides in part:

"(a) If an employee 
covered by this act [§§ 27-12-101 through 27-12-804] receives an injury under 
circumstances creating a legal liability in some person other than the employer 
to pay damages, the employee if engaged in extrahazardous work for his employer 
at the time of the injury is not deprived of any compensation to which he is 
entitled under this act. He may also pursue his remedy at law against the third 
person."

In Markle v. Williamson, Wyo., 518 P.2d 621 
(1974), we said that substantially identical language in a predecessor of the 
current statute provided in unambiguous language that an employee who is injured 
under circumstances which create a legal liability in some person other than the 
employer is entitled to pursue his remedy at law against the third 
person.

RIGHTS OF THIRD PARTIES 
AGAINST EMPLOYER

[¶10.]  In Pan American Petroleum Corporation v. Maddux 
Well Service, Wyo., 586 P.2d 1220 (1978), we considered whether a third 
party who is sued by an employee for damages resulting from injuries covered by 
worker's compensation can maintain an indemnity action against the employer with 
respect to those injuries and damages. We first reviewed the provisions of the 
Wyoming Worker's Compensation Act, §§ 27-12-101 through 27-12-805, W.S. 1977, 
enacted by our legislature. We found that the act itself barred the employee and those claiming under him from suing 
his employer to recover damages for the same work-related injury or death, but 
it did not expressly bar actions by other third parties against the employer. We 
then considered the effect of Article 10, § 4 of the Constitution of the State 
of Wyoming upon the claims of third parties against an employer contributing to 
the worker's compensation fund as required by the act. Article 10, § 4 of the 
Wyoming Constitution provides in part as follows:

"The right of each 
employee to compensation from such fund shall be in lieu of and shall take the 
place of any and all rights of action against any employer contributing as 
required by law to such fund in favor of any person or persons by reason of any 
such injuries or death." (Emphasis added.)

[¶11.]  We held that the provisions of Article 
10, § 4, supra, did not bar suits against an employer by third parties seeking 
indemnity where such claim for indemnity was based upon a contract between the 
employer and the third party in which the employer agreed to such 
indemnification. Thus, in proper circumstances, we have said that a third party 
may assert a claim for indemnity against the employer for all or part of a loss 
that may result to the third party because of the employee's injuries. Wyoming Johnson, Inc. v. Stag Industries, 
Inc., Wyo., 662 P.2d 96 (1983). In support of our 
conclusion that the Worker's Compensation Act and Article 10, § 4 of the Wyoming 
Constitution permit such claims against the employer, we noted that the third 
party was not a party to the worker's compensation relationship, received no 
benefit as a result of the same and was held, therefore, to have lost no rights 
possessed by that third party. Pan 
American Corporation v. Maddux Well Service, supra.

[¶12.]  In this case Bailey was paid worker's 
compensation. He was barred from suing his employer Northern Production. The 
worker's compensation award did not affect his claim against Cities Service. 
Bailey could, therefore, pursue his claim for injuries against Cities Service 
and, if Cities Service was also at fault and a cause of Bailey's injuries, it 
was potentially liable for the entire amount of damage resulting from the 
injuries.

[¶13.]  It is said that

"the most evenly-balanced 
controversy in all of compensation law is the question whether a third party in 
an action by the employee can get contribution or indemnity from the employer, 
when the employer's negligence has caused or contributed to the injury." 2A 
Larson, The Law of Workmen's Compensation § 76.11.

[¶14.]  With the adoption of comparative 
negligence, § 1-1-109, W.S. 1977, a method was provided for determining the 
percentage of negligence attributable to each participant which was a cause of a 
plaintiff's injuries. The percentage of negligence of everyone at fault, 
including non-parties, should be determined by the fact finder in arriving at 
the 100 percent of negligence that caused the injuries. 
Thus,

"the trier of fact should 
find the percentage of negligence attributable to each of the actors who have 
proximately caused the plaintiff's injuries regardless of whether the actors 
have been named as parties to the lawsuit." Palmeno v. Cashen, Wyo., 
627 P.2d 163, 165-166 (1981).

We said that was 
necessary notwithstanding the fact that plaintiff may have chosen not to sue 
such non-parties and may have structured his pleading in such a way that no 
claim was asserted against them. Board of 
CountyCom'rs of CampbellCounty v. Ridenour, Wyo., 
623 P.2d 1174 (1981).

[¶15.]  In this case, Bailey sues only Cities 
Service asserting a claim against Cities Service because of its negligence. 
Cities Service in its defense claims that the accident and plaintiff's injuries 
were caused by the negligence of Northern Production. It is likely that in 
allocating the 100 percent of negligence which caused plaintiff's injuries among 
the parties, it will be necessary that Northern Production be on the verdict 
form and the percentage of its negligence determined.

[¶16.]  For purposes of illustration only, let us 
assume that plaintiff's negligence is assessed at 0 percent, Cities Services 
negligence at 50 percent, and the negligence of Northern Production at 50 
percent, and damages determined to be in the amount of $100,000. Plaintiff, in 
this example, can recover the entire amount of his loss, $100,000, from Cities 
Service which is responsible for only 50 percent of the fault causing his 
injury. This is so because at common law tortfeasors were jointly and severally 
liable to the injured party who could recover the entire amount of his loss from 
either or both. 57 Am.Jur.2d Negligence § 189. The common law joint and several 
liability of tortfeasors was preserved with the enactment of § 1-1-110(h), W.S. 
1977, which provides:

"(h) W.S. 1-1-110 through 
1-1-113 do not affect the common law liability of the several joint tortfeasors 
to have judgments recovered and payment made from them individually by the 
injured person for the whole injury."

This brings us 
to the question we must determine in this case. Assuming that Cities Service is 
required to pay 100 percent of a judgment for injuries which, at least in theory 
in our hypothesis, were caused by the 50 percent fault of Northern Production, 
should Cities Service be entitled to recover by indemnity from Northern 
Production its share of the damage? If worker's compensation were not involved, 
there would be no question but that Cities Service could recover from Northern 
Production by way of contribution pursuant to the provisions of § 1-1-110, W.S. 
1977, infra, the portion of the judgment represented by the percentage of 
negligence attributable to Northern Production.

EFFECT OF WORKER'S 
COMPENSATION

[¶17.]  Section 1-1-110(a), W.S. 1977, provides 
that,

"where two (2) or more 
persons become jointly or severally liable in tort for the same injury to person 
or property or for the same wrongful death, there is a right of contribution 
among them * * *."

Cities Service, 
however, may not recover from Northern Production by way of contribution its pro 
rata share of the judgment because the provisions of the Worker's Compensation 
Act result in the employer being liable not in tort for negligence or fault as 
required by § 1-1-110, supra, but by operation of law under the Worker's 
Compensation Act. Heckart v. Viking 
Exploration, Inc., 673 F.2d 309 (10th Cir. 1982). Thus, it is 
said:

"The great majority of 
jurisdictions have held that the employer whose concurring negligence 
contributed to the employee's injury cannot be sued or be joined by the third 
party as a joint tortfeasor, whether under contribution statutes or at common 
law. The ground is a simple one: the employer is not jointly liable to the 
employee in tort." (Footnotes omitted.) 2A Larson, The Law of Workmen's 
Compensation § 76.20. See, Cottonwood 
Steel Corp. v. Hansen, Wyo., 
655 P.2d 1226 (1982); Heckart v. Viking Exploration, Inc., 
supra.

[¶18.]  Although a third party may not recover an 
employer's pro rata share by way of contribution, the right of indemnity is 
preserved in § 1-1-110(f), W.S. 1977, which provides:

"W.S. 1-1-110 through 
1-1-113 do not impair any right of indemnity under the existing law. Where one 
(1) tortfeasor is entitled to indemnity from another, the right of the indemnity 
obligee is for indemnity and not contribution, and the indemnity obligor is not 
entitled to contribution from the obligee for any portion of his indemnity 
obligation."

Here there was a 
written contract between Cities Service and Northern Production providing for 
indemnity. With respect to contracts between the parties providing for 
indemnity, it is stated that: 

"The clearest exception 
to the exclusive-liability clause [in worker's compensation] is the third 
party's right to enforce an express contract in which the employer agrees to 
indemnify the third party for the very kind of loss that the third party has 
been made to pay to the employee." 2A Larson, The Law of Workmen's Compensation 
§ 76.42. See also, Shields v. Bechtel 
Power Corp., 439 F. Supp. 192 (1977).

Thus, it is said 
that an employer, though otherwise protected by worker's compensation statutes 
against a claim resulting from injury of its employee, can nevertheless contract 
away that protection and agree to indemnify a third party against the claim. 
Such indemnification is held valid in every jurisdiction with similar statutes. 
City of Artesia v. Carter, 94 N.M. 
311, 610 P.2d 198 (1980).

[¶19.]  At this point we must distinguish between 
cases in which a third party sued by an employee seeks indemnity against his 
employer upon an agreement that pertains to any well for oil, gas or water, or 
mine for any mineral and one that does not so pertain. Where the indemnity 
agreement does not concern a well for oil, gas or water or mine for mineral, 
there is no statute declaring an agreement which indemnifies against one's own 
negligence to be void. Thus, where the agreement, in clear and unambiguous 
language and beyond peradventure when strictly construed, provides 
indemnification against one's own negligence, it will be upheld. Wyoming Johnson, Inc. v. Stag Industries, 
Inc., supra.

[¶20.]  The indemnity agreement involved in this 
case, however, does pertain to a well for oil or gas and therefore is governed 
by § 30-1-131, W.S. 1977, which provides as follows:

"(a) All agreements, 
covenants or promises contained in, collateral to or affecting any agreement 
pertaining to any well for oil, gas or water, or mine for any mineral, which 
purport to indemnify the indemnitee against loss or liability for damages 
for:

"(i) Death or bodily 
injury to persons;

"(ii) Injury to property; 
or

"(iii) Any other loss, 
damage, or expense arising under either (i) or (ii) from:

"(A) The sole or 
concurrent negligence of the indemnitee or the agents or employees of the 
indemnitee or any independent contractor who is directly responsible to such 
indemnitee; or

"(B) From any accident 
which occurs in operations carried on at the direction or under the supervision 
of the indemnitee or an employee or representative of the indemnitee or in 
accordance with methods and means specified by the indemnitee or employees or 
representatives of the indemnitee, are 
against public policy and are void and unenforceable to the extent that such 
contract of indemnity by its terms purports to relieve the indemnitee from loss 
or liability for his own negligence. This provision shall not affect the 
validity of any insurance contract or any benefit conferred by the Worker's 
Compensation Law [§§ 27-12-101 to 27-12-805] of this state." (Emphasis 
supplied.)

By enactment of 
this statute the legislature has declared it to be against public policy to 
provide indemnity against loss or liability resulting from one's own negligence 
in an agreement pertaining to wells for oil, gas or water, or mines for mineral. 
It is undisputed that the agreement between Cities Service and Northern 
Production did pertain to wells for "oil [or] gas." We must determine whether 
(a) the parties' indemnity agreement provides for indemnity against Cities 
Service's own negligence and is, therefore, void, or whether it provides 
indemnity only for the negligence of Northern Production in its work under the 
agreement and is, therefore, valid and enforceable, and (b) whether the 
agreement, in any event under the provisions of § 30-1-131, supra, is void in 
its entirety.

CONSTRUCTION OF THE 
CONTRACT

[¶21.]  The agreement between the parties in this 
case provides:

"2. If CITIES SERVICE 
requests CONTRACTOR to perform services and if CONTRACTOR agrees to perform those services 
requested, then, it is specifically agreed and understood by the parties 
hereto that the terms and conditions of this Agreement shall control in 
determining the rights and liabilities of the parties hereto * * 
*.

* * * * * 
*

"5. CONTRACTOR shall defend, indemnify, protect and hold harmless 
CITIES SERVICE, its co-owners and joint venturers (if any) in the project 
covered hereby or in connection with 
which the work or operations covered or contemplated by this Agreement are 
to be performed, and its and their officers, directors, agents, employees and 
invitees, from and against injuries to or 
illnesses or death of any and all persons and losses of or damages to 
property caused by, resulting from, 
occurring in connection with, or arising out of, the performance or 
non-performance of this Agreement or the prosecution of work or operations 
covered or contemplated hereby, wheresoever or howsoever caused, and from and 
against all liabilities, claims, actions and judgments therefor, together with 
costs and expenses (including attorney's fees) incurred in connection therewith 
except in the following instances:

"(a) CITIES SERVICE 
agrees that the above provision shall not apply to injuries to or deaths of any 
and all persons and losses of or damages to property which are caused by or 
result from the sole negligence of CITIES SERVICE * * *." (Emphasis 
added.)

[¶22.]  The contract between these parties 
provides that Northern Production will perform services upon request of Cities 
Service and will indemnify Cities Service

"in the project covered 
hereby or in connection with which the work or operations covered or 
contemplated by this Agreement * * * against injuries to or illnesses or death 
of any and all persons * * * resulting from * * * the performance or 
non-performance of this Agreement * * * wheresoever or howsoever caused * * 
*."

[¶23.]  The agreement of the parties speaks of 
the performance of services by Northern Production when requested by Cities 
Service and provides indemnity against loss resulting from the performance or 
non-performance of those services. Yet the agreement also provides indemnity 
against losses "wheresoever or howsoever caused, and from and against all 
liabilities, claims, actions and judgments therefor * * *." Does this latter 
broad, general language run afoul of § 30-1-131; does it enlarge the indemnity 
beyond the performance of services by Northern or is indemnity restricted by the 
activities of Northern in the "performance of services"? The agreement is not 
clear and unambiguous. It is obscure in its meaning when it excludes from 
indemnity the sole negligence of Cities Service but does not address the 
situation in which the negligence of Cities Service concurs with the negligence 
of Northern Production in causing the employee's injury. The agreement is also 
obscure when it seemingly concerns only performance of requested services but 
alludes to more. It is, therefore, subject to construction and interpretation 
which is a matter of law for the court. Amoco Production Company v. Stauffer 
Chemical Company of Wyoming, Wyo., 612 P.2d 463 
(1980).

[¶24.]  Northern Production contends that the 
agreement provides indemnity to Cities Service against its own negligence 
contrary to § 30-1-131, supra, and is therefore void. Were Cities Service (the 
indemnitee) making this claim, we would apply a rule of strict construction. 
Thus, in Wyoming Johnson, Inc. v. Stag 
Industries, Inc., supra, we said that where Wyoming Johnson sought to be 
indemnified for its own acts of negligence, the indemnity contract was to be 
strictly construed against the indemnitee and that:

"Generally, contracts 
exculpating one from the consequences of his own acts are looked upon with 
disfavor by the courts. * * * If the indemnitee means to throw the loss upon the 
indemnitor for a fault in which he himself individually shares, he must express 
that purpose beyond any peradventure of doubt." 662 P.2d  at 
99.

The rule of 
strict construction, however, should not apply where indemnity is claimed only 
for the negligent acts of the indemnitor. Thus, it is said 
that:

"[T]he rule of strict 
construction of indemnity contracts applies only where it is contended the 
indemnity contract covers the negligent acts of the indemnitee. Indeed the rule 
is usually stated in the following or similar language:

"`"A contract of 
indemnity will not be construed to indemnify a person against his own negligence where such 
intention is not expressed in `clear and unequivocal terms.'"' 175 A.L.R. 8, 30. 
(Emphasis supplied.) See also Majestic 
Realty Corp. v. Brant (1929), 198 Wis. 527, 224 N.W. 743.

"Where the indemnitor 
merely contracts to indemnify another against his own acts there is no reason in 
law, logic or policy to apply strict construction. Rather, public policy would 
seem to call for a rule of broad construction in such instances." Algrem v. Nowlan, 37 Wis.2d 70, 154 N.W.2d 217, 220 (1967).

[¶25.]  The contract should be considered as a 
whole and a broad construction placed upon it that reasonably gives effect to 
the intention of the parties as expressed by its terms in light of the 
applicable law then existing. Wyoming 
Game & Fish Comm'n v. Mills Company, Wyo., 701 P.2d 819 (1985). 
Thus,

"`An interpretation [of a 
contract] which gives a reasonable, lawful and effective meaning to all 
manifestations of intention is preferred to an interpretation which leaves a 
part of such manifestations unreasonable, unlawful or of no effect.'" Tyson v. Tyson, 61 Ariz. 329, 149 P.2d 674 (1944) (quoting from Restatement of the Law, Contracts § 
236)).

[¶26.]  Applying the rule of broad construction, 
we have no difficulty finding that the agreement requires that Northern 
Production indemnify Cities Service against damage or loss resulting from its 
negligence in the performance of services, prosecution of work, and operations 
under the agreement. We hold that the broad general language, "wheresoever or 
howsoever caused, and from and against all liabilities," refers to the 
performance of services by Northern Production, does not enlarge the indemnity 
required of Northern Production and that the agreement does not provide 
indemnity for the negligence of Cities Service.

EFFECT OF § 30-1-131, 
W.S. 1977

[¶27.]  We have held that a liberal construction 
of the indemnity agreement between these parties leads us to the conclusion that 
it does not provide indemnification to Cities Service for its own negligence. 
Our holding that the agreement, therefore, is not void but is valid and 
enforceable finds further support in § 30-1-131, W.S. 1977, supra. This statute 
was first enacted as Chapter 46, § 1, Session Laws of Wyoming 1969 and compiled 
as § 30-28.3, W.S. 1957, C. 1967, 1975 Cum. Supp. Section 30-28.3 was the 
statute governing the disposition of Mountain Fuel Supply Company v. Emerson, 
Wyo., 578 P.2d 1351 (1978). Section 30-28.3, W.S. 1957, supra, as drafted 
and enacted by the legislature was in part as follows:

"All agreements * * * 
which purport to indemnify * * * for

"(a) Death or bodily 
injury to persons, or

"(b) Injury to property 
[from]

* * * * * 
*

"(i) The sole or concurrent negligence of the 
indemnitee or the agents or employees of the indemnitee or any independent 
contractor who is directly responsible to such indemnitee; 
or

"(ii) From any accident which occurs in operations 
carried on at the direction or under 
the supervision of the indemnitee or 
an employee or representative of the indemnitee or in accordance with methods 
and means specified by the indemnitee or employees or representatives of the 
indemnitee, "are against public policy and are void and unenforceable. This 
provision shall not affect the validity of any insurance contract or any benefit 
conferred by the Workmen's Compensation Law of this state." (Emphasis 
added.)

The part of the 
last paragraph of the statute beginning with "are against public policy and void 
and unenforceable" was separated and set off in such a fashion as to make it 
clear that it applied to both paragraph (i) causing agreements indemnifying 
against the sole or concurrent negligence of the indemnitee to be void and 
paragraph (ii) with respect to agreements which purport to indemnify against 
liability resulting from the operations of the indemnitee. This was our holding 
in Mountain Fuel Supply Company v. Emerson, supra, wherein it is stated at page 
1357:

"The statute expressly 
states that it applies to any agreement or covenant which seeks to indemnify the 
indemnitee against liability for death or injury arising from the sole or 
concurrent negligence of the indemnitee, or from any operation carried on at the 
direction of, under the supervision of, or in accordance with methods and means 
specified by the indemnitee. * * * We hold that the clear language of the 
statute voids and makes unenforceable any agreement to the extent that it seeks 
to indemnify an indemnitee for his own negligence - regardless of the character 
of the negligence sought to be protected." (Emphasis 
omitted.)

[¶28.]  In the Session Laws of Wyoming 1977, 
Chapter 145, § 30-28.3, was amended as follows, the underlined words being added 
to the statute:

"are against public 
policy and are void and unenforceable to 
the extent that such contract of indemnity by its terms purports to relieve the 
indemnitee from loss or liability for his own 
negligence."

The part of the 
above paragraph beginning with "are against public policy" is not separated as 
it was in § 30-28.3. However, the intent of the legislature that this portion of 
the last paragraph applies to both sections (i) and (ii) is made clear when it 
is stated in the preamble as follows:

"AN ACT to amend W.S. 
30-28.3 relating to indemnity agreements in oil, gas or water well contracts or 
mining contracts; providing such indemnity agreements are void and unenforceable 
to the extent that the contract purports to relieve the indemnitee from loss or 
liability for his own negligence; and providing for an effective 
date."

[¶29.]  It is apparent that the legislature added 
this amendment to the statute without intending that it otherwise be changed or 
interpreted differently. The amendment applies to all indemnity agreements which purport 
to relieve the indemnitee from liability for his sole or concurrent negligence 
as in subparagraph (i) of § 30-1-131, supra, and from § 30-1-131 operations 
carried on by the indemnitee as in subparagraph (ii) of the same statute. This 
was our holding in Mountain Fuel Supply 
Company v. Emerson, supra, and it is reaffirmed in this case. Thus, a 
contract of indemnity is void and unenforceable to the extent that the contract 
purports to relieve the indemnitee from loss or liability for his own 
negligence. The indemnity agreement in this case is void to this extent only. It 
is valid and enforceable in every other respect. The effect of the statute 
governing the disposition of this case, § 30-1-131, supra, is that, to the 
extent the parties' agreement might be said to indemnify Cities Service for its 
own negligence, it is void; and to the extent that it indemnifies Cities Service 
for damage it may suffer because of the negligence of Northern Production in its 
performance under the agreement, it is valid and enforceable. It matters not 
whether such negligence was the sole cause or concurred with the negligence of 
Northern Production to cause the loss.

[¶30.]  The result of this case furthers two 
important public policies. The first and most important is the freedom of 
persons to contract for legitimate and proper purposes. The second is a policy 
which encourages safety in the work place. Both Cities Service and Northern 
Production have potential liability for injuries to or death of workmen. Having 
this potential liability, each party will have a considerable incentive to avoid 
industrial accidents and injuries. The holding of this court results in each 
party being responsible for its own activities and liable for loss and damage 
caused by its own failure to exercise reasonable care in its operations and 
furthers this beneficial public policy. Guitard v. Gulf Oil Company, 100 N.M. 
358, 670 P.2d 969 (1983).

[¶31.]  Summary judgment, therefore, should not 
have been granted and it is reversed and this case remanded for further 
proceedings consistent with this opinion.

[¶32.]  Reversed and 
remanded.