Title: Butters v. Consolidated Transfer & Warehouse Co., Inc.

State: kansas

Issuer: Kansas Supreme Court

Document:

212 Kan. 284 (1973)
510 P.2d 1269
KENNETH R. BUTTERS, ELMA BUTTERS and CITY OF INDEPENDENCE, MISSOURI, a municipal corporation, Appellants,
v.
CONSOLIDATED TRANSFER AND WAREHOUSE COMPANY, INC., Appellee.
No. 46,794

Supreme Court of Kansas.
Opinion filed June 9, 1973.
J.D. Lysaught, of Weeks, Thomas, Lysaught, Bingham & Johnston, Chartered, of Kansas City, argued the cause, and Thomas D. Cochran, of Independence, Missouri, was with him on the brief for appellants.
N. Jack Brown, of Boddington, Brown & Unverferth, of Kansas City, argued the cause, and Roy A. Larson, Jr., of Sprinkle, Carter, Lawson & Hanna, of Kansas City, Missouri, was with him on the brief for appellee.
The opinion of the court was delivered by
FATZER, C.J.:
This is an appeal from a summary judgment denying relief under a "hold harmless" agreement.
The city of Independence, Missouri, owns and operates a power and light department as a public utility engaged in the proprietary function of purchasing electric power for distribution to customers. In connection therewith it owned, controlled, and operated an electric transformer substation located at 34th Street and Kiger Road.
On or about July 12, 1968, Consolidated Transfer and Warehouse *285 Company, Inc. (Consolidated) was performing heavy hauling work for the city of Independence (city), and was specifically engaged in delivering a large electric transformer to the substation mentioned. The contract governing the performance of the work provided, in part:
John Jamieson; an engineer for the city of the last eight years, including the time covered by the accident in question, was familiar with the National Electric Safety Code followed as a rule book or guide by the city employees. These safety standards required that unqualified workmen and visitors, unqualified employees or visitors and workmen whose employment incidentally brought them into the vicinity of electrical supply equipment to be accompanied by a qualified employee to provide suitable safeguards and instructions.
At the time of the accident in question, wherein Consolidated was attempting to deliver the transformer to the substation, the foreman in charge of the substation was Leo F. Hoyle. As foreman, Hoyle was not familiar with the safety rules or regulations with respect to the usage of a crane in or about an energized substation, although he was generally aware that unqualified persons were not to be allowed in the substation. As foreman of the substation Hoyle failed to warn any of the employees of Consolidated of the existence or the voltage of the power lines, and admitted there were no warning signs on or about the power lines. Further, Hoyle left the substation before the arrival of Consolidated's employees and took with him the only other city employee at the substation.
When the employees of Consolidated arrived with the crane and transformer at the unmanned substation they were unaware that if the boom of the power crane came closer than two and a half or three feet to the 69,000 volt conductor existing at the station in question, this would cause "arcing." While Kenneth Butters was unhooking the "whip line" it swung out away from the bumper *286 and as he saw the whip line coming back toward him, he grabbed it with his left hand, receiving an electrical shock injuring his body.
As a result of the injuries sustained by Kenneth, he and his wife, Elma Butters, residents of Wyandotte County, Kansas, instituted an action for damages against the city and Olinger Heavy Hauling Service (Olinger) and added Evans as an additional defendant. Thereafter, Olinger impleaded Consolidated as a third party defendant and the city made a third party claim against Consolidated, cross claiming Evans and Olinger.
Thereafter, the Butters entered into an agreement with the city, whereby the city paid the Butters the sum of $25,000 and the Butters acknowledged that they were making claim against the city, Olinger and Evans and that in the event they recovered judgments against the city, execution thereon would be limited to all proceeds, claims and rights in contract and in tort of certain specified insurance companies and written contracts of indemnity and all indemnifications, whether in contract or in tort (whether written, oral, implied or arising by operation of law) between the city and Evans, Consolidated and any subsidiary or agent except Olinger, and that the city would assign such rights of indemnity, if any, to Butters.
Kenneth, being an employee of Consolidated, had previously filed for and received workmen's compensation from Consolidated, under the laws of the State of Missouri in the amount of $40,877.43.
On January 28, 1971, the Thursday before this case was to commence trial on Monday, Butters proceeded to put on evidence in a default proceeding against the city under the agreement reached with the city hereinbefore mentioned. The attorneys for the other interested parties, having previous knowledge of the intention of Butters and his attorneys, were present at those default proceedings and attempted to participate therein in order to protect the interest of their respective clients. At that time, in order to protect the parties not allowed to participate, the Missouri court ruled that any determination in favor of the Butters and against the city would not be binding on the other parties, including Consolidated. Butters then proceeded to present evidence and argument in support of his damages in this default proceeding against the city, and at the conclusion of the trial, the court took the matter under advisement and on April 8, 1971, entered its judgment in favor of Kenneth Butters in the sum of $250,000 and in favor of Elma Butters in the sum of $50,000 and against the city.
*287 On April 21, 1971, the city voluntarily dismissed the Missouri action as to defendants Evans and Consolidated; Olinger had previously been dismissed from the Missouri action as a result of a settlement reached with Butters.
Thereafter, pursuant to its agreement, the city assigned to the Butters its right of indemnity against Consolidated. The action which we are now considering was filed by the city and the Butters, claiming Butters to be the assignee of the city's rights against Consolidated under the indemnity agreement.
Consolidated filed motions to dismiss both as to the city and the Butters. The pleadings, transcript, and journal entry in the Missouri default proceedings were submitted to the district court. The district court treated the motions to dismiss as motions for summary judgment. Without setting out all the grounds for dismissal, it will suffice to say that the district court found the actions were barred by the Workmen's Compensation Act and the Statute of Limitations, and further found:
The appellants challenge the conclusions of the district court.
We first consider the district court's conclusion that the indemnity agreement could not be enforced because of the negligence of the city. Inherent in this proposition are two questions:
1. Was the liability of the city to the Butters founded on negligence?
2. If the first question is answered in the affirmative, did the indemnity agreement cover the city's liability for its own negligence?
We are forced to conclude that the Butters' claim against the city was based on the negligence of the city.
We quote in part from the allegations of the petition in Butters v. *288 City of Independence Missouri and Olinger Heavy Hauling Service, in which the default judgment was obtained:
In Loan Co. v. Marks, 59 Kan. 230, 52 Pac. 449, we held:
The transcript of proceedings in the Missouri action contained the following:
..............
The following is also found in the stipulated record on appeal:
At the time of Butters' injury, Hoyle was substation foreman for I substation for the Power and Light Department of the city, although he stated he was actually employed by Evans Electric. After October 5, 1969, he has been working directly for the city, receiving his wages directly from the city. He testified that "we" were building an addition to the existing substation by adding a transformer to double the capacity of the substation, but that at the time of the accident, there was no one present at the substation who was employed either by Evans Electric or the city. That as foreman of the substation, Hoyle failed to point out to the employees of Consolidated the existence or the voltage of the power lines over the driveway and admitted there were no warning signs on the line or on the pole. He stated he was not familiar with one single safety rule or regulation with respect to the usage of a crane in or about an energized substation. Hoyle further testified there was a rule or regulation to the effect that unqualified persons were not to be allowed into the substation. He further stated that when he left the substation, before the arrival of Consolidated's employees, he took with him the only other city employee at the substation.
Inter-departmental correspondence of the city to its employees concerning substation procedure, admitted in evidence in the Missouri action, is summarized as follows: That to protect its employees and outside contractors from serious accidents in substations, those contractors and employees who were not familiar with substation equipment would not be allowed to enter a substation without having been notified by the substation crew foreman, and that the substation foreman would provide an employee to be present while the outside contractor or employee were completing their work.
We are of the opinion the agreement for indemnification does not include the duty to indemnify against the city's own negligence.
It would appear that an overwhelming majority of jurisdictions adhere to the general rule requiring an unequivocal expression of intent before allowing indemnity for the indemnitee's own negligence. *290 In 41 Am.Jur.2d, Indemnity, Sec. 15, p. 699, the rule is stated:
The law of Missouri which would appear to govern this controversy follows the same general rule. In Kansas City Power & Light Co. v. Federal Const. Corp., 351 S.W.2d 741, the rule of the Missouri Supreme Court is announced in headnotes 2, 3 and 4, as follows:
This court does not appear to have had occasion to pass on a "hold harmless" agreement such as the one before us. However, *291 the federal courts follow the general rule announced. (Brogdon v. Southern Railway Company, 384 F.2d 220.)
The indemnity or "hold harmless" agreement does not show an intention to indemnify the indemnitee against loss resulting from its own negligent acts expressed in clear and unequivocal terms, or even necessarily indicate it.
What has been said disposes of this controversy and the other questions do not require consideration.
The judgment is affirmed.
FROMME, J., not participating.