Title: W. R. Hall v. Hampton Roads Sanitation District

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  Hassell, C.J., Lacy, Keenan, Koontz, Lemons, and Agee, 
JJ., and Stephenson, S.J. 
 
W. R. HALL, INC. 
 
OPINION BY 
v.  Record No. 060717 
JUSTICE LAWRENCE L. KOONTZ, JR. 
 
March 2, 2007 
HAMPTON ROADS SANITATION DISTRICT 
 
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK 
Charles D. Griffith, Jr., Judge 
The sole issue in this appeal is whether two indemnification 
provisions in a construction contract are void as against public 
policy insofar as they entitle the indemnitee to be reimbursed by 
the indemnitor for costs and expenses incurred in the defense of 
a personal injury claim by a third party. 
BACKGROUND 
The relevant facts are undisputed.  W. R. Hall, Inc. 
(“W. R. Hall”), a construction company, entered into a contract 
with the Hampton Roads Sanitation District (“HRSD”) whereby 
W. R. Hall would install or replace various sewer lines in the 
City of Norfolk.  One of these sewer lines crossed under a set 
of railroad tracks owned by the Norfolk and Portsmouth Belt Line 
Railroad Company (“Belt Line”).  HRSD had previously obtained 
the authority to install this sewer line on Belt Line’s property 
by means of a utility line agreement between HRSD and Belt Line.  
The utility line agreement contained an indemnity provision 
whereby HRSD agreed to “be responsible for and save harmless 
Belt Line from and against any and all detriment, damages, 
 
 
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losses, claims, demands, suits, costs, or expenses” arising by 
reason of the installation of the sewer line on Belt Line’s 
property. 
On the morning of December 8, 2003, W. R. Hall’s crew was 
in the process of completing the installation of the sewer line 
passing under Belt Line’s railroad tracks.  At that time, a Belt 
Line train was stopped on the tracks separating certain members 
of W. R. Hall’s crew on one side of the tracks from members on 
the other side.  A member of W. R. Hall’s crew, Joshua G. 
Collins, attempted to cross over the tracks between two train 
cars.  The train lurched forward and crushed Collins’ foot 
between two couplings. 
Collins filed a personal injury negligence action against 
Belt Line.  Pursuant to the indemnity provision in the utility 
line agreement between HRSD and Belt Line described above, which 
is not at issue in this appeal, HRSD assumed Belt Line’s defense 
against Collins’ lawsuit, along with all costs and expenses 
attendant thereto.  Subsequently, HRSD demanded that W. R. Hall 
pay the costs and expenses HRSD incurred in defending Collins’ 
 
 
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suit against Belt Line.1  HRSD cited two provisions in its 
contract with W. R. Hall that HRSD claimed entitled it to 
indemnification.  The first of these provisions is set forth in 
Article 6.162 of the contract and states, in relevant part, that: 
[W. R. Hall] shall assume full responsibility for 
any damage to any such land or area [on which the work 
is to be done], or to the owner or occupant thereof or 
of any adjacent land or areas, resulting from the 
performance of the Work.  Should any claim be made by 
any such owner or occupant because of the performance 
of the Work, [W. R. Hall] shall promptly settle with 
such other party by negotiation or otherwise resolve 
the claim by arbitration or other dispute resolution 
proceeding or at law.  [W. R. Hall] shall, to the 
fullest extent permitted by Laws and Regulations, 
indemnify and hold harmless [HRSD] and anyone directly 
or indirectly employed by any of them from and against 
all claims, costs, losses and damages arising out of 
or resulting from any claim or action, legal or 
equitable, brought by any such owner or occupant 
against [HRSD] or any other party indemnified 
hereunder to the extent caused by or based upon [W. R. 
Hall’s] performance of the Work. 
 
The second provision HRSD cited is set forth in Article 6.31 
of the contract and states, in relevant part, that: 
                     
 
1Collins’ lawsuit against Belt Line was stayed pending the 
resolution of HRSD’s indemnity proceeding against W. R. Hall. 
 
2HRSD did not refer to Article 6.16 in its original 
pleading, but the trial court permitted such a reference by a 
subsequent order. 
 
 
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[W. R. Hall] shall indemnify and hold harmless 
[HRSD] against all claims, costs, losses and damages 
. . . caused by, arising out of or resulting from the 
performance of the Work, provided that any such claim, 
cost, loss or damage: (i) is attributable to bodily 
injury, sickness, disease or death . . . and (ii) is 
caused in whole or in part by any negligent act or 
omission of [W. R. Hall], any Subcontractor, any 
Supplier, any person or organization directly or 
indirectly employed by any of them to perform or 
furnish any of the Work or anyone for whose acts any 
of them may be liable, regardless of whether or not 
caused in part by any negligence or omission of a 
person or entity indemnified hereunder. 
 
After W. R. Hall refused HRSD’s demand for indemnity, HRSD 
filed a petition in the trial court requesting a declaratory 
judgment that these contractual indemnity provisions obligated 
W. R. Hall to indemnify and hold harmless HRSD for any and all 
expenses arising from Collins’ lawsuit.  In a responding trial 
brief, W. R. Hall maintained that Articles 6.16 and 6.31 of the 
parties’ contract are not applicable under the facts of this 
case.  W. R. Hall also maintained that these provisions are void 
as against public policy insofar as they apply to personal 
injuries, citing Johnson v. Richmond & Danville R.R. Co., 86 Va. 
975, 978, 11 S.E. 829, 829 (1890) and Hiett v. Lake Barcroft 
Community Ass’n, 244 Va. 191, 196, 418 S.E.2d 894, 897 (1992). 
The trial court held a hearing on the issues of whether the 
contractual indemnity provisions were triggered in this case and, 
if so, whether they were nonetheless void as against public 
policy.  Finding that Article 6.16 and Article 6.31 were 
 
 
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triggered by the facts and circumstances of this case and that 
neither was void as against public policy, the trial court ruled 
that HRSD was entitled to indemnity from W. R. Hall under both 
provisions.3  
Accordingly, the trial court entered an order on January 12, 
2006 requiring that W. R. Hall indemnify HRSD for all expenses, 
damages, attorneys’ fees and costs arising out of Collins’ suit 
against Belt Line.  This appeal followed. 
DISCUSSION 
W. R. Hall’s sole assignment of error asserts that “[t]he 
trial court erred by finding that the indemnification provisions 
contained within the contract between HRSD and [W. R.] Hall are 
not contrary to public policy insofar as they apply to future 
acts of negligence that result in bodily injury.”  Thus, the 
                     
 
3In discussing whether HRSD’s damages were “caused in whole 
or in part by a negligent act or omission of [W. R. Hall]” for 
purposes of Article 6.31, the trial court indicated that Collins 
was negligent for crossing the railroad tracks between the train 
cars and that W. R. Hall was negligent for failing to take 
adequate safety precautions.  Because we are not concerned here 
with the negligence issues that ultimately will be determined in 
Collins’ suit against Belt Line, we express no opinion on these 
issues. 
 
 
 
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applicability of these indemnification provisions to the facts of 
this case are not at issue in this appeal.  Our analysis of the 
enforceability of indemnity provisions pertaining to losses 
arising from personal injury in Estes Express Lines, Inc. v. 
Chopper Express, Inc., 273 Va. ___, ___ S.E.2d ___ (2007) (this 
day decided) is instructive. 
In that case, the plaintiff, Estes Express Lines, was a 
vehicle leasing company that had leased a number of trucks to 
Chopper, a trucking company.  A Chopper employee was subsequently 
injured while using one of the leased trucks and sued Estes and 
another party for negligence.  Estes reached a mediated 
settlement with the injured party.  Id. at ___, ___ S.E.2d at 
___. 
Estes then sought indemnity from Chopper under a provision 
in the lease agreement whereby Chopper agreed to indemnify Estes 
for: 
Any and all loss, cost, claim, expense, cause of 
action, loss of use and liability by reason of injury 
(including death) to persons or damage to property 
arising out of the use, operation, ownership, 
maintenance or control of a [leased] Vehicle whether 
covered by insurance or not, including claims in 
excess of insurance limits and all claims determined 
not to be covered by insurance irrespective of who, 
among [Chopper] or its insurance carrier or others, 
may be the cause for such failure of coverage or 
recovery in excess of coverage. 
 
Id. at ___, ___ S.E.2d at ___. 
 
 
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The trial court sustained a demurrer filed by Chopper, 
accepting Chopper’s contention that, under Johnson and Hiett, an 
indemnity provision whereby a party indemnifies itself against 
liability for personal injury caused by its own future negligence 
is void as against public policy.  We reversed, holding that such 
provisions are not void as against public policy and are 
enforceable.  In doing so, we concluded that since indemnity 
provisions do not bar the injured party from recovery from the 
tortfeasor and that it was unlikely that a party would fail to 
exercise ordinary care based on the mere possibility of 
indemnity, such provisions do not implicate the same public 
policy concerns that counsel against enforcement of the pre-
injury release provisions addressed in Johnson and Hiett.  Id. at 
___, ___ S.E.2d at ___.  Estes, therefore, establishes that a 
contractual provision whereby a party indemnifies itself against 
losses incurred as the result of personal injury caused by its 
own future negligence is enforceable and does not violate the 
public policy of the Commonwealth. 
The only distinction between the principal assertion made by 
the indemnitor in Estes and this case is that here, W. R. Hall 
contends that any indemnity provision entitling a party to be 
indemnified for losses resulting from the negligent infliction of 
personal injuries, even those not caused by or otherwise related 
 
 
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to the indemnitee’s own negligence, are void.  In light of our 
holding in Estes, to accept W. R. Hall’s argument we would have 
to hold that it is not acceptable for a party to indemnify itself 
against losses from personal injury for which it was not at fault 
but is acceptable when the party’s own negligence caused the 
injury.  We will not adopt such an inconsistent position.  Thus, 
we reject W. R. Hall’s argument. 
Turning to the specific indemnity provisions at issue in 
this case, we hold that they are not in violation of any public 
policy of the Commonwealth.  In Article 6.16, W. R. Hall agreed 
to indemnify HRSD for any losses incurred as a result of damage 
to Belt Line or Belt Line’s property.  Clearly, this provision 
was based in part on the fact that W. R. Hall was the party 
actually performing the construction work on Belt Line’s property 
and, thus, was in the best position to prevent damage to Belt 
Line and its property. 
In this case, Collins’ lawsuit against Belt Line caused Belt 
Line to seek indemnity under the utility line agreement in the 
form of HRSD assuming the defense of the lawsuit.  Consequently, 
HRSD sought indemnity from W. R. Hall for the costs and expenses 
of defending the lawsuit.  This series of events was predicated 
upon contractual indemnity provisions negotiated at arm’s length 
and agreed to by the parties.  To the extent that Article 6.16 of 
 
 
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the contract between HRSD and W. R. Hall has been determined to 
be applicable to this factual scenario, it is not repugnant to 
the public policy of the Commonwealth.  See Shuttleworth, Ruloff 
& Giordano, P.C. v. Nutter, 254 Va. 494, 498, 493 S.E.2d 364, 366 
(1997) (“the law looks with favor upon the making of contracts 
between competent parties upon valid consideration and for lawful 
purposes”). 
Article 6.31 of the parties’ contract is also clearly not in 
violation of public policy.  In that provision, W. R. Hall agreed 
to indemnify HRSD for any loss arising out of or resulting from 
the performance of the construction work if such loss was 
attributable to bodily injury and caused, in whole or in part, by 
W. R. Hall’s negligence.  This provision operates to place the 
ultimate burden for a personal injury upon the negligent party 
causing that injury.  The trial court found that negligence by 
W. R. Hall, at least in part, led to Collins’ injury, thus 
triggering Article 6.31 when HRSD subsequently assumed the costs 
and expenses of defending the lawsuit filed by Collins against 
Belt Line.  The operation of Article 6.31 in this manner does not 
constitute a violation of public policy. 
CONCLUSION 
For these reasons, as well as the reasons stated in Estes, 
we reject W. R. Hall’s assertion that a contractual 
 
 
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indemnification provision is void as against public policy 
insofar as it indemnifies a party against liability for future 
acts of negligence causing personal injury.  Accordingly, the 
trial court correctly ruled that the indemnity provisions in 
Article 6.16 and Article 6.31 are not void as against public 
policy and are enforceable.  The judgment of the trial court will 
therefore be affirmed. 
Affirmed.