No. 14832 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1979 

HOWARD S. WRIGHT CONSTRUCTION COMPANY, 

a Washington Corporation, and SAFECO 

INSURANCE COMPANY I 

Plaintiffs and Respondents, 

F. E. DeBEER MECHANICAL CONSTRUCTION 

COMPANY, et al., 

Defendants and Appellants. 

Appeal from: District Court of the Fifth Judicial District, 

Honorable Frank E. Blair, Judge Presiding. 

Counsel of Record: 

For Appellants: 

Berg, Angel, Morgan and Coil, Bozeman, Montana 

Ben Berg argued, Bozeman, Montana 

For Respondents: 

Brown, Pepper and Kommers, Bozeman, Montana 

Gene Brown argued, Bozeman, Montana 

Submitted: December 12, 1979 

Decided : DEC 31 l!jC@ 

Filed: G~CQ~@J 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

This appeal is by DeBeer Mechanical Construction Company 

from a judgment entered against it in the Fifth Judicial 

District, Madison County. 

Big Sky of Montana, Inc. (Big Sky) is the developer of 

a condominium project known as Stillwater Condominiums 

located in Madison County, Montana. By written contract 

dated April 19, 1973, Big Sky entered into a contract with 

Howard S. Wright Construction Company (Wright) whereby 

Wright became the general contractor for the construction of 

the condominiums. 

Wright entered into a subcontract with F. E. DeBeer 

Mechanical Construction Company (DeBeer) under the terms of 

which DeBeer was to do the plumbing and mechanical work on 

the condominiums. DeBeer commenced work under a verbal 

agreement during the spring of 1973. The verbal agreement 

was reduced to writing on August 15, 1973. The subcontract 

between Wright and DeBeer contains an indemnity provision as 

follows: 

"(1) To indemnify and save harmless the CONTRACTOR 

from and against any and all suits, claims, actions, 

losses, costs, penalties, and damages, of whatsoever 

kind or nature, including attorney's fees, arising 

out of, in connection with, or incident to the SUBCONTRACTOR'S performance of this SUBCONTRACT." 

Regene Shannon was a plumber employed by DeBeer. On 

October 4, 1973, Shannon arrived for work at Building B of the 

Stillwater Condominiums. Shannon was scheduled to work on the 

second floor of the building, but Wright had failed to provide 

access to the second floor. Wright had transferred its framing 

crew to another project at Big Sky. While Shannon was attempting 

to gain access through a second floor window, his ladder slipped 
and Shannon fell to the ground suffering severe injuries to 

his right ankle. 

Shannon filed a personal injury suit against Wright, DeBeer and Big Sky on October 3, 1975. During the course of the 

suit Shannon entered into a "stipulation of dismissal" with 

DeBeer on November 9, 1977 in consideration of payment of $3,000 

by DeBeer. Continuing the cause against Wright and Big Sky, 

Shannon obtained judgment against both in the amount of $250,000. 

The case was appealed and affirmed by this Court in Shannon v. 

Howard S. Wright Const. Co. (1979), Mont . , 593 P.2d 

438, 36 St.Rep. 632. Wright and its insurer paid the full amount 

of the judgment and did not seek contribution from Big Sky. 

Subsequently Wright brought this declaratory judgment action 

attempting to place the ultimate responsibility for the personal 

injury judgment on DeBeer and its insurers. Two claims for 

relief were alleged in Wright's amended complaint: (1) that 

DeBeer was required to indemnify Wright based upon an indemnity 

provision contained in the subcontract, and (2) that DeBeer breached 

a provision of the subcontract by not having Wright named as an 

additional insured on DeBeer's insurance coverage. 

Trial was held on September 25, 1978, and the District Court 

entered judgment in favor of Wright on January 19, 1979. The 

District Court concluded that Wright was passively negligent and 

that the indemnity clause in the subcontract is clear, unambiguous 

and intended to cover - all suits. It therefore rendered DeBeer 

liable to indemnify Wright. 

It is from this judgment DeBeer appeals setting forth the 

following issues for our review: 

(1) Does the indemnity provision in the subcontract protect 

Wright, the indemnitee, from its own negligence? 
(2) Was Wright, the indemnitee, actively negligent? 

(3) Can DeBeer be required to pay Big Sky's portion of 

the personal injury judgment? 

Recently, this Court held that an employer who had paid 

an employer benefits pursuant to a Workers' Compensation claim 

is not subject to further liability arising out of the injuries 

of the employee as to a third party claiming contribution for 

indemnity from the same industrial accident. However we expressly 

excluded from that rule those cases in which there was "some 

other legal transaction" between the parties. Cordier v. 

Stetson-Ross, Inc. (1979) , Mont. I- P.2d I 

In the present case there is "some other legal transaction" 

consisting of a contract of indemnity which includes not only 

the negligent acts of DeBeer but also those of Wright. Under 

Ballard v. Vollestedt Kerr Lumber Company (1973), 163 Mont. 324, 

517 P.2d 349, this clause can be enforced. 

As to the second issue, if the indemnity provision is broad 

enough, as appears here, to include the negligent acts of Wright, 

it makes no difference if Wright was actively or passively 

negligent. 

"With respect to an indemnification claim based 

on a tort, resort can be had to consideration of 

whether the negligence of each is 'active' or 

'passive', or 'primary' or 'secondary', to determine 

whether the difference in the gravity of the fault 

of the participants is sufficient to justify burdening 

one party with the entire loss. Great Northern 

Railway Company v. - United States (D. Mont. 1960). 187 F. 

Supp. 690, 693; Fletcher v. City - of Helena (1973), 

163 Mont. 337, 517 P.2d 365. 

"However, these cases do not apply to a theory of 

indemnity based upon contract. In an indemnity 

action arising out of contract, the 'application of 

the theories of "active" or "passive" as well as 

"primary" and "secondary" negligence is inappropriate.' 

Weyerhaeuser --- S.S. Co. v. Nacirema Operating Co. (1958). 

355 U.S. 563, 569, 78 S.Ct. 438, 442, 2 L ~dx 491, 

495; -- Hill v. George Engine Company (D. La. 1961) , 190 

F.Supp. 417." Ferguson v. Town Pump, Inc. (1978), 

Mont. , 580 P.2d 915, 920, 35 St.Rep. 824, 830. 
Since a separate contractual agreement does exist in the 

present case, this degree of negligence rule is not applicable. 

As for the covenant not to sue, it only protects DeBeer 

from any further action by Shannon relating to the same accident. 

The right of Wright to collect on the indemnity clause cannot 

be affected by a contract between other parties (i.e. Shannon 

and DeBeers) . 

This same reasoning resolves the last issue. Irrespective 

of which of the two parties in fact paid the full amount of 

the judgment, the judgment in this case is against Wright and 

Big Sky and does not involve a comparative negligence situation. 

As a result, a right to contribution does not arise and in 

any event DeBeer has no standing to raise such an issue. 

See Consolidated Freightways Corporation v. Osier (19791, 

Mon t . I P.2d , 36 St.Rep. 1810; Panasuk 

v. Seaton (D. Mont. 19681, 277 F.Supp. 979. 

The decision of the District Court is affirmed. 

Justice 

We Concur: 

Chief Justice /' fJustices