No. 14832 IN THE SUPREME COURT OF THE STATE OF MONTANA 1979

HOWARD S. WRIGHT CONSTRUCTION COMPANY, aWashington Corporation,and SAFECO INSURANCE COMPANYI Plaintiffsand Respondents,

F. E. DeBEER MECHANICAL CONSTRUCTION COMPANY, et al., Defendantsand Appellants.
Appeal from: District Court of the Fifth JudicialDistrict, 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

## 31l!jC@ Filed: 

## G~CQ~@JMr. Justice John C. Sheehy delivered the Opinion of the Court.
This appeal isby 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 contractwith Howard S. Wright Construction Company (Wright) whereby Wright became the general contractor for the construction of the condominiums. Wright entered into a subcontractwith 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 towriting 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 connectionwith, or incident to the SUBCONTRACTOR'S performance of this SUBCONTRACT." Regene Shannonwas a plumber employed by DeBeer. On October 

### 4, 1973, Shannon arrived for work at Building B of the Stillwater Condominiums. Shannonwas 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 Shannonwas attempting to gain access through a second floor window, his ladder slippedand 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 "stipulationof dismissal" with DeBeer onNovember 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 Shannonv. Howard S. Wright Const. Co. (1979), Mont

# . , 593 P.2d 438, 36 St.Rep. 632. Wright and its insurerpaid 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 DeBeerwas required to indemnifyWright based upon an indemnity provision contained in the subcontract, and (2)that DeBeer breached
a provision of the subcontractby 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 indemnityprovision 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'sportion of the personal injury judgment? Recently, this Courtheld that an employerwho had paid an employer benefits pursuant to aWorkers' 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 inwhich therewas "some other legal transaction" between the parties. Cordier v. Stetson-Ross, Inc. (1979)

### , Mont. I- P.2d I

In the present case there is "someother legal transaction" consisting of a contract of indemnitywhich includes not only the negligent acts of DeBeer but also those of Wright. Under Ballard v. Vollestedt Kerr Lumber Company (1973),163Mont. 324, 517 P.2d 349, this clause can be enforced. As to the second issue, if the indemnityprovision is broad enough, as appears here, to include the negligent acts of Wright, itmakes no difference if Wright was actively or passively negligent. "Withrespect 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. GreatNorthern Railway Companyv. -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 indemnitybased 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 covenantnot 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 againstWright and Big Sky and does not involve a comparative negligence situation. As a result, a right to contributiondoes not arise and in any event DeBeer has no standing to raise such an issue. See Consolidated FreightwaysCorporation v. Osier (19791, Mont

# . 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