Opinion ID: 1694040
Heading Depth: 1
Heading Rank: 4

Heading: As to APCo: 1) Subrogation

Text: Although the trial court's order does not state the grounds for its dismissal of APCo, APCo argues that ACCO was not liable to K-C under paragraph 9, the indemnification provision of the agreement between ACCO and K-C, thus preventing ACCO from pursuing APCo under a theory of subrogation. According to that agreement, ACCO is liable to K-C for any loss or damage which [K-C] may incur as a result ... of the act of [ACCO], its employees or agents. Admittedly, Sayers was an independent contractor, and Gramling was his employee. APCo contends that this distinction is dispositive of the subrogation issue, and thus dispositive of the issue of its liability to ACCO. We disagree. While, according to the letter of the indemnification agreement, it is arguable that ACCO is to hold K-C harmless for loss or damage caused by ACCO's employees or agents, the spirit of the agreement is not so limited. Rather, the intent of the agreement is not to limit loss or damage to that caused solely by ACCO's agents or employees, but to include loss or damage incurred by K-C as a result of the act of ACCO in the performance of its contractual obligations to K-C. Indeed, it is unreasonable to speculate that ACCO could have successfully defended a claim for indemnity by K-C for the loss here in question on the ground that Sayers was an independent contractor and not its employee. Particularly is this true where, as here, ACCO's liability, pursuant to the terms of indemnity, is not predicated upon ACCO's culpable conduct. For purposes of K-C's enforcement of the indemnity agreement, any loss or damage which [K-C] may incur as a result ... of the act of [ACCO] is the same, in legal terms, whether the power outage was caused by ACCO's employee, while cleaning out ACCO's ponds, or by an independent contractor engaged by ACCO for that purpose. Whatever legal significance may attach to the employee/independent contractor distinction in other contexts, in the instant context it is a distinction without a difference. Furthermore, beyond the narrow language of the indemnity agreement, ACCO rests its theory of subrogation on the principles enunciated in American Southern Insurance Co. v. Dime Taxi Service, Inc., 275 Ala. 51, 151 So.2d 783 (1963). Dime Taxi involved the liability of a taxi company for damages sustained by a passenger in an accident caused by the negligence of the taxi company's driver. The taxi company was liable because of the negligence of its driver, and the Court allowed the employer to be subrogated to the rights of the injured party against the driver, its own employee, and the driver's insurer. 275 Ala. at 56, 151 So.2d at 786. While Dime Taxi 's theory of subrogation is limited, of course, to the factual context of that casea master/servant relationwe cannot so limit the rule's application. The Dime Taxi principle of subrogation is equally applicable here. When one, under a claim of right, discharges an obligation for which another should be held legally liable for payment, then the former stands in the shoes of the obligor and may seek reimbursement against the latter for the damages caused by its allegedly culpable conduct. At any rate, K-C did, in fact, assert its claim (albeit informally) against ACCO, pursuant to the indemnity agreement; and ACCO, consistent with K-C's interpretation of that agreement, paid the claim. Therefore, APCo is without standing to contest ACCO's status as subrogee on the ground that ACCO was not obligated to pay K-C's loss under the terms of the indemnity agreement. Because of ACCO's payment to K-C under the indemnity agreement, we hold that ACCO is entitled to stand in the shoes of K-C against APCo. This is not to say, of course, that ACCO, by its payment, enhanced its position over that held by K-C in the pursuit of its claims against either of the alleged joint tortfeasors. In its claims against each of the Defendants, ACCO's plaintiff status is no better or no worse than that of the party in whose shoes it now stands.