Opinion ID: 1123491
Heading Depth: 4
Heading Rank: 2

Heading: AS 45.45.900 renders Aetna's claim for indemnity unenforceable

Text: The indemnity clause at issue is unenforceable if it purports to indemnify Wright from the sole negligence or wilful misconduct of [Wright] or [Wright's] agents, servants or independent contractors who are directly responsible to [Wright]. AS 45.45.900. We conclude that Aetna is attempting to seek indemnity for an injury that resulted from Wright's wilful misconduct and sole negligence. Thus, on both of the grounds set forth in AS 45.45.900, we hold the indemnity clause in this case unenforceable. The trial court held the indemnity clause unenforceable because it concluded that Aetna was seeking indemnity for Wright's wilful misconduct. The court based this conclusion on the fact that the jury in the Crane lawsuit found that Wright's behavior constituted grounds for punitive damages. In the words of the jury instruction, Wright's conduct was found to be the result of maliciousness or hostile feelings toward the plaintiff, or ... undertaken with reckless indifference to the interests, rights, or safety of others. Based on this finding of reckless indifference, the lower court ruled that Wright's actions were the equivalent of wilful misconduct. Aetna argues that wilful misconduct is a term inapplicable to Wright because it describes only those tortfeasors who intend harm. We disagree. It is true that [t]he phrase `wilful misconduct' implies intent. However, the intention relates to the misconduct, not to the result, and, therefore, an intent to injure need not be shown. Brockman v. Bell, 78 Ohio App.3d 508, 605 N.E.2d 445, 449 (1992). A number of Alaska cases inferentially support the lower court's holding that actions undertaken with reckless indifference to the interests, rights, and safety of others constitute wilful misconduct. In Van Biene v. ERA Helicopters, Inc., 779 P.2d 315 (Alaska 1989), we held that allegations of wilful misconduct were insufficient to make out a cause of action for an intentional tort. Id. at 318-19. In Korean Air Lines Co. v. State, 779 P.2d 333 (Alaska 1989), we noted that a defendant had been found guilty of wilful misconduct by a jury following this instruction: The defendants' behavior is wilful misconduct if they intentionally performed or failed to perform some act or series of acts either: (1) with knowledge that such act or omission would probably result in injury or damage, or (2) in a manner from which could be implied reckless disregard of the probable consequences of the act or omission. Id. at 337 & n. 3 (emphasis added). Finally, in Borg-Warner Corp. v. Avco Corp., 850 P.2d 628 (Alaska 1993), we termed persuasive the view that in comparative negligence jurisdictions like Alaska, wilful misconduct should be considered a category of misconduct that falls short of being intentional. [10] We held that intentional tortfeasors are those who act with specific intent to cause an injury. We classified wilful and wanton actors as unintentional tortfeasors. Id. at 633. What we have implied in the aforementioned cases, we hold explicitly today in the context of AS 45.45.900: wilful misconduct means volitional action taken either with a knowledge that serious injury to another will probably result, or with wanton and reckless disregard of the possible results. Rost v. United States, 803 F.2d 448, 450 (9th Cir.1986) (quotation omitted). Because Wright was found by a jury to have acted with reckless disregard of Crane's interests and safety, Wright's injurious behavior is properly termed wilful misconduct. Consequently, AS 45.45.900 forbids the indemnity Aetna seeks. Aetna cites Borg-Warner for the proposition that a comprehensive system of comparative negligence should allow for the apportionment of damages in all cases involving misconduct which falls short of being intentional. 850 P.2d at 633 n. 14. From this Aetna infers that AS 45.45.900 should be read to prohibit indemnity only for tortfeasors who ... intended harm. This inference is unwarranted, however. The case at bar does not concern Alaska's comprehensive system of comparative negligence; rather, this case requires us to construe AS 45.45.900, an anti-indemnity statute. In the statute, the legislature chose to disallow indemnification in construction-related contracts where the indemnitee is guilty of wilful misconduct  a term with specific legal meaning that does not require intent to harm. The legislature's authority to enact this provision is not in doubt, and thus we are bound to give effect to this provision in light of our precedents concerning the meaning of the term wilful misconduct. Aetna also argues that because liability for punitive damages can be insured against in Alaska, activity that gives rise to punitive damages should also be subject to indemnification. While it is true, as Aetna notes, that a company can insure itself against punitive damages, it is equally true, under AS 45.45.900, that except in an insurance contract no party in a construction-related contract may obtain indemnity for its sole negligence or wilful misconduct. In other words, Aetna's argument simply ignores the fact that the parameters of indemnity law have been narrowed by the legislature in a way that the parameters of insurance law have not. Since we are obligated to respect this legislated distinction, we must reject Aetna's interpretation of AS 45.45.900. Finally, even if Wright had not engaged in wilful misconduct, we find that AS 45.45.900 would disallow indemnity in this case. Alaska Statute 45.45.900 voids indemnity clauses in construction-related contracts when they purport to indemnify the promisee against liability from the sole negligence of the promisee or the promisee's agents, servants or independent contractors who are directly responsible to the promisee. In this case, the jury found Crane's accident 95% attributable to the negligence of Wright and 5% attributable to the negligence of Crane, who was employed by Wright's subcontractor, Cochran. Since Crane was employed by a subcontractor of Wright, he falls into the category of [Wright's] agents, servants or independent contractors who are directly responsible to [Wright]. [11] AS 45.45.900.