Court Opinion

ID: 5173986
Source: CourtListenerOpinion
Date Created: 2022-01-02 05:16:58.350162+00
Date Added: 2024-06-11T08:24:29.344583
License: Public Domain

BOYLE, Justice,
concurring in the result as to Part IV and dissenting as to Part VII.
I concur with Parts I, II, III, V, and VI of the majority opinion. However, I write separately to record the basis for my limited concurrence in Part IV. I also write separately to record my dissent as to Part VII of the majority opinion.
Part IV of the opinion comes to the correct conclusion but, in my view, it does so for the wrong reason. The opinion states *719that “even if an unnamed party who allegedly removed the lighted barricade from the site of the excavation had been included on the verdict form, all of the named defendants would have been liable to Beitzel.” 121 Idaho at 713, 827 P.2d at 1164. This rationale is problematic because there is no way of knowing the validity of the statement until after the issue has gone to the jury. Moreover, it is equally possible that if an unknown defendant had been placed on the verdict form, the jury might have rendered a verdict finding that the unknown defendant was partially or entirely responsible for the accident. Because a trial court must determine whether to include an unnamed party before the jury renders its verdict, this analysis does not provide the correct perspective.
In my view, the correct rationale for not including an unknown defendant on the special verdict form is simply that the “facts” surrounding the alleged unknown defendant in the instant action are wholly speculative. In the cases cited by the majority opinion where a non-party was or should have been placed on the verdict form witnesses were available to testify as to the conduct of the non-party. While the non-party was not amenable to suit in those other cases, there was still testimony or evidence about that person’s actions and identity. See, e.g., Hickman v. Fraternal Order of Eagles, 114 Idaho 545, 758 P.2d 704 (1988). Here there is neither. The person allegedly involved is unknown and there is no testimony about the removal of the barricades. The defendants should carry the burden of producing such evidence because they had a duty to maintain the barricade and provide inspection over the weekend. Further, it is possible that any number of individuals, including their own employees, could have removed the barricades. It is simply too easy for the defendants to blame an unknown person and thereby attempt to transfer the blame for failure to properly barricade the construction site. Therefore, because the defendants produced no testimony other than speculation that someone other than themselves removed the barricades, an unknown person under these circumstances should not be included as a defendant on the special verdict form.
Part VII concludes that the indemnification agreement between GTNW and Orton was valid and that CDAA must indemnify the city of Coeur d’Alene and GTNW on common law indemnity principles. I cannot agree with these conclusions and respectfully dissent.
The first portion of Part VII of the majority opinion concludes that the contractual indemnity provision requires Orton to indemnify GTNW for the combined negligence of all parties that contributed to the plaintiff’s harm. The majority makes this conclusion while acknowledging that “[tjhere is no specific provision in the [indemnification] clause requiring Orton to indemnify GTNW for the negligence of the city and CDAA.” 121 Idaho at 715-716, 827 P.2d at 1166-1167. Nevertheless, the majority concludes that the phrase “the work” was intended by the parties to demonstrate that Orton had assumed responsibility for the “loss caused in whole or in part by others, such as the city and CDAA.” 121 Idaho at 716, 827 P.2d at 1167. The majority offers no support for this conclusion except to state that it can think of no reason to suppose that this is not what the parties contemplated when they entered into their contract. Id. After reviewing this contractual provision I must respectfully disagree.
The presumption must always be when interpreting contracts that a party does not intend to assume the risks of third parties, especially parties not under its control, unless it is done by explicit language. Here the agreement is solely between GTNW and Orton and there is not the slightest hint that Orton intended to assume responsibility for any other party’s negligence including that of the city or CDAA. The last clause of paragraph sixteen of the contract, limiting Orton’s responsibility when damage is caused by GTNW’s negligence, demonstrates that Orton did not intend to assume all responsibility for harm associated with “the work” of the contract.
A better interpretation of paragraph sixteen of the contract is that Orton would *720assume responsibility for that portion of fault that GTNW was required to pay but for which Orton was at fault. Such an interpretation comports with the words of the indemnification clause and avoids the restrictions of I.C. § 29-114 discussed hereafter. The majority’s conclusion which simply assumes that the phrase “the work” was intended by Orton to be an assumption of all other parties’ negligence is not supported by the record.
Aside from the question of which contractual interpretation is more faithful to the parties’ original intent is the more fundamental question of who should make this determination. While in my view the interpretation I suggest above is clear, at a minimum it serves to illustrate that the majority’s interpretation is subject to considerable doubt. The interpretation of an ambiguous contract has always been a fact question for the trier of fact and is not determined on appeal. See Ramco v. H-K Contractors, Inc., 118 Idaho 108, 794 P.2d 1381 (1990); Luzar v. Western Surety Co., 107 Idaho 693, 692 P.2d 337 (1984); International Engineering Co. v. Daum Industries, 102 Idaho 363, 630 P.2d 155 (1981). Moreover, we have long declined to address arguments not presented at trial. See, e.g., Kinsela v. State Dep’t of Finance, 117 Idaho 632, 790 P.2d 1388 (1990). However, in this case there was no evidence presented to the jury on the interpretation of the indemnification clause of the contract between Orton and GTNW. Not a single witness testified as to the meaning of the indemnification clause. Therefore, it is troubling to me that in this case the Court not only addresses an issue not considered by the jury but also seeks to resolve factual questions as well. While the majority argues that equitable indemnification was presented to the jury via a portion of one of the jury instructions, the contractual indemnification issue was a fact question that was not presented nor decided by the jury. In my view, this Court should avoid resolving the factual question about whether Orton intended to assume responsibility for all potential third parties by the contractual reference to “the work” found dis-positive by the majority.
After deciding the factual interpretation of the contract the majority then reaches out to interpret I.C. § 29-114. While, in my view, this question is not properly before this Court, because it is addressed by the majority I feel it necessary to present my views and address this issue. If we were to assume that the majority properly interpreted the indemnification clause of the contract and that Orton deliberately chose to assume responsibility for all other parties’ negligence, I.C. § 29-114 would make such an agreement void and unenforceable. The majority limits the “sole negligence” clause of I.C. § 29-114 so that it voids only those contracts in which one-hundred percent of the harm is caused by the promisee and his agents, employees or indemnitees. Because the city is not an indemnitee of GTNW the majority concludes that the statute is inapplicable. This reading of the statute voids its purpose and ignores its clear language.
Idaho Code § 29-114 voids indemnification agreements, for the narrow class of contracts specified therein, to the extent that they apportion liability out of proportion to fault. Properly understood, I.C. § 29-114 clearly states that an agreement related to highway alteration or repair that purports to indemnify the promisee for damage caused by either the promisee or the promisee’s agents or the promisee’s employees or the promisee’s indemnitees “is against public policy and is void and unenforceable.” I.C. § 29-114.
The clear purpose of this provision is that while a promisee may enforce an indemnity agreement if the promisee is saddled with financial responsibility that exceeds its fault, the promisor cannot be held responsible for the fault of the others. The obvious rationale for this statutory provision is that to allow such indemnification agreements would shift responsibility for the harm away from a party who contributed to the harm. While this rationale could be debated, we unanimously accepted it in Borchard v. Wefco, Inc., 112 Idaho 555, 733 P.2d 776 (1987). In the context of a retailer and manufacturer we concluded:
*721Therefore, a retailer must be free of liability in order to receive indemnity either under a general indemnity agreement or under implied indemnity. INA Ins. Co. v. Valley Forge Ins. Co., 150 Ariz. 248, 722 P.2d 975, 982 (App.1986). This principle receives ample support in case law. May Trucking Co. v. International Harvester Co., 97 Idaho 319, 543 P.2d 1159 (1975); Industrial Indem. Co. v. Columbia Basin Steel & Iron, Inc., 93 Idaho 719, 471 P.2d 574 (1970); Prickett v. Hawkeye Security Ins. Co., 282 F.2d 294 (10th Cir.1960); Allied Mut. Casualty Corp. v. General Motor Corp., 279 F.2d 455 (10th Cir.1960).
Borchard, 112 Idaho at 558, 733 P.2d at 779. Therefore, we should not ignore the legislature’s clear policy choice in the field of construction activities.
Applying I.C. § 29-114 to this case, if GTNW were to pay the entire damage award, it could seek indemnification under the contract for that portion of fault allocated to Orton by the jury. However, GTNW could not force Orton to pay for GTNW’s own fault and surely could not seek indemnification from Orton for the fault of other third parties such as the city and CDAA. Even if Orton had agreed to assume responsibility for all parties associated with “the work,” (a proposition which I find untenable) it is clear that the statute would void any attempt to force Orton to pay for the fault of the city, GTNW and CDAA. Accordingly, I respectfully dissent from the majority’s holding that the indemnity agreement makes Orton liable for the combined negligence of all of the defendants in this case.
Having concluded that the purported indemnity agreement between Orton and GTNW is unenforceable, the next issue to which I take exception is whether the district court erred in concluding that the city and GTNW were not entitled to equitable indemnity. A majority of the Court concludes that the district court erred. I respectfully disagree.
As its name suggests, the doctrine of equitable indemnity is intended to promote equity and fairness because it “refers to those situations where a person who without fault on his part is compelled to pay damages occasioned by the negligence of another.” May Trucking Co. v. International Harvester Co., 97 Idaho 319, 321, 543 P.2d 1159, 1161 (1975) (emphasis added) (citations omitted). The majority acknowledges the rule of law that a party is only entitled to equitable indemnity if they are without fault. See 121 Idaho at 717, 827 P.2d at 1168 (quoting Industrial Indemnity Co. v. Columbia Basin Steel & Iron Inc., 93 Idaho 719, 723, 471 P.2d 574, 578 (1970)). However, the majority takes admitted dicta out of context in two older cases to support its point. See 121 Idaho at 717, 827 P.2d at 1168 (quoting Baillie v. City of Wallace, 24 Idaho 706, 718, 135 P. 850, 854 (1913) and Williams v. Johnston, 92 Idaho 292, 442 P.2d 178 (1968)). Both of the quotations used by the majority are correct when understood in context, but here they haye been presented out of context to give a meaning that, in my view, was not intended.
In Williams the Court addressed the issue of whether an out-of-court settlement constituted the derivative liability that is necessary for an equitable indemnity claim. In holding that the settlement at issue did constitute an example of derivative liability, we followed the long established rule that a party seeking equitable indemnity must be without fault because the jury in Williams found the two parties claiming subrogation to be “free from any negligence as to the plaintiff.” Williams, 92 Idaho at 296. The Baillie quote should also be understood in the following way. If a city has derivative liability for the injuries of another, they may be entitled to equitable indemnification but only if the city is without fault. See Baillie, 24 Idaho at 718, 442 P.2d 178.
The majority points out that various types of derivative liability, including passive neglect, secondary duty, or vicarious liability may establish the legal liability of a party who is without fault. 121 Idaho at 717, 827 P.2d at 1168 (quoting May Trucking Co. v. International Harvester Co., 97 *722Idaho 319, 321, 543 P.2d 1159, 1161 (1975)). However, only when a party shares derivative liability and yet is without fault is that party entitled to equitable indemnity. By failing to acknowledge this distinction, the majority’s holding has the effect of eliminating the long established “without fault” requirement to allow indemnification even when both parties are at fault.
The majority seeks to avoid this characterization of its holding by implying that the fault of the city and GTNW, on the one hand, and Orton and CDAA, on the other, is not “equal in grade and similar in character.” 121 Idaho at 717-718, 827 P.2d at 1168-1169 (quoting Borckard v. Wefco, Inc., 112 Idaho 555, 733 P.2d 776 (1987)). However, the determination of whether a party is without fault or whether it shares fault that “is equal in grade or similar in character” to the other parties’ fault is a fact question. 121 Idaho at 717, 827 P.2d at 1168 (quoting Borchard v. Wefco, Inc., 112 Idaho 555, 733 P.2d 776 (1987)). Fault is crucial to the determination of equitable indemnity because “no one should be permitted to base a cause of action on [that party’s] own wrong. Thus, the determination of whether or not indemnity should be allowed must of necessity depend upon the facts of each case.” Id.
Nevertheless, the majority again determines the facts of this case by concluding that “[t]he negligence of the city and GTNW in failing to discover or remedy any defect in the street or any inadequacy in warning of any defect caused by Orton or CDAA was not similar in character to the negligence of CDAA.” 121 Idaho at 718, 827 P.2d at 1169. Clearly such a factual finding is not the province of this Court. Moreover, it directly contradicts the finding of the district court who has exclusive province over factual determinations.
The district court addressed the indemnification cross-claim of GTNW and the city by noting that “[sjpecific instructions on the cross-claim and/or indemnification were not given at the trial. An instruction submitted by Defendants [GTNW] and City regarding the cross-claim was withdrawn. The special verdict form submitted by Defendants [GTNW] and City did not address the cross-claim.” The district court concluded:
After reviewing the instructions and the verdict, this Court concludes that there was no specific finding by the jury on indemnification nor can any assumption be made about the jury’s intentions with respect to indemnification. Rather, the special verdict form apportions fault based upon the independent negligence of each of the Defendants. The issue of indemnity as set forth in the Cross-claim was not presented to the jury by instruction or on the verdict form.
R. at 349.
Not only is it impermissible for this Court to make finding of fact, we have repeatedly held that issues not raised at trial will not be considered on appeal. See, e.g., Kinsela v. State Dep’t of Finance, 117 Idaho 632, 790 P.2d 1388 (1990). Here the issue of indemnification was not raised by GTNW and the city until they filed their post-trial motions. Because indemnification was not raised at trial the only remedy available to the city and GTNW is by way of their new trial motion. The majority correctly concludes in Part V of the opinion that there was no error in denying the motion for a new trial. Therefore, this Court should not reach an issue not raised at trial and therefore not properly before us.
Even if we could reach this factual issue, the Court’s conclusion that the negligence of the city and GTNW was not “equal in grade or similar in character” to that of Orton and CDAA, in my view, is incorrect. As the district court noted, the jury was asked to find the independent negligence of each of the parties. The jury did so and assessed a higher percentage of negligence to the city and to GTNW individually than to either Orton or CDAA. Moreover, as the grade and character of the parties’ negligence was before the jury, our role on appeal is simply to determine whether there is substantial evidence to support the conflicting evidence presented at trial. The majority opinion correctly notes that “[t]he city and GTNW each had an inspector to *723inspect the work on the project,” 121 Idaho at 711, 827 P.2d at 1162, both the city and GTNW had a nondelegable duty to “place and maintain traffic control devices necessary to regulate, warn or guide traffic in the construction area,” 121 Idaho at 712, 827 P.2d at 1163, “GTNW’s inspector did not work on the Friday, Saturday, or Sunday preceding Beitzel’s accident,” id., and the city’s “inspector was not expected to make regular trips to the site of the excavation” and did not do so, 121 Idaho at 712, 827 P.2d at 1163. Therefore, in my view, there was substantial evidence to conclude that the city and GTNW were not without fault and should be responsible for their respective contribution to the plaintiff’s harm.
Accordingly, I would affirm the district court.