Court Opinion

ID: 4542030
Source: CourtListenerOpinion
Date Created: 2020-06-17 16:04:37.830661+00
Date Added: 2024-06-11T12:47:06.176149
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 19-1611
                              Filed June 17, 2020

FIDEL TAYLOR,
     Plaintiff-Appellant,

vs.

GAZETTE COMMUNICATIONS, INC. d/b/a COLOR WEB PRINTERS, INC.,
     Defendant-Appellee.
________________________________________________________________

      Appeal from the Iowa District Court for Linn County, Sean W. McPartland,

Judge.

      A worker appeals from the district court’s order granting summary judgment

and dismissing his claim. AFFIRMED.

      J. Richard. Johnson of Johnson & Legislador, P.L.C., Cedar Rapids, for

appellant.

      Janice M. Thomas and Thomas M. Boes (until withdrawal) of Bradshaw,

Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellee.

      Considered by Bower, C.J., and Doyle and Schumacher, JJ.
                                         2

SCHUMACHER, Judge.

       After using a labor broker for employment with a commercial printing

company, the plaintiff was injured while working with a printing machine. He made

a claim for workers’ compensation benefits and brought suit against the printing

company for negligence. However, the employment agreement he entered into

with the labor broker contained an exculpatory provision that provided he would,

in case of injury, look only to the labor broker’s workers’ compensation insurance

and not bring suit against the labor broker’s clients. The district court granted

summary judgment and dismissed the plaintiff’s suit against the printing company

on the ground that the exculpatory provision barred his suit. We affirm.

I. Background Facts and Proceedings

       Aerotek, Inc. (Aerotek) is a labor broker. It contracts with individuals and

companies to provide employers with temporary supplemental staffing. Gazette

Communications, Inc., d/b/a Color Web Printers, Inc. (Gazette), entered into a

Services Agreement in 2013 to memorialize this type of relationship.

       In April 2016, Fidel Taylor,1 accepted a conditional offer of employment from

Aerotek to work at Gazette’s facility in Cedar Rapids.        This agreement was

recorded in a conditional employment agreement (CEA). On June 4, 2016, Fidel

suffered a partial amputation of his left-hand pinkie finger while operating a bottom

wrap machine at Gazette’s facility. He filed a claim for workers’ compensation

benefits and on May 30, 2018, filed suit against Gazette for negligence.

1 Fidel Taylor’s name appears as “Fidel Ngenzebuhoro” several times in the record,
including on the conditional employment agreement, which is central to the issues
on appeal. The parties have not explained this discrepancy, nor do they treat it as
material. To avoid confusion, we refer to the plaintiff as Fidel.
                                         3

      Gazette filed a motion for summary judgment on June 19, 2019. In the

motion, Gazette argued that Fidel’s suit was barred by both an exculpatory

provision found in paragraph twelve of the CEA and by Iowa Code section 85.20

(2018). The CEA provides as follows:

      12. Limitation of Liability - To the extent permitted by law, you, on
      your own behalf and on behalf of anyone claiming by or through you,
      waive any and all rights you have, or may have, to claim or assert a
      claim, suit, action or demand of any kind, nature or description,
      including without limitation, claims, suits, actions or demands for
      personal injury or death whether arising in tort, contract or otherwise,
      against Client or Client’s customers, agents, officers, directors, or
      employees, resulting from or arising directly or indirectly out of your
      employment with Aerotek, Inc. You recognize and agree that
      Aerotek, Inc provides workers’ compensation coverage for such
      things as on-the-job injuries or occupational diseases incurred while
      on assignment for Aerotek, Inc, and you agree to look solely to
      Aerotek, Inc and/or its insurer for damages and/or expenses for such
      injury, illness or other claims incurred while on assignment. In
      furtherance of the foregoing and in recognition that any work related
      injuries which might be sustained by you are covered by state
      Workers’ Compensation statutes, and to avoid the circumvention of
      such state statutes which may result from suits against the Clients of
      Aerotek, Inc based on the same injury or injuries, and to the extent
      permitted by law, YOU HEREBY WAIVE AND FOREVER RELEASE
      ANY RIGHTS YOU MIGHT HAVE to make claims or bring suit
      against the Client of Aerotek, Inc for damages based upon injuries
      which are covered under such Workers’ Compensation statutes.
      You agree to notify Aerotek, Inc if you believe that there are any
      unsafe conditions at the Client worksite or facility.

      The district court granted Gazette’s motion for summary judgment,

determining that this exculpatory provision barred Fidel’s suit. The district court

also found that material disputes of fact precluded a grant of summary judgment

on the ground that Fidel’s suit was barred by Iowa Code section 85.20. However,

the district court found the exculpatory provision dispositive and dismissed Fidel’s

petition. Fidel appeals from the court’s order granting summary judgment.
                                          4

II. Standard of Review
       In reviewing a lower court’s grant of a motion for summary judgment, we

follow the well-established standard of review for such orders.

       A court should grant summary judgment if the pleadings,
       depositions, answers to interrogatories, and admissions on file,
       together with the affidavits, if any, show that there is no genuine issue
       as to any material fact and that the moving party is entitled to a
       judgment as a matter of law. In other words, summary judgment is
       appropriate if the record reveals a conflict only concerns the legal
       consequences of undisputed facts. When reviewing a court’s
       decision to grant summary judgment, we examine the record in the
       light most favorable to the nonmoving party and we draw all
       legitimate inferences the evidence bears in order to establish the
       existence of questions of fact.

Jones v. Univ. of Iowa, 836 N.W.2d 127, 139–40 (Iowa 2013) (citation omitted).

III. Discussion

       On appeal, Fidel contends the exculpatory clause in paragraph twelve of

the CEA “is not enforceable because Aerotek breached the contract by failing to

ensure that Fidel received site specific training and that he was working with

properly guarded equipment in a safe workplace.”             He further argues that

paragraph twelve of the CEA “is not applicable to the facts of this case” and that

there are material issues of fact which preclude summary judgment. He also

claims that “Aerotek delegated the duties of training and providing a safe

workplace for contract employees” to Gazette and that Gazette “breached the

Services Agreement by failing to provide a safe workplace or appropriate training

to Fidel.”

       We conclude the exculpatory clause is valid and enforceable. We find

Fidel’s allegation that Aerotek breached the contract to be misplaced because the

provisions he alleges were breached do not in fact exist in the CEA. We find the
                                          5

exculpatory clause to be dispositive and determine that no disputes over material

facts preclude its application. We reject the remainder of Fidel’s arguments and

affirm the grant of summary judgment.

       A. Disputes of Material Fact

       The party resisting a motion for summary judgment “must set forth specific

facts showing that a genuine factual issue exists.” Huber v. Hovey, 501 N.W.2d

53, 55 (Iowa 1993).     Fidel argues there are disputed issues of material fact

regarding whether Aerotek breached the conditional employment contract,

however he does not specify which facts are disputed. Following our review of the

record, we conclude that whether the CEA’s exculpatory provision bars Fidel’s suit

is not dependent on any disputed facts. We find that this case can be disposed of

on the basis of an analysis of the contractual provisions, which are not disputed.

Determining the legal effect of a contract “is a matter of law to be resolved by the

court.” Id. at 55–56.

       B. Applicability of Exculpatory Provision

       The exculpatory clause in paragraph twelve of the CEA is valid and

enforceable. Fidel does not dispute the enforceability of such waivers.

       “Contracts releasing persons from liability for their own negligent acts have

been found to be enforceable and are not contrary to public policy.” Grabill v.

Adams Cty. Fair & Racing Ass’n, 666 N.W.2d 592, 596 (Iowa 2003). We have

upheld contract provisions in which an individual agrees in a labor brokerage

contract that, in the event the individual is injured at the workplace of the labor

broker’s client, the individual’s remedies shall be limited to a claim under the labor

broker’s workers’ compensation insurance and shall not include a damages claim
                                         6

against the labor broker’s client. E.g., Cupps v. S & J Tube, Inc., No. 17-1922,

2019 WL 156583, at *5 (Iowa Ct. App. Jan. 9, 2019); Hargrave v. Grain Processing

Corp., No. 14-1197, 2015 WL 1331706, at *3 (Iowa Ct. App. Mar. 25, 2015).

       Here, Fidel agreed that he would “look solely to Aerotek, Inc and/or its

insurer for damages and/or expenses” resulting from a workplace injury, and he

agreed to waive any rights he had against Aerotek’s clients for damages based

upon injuries covered by workers’ compensation insurance and the applicable

statutes.   We do not find the CEA’s exculpatory clause to be materially

distinguishable from Cupps and Hargrave. It is enforceable by Gazette. See

Cupps, 2019 WL 156583, at *3; Hargrave, 2015 WL 1331706, at *3.

       C. Whether Aerotek Breached the CEA

       We next consider Fidel’s argument that the exculpatory provision is

inapplicable because Aerotek breached “by failing to ensure that Fidel received

site specific training and that he was working with properly guarded equipment in

a safe workplace.” Fidel argues that the exculpatory provision in paragraph twelve

of the CEA “is conditioned upon Aerotek’s compliance with the terms of the

conditional employment contract.”

       “It is a basic principle of contract law that once one party to a contract

breaches the agreement, the other party is no longer obligated to continue

performing his or her own contractual obligations.” Kelly v. Iowa Mut. Ins. Co., 620

N.W.2d 637, 641 (Iowa 2000).          The breach must be material to excuse

performance. Van Oort Constr. Co. v. Nuckoll’s Concrete Serv., Inc., 599 N.W.2d

684, 692 (Iowa 1999).
                                         7

       To determine whether Aerotek breached, we look to the contract terms,

seeking to determine whether Aerotek made the contractual promise Fidel alleged

was made. “A party breaches a contract when, without legal excuse, it fails to

perform any promise which forms a whole or a part of the contract.” Molo Oil Co.

v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa 1998). We

conclude Aerotek has not breached because it did not make the “promise which

forms a whole or a part of the contract” that Fidel alleges was made. Specifically,

we find that Aerotek did not agree in the CEA “to ensure that Fidel received site

specific training and that he was working with properly guarded equipment in a

safe workplace.”

       Fidel asserts three times that Aerotek agreed to ensure Fidel would have a

safe workplace.      First, he says “Aerotek agreed to place Fidel in a work

environment free of hazards (like unguarded machinery) and to comply with

IOSHA safety regulations.” Next, “Aerotek promised Fidel he would receive site

specific training before starting work at the Color Web plant. Aerotek breached

that promise.” Finally, “Aerotek promised Fidel he would be working in a safe

workplace and that promise was breached as well.” None of these assertions are

accompanied by citations to the record. Aerotek did not make the promises Fidel

has asserted were made. The CEA does not contain provisions relating to safety

or hazards.

       To support his theory, Fidel notes that he was provided a form titled

“Verification of Instruction,” and he points to language in that document regarding

“site specific safety training.” The Verification of Instruction indicated that Fidel

agreed as follows:
                                         8

       I, Ngenzebuhoro Fidel have read the Aerotek, Inc Contract
       Employee Safety Handbook and viewed the Aerotek, Inc General
       Awareness Safety Training Video. I understand that:
       1. I am to receive site specific safety training from the Aerotek, Inc
   Client before beginning my assignment.
       2. I am to wear all appropriate personal protective equipment
   required by my assignment.
       3. I am to report any injury or illness IMMEDIATELY to the Client
   Supervisor and my Aerotek, Inc representative.
       4. I am to report any unsafe condition or situation that I am untrained
   to handle to my Client Supervisor, Aerotek, Inc representative or to the
   Aerotek Safety Hotline.
       5. I am to immediately report back to the Aerotek, Inc office if I am
   asked to do anything outside of the position or work function I was
   originally placed to perform.

The Verification of Instruction then lists topics discussed in the safety handbook.

Fidel electronically signed and dated the document.

       Aerotek made no promises in the Verification of Instruction; it is only an

acknowledgement by Fidel that he “understand[s]” five instructions related to

safety. We do not read the Verification of Instruction as creating contractual duties

on Aerotek’s part, and even if we did, the CEA’s integration and merger clause,

found in paragraph thirteen, requires that we ignore prior agreements and read the

CEA to be “the entire agreement of the parties.” We find it was not possible for

Aerotek to breach the terms of CEA in the manner Fidel alleges occurred, because

the contract does not create the duties Fidel alleges have been breached. We

therefore reject the argument that the CEA’s exculpatory provision is inapplicable

due to Aerotek’s alleged breach.

       D. Effect of the Services Agreement

       Although somewhat unclear, Fidel seems to argue that paragraph twelve of

the CEA should not bar his suit because he is a third-party beneficiary of the

Services Agreement. In paragraph 15.14.4 of the Services Agreement, Gazette
                                           9

promised Aerotek, inter alia, that it would provide a safe work environment, obey

the requirements of government agencies, and train the contract employees. Fidel

alleges that Gazette breached the promises it made in the Services Agreement to

Aerotek.

       Fidel disputes the district court’s characterization of this argument. The

court said, “Plaintiff contends the waiver in ¶ 12 of the conditional employment

contract was conditioned on the client’s [Gazette / Color Web] compliance with the

terms of the Services Agreement.” Fidel seeks to clarify what he perceives to be

a misstatement of his argument: “Fidel’s argument is that the enforcement of the

Limitation of Liability provision (¶ 12) (by any client as a third-party beneficiary) is

conditioned upon Aerotek’s compliance with the terms of the conditional

employment contract.” Yet, although Fidel disclaims the argument that the CEA’s

exculpatory provision was conditioned on Gazette’s compliance with the terms of

the Services Agreement, he devotes one and one-half pages of his appellate brief

to the Services Agreement and argues that Gazette breached paragraph 15.4.4,

which pertains to Gazette’s responsibilities with respect to safety. Additionally, he

says that his “claim of negligence against Gazette . . . is based on these breaches

of duty (training and safe work place) derived from the Services Agreement.”

(Emphasis added). We understand his complaint over Gazette’s alleged breach

of the Services Agreement as an argument either that (1) Gazette’s alleged breach

of the Services Agreement nullifies the exculpatory clause in the CEA, or (2)

Gazette’s alleged breach of the Services Agreement gives Fidel a right to enforce

the Services Agreement as a third-party beneficiary.                 We reject both

manifestations.
                                         10

       First, we find nothing in the CEA indicating that the CEA’s exculpatory

provision is conditioned on the terms or performance of the Services Agreement

and, as we have already discussed, the CEA contains a merger and integration

provision. Thus, even assuming arguendo that Gazette breached the Services

Agreement, the CEA’s exculpatory clause is still enforceable.

       Second, Fidel does not have standing to enforce the provisions of the

Services Agreement as a third-party beneficiary, because the Services

Agreement, which contains a merger and integration clause, expressly refrained

from conferring rights on third parties. Section 15.5 of the Services Agreement

provides, “Except as otherwise specifically provided, this Agreement is not

intended and shall not be construed to confer upon or to give any person other

than the parties any rights or remedies.” “When a contract expressly negates the

creation of third-party beneficiaries,” we reject such claims. RPC Liquidation v.

Iowa Dep’t of Transp., 717 N.W.2d 317, 320 (Iowa 2006).                The Services

Agreement “expressly negate[d] the creation of third-party beneficiaries,” and

therefore Fidel has no rights as a third-party beneficiary. See id.

       E. Indemnification, IOSHA Violations, and Contract Law Principles

       Fidel raises three additional concerns centered on alleged defects in

Gazette’s performance under the Services Agreement.            First, he notes that

Gazette agreed to “indemnify AEROTEK and hold it harmless against and from

any claims made or brought as a result of [Gazette’s] breach of its obligations.”

We are unconvinced that the indemnification clause in the Services Agreement is

relevant to this appeal. It is not clear why Gazette’s promise to indemnify Aerotek

would be relevant, as Fidel filed suit against Gazette, not Aerotek.
                                        11

       Second, Fidel notes that Gazette admitted to violations of various rules in a

settlement   agreement    with   the   Iowa   Occupational    Safety   and   Health

Administration (IOSHA). Even if IOSHA violations by Gazette constitute a violation

of the Services Agreement—a question on which we take no position—we have

found nothing in the CEA which indicates the CEA’s exculpatory provision is

conditioned upon Gazette’s compliance with the Services Agreement.

       Lastly, Fidel invokes several principles of contract law we find inapplicable

here. He argues that he “‘justifiably expected’ . . . training and working in a safe

workplace,” quoting Van Oort Constr. Co. v. Nuckoll’s Concrete Serv., Inc., 599

N.W.2d 684, 692 (Iowa 1999). He claims elsewhere in his brief that “Aerotek

delegated the duties of training and providing a safe workplace for contract

employees.” Aerotek did not contractually assume either the duty of training Fidel

for work at Gazette or the duty of ensuring that the Gazette workplace would be

safe. To the extent Aerotek had the duties Fidel alleges were breached, they were

not created by the CEA and can only have existed under the law of tort. However,

Fidel contracted away his right to a tort remedy for those alleged breaches when

he entered into the CEA, and a provision excusing a party from its own

negligence—like the exculpatory provision here in question—will overcome a

person’s duty to provide safe premises.         See Huber, 501 N.W.2d at 55.

Additionally, while Fidel claims he “expected” training and safe conditions from

Aerotek, Aerotek did not contract to provide such conditions, and it therefore could

not have contractually delegated to Gazette the duty to provide such conditions by

way of the Services Agreement.
                                        12

      F. Statutory Preclusion

      The district court determined that questions of material fact precluded a

grant of summary judgment to the extent it was based on the ground that, pursuant

to Iowa Code section 85.20, a worker’s compensation award was Fidel’s exclusive

remedy. Because we find that the CEA’s exculpatory provision bars Fidel’s suit,

we need not consider the applicability of section 85.20.

IV. Conclusion

      We find that Aerotek did not breach its agreements with Fidel, because it

did not make the promises Fidel alleges were breached. The exculpatory clause

in paragraph twelve of the CEA can be enforced by Gazette. We further conclude

that Fidel is not a third-party beneficiary of the Services Agreement and therefore

cannot enforce any alleged breach of that agreement by Gazette. Additionally,

any alleged breach by Gazette of the Services Agreement does not impact the

exculpatory provision of the CEA, as the CEA is not conditioned on the Services

Agreement and contains a merger and integration clause.          Even if Gazette

breached the Services Agreement, Fidel is barred from bringing the instant suit by

the exculpatory provision in the CEA. Because we, like the district court, find the

exculpatory provision dispositive, we affirm the district court’s grant of summary

judgment dismissing Fidel’s claim, and do not consider the applicability of Iowa

Code section 85.20.

      AFFIRMED.