Court Opinion

ID: 2741643
Source: CourtListenerOpinion
Date Created: 2014-10-10 17:05:48.637442+00
Date Added: 2024-06-11T10:36:47.279459
License: Public Domain

J-A28011-13

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

TONI BRACKEN, ADMINISTRATRIX OF                IN THE SUPERIOR COURT OF
THE ESTATE OF WILLIAM BRACKEN,                       PENNSYLVANIA
DECEASED

                   v.

BURCHICK CONSTRUCTION COMPANY,
INC., PATENT CONSTRUCTION COMPANY
AND HARSCO CORPORATION

APPEAL OF: BURCHICK CONSTRUCTION
                                                   No. 1432 WDA 2012
COMPANY, INC.

          Appeal from the Judgment Entered September 14, 2012
            In the Court of Common Pleas of Allegheny County
                   Civil Division at No(s): GD-09-015529

BEFORE: FORD ELLIOTT, P.J.E., PANELLA AND OLSON, JJ.

DISSENTING MEMORANDUM BY OLSON, J.:             FILED OCTOBER 10, 2014

     I agree with the Learned Majority that the contract between Burchick

Construction Company, Inc. (Burchick) and Kusler Masonry, Inc. (Kusler)

does not require Kusler to indemnify Burchick for liability arising from

Burchick’s negligence.   I am compelled to dissent, however, as I cannot

agree with the Majority’s conclusion that Kusler is obligated to indemnify

Burchick for liability stemming from Kusler’s own negligence.

     The Majority has accurately summarized the factual and procedural

history of this case. Hence, I need not repeat that material here. Both the

Majority and the parties examine the issues in this case by looking first at

whether the indemnification provisions of the parties’ agreement require

indemnity for Burchick’s negligence and then at whether the contract
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compels indemnity for Kusler’s own negligence. I shall do the same. As I

agree with the Majority’s first conclusion, I only briefly comment on how my

analysis differs from that of the Majority.   I devote the lion’s share of my

discussion to the second issue in this case where my conclusion parts ways

from that reached by the Majority.

     There is no dispute regarding the principles that govern this appeal.

For convenience and ease of reference, I recite them briefly.

     The Workers' Compensation Act (the Act) is the sole and
     exclusive means of recovery against employers for all injuries
     arising out of accidents occurring within the course of
     employment. 77 P.S. § 481(a). The exclusivity provision of the
     [Act] essentially “bars tort actions flowing from any work-related
     injury.” Kline v. Arden H. Verner Co., 469 A.2d 158, 160 (Pa.
     1983).    An employer may, however, consistent with the
     indemnification provision in the Act, 77 P.S. § 481(b), enter into
     an indemnity contract with a third party; the employer, then,
     may expressly assume liability for the negligence of a third party
     which results in injury to the employer's employee.

     The relevant portion of the Act provides:

        In the event injury or death to an employee is caused by a
        third party, then such employee, his legal representative,
        husband or wife, parents, dependents, next of kin, and
        anyone otherwise entitled to receive damages by reason
        thereof, may bring their action at law against such third
        party, but the employer, his insurance carrier, their
        servants and agents, employees, representatives
        acting on their behalf or at their request shall not be
        liable to a third party for damages, contribution, or
        indemnity in any action at law, or otherwise, unless
        liability for such damages, contributions or indemnity
        shall be expressly provided for in a written contract
        entered into by the party alleged to be liable prior to
        the date of the occurrence which gave rise to the
        action.

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        77 P.S. § 481(b) (emphasis added).

        Though specifically provided for in the statute, indemnification
        contracts in this context are not favored in the law and every
        intendment must be construed against the party seeking
        protection from liability or indemnification from the employer.
        See Pittsburgh Steel Co. v. Patterson–Emerson–Comstock,
        Inc., 171 A.2d 185 (Pa. 1961); Gerard v. Penn Valley
        Constructors, Inc., 495 A.2d 210 (Pa. Super. 1985); see
        generally Standard Pennsylvania Practice § 167:297.           The
        language in such contracts must be clear and unequivocal; the
        parties to the contract must specifically provide that a named
        employer agrees to indemnify a named third party from liability
        for the acts of that party's negligence which cause harm to the
        named employer's employees. Bester v. Essex Crane Rental
        Corp., 619 A.2d 304 (Pa. Super. 1993). Furthermore, the
        burden of proving the applicability of an indemnification
        provision is on the party seeking relief from liability, and the
        burden increases if the party seeking such relief has drafted the
        agreement. Donaldson v. Commonwealth, Department of
        Transportation, 596 A.2d 269 (Pa. Commw. 1991).

Snare v. Ebensburg Power Co., et al., 637 A.2d 296, 298 (Pa. Super.

1993), appeal denied, 646 A.2d 1181 (Pa. 1994).

        In determining whether the parties’ contract requires Kusler to

indemnify Burchick for Burchick’s negligence, the Majority looks to both

Article IV and Article VI of the agreement.      See Majority Memorandum at

7-12.    I disagree with this approach.      In my view, Article IV addresses

indemnity    based   upon   Kusler’s   negligence   while   Article   VI   governs

indemnification predicated upon Burchick’s negligence. Article IV bears the

heading “Subcontractor’s Liability” and states that, “[i]f any person

(including employees of [Kusler]) suffers injury or death . . . as a result, in

whole or in part, of negligence (or other act for which there is legal liability)

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of [Kusler] . . . then [Kusler] shall assume the entire liability therefore[.]”

Burchick Construction Company, Inc. Subcontract Agreement, 6/12/07, at 3.

In contrast, Article VI carries the heading “Indemnification” and provides, in

relevant part, “[Kusler] agrees to defend, indemnify and hold harmless

[Burchick] and Owner . . . from and against any and all claims . . . damages

and liabilities of every nature (including contractual liability “Losses”), arising

from or relating to Work performed by [Kusler] on the Project . . . whether

or not [Burchick] was alleged to be negligent, unless [Burchick] was alleged

to be solely negligent.”    Id. at 4.   In Article IV, Kusler agrees to assume

liability if injury or death results, in whole or in part, from its negligence.

Under Article VI, however, Kusler agrees to indemnify Burchick against

claims, damages, and liabilities arising from Kusler’s work on the project,

whether or not Burchick is alleged to be negligent, so long as Burchick is not

alleged to be solely negligent. Accordingly, the plain language of the parties’

contract leads me to conclude that we should look only to Article VI in

determining whether Kusler is obligated to indemnify Burchick for Burchick’s

negligence.

      Focusing exclusively upon Article VI, I would conclude that Kusler is

not obligated to indemnify Burchick for Burchick’s own negligence. Although

Article VI employs the term ‘indemnify,’ Article VI does not expressly provide

that Kusler agrees to indemnify Burchick for Burchick’s negligence that

causes harm to Kusler’s employees.              For this reason alone, I would

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conclude that the language of Article VI is not sufficiently clear and

unequivocal to meet the requirements of Pennsylvania law.1            See Bester,

supra (contract must specifically provide that a named employer agrees to

indemnify a named third party from liability for the acts of that party's

negligence which cause harm to the named employer's employees).

       I turn now to Burchick’s second claim in which I consider its right to

indemnity under Article IV based upon Kusler’s negligence.            Again, I find

that Article IV is the contractual provision applicable to indemnification

claims based upon Kusler’s negligence.           It provides that, “[i]f any person

(including employees of [Kusler]) suffers injury or death . . . as a result, in

whole or in part, of negligence (or other act for which there is legal liability)

of [Kusler] . . . then [Kusler] shall assume the entire liability therefore[.]”

Burchick Construction Company, Inc. Subcontract Agreement, 6/12/07, at 3.

Here, too, I find the parties’ contract to be deficient because Article IV does

not expressly state that Kusler will indemnify Burchick for damages

sustained by Kusler’s employees that result, in whole or in part, from

Kusler’s negligence.

____________________________________________

1
   I also agree that, pursuant to Greer v. City of Philadelphia, 795 A.2d
376 (Pa. 2002), the “whether or not” clause in Article VI serves merely to
clarify that any contributory negligence on the part of Burchick would not bar
its indemnification for damages arising from Kusler’s work on the project. I
find this discussion to be superfluous, however, given the contract’s
deficiencies under Bester.

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         I reach this conclusion because, in my view, the Act and our

interpretive case law require the same clear and unequivocal statement of

intent to indemnify regardless of whether the right to indemnity is

predicated upon the negligence of the indemnitee (in this case, Burchick) or

that of the indemnitor (here, Kusler). In Bester, we said that the language

in an indemnification contract clearly and unequivocally establishes a right to

indemnity where the parties to the contract “specifically provide that a

named employer agrees to indemnify a named third party from liability for

the acts of that party's negligence which cause harm to the named

employer's employees.”         See Bester, 619 A.2d at 309.         Admittedly, this

formulation does not refer to indemnification of a named third party against

liability arising from the indemnitor’s negligence that harms the indemnitor’s

employees.      In Bester, however, we said that “th[e foregoing] level of

specificity in the language employed in [a] contract of indemnification” was

necessary to avoid the ambiguities that could arise out of the use of general

language and that, in the absence of such language, the Act precludes the

imposition of liability upon an employer. Id. at 308-309. We also said that

“[t]he intent to indemnify against claims by employees of the alleged

indemnitor [] must clearly appear.” Id. at 307. Thus, in keeping with the

spirit   of   our   holding   in   Bester,   I   would   conclude   that   where   an

indemnification clause purports to indemnify a third party against liability

arising from the indemnitor’s negligence that harms the indemnitor’s

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employees, the language of the contract should parallel the unequivocal

provisions prescribed in Bester.

      The Majority asserts that there is a dearth of Pennsylvania law

relevant to Burchick’s second claim. See Majority Memorandum at 15. My

study of prior cases reveals, however, that although we have not extensively

discussed the issue of indemnification based upon the negligence of an

employer/indemnitor, we have never materially distinguished such claims

from the treatment accorded indemnification predicated upon the negligence

of an indemnitee.   Our decision in Snare, supra illustrates this point.    In

that case, the plaintiff was a pipefitter employed by Sauer, Inc. (Sauer) at

the Ebensburg Power Company (Ebensburg) in Ebensburg, Pennsylvania. At

that time, Sauer was engaged as a subcontractor on a power plant

construction project for which Ebensburg was the owner and UE & C

Catalytic (Catalytic) was the general contractor.      The plaintiff sustained

injuries when a crane he was operating on a turbine floor fell into a hole. To

recover for his injuries, the plaintiff filed a complaint against Ebensburg and

Catalytic alleging that they negligently failed to provide a safe worksite.

Thereafter, Ebensburg filed a third party complaint against United Engineers

& Constructors, Inc. (United), a sister corporation of Catalytic. Catalytic and

United subsequently filed a third party complaint against Sauer requesting

indemnification and contribution in the event they were found liable to the

plaintiff. Catalytic and United based their claims on the indemnity provisions

                                     -7-
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in a written contract between United and Sauer. United and Catalytic denied

any negligence and alleged that if the plaintiff were injured in the manner

that he claimed, then his injuries were caused by Sauer’s negligence and the

contract between Sauer and United required Sauer, as the subcontractor, to

indemnify United and Catalytic for personal injuries caused by its negligence.

Applying Bester and related cases, this Court rejected the indemnity claims

advanced by United and Catalytic, concluding that the disputed contractual

language was not sufficiently specific to compel Sauer, as an employer, to

indemnify a third party.2         The panel in Snare followed Bester without

distinguishing or discussing whether the indemnity claims forwarded by

United and Catalytic were based upon the negligence of an indemnitor or

that of an indemnitee. See Snare, 637 A.2d at 299.

       I derive further support for my position from the plain terms of the

Act.   The Act unmistakably declares that it is the sole means of recovery
____________________________________________

2
  The indemnity provision we rejected in Snare was remarkably similar to
the one found in Article VI of the parties’ agreement, which the Majority
upholds. It read:

       5. [Subcontractor/Sauer] Agrees to indemnify and hold harmless
       the Owner [Ebensburg Power Company] and Contractor [United]
       their successors and assigns, from and against any and all
       claims, demands, suits, actions, losses, liens, damages, or
       expenses and attorneys' fees, however caused, resulting from,
       arising out of or in any way connected with the Contract....

See Snare at 637 A.2d at 299. Like Article VI in the case before us, the
indemnity provision in Snare did not expressly provide that Sauer agreed to
indemnify United for United’s negligence that harmed Sauer’s employee.

                                           -8-
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against an employer for all injuries arising out of accidents occurring within

the course of employment. 77 P.S. § 481(a). Given that an employer will

assume responsibility for injuries to its workers under this provision, we

should not lightly presume that an employer would be willing to double its

liability exposure by agreeing, through general terms, to indemnify a third

party for injuries sustained by its employees as a result of its negligence.

See Bester, 619 A.2d at 308 (indemnification clauses must contain express

provisions   in   order   to   overcome   employer’s   protection   from   double

responsibility afforded under the Act). I also note that the Act specifically

states that, “[an] employer . . . shall not be liable to a third party for

damages, contribution, or indemnity in any action at law, or otherwise,

unless liability for such damages, contributions or indemnity shall be

expressly provided for in a written contract entered into by the party alleged

to be liable prior to the date of the occurrence which gave rise to the action.”

77 P.S. § 481(b) (emphasis added).          Contribution is nothing more, and

nothing less, than judicially imposed indemnification for liability arising from

the indemnitor’s negligence in the absence of a contract.           See Nancy J.

White, Death, Taxes, and . . . Insurance: Current Legal Issues Relating to

Insurance in the Construction Industry, 36 Real Est. L.J. 154, 157 (under

limited form indemnity agreement, subcontractor is legally liable to general

contractor for any sums the general must pay as a result of defects in the

subcontractor’s work and limited form agreement does nothing more than

                                      -9-
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what the law requires under the doctrine of contribution).      Since the Act

provides that a third party cannot assert a claim for contribution (or a

contractual claim for indemnity based upon the indemnitor’s negligence) in

the absence of an express provision in a written contract, I would argue that

a provision which allows such a claim should meet the requirements set forth

in Bester.    In this case, neither Article IV nor Article VI meets Bester’s

specificity requirements; hence, neither provision permits indemnity on any

ground.

      For the foregoing reasons, I am unable to agree that the contract

between Burchick and Kusler required Kusler to indemnify Burchick for

liability arising either from Burchick’s negligence or Kusler’s own negligence.

Accordingly, I dissent.

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