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(A
revised version of this article will appear in The Construction
Lawyer, Volume 22, No. 3, Summer 2002, published by
the American Bar Association's Forum on the Construction
Industry.)
By
John W. Ralls
Thelen Reid Brown Raysman & Steiner LLP
A
subcontractor's employee was injured on a construction project
at a university campus. The employee sued the general contractor
for negligence. The general contractor filed a third-party
petition against the subcontractor seeking contractual indemnity.
The subcontractor filed a motion for summary judgment on
the ground that the Iowa Workers' Compensation Act made
it immune from suit. The trial court granted the subcontractor's
motion and entered judgment against the general contractor
on the indemnity claim. The Iowa Supreme Court reversed.
Evans v. McComas-Lacina Construction Co., 2002 Iowa
Sup. LEXIS 43 (Iowa 2002).
The
general contractor argued that employers may agree to indemnify
against suits that they otherwise would avoid under the
exclusive recovery rule of the worker's compensation statute.
The court agreed. "[W]orkers' compensation does not
function as a complete bar to suit against an employer by
a third-party where the employer has breached an independent
duty to the third-party."
The
court treated the issue as one of contractual interpretation.
The court reviewed the indemnification provisions of the
subcontract to determine whether the subcontractor agreed
to indemnify the general contractor against the claim asserted
by the employee.
The
subcontractor agreed "to indemnify and to save harmless
the Owner and General Contractor against loss or expense...
whether or not such injury to persons or damage to the property
are due or claimed to be due to any negligence of the Sub-contractor,
his employees, his agents or servants." The subcontractor
also agreed to "protect and indemnify said Contractor
against any loss or damage suffered by anyone arising through
the negligence of the Sub-contractor, or those employed
by him, or his agent or servants...."
The
court concluded that if the general contractor had sought
indemnity based on its own negligence, "our prior case
law suggests [the general contractor] would be precluded
from seeking contractual indemnity because the language...
of the subcontract does not clearly and unequivocally provide
for indemnity under those circumstances." However,
the court found that the subcontract did provide that the
subcontractor would indemnify the general contractor for
the subcontractor's negligence.
After
reviewing the record, the court found that the employee's
suit involved allegations of negligence attributable not
only to the general contractor but also to the subcontractor.
The court concluded that the motion for summary judgment
should have been denied. "[T]he indemnity provision...
may apply if [the general contractor] can show [the subcontractor]
was negligent and the negligence was a proximate cause of
[the employee]'s injuries."
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For more information about the issues covered in this report, please contact John Ralls in our San Francisco office at 415-369-7210 or at jralls@thelen.com or contact your Thelen attorney. For more information about Thelen's Construction and Government Contracts Department, click here.
©2002 Thelen Reid Brown Raysman & Steiner LLP
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