Estes Co. v. Aztec Construction, Inc.

677 P.2d 939, 138 Ariz. 166, 1983 Ariz. App. LEXIS 663
CourtCourt of Appeals of Arizona
DecidedAugust 30, 1983
DocketNo. 1 CA-CIV 5862
StatusPublished
Cited by16 cases

This text of 677 P.2d 939 (Estes Co. v. Aztec Construction, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estes Co. v. Aztec Construction, Inc., 677 P.2d 939, 138 Ariz. 166, 1983 Ariz. App. LEXIS 663 (Ark. Ct. App. 1983).

Opinion

OPINION

CONTRERAS, Judge.

Cross-claimant the Estes Company appeals from the judgment denying its cross-claim for indemnity and the denial of its motion for a new trial on the cross-claim. We reverse and remand with directions to enter judgment for Estes on its cross-claim.

NATURE OF CASE

The parties to this appeal were defendants in a wrongful death action. Based upon an indemnity agreement The Estes Company, the general contractor, filed a cross-claim seeking indemnity from Aztec Construction Company, a subcontractor.

Before the trial on the principal claim, the defendants agreed that the trial judge could, without jury and based upon the evidence presented, decide the cross-claim following a jury verdict. The trial resulted in a verdict in favor of the plaintiffs and a judgment that both defendants were negligent. Following the trial, the trial judge, in denying the claim for indemnification, stated in a minute entry:

[t]he Court does not believe that the contract itself sufficiently demonstrates that the parties intended that Estes would be indemnified for its own negligent actions which may have related to the trenching operation.
The Court, in addition, does not believe that ... a common law right to indemnification [exists]. Estes knew of the open trench, it knew of the hazards of trenching (as evidenced by signs erected at other points on the project), and it knew or should have known that no warnings or special precautions were being taken with regard to the trench. It also knew children played in the area. Its acquiescence in the continuation of the condition constitutes active negligence.

The judgment on the verdict in favor of the plaintiffs has been compromised and paid, with each of the parties to this appeal paying one-half of the agreed amount, and reserving their rights as to indemnity. This appeal is from the portion of the judgment entered on October 21, 1980, which found in favor of Aztec on the cross-claim for indemnification and from the order of January 12, 1981, which denied the motion for a new trial on the cross-claim.

FACTUAL BACKGROUND

On Sunday, December 10, 1978, at a subdivision construction site in northwest Phoenix, two boys died as a result of the collapse of a sewer trench in which they were playing. The trench was being dug by Aztec Construction Company pursuant to its subcontract with Estes Company. Aztec followed a process of digging the trench, laying pipe and filling the trench. The subcontract provides, in pertinent part, that “[subcontractor shall protect and indemnify [contractor from any claims, liability, or losses suffered by anyone wholly [168]*168or partially through the negligence of [subcontractor or any of its agents or employees.”

The principal activity of the general contractor was to coordinate the work of its subcontractors. Estes’ construction superintendent, Robert Stewart, visited the site daily to check on the progress of the project including the excavation and to see if there were any problems. He testified at trial that Estes recognized a general duty of safety over the total site and had posted signs at the north end of the construction area where model homes were located and in the area where the streets came to an end.

City of Phoenix inspectors regularly inspected the project to ensure compliance with the approved plans and specifications and the Maricopa Association of Governments (“MAG”) specifications. The City of Phoenix has authority to correct conditions that are unsafe. There is no evidence that the project was cited for any code violations or that the excavation was not in accordance with industry-wide procedures. The evidence shows that the trench was being dug with a trenching machine, but that shoring was to be used in the trench when pipe was being laid. In addition, even though the open trench was not fenced, barricaded, or marked by warning signs, there is no evidence that this was in violation of applicable codes or general construction practice. Aztec, as a subcontractor determined the type of equipment to be used and the manner in which the excavation was to be performed.

INDEMNITY PROVISION IN THE CONTRACT

A. The Effect of the Indemnity Provision

The trial court, in denying Estes’ cross-claim, reasoned that the contract between Estes as general contractor and Aztec as a subcontractor did not sufficiently demonstrate that the parties intended that Estes would be indemnified for its own negligent actions which may have related to the trenching operation. We disagree.

The parties expressly contracted with respect to the duty to indemnify and the extent of that duty must be determined from the contract. Rossmoor Sanitation, Inc. v. Pylon, Inc., 13 Cal.3d 622, 119 Cal. Rptr. 449, 532 P.2d 97 (1975). The test in construing indemnity contracts is:

[Wjhether or not, considering all of the relational circumstances, the indemnitee reasonably expected as part of his "bargain with the indemnitor that the duty he failed to perform and on which his liability to plaintiff is predicated would be performed by the indemnitor. Then, of course, as between themselves, the indemnitee should be relieved of responsibility for his breach of duty vis-a-vis plaintiff since the indemnitor’s obligation to indemnify in that situation would clearly have been within the parties’ contemplated bargain.

Doloughty v. Blanchard Constr. Co., 139 N.J.Super. 110, 352 A.2d 613, 620 (1976). See also General Accident Fire & Life Assurance Cory. v. Traders Furniture Co., 1 Ariz.App. 203, 401 P.2d 157 (1965). Furthermore, a general principle of contract law is that where parties bind themselves by a lawful contract and the terms of the contract are clear and unambiguous, a court must give effect to the contract as written. Isaak v. Massachusetts Indemn. Life Ins. Co., 127 Ariz. 581, 623 P.2d 11 (1981); Dutch Inns of America, Inc. v. Horizon Corp., 18 Ariz.App. 116, 500 P.2d 901 (1972). Where a subcontractor expressly agrees to indemnify the general contractor, he will be bound by the clear terms of his undertaking. See Annot. 143 A.L.R. 312 (1943).

The indemnity provision in this construction contract states that Aztec will indemnify Estes “from any claims, liability or losses suffered by anyone wholly or partially through the negligence of [subcontractor.” The clause does not specifically address what effect the indemnitee’s negligence will have on the indemnitor’s obligation to indemnify and, therefore is regarded as a “general” indemnity agree[169]*169ment. Rossmoor, Gonzales v. R.J. Novick Constr. Co., Inc., 20 Cal.3d 798, 144 Cal. Rptr. 408, 575 P.2d 1190 (1978).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Flood Control District v. Paloma Investment Ltd. Partnership
279 P.3d 1191 (Court of Appeals of Arizona, 2012)
BMW of North America, LLC v. Mini Works, LLC
166 F. Supp. 3d 976 (D. Arizona, 2010)
Sprint Communications Co. v. Western Innovations, Inc.
618 F. Supp. 2d 1101 (D. Arizona, 2009)
Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C.
138 P.3d 1210 (Court of Appeals of Arizona, 2006)
Estate of King v. Wagoner County Board of County Commissioners
2006 OK CIV APP 118 (Court of Civil Appeals of Oklahoma, 2006)
Cunningham v. Goettl Air Conditioning, Inc.
980 P.2d 495 (Court of Appeals of Arizona, 1998)
Birth Hope Adoption Agency, Inc. v. Doe
947 P.2d 859 (Court of Appeals of Arizona, 1997)
Washington Elementary School District No. 6 v. Baglino Corp.
817 P.2d 3 (Arizona Supreme Court, 1991)
Coldwell Banker Commercial Group, Inc. v. Camelback Office Park
751 P.2d 530 (Court of Appeals of Arizona, 1987)
Superior Companies v. Kaiser Cement Corp.
733 P.2d 1158 (Court of Appeals of Arizona, 1986)
Pioneer Roofing Co. v. Mardian Construction Co.
733 P.2d 652 (Court of Appeals of Arizona, 1986)
Ina Insurance Co. of North America v. Valley Forge Insurance
722 P.2d 975 (Court of Appeals of Arizona, 1986)
Skousen v. W.C. Olsen Investment Co.
717 P.2d 930 (Court of Appeals of Arizona, 1986)
Transamerica Insurance v. Trico International, Inc.
716 P.2d 1041 (Court of Appeals of Arizona, 1985)
Estes Co. v. Aztec Const., Inc.
677 P.2d 939 (Court of Appeals of Arizona, 1983)

Cite This Page — Counsel Stack

Bluebook (online)
677 P.2d 939, 138 Ariz. 166, 1983 Ariz. App. LEXIS 663, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estes-co-v-aztec-construction-inc-arizctapp-1983.