Lowell Tietz v. United Rentals (North America), Inc., General Equipment Company

• Court: Court of Appeals of Minnesota
• Decided: July 21, 2014
• Docket: A13-2284
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

STATE OF MINNESOTA IN COURT OF APPEALS A13-2284

Lowell Tietz, Appellant,

vs.

United Rentals (North America), Inc., Respondent,

General Equipment Company, et al., Defendants.

Filed July 21, 2014 Affirmed Reilly, Judge

Ramsey County District Court File No. 62-CV-12-7014

Dominique J. Navarro, Larry B. Stevens, Larry B. Stevens & Associate, Roseville, Minnesota (for appellant)

Michael S. Ryan, Christian A. Brandt, Murnane Brandt, St. Paul, Minnesota (for respondent)

Considered and decided by Worke, Presiding Judge; Stauber, Judge; and Reilly,

Judge.

UNPUBLISHED OPINION

REILLY, Judge

Appellant general contractor brought action against respondent equipment-

supplier asserting claims for negligence, failure to warn, and res ipsa loquitur. The district court granted respondent’s motion for declaratory judgment against appellant,

concluding that the rental agreement did not constitute a “building and construction

contract” under chapter 337. We affirm.

FACTS

The present action arises out of personal injuries sustained by appellant Lowell

Tietz caused by equipment rented from respondent United Rentals (North America), Inc.

Appellant was a carpenter working in residential construction and home improvement. In

June 2009, appellant agreed to remove a deck from the back of his neighbor’s house and

rebuild a larger one in its place. Appellant was the general contractor on the job and had

two employees working for him. On June 8, appellant entered into a rental agreement

with respondent for a skid steer loader, a bucket, a skid steer auger power unit, and an 18-

inch skid steer auger bit. The equipment was scheduled to be delivered to appellant’s

residence in Roseville on June 9 and returned on June 10.

The agreement contained a number of provisions related to indemnification and

insurance as follows:

INDEMNITY/HOLD HARMLESS. TO THE FULLEST EXTENT PERMITTED BY LAW, CUSTOMER AGREES TO INDEMNIFY, DEFEND AND HOLD UNITED HARMLESS FROM AND AGAINST ANY AND ALL LIABILITY, CLAIM, LOSS, DAMAGE OR COSTS (INCLUDING, BUT NOT LIMITED TO, ATTORNEYS’ FEES, LOSS OF PROFIT, BUSINESS INTERRUPTION OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES, DAMAGES RELATING TO BODILY INJURY, DAMAGES RELATING TO WRONGFUL DEATH) CAUSED BY OR IN ANY WAY ARISING OUT OF OR RELATED TO THE OPERATION, USE, MAINTENANCE, INSTRUCTION, POSSESSION, TRANSPORTATION,

2 OWNERSHIP OR RENTAL OF THE EQUIPMENT, INCLUDING, BUT NOT LIMITED TO, WHENEVER SUCH LIABILITY, CLAIM, LOSS, DAMAGE OR COST IS FOUNDED, IN WHOLE OR IN PART, UPON ANY NEGLIGENT OR GROSSLY NEGLIGENT ACT OR OMISSION OF UNITED OR THE PROVISION OF ANY ALLEGEDLY DEFECTIVE PRODUCT BY UNITED. THIS INDEMNITY PROVISION APPLIES TO ANY CLAIMS ASSERTED AGAINST UNITED BASED UPON STRICT OR PRODUCT LIABILITY CAUSES OF ACTION, BREACH OF WARRANTY OR UNDER ANY OTHER THEORY OF LAW.

...

LIMITATION OF LIABILITY. In no event shall United be responsible to Customer or any other party for any loss, damage or injury caused by, resulting from or in any way connected with the Equipment, its operation or its use, United’s failure to deliver the Equipment as required hereunder, or United’s failure to repair or replace non- working Equipment. Customer acknowledges and assumes all risks inherent in the operation, use and possession of the Equipment from the time the Equipment is delivered to Customer until the Equipment is returned to United and will take all necessary precautions to protect all persons and property from injury or damage from the Equipment.

CUSTOMER’S INSURANCE COVERAGE. Customer agrees to maintain and carry, at its sole cost, adequate liability, physical damage, public liability, property damage and casualty insurance for the full replacement cost of the Equipment, including, but not limited to all risks of loss or damage covered by the standard extended coverage endorsement, to cover any damage or liability arising from the handling, transportation, maintenance, operation, possession or use of the Equipment during the entire Rental Period. When requested, Customer shall supply to United proof of such insurance by Certificate of Insurance clearly setting forth the coverage for the equipment and naming United as loss payee and additional insured; such insurance

3 and evidence thereof to be in amounts and form satisfactory to United. The Certificate of Insurance and policy shall provide that United shall receive not less than 30 days’ notice prior to any cancellation of the insurance required hereunder.

Appellant executed the agreement on June 8. On June 9, respondent’s employee

delivered the equipment to appellant in accordance with the terms of the agreement. The

equipment had been loaded on a roll-back flatbed truck. The auger power unit was

loaded toward the front of the flatbed, and the skid steer with bucket attached and auger

bit were loaded toward the back of the flatbed. Respondent delivered the equipment to

appellant’s address and unloaded it alongside the curb in front of his house. The skid

steer was unloaded first, with attached bucket and auger bit in the bucket. The auger

power unit was unloaded last. In the process of unloading the auger power unit, the

mounting plates on the front of the skid steer were maneuvered into position under the

mounting brackets of the auger power unit and lifted off the flatbed. During this

unloading process, respondent’s employee stated that he did not push the two latch

handles down or engage the pins in the slots on the back of the auger power unit because

he did not know which attachment—the bucket or the auger power unit—appellant

intended to use on the job first. The two latches were in the up position when

respondent’s employee left the job site. Appellant did not recall whether the latches were

secured or not, but one of his employees testified that the latches were in the down

(secured) position. Before beginning work, one of appellant’s employees testified that he

shook the equipment to ensure it was properly assembled and secured. The employee

repeated this process again just before appellant was injured.

4 At the time of the delivery, an operator’s manual for the skid steer was in the

compartment immediately behind the operator’s seat. A skid steer safety manual was

also on the skid steer in a pocket compartment immediately to the right of the operator’s

seat. Both manuals provided instructions for the safe use of the attachment mounting

system. Appellant did not remember receiving or reviewing these manuals. The auger

power unit also carried a warning label that stated in bold letters: !DANGER—STAY 10

FEET FROM AUGER.

Appellant remained outside near respondent’s truck and watched the unloading

operation. Respondent demonstrated for appellant how to connect the hydraulic hoses of

the auger power unit to the skid steer. Before leaving, respondent asked appellant to

review the equipment and sign the rental agreement and the skid steer quality condition

report. In the quality condition report, appellant acknowledged that he understood the

correct operation and function of the controls and that he received adequate instruction to

operate the equipment safely.

Appellant began to connect the auger bit to the unit. When the equipment was

started, the auger came off the rig and struck appellant on the side of his face, neck, and

scalp. As a result, appellant suffered injuries including vocal cord paralysis, nose

deviation and nasal problems, left vertebral artery damage, eye and vision problems,

facial nerve damage, and permanent scarring, among others.

Appellant initiated suit by serving a complaint against respondent, General

Equipment Company, and Deere & Company, Inc., asserting in relevant part claims for

negligence, failure to warn, and res ipsa loquitur. Respondent asserted a counterclaim

5 seeking declaratory relief for contractual indemnity and later filed a motion for summary

judgment. The district court granted summary judgment on the res ipsa loquitur claim,

denied summary judgment on the negligence and failure-to-warn claims, and granted the

motion for declaratory judgment with respect to indemnification.

In its factual findings, the district court determined that the auger came off the unit

because it was not properly attached. Appellant admitted that if he had conducted a

proper investigation of the equipment before starting to work, the accident would not

have happened. The district court found that appellant had not received training with

respect to the operation of the equipment and did not know how to operate the equipment

or secure the attachments. The district court further found that appellant was standing

within ten feet of the auger at the time the accident occurred. The district court rejected

appellant’s argument that the rental agreement was a building and construction contract

and determined that the rental agreement was “an agreement to rent equipment.” The

district court continued that, “[e]ven if it were deemed a building and construction

contract, under Minn. Stat. Sec. 337.05, [appellant] must still indemnify [respondent]

based upon the indemnification provision in the rental contract.” The district court

concluded its analysis as follows: “Under common law, then, [appellant] is obligated to

indemnify [respondent] because: (1) The agreement is a valid contract; (2) The

indemnification provision applies to the claims alleged; and (3) The agreement is not

against public policy.” This interlocutory appeal of the declaratory judgment portion of

the order followed.

6 DECISION

Rule 56 of the Minnesota Rules of Civil Procedure is designed to implement the stated purpose of the rules— securing a just, speedy, and inexpensive determination of an action—by allowing a court to dispose of an action on the merits if there is no genuine dispute regarding the material facts and, a party is entitled to judgment under the law applicable to such facts.

DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997). Accordingly, summary judgment is

appropriate 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 either party is entitled to a judgment as a matter of law.” Minn. R.

Civ. P. 56.03. On appeal, the reviewing court applies a de novo standard of review to a

grant of summary judgment. Kratzer v. Welsh Cos., LLC, 771 N.W.2d 14, 18 (Minn.

2009). The evidence is viewed in the light most favorable to the party against whom

judgment was granted. Id. “The judgment will be affirmed, however, if no genuine

issues of material fact exist and if the court below properly applied the law.” Id. Even if

an appellate court disagrees with the district court’s analysis of some issues, “summary

judgment will be affirmed if it can be sustained on any grounds.” Allianz Ins. Co. v. PM

Servs. of Eden Prairie, Inc., 691 N.W.2d 79, 82-83 (Minn. App. 2005).

Indemnification provisions are construed narrowly and are generally not favored

under Minnesota law. See Nat’l Hydro Sys., a Div. of McNish Corp. v. M.A. Mortenson

Co., 529 N.W.2d 690, 694 (Minn. 1995) (holding that, absent certain exceptions,

“[a]greements seeking to indemnify the indemnitee for losses occasioned by its own

negligence are not favored by the law and are not construed in favor of indemnification”).

7 Indeed, “[a]n indemnification agreement contained in, or executed in connection with, a

building and construction contract” is generally unenforceable. Minn. Stat. § 337.02

(2012). Minnesota law recognizes an exception to this rule to the extent that “the

underlying injury or damage is attributable to the negligent or otherwise wrongful act or

omission, including breach of a specific contractual duty, of the promisor or the

promisor’s independent contractors, agents, employees, or delegates.” Id.

Appellant argues that because the rental agreement was executed in connection

with a building and construction contract, the indemnification provision contained therein

is statutorily unenforceable. The district court rejected appellant’s argument, concluding:

It is clear that is not the case. A building and construction contract, as defined by statute is a contract for the design, construction, alteration, improvement, repair or maintenance of real property, highways, roads or bridges. This was nothing of the sort: it was an agreement to rent equipment.

Determining whether the parties’ agreement for the rental of equipment arose “in

connection with” a business and construction contract under chapter 337 ultimately turns

on a question of statutory interpretation. Statutory interpretation presents a question of

law reviewed on a de novo basis. Hoekstra v. Comm’r of Pub. Safety, 839 N.W.2d 536,

540 (Minn. App. 2013). “The object of all interpretation and construction of laws is to

ascertain and effectuate the intention of the legislature.” Minn. Stat. § 645.16 (2012).

The plain language of a statute is the “touchstone” of statutory interpretation. ILHC of

Eagan, LLC v. Cnty. of Dakota, 693 N.W.2d 412, 419 (Minn. 2005). Thus, where the

statutory language is “clear, explicit, unambiguous, and free from obscurity, courts are

bound to expound the language according to the common sense and ordinary meaning of

8 the words.” Krueger v. Zeman Const. Co., 758 N.W.2d 881, 885 (Minn. App. 2008),

aff’d, 781 N.W.2d 858 (Minn. 2010) (citations omitted); Minn. Stat. § 645.08(1)

(“[W]ords and phrases are construed according to rules of grammar and according to

their common and approved usage[.]”). “When a statute’s meaning is plain from its

language as applied to the facts of the particular case, a judicial construction is not

necessary.” ILHC of Eagan, LLC, 693 N.W.2d at 419. When possible, a law should be

construed “to give effect to all its provisions,” Minn. Stat. § 645.16 (2012), and “no

word, phrase, or sentence should be deemed superfluous, void, or insignificant.” ILHC of

Eagan, LLC, 693 N.W.2d at 419.

The Minnesota statute invoked in this case defines a “building and construction

contract” as:

a contract for the design, construction, alteration, improvement, repair or maintenance of real property, highways, roads or bridges. The term does not include contracts for the maintenance or repair of machinery, equipment or other such devices used as part of a manufacturing, converting or other production process, including electric, gas, steam, and telephone utility equipment used for production, transmission, or distribution purposes.

Minn. Stat. § 337.01, subd. 2 (2012).

The court is presented with two separate agreements in this case: an oral contract

between a nonparty homeowner and appellant for the construction of a residential deck,

and a written contract between appellant and respondent for the rental of equipment.

Appellant contends that the rental of the skid loader, auger, and related equipment was

done “in connection with” the oral building contract and therefore qualifies as a building

9 and construction contract under a broad reading of the statute. However, appellant has

not cited to any persuasive authority to support this position. Chapter 337 generally

applies to construction-industry projects. Target Corp. v. All Jersey Janitorial Serv., Inc.,

916 F. Supp. 2d 909, 913 (D. Minn. 2013). Indeed, appellate-court analysis of section

337.02 has mainly arisen in contracts between general contractors, subcontractors, and

their employees. See, e.g., Katzner v. Kelleher Constr., 545 N.W.2d 378 (Minn. 1996)

(analyzing Minn. Stat. §§ 337.02, 337.05 in context of construction contract between

designer/builder of construction project and its contractors); Van Vickle v. C. W. Scheurer

& Sons, Inc., 556 N.W.2d 238 (Minn. App. 1996) (performing chapter 337 analysis on

subcontract agreement between general contractor and subcontractor for expansion and

renovation of university library); Holmes v. Watson-Forsberg Co., 488 N.W.2d 473

(Minn. 1992) (involving injuries sustained by subcontractor’s employee while engaged in

roofing activity at construction site).

Appellant argues that the equipment rental contract and its attendant indemnity

provision was executed “in connection with” a building and construction contract.

Appellant’s argument is strained. Appellant does not cite to any binding Minnesota

caselaw or statutory authority extending “building and construction” contracts to

encompass an agreement between a party to a construction contract and a remote

nonparty for the rental of equipment. The legislature could have included rental

equipment in its definition of a building and construction contract if that had been its

intent. See Minn. Stat. § 337.01, subd. 2. As drafted, however, the statute does not apply

under these circumstances and this court “cannot add language that is not present in the

10 statute or supply what the legislature purposely omits or inadvertently overlooks.”

Semler v. Klang, 743 N.W.2d 273, 280 (Minn. App. 2007), review denied (Minn.

Feb. 19, 2008). We decline to broaden existing law to the extent appellant suggests. The

district court did not err in determining that the agreement for rental equipment was not a

“building and construction contract” as that term is defined by Minn. Stat. § 337.01.

Affirmed.