Parks v. Western Washington Fair Ass'n

553 P.2d 459, 15 Wash. App. 852, 1976 Wash. App. LEXIS 1489
CourtCourt of Appeals of Washington
DecidedJuly 21, 1976
Docket1643-2
StatusPublished
Cited by11 cases

This text of 553 P.2d 459 (Parks v. Western Washington Fair Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Parks v. Western Washington Fair Ass'n, 553 P.2d 459, 15 Wash. App. 852, 1976 Wash. App. LEXIS 1489 (Wash. Ct. App. 1976).

Opinion

*853 Reed, J.

The Lamkens appeal an order requiring them to indemnify Western Washington Fair Association for attorney’s fees pursuant to an indemnity contract. Mr. and Mrs. Harold Parks, not parties to this appeal, sued the Fair Association to recover for injuries sustained when they slipped and fell upon leaving the grandstand at the Western Washington Fair in 1972. The Parks’ complaint alleged:.

III
That on or about the 23rd day of September, 1972, the plaintiff, Olive E. Parks, while patronizing the defendant’s fair, slipped and fell on the premises due to the negligent conduct of the defendant.
IV
That the sole and proximate cause of the injury was the negligence of the defendant in maintaining the fair grounds.

Preliminary investigation by the Fair Association revealed that the Parks slipped in an aisle of the grandstand on what appeared to be ice on the steps. Believing the ice was from a “snow cone,” the Fair Association tendered defense of the lawsuit to the Lamkens, exclusive “snow cone” concessionaires at the Fair, pursuant to the following provision of their concession contract.

In consideration of the privileges granted by this contract, the concessionaire agrees to protect and indemnify and hold harmless the association from any and all claims for damages, demands or suits, arising from injuries or damage sustained or alleged to be sustained by employees of the concessionaire or by any member of the public where such injuries or damage shall have resulted either directly or indirectly from the activities and business of the concessionaire in connection with this contract.

Recognizing the broad language of the indemnification provision quoted above, the Lamkens informed the Fair Association they would accept the tender of defense, but at the same time reserved the right to contest liability to pay any judgment if the facts at trial revealed that the Parks did not slip on a “snow cone.” The Fair Association deemed this arrangement'unacceptable and informed the Lamkens *854 that it would be necessary for the Fair Association to participate in the defense of the Parks’ suit and pursue a third-party claim against the Lamkens for indemnification. The case proceeded to trial with attorneys for both the Lamkens and the Fair Association participating. The jury returned a verdict for the defendant and the court dismissed the plaintiffs’ suit. The Fair Association then made an oral motion to recover its attorney’s fees from the Lamkens pursuant to the indemnity agreement. The court granted the motion and the Lamkens appeal. For the reasons stated herein we reverse the trial court’s order.

The Fair Association contends the Lamkens’ acceptance of the tender of defense with a reservation of rights constituted a breach of their duty to defend under the indemnification provisions of the concession contract. They assert the Lamkens’ reservation of rights gave rise to a conflict of interest between indemnitor and indemnitee necessitating active participation by the indemnitee to protect its right to indemnification. The Lamkens argue, on the other hand, that they did accept the tender of defense and took no action contrary to the indemnity contract. They further assert that the participation of the Fair Association’s attorney was purely voluntary and gratuitous and was not necessitated by the reservation of rights.

We are unable from the record before us to resolve the parties’ dispute concerning who actually defended the Parks’ lawsuit. It is apparent from the record that appearances were entered by attorneys for both the Fair Association as defendant and third-party plaintiff and by the Lamkens as third-party defendants. The record presented by the parties tends to support the Fair Association’s contention that it actively defended the Parks’ lawsuit, having conducted the majority of cross-examination of plaintiffs’ witnesses. The cross-examination conducted by the Lam-kens’ attorney appears to have been limited to an attempt to establish that the Parks’ injuries were not caused by a slip on ice from a “snow cone,” i.e., a defense of the third-party action for indemnity. However, we do not deem it neces *855 sary to resolve this issue. The trial court’s order awarding attorney’s fees was necessarily based on a conclusion that the Lamkens breached their duty to defend under the terms of the indemnity provision of the concession contract. An indemnitor’s duty to defend a lawsuit against its indem-nitee is totally independent from the obligation to indemnify in the event judgment is rendered. Karnatz v. Murphy Pac. Corp., 8 Wn. App. 76, 80, 503 P.2d 1145 (1972). Accordingly, resolution of the issue whether the Lamkens had a duty to defend in the first instance will be dispositive of this appeal. Only if the indemnitor can be said to have breached that duty can it be held liable for the indemni-tee’s costs of defending the lawsuit.

The law is clear in cases involving insurance policies that an insurer’s duty to defend arises when a complaint is filed against its insured alleging facts which, if proved, would render the insurer liable under its policy. National Steel Constr. Co. v. National Union Fire Ins. Co., 14 Wn. App. 573, 543 P.2d 642 (1975); Holland America Ins. Co. v. National Indem. Co., 75 Wn.2d 909, 454 P.2d 383 (1969). This court has expressed dissatisfaction with the strictness of this rule in light of the advent of notice pleadings, suggesting that an insurer’s duty to defend arises and is determined by the facts known by the insurer at the time of tender. National Steel Constr. Co. v. National Union Fire Ins. Co., supra at 575. This expanded rule had earlier been applied in a case involving common-law indemnity, Dixon v. Fiat-Roosevelt Motors, Inc., 8 Wn. App. 689, 509 P.2d 86 (1973), where the court stated at pages 693-94:

Before the common-law vouching-in device can be used to bind a nonappearing party in an instance such as presently before us, the facts at the time of the tender of defense must demonstrate that liability would eventually fall upon the indemnitor, thereby placing it under a duty to defend. Glick v. White Motor Co., 458 F.2d 1287, 1292 (3d Cir. 1972); Humble Oil & Ref. Co. v. Philadelphia Ship Maintenance Co., 444 F.2d 727 (3d Cir. 1971).

(Italics ours.) Though we favor application of the more expansive test to both insurers and indemnitors, we do not *856

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Bluebook (online)
553 P.2d 459, 15 Wash. App. 852, 1976 Wash. App. LEXIS 1489, Counsel Stack Legal Research, https://law.counselstack.com/opinion/parks-v-western-washington-fair-assn-washctapp-1976.