Royal Ins. Co. v. Whitaker Contracting Corp.

824 So. 2d 747, 2002 WL 27985
CourtSupreme Court of Alabama
DecidedJanuary 11, 2002
Docket1000944
StatusPublished
Cited by9 cases

This text of 824 So. 2d 747 (Royal Ins. Co. v. Whitaker Contracting Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Royal Ins. Co. v. Whitaker Contracting Corp., 824 So. 2d 747, 2002 WL 27985 (Ala. 2002).

Opinion

824 So.2d 747 (2002)

ROYAL INSURANCE COMPANY OF AMERICA, as subrogee of R.E. Grills Construction Co., Inc.
v.
WHITAKER CONTRACTING CORP.

1000944.

Supreme Court of Alabama.

January 11, 2002.

*748 Richard W. Lewis and Joseph E.B. Stewart of Austill, Lewis & Simms, P.C., Birmingham, for plaintiff.

F. Lane Finch, Jr., and Ryan M. Aday of Haskell, Slaughter, Young & Rediker, L.L.C., Birmingham, for defendant.

STUART, Justice.

The United States Court of Appeals for the Eleventh Circuit has certified the following question to this Court:

"Must an indemnity agreement specifically state that an indemnitor will indemnify the indemnitee for a nondelegable duty to which the indemnitee is subject under state law to require indemnification for the failure to execute such nondelegable duty, which results in the underlying cause of action for which indemnification is sought?"

We answer this question in the negative.

Background

In November 1993, R.E. Grills Construction Co., Inc. ("Grills"), a general contractor, entered into a contract with the State of Alabama; pursuant to that contract Grills was to widen, grade, provide drainage, and pave approximately a six-mile stretch of Alabama Highway 75 in Blount County. The contract incorporated designated portions of the Alabama Highway Department Standard Specifications for Highway Construction (1992 ed.) ("the standard specifications"). The standard specifications required Grills, as the general contractor, to "assume full responsibility for the continuous and expeditious maintenance of all construction warning signs, barricades and other traffic control devices"; they also provided that the general contractor

"is not relieved of his responsibility to continuously review and maintain all traffic handling measures and insure himself that adequate provisions have been made for the safety of the public and workmen. Construction signs and other traffic control devices specified by plan details are considered the necessary requirements for satisfactory traffic control."

Grills subsequently entered into a subcontract with Whitaker Contracting Corp. ("Whitaker"), pursuant to which Whitaker was to perform the paving of Highway 75 required by the contract between Grills and the State. Grills provided the form of the subcontract between Whitaker and Grills; that subcontract contained the following indemnity agreement:

"The Subcontractor covenants to indemnify and save harmless and exonerate the Contractor and the Owner of and from all liability, claims and demands for bodily injury and property damage arising out of the Work undertaken by the Subcontractor, its employees, agents or its subcontractors, and arising out of any other operation no matter by whom performed for and on behalf of the Subcontractor, whether or not in whole or in part to conditions, acts or omissions done or permitted by the Contractor or Owner."

On April 11, 1996, automobiles being driven by Rhonda Chase and Vicky Hood Washburn collided at the intersection of Highway 75 and Blount County Road 1, on *749 that portion of Highway 75 that was the subject of the contract between Grills and the State and of the paving subcontract between Grills and Whitaker. Chase died as a result of the injuries she sustained in the collision.

The administratrix of Chase's estate (hereinafter referred to as "Chase" or "Chase's estate") sued Whitaker, Washburn, and Washburn's insurance carrier in state court. During her deposition, Washburn, who was attempting to enter Highway 75 from County Road 1 when the accident occurred, testified that barricades, barrels, and equipment at the construction site obstructed her ability to see north onto Highway 75 and contributed to her pulling out in front of Chase's vehicle.

After the deposition, Chase filed an amended complaint, adding various negligence claims against Grills. In those claims, Chase alleged, among other things, that Grills had breached its duty of ordinary care by failing to follow the traffic-control plan designed for the job site on Highway 75 and that Grills had failed to provide an adequate number of barricades, barrels, signs, and other safety devices at the job site to protect the public.

During discovery in Chase's lawsuit, it was learned that the barrels and barricades that allegedly had obstructed Washburn's view were placed and maintained by Grills under the supervision of the Alabama Department of Transportation. It was also revealed during discovery that, before the date of the accident, those barrels and barricades had been set up 13 feet from the edge of Highway 75. However, at the time of the accident, they were within three to five feet of the edge of Highway 75. Although this three- to five-foot distance did not comply with the standard specifications, the parties learned during discovery that Grills's original placement of the barrels and barricades— i.e., 13 feet from the highway—was also not in compliance with the standard specifications or with the traffic-control plan specifically designed for the job site on Highway 75. Evidence was also presented in the form of deposition testimony by David Nooney, vice president of Grills, that, immediately upon learning of the accident, two employees of Grills placed additional barrels at the job site.

Additionally, the parties do not dispute that Whitaker was performing paving work on Highway 75 near the intersection of Highway 75 and County Road 1 on the date of the accident. However, no evidence —other than the fact that Whitaker was paving Highway 75 in the vicinity of the accident—was offered to establish that Whitaker had moved any of the barrels or barricades from where Grills had placed them.

On the morning of the trial, Grills settled the claims asserted against it for $400,000. Later that day, Whitaker settled the claims asserted against it for $250,000. The other defendants settled the claims pending against them for various amounts. Thus, the claims asserted by Chase's estate were never adjudicated, but were resolved through settlement, with no admission of liability by any of the defendants.

Royal Insurance Company of America ("Royal"), Grills's liability insurer, then sought indemnity from Whitaker for the $400,000 Royal paid on Grills's behalf to settle the claims against Grills. Whitaker denied that it was obligated to indemnify Grills or its insurer, and Royal instituted this action in the federal district court.

In the district-court action, Royal asserted that because a trier of fact could have reasonably determined that before the accident Whitaker had moved the barrels and barricades that Washburn says *750 blocked her line of sight, Whitaker had performed the acts upon which Chase's claims of liability against Grills were based. Accordingly, Royal claimed it was entitled to indemnification under the indemnity provision of the subcontract between Grills and Whitaker.

During his deposition, David Nooney, Grills's vice president, testified that he did not believe the indemnity provision required the subcontractor to indemnify Grills for Grills's own negligence. Royal's claims specialist, George Mahon, agreed with Nooney's interpretation of the indemnity provision. Moreover, both Nooney and Mahon admitted that the amended complaint stated claims against Grills for Grills's independent and active negligence or wantonness. However, both Nooney and Mahon claimed that Grills was not working at the job site on the day of the accident, while it is undisputed that Whitaker was

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824 So. 2d 747, 2002 WL 27985, Counsel Stack Legal Research, https://law.counselstack.com/opinion/royal-ins-co-v-whitaker-contracting-corp-ala-2002.