United States Fidelity & Guaranty Co. v. James F. O'Neil Co.

254 F. Supp. 140, 1966 U.S. Dist. LEXIS 7628
CourtDistrict Court, E.D. Louisiana
DecidedMay 9, 1966
DocketCiv. A. No. 13144
StatusPublished

This text of 254 F. Supp. 140 (United States Fidelity & Guaranty Co. v. James F. O'Neil Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fidelity & Guaranty Co. v. James F. O'Neil Co., 254 F. Supp. 140, 1966 U.S. Dist. LEXIS 7628 (E.D. La. 1966).

Opinion

AINSWORTH, District Judge:

This is an action by United States Fidelity & Guaranty Company, assignee and subrogee to the rights of Blount Brothers Construction Company, its assured, for indemnity from James F. O’Neil Company, Inc., in the sum of $35,886.82, representing legal fees and expenses incurred by assignee in defending a suit brought against Blount Brothers Construction Company by the widow of an employee of O’Neil, and the cost of a compromise settlement with the widow.

On March 6, 1956, James F. O’Neil Company, Inc. was awarded a subcontract by Blount Brothers Construction Company, the general contractor of the United States Atomic Energy Commission, for the construction of a Feed Plant Facility, Portsmouth Area Project. O’Neil was to perform certain mechanical work in connection with the construction of the Facility. The subcontract contained the following indemnity clause:

“Article IX — (a). Sub-contractor shall indemnify Contractor against all claims for damages arising from accidents to persons or property occasioned by the Sub-contractor, his agents or employees; and Sub-contractor shall defend all suits brought against the Contractor on account of any such accidents and shall reimburse Contractor for any expense, including reasonable attorney’s fee sustained by Contractor by reason of such accidents.”

During the course of the work an accident occurred causing the death by electrocution of John E. Parsons, a pipe fitter, employed by O’Neil. A diversity suit was brought by the widow of Parsons, the administratrix of his estate, against Blount Brothers Construction Company (and another defendant not involved in this suit) for indemnity in the United States District Court, Southern District of Ohio, Eastern Division, to recover damages for the alleged wrongful death of her husband, in which Ohio substantive law controlled. United States Fidelity & Guaranty, liability insurer of Blount, requested that O’Neil defend the suit, which O’Neil declined, as a consequence of which United States Fidelity & Guaranty employed its own counsel. A jury trial was held and at the close of plaintiff’s evidence, the court directed a verdict in favor of both defendants. On appeal, the Sixth Circuit reversed and remanded, holding that the matter presented a jury issue as to the possible negligence of Blount and the contributory negligence of decedent. Parsons v. Blount Brothers Construction Company, 6 Cir., 1960, 281 F.2d 414. Subsequently, and after informing O’Neil of its intention to do so, United States Fidelity & Guaranty, on behalf of Blount, negotiated a compromise settlement with the widow of Parsons. The question of negligence was, therefore, not decided.

The following pertinent facts concerning the accidental death of Parsons have been stipulated by the parties in the pretrial order:

That on March 6, 1956, James F. O’Neil Company, Inc. entered into a subcontract with Blount Brothers Construction Company, the general contractor, with the United States Atomic Energy Commission for construction of Feed Plant Facility, Portsmouth Area Project. On March 11, 1957, John E. Parsons, an employee of O’Neil, was electrocuted as the result of holding a length of [142]*142pipe which was being lifted by a crane which struck an exposed overhead electric wire. Parsons was acting in the course of his employment in assisting in removing pipe, pursuant to the contract between O’Neil and Blount. The hydraulic crane and the lift were operated by Hobert Johnson, Jr., also an employee of O’Neil. The electric current which killed Parsons was conducted through the crane or lift and through the pipe which was being held by Parsons. O’Neil refused to defend the ensuing lawsuit and was notified of the proposed compromise settlement prior to the consummation thereof. United States Fidelity & Guaranty Company, liability insurer of Blount, defended the' suit by the administratrix and expended $8,386.82 in attorney’s fees and other expenses. Also, as a result of the compromise settlement with the administratrix, United States Fidelity & Guaranty Company paid on behalf of Blount $27,500, a total of $35,-886.82.

The parties have also agreed that the indemnity provisions of the subcontract should be interpreted in accordance with the law of Ohio, and that the legal issue is whether the terms of the indemnity agreement render defendant liable in indemnity to plaintiff as the subrogee of Blount Brothers Construction Company.

In addition to these stipulations, the parties have offered in evidence the transcript of testimony and the exhibits of the trial in the federal court in Ohio.

Under Ohio law contracts of indemnity purporting to relieve one from the results of his own negligence are not contrary to public policy if the indemnity provisions express that intent in clear and unequivocal terms. George H. Dingledy Lumber Co. v. Erie R. Co., 102 Ohio St. 236, 131 N.E. 723 (1921); St. Paul Mercury Indemnity Co. v. Kopp, Ohio App., 1954, 121 N.E.2d 23. The word “negligence” is not sacrosanct if the language expressed in the agreement shows a clear intention to hold the negligent indemnitee harmless. General Acc. F. & L. Assur. Corp., Ltd. v. Smith & Oby Co., 6 Cir., 1959, 272 F.2d 581, 77 A.L.R.2d 1134; George H. Dingledy Lumber Co. v. Erie R. Co., supra.

We are convinced that the parties to the present agreement, in clear and unequivocal language, expressed the intention that Blount should be held harmless and indemnified against all claims for damages arising from accidents suffered by O’Neil’s employees occasioned or caused by O’Neil or its employees, regardless of whether Blount was negligent.

In New Amsterdam Cas. Co. v. Kilroy Structural Steel Co., Ohio App., 1959, 159 N.E.2d 797, the court held that the following contract of indemnity imposed liability on the indemnitor:

“The subcontractor shall indemnify and save harmless, the owner, the architect, the contractor, and their respective agents, from any and all liability, payments and expenses of any nature, for injury or death to any person, or persons, or for damage to any property, caused or alleged to have been caused by the subcontractor, or incidental to the execution of work under this contract by the subcontractor, his agents or employees.” (Emphasis added.)

In St. Paul Mercury Indemnity Co. v. Kopp, Ohio App., 1954, 121 N.E.2d 23, the following similar indemnity agreement was construed to impose liability on the indemnitor:

“Contractor agrees, in consideration of the work awarded to it by Principal, to indemnify and save harmless Principal from any and all loss, cost, damage, or expense to persons or property, including injury or death suffered by persons employed by said Contractor or members of the public, growing out of or in any way connected with the performance of the work awarded to Contractor.” (Emphasis added.)

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Bluebook (online)
254 F. Supp. 140, 1966 U.S. Dist. LEXIS 7628, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-james-f-oneil-co-laed-1966.