COURT OF APPEALS DECISION DATED AND FILED February 25, 2010 David
R. Schanker Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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APPEAL
from an order of the circuit court for
Before Vergeront, Lundsten and Higginbotham, JJ.
¶1 HIGGINBOTHAM, J. Dan-Ash Trucking, Inc. subcontracted with Mathy Construction Company, Inc. to haul material for a road resurfacing project on which Mathy was the general contractor. As part of the hauling agreement between the parties, Dan-Ash agreed to defend and indemnify Mathy against claims caused by the negligence of Dan-Ash or its subcontractors. The issue in this case is whether Dan-Ash was obligated to defend and indemnify Mathy for costs Mathy incurred in defending against and settling two lawsuits brought by the estate of David Holmes and his heirs after Holmes was killed after falling under the wheels of a semi-truck driven by a Dan-Ash subcontractor while riding his bicycle through the resurfacing project construction zone. The circuit court concluded that, based on the allegations made against Mathy in the two complaints, Dan-Ash had no duty to defend and indemnify Mathy under the agreement. We agree.
¶2 The second issue in this appeal is whether Mathy’s status as an
“additional insured” under Dan-Ash’s commercial general liability policy with
West Bend Mutual Insurance Company required
BACKGROUND
¶3 The following facts are taken from the parties’ summary
judgment submissions.[1] Mathy, a general contracting company, was
awarded a contract to resurface a county road in Scott County, Iowa. Mathy subcontracted with Dan-Ash, a trucking
company, to transport materials for the project. The parties executed a hauling agreement,
which contained an indemnification provision. The agreement also required Dan-Ash to
purchase liability insurance. Accordingly,
Dan-Ash purchased insurance from
¶4 Dan-Ash subcontracted with RT&T Trucking, Inc. to haul materials, which, in turn, subcontracted with truck driver William Hartmann. On the day of the traffic accident, one lane of the county road was closed for resurfacing, creating a one and one-half mile long “bottleneck.” Traffic was being controlled by flag persons at either end of the blocked-off lane and by a “pilot car,” which led cars through the bottleneck. The pilot car was driven by a Mathy employee, Elizabeth Rogers.
¶5 David Holmes approached the construction zone on a bicycle
and was allowed to enter the bottleneck.
¶6 Holmes’ heirs filed two wrongful death suits in Scott
County, Iowa (the “Iowa suits”), against Mathy, RT&T Trucking, Rogers,
Hartmann and Scott County.[2] Dan-Ash was not a defendant in the
¶7 Mathy’s and Rogers’ insurer, St. Paul Fire & Marine Insurance Company, and RT&T’s and Hartmann’s insurer negotiated separate settlement agreements with the heirs, and the suits were subsequently dismissed. Additional facts are set forth as necessary in the discussion section.
¶8 Mathy filed this declaratory judgment action against Dan-Ash
and
¶9 Mathy moved for reconsideration, arguing that the court’s
decision disregarded the plain language of the indemnification provision. On reconsideration, the court, Judge Todd
Bjerke presiding, issued a seventeen-page “Findings of Fact, Conclusions of Law
and Order,”[3]
that, by its terms, reaffirmed and superseded the prior court’s award of
summary judgment to Dan-Ash and
STANDARD OF REVIEW
¶10 An appellate court reviews the circuit court’s order on a
motion for summary judgment de novo, applying the same methodology as the
circuit court. Tensfeldt v. Haberman,
2009 WI 77, ¶24, 319
DISCUSSION
¶11 The duty to defend “is determined by comparing the allegations
of the complaint to the terms of the insurance policy.” Estate of Sustache v. American Family Mut.
Ins. Co., 2008 WI 87, ¶20, 311
¶12 Interpretation of an indemnification agreement, like any other
written contract, begins with the language of the agreement. See Williams v. Rexworks, Inc., 2004 WI
App 228, ¶11, 277
¶13 “The general rule accepted in this state and elsewhere is that
an indemnification agreement will not be construed to cover an indemnitee for
his own negligent acts absent a specific and express statement in the agreement
to that effect.” Dykstra v. Arthur G. McKee &
Co., 100
¶14 On appeal, Mathy argues that the plain language of the
indemnification agreement requires Dan-Ash to defend and indemnify Mathy for
Mathy’s costs to defend against and settle the
¶15 The indemnification provisions of the hauling agreement between Dan-Ash and Mathy obligate Dan-Ash to:
defend, indemnify and hold harmless Mathy … against all claims, including claims for which Mathy may be or claimed to be negligent or liable … arising out of or resulting from the performance of the work in this Agreement or occurring or resulting from the use by [Dan-Ash], [its] agents or employees of … equipment, … provided that any such claim … is … [c]aused in whole or in part by any negligent act or omission of [Dan-Ash], [or] their subcontractors ….”[5]
The hauling agreement defines the “work to be performed” as follows: “Mathy or other Divisions, subsidiaries or affiliated companies of Mathy will, from time to time, tender to Hauler a load or loads of Materials for delivery by Hauler ….”
¶16 Mathy notes that the agreement broadly requires Dan-Ash to defend and indemnify Mathy “against all claims, including claims for which Mathy may be or claimed to be negligent or liable … provided that any such claim … is … [c]aused in whole or in part by any negligent act or omission of [Dan-Ash], [or] their subcontractors.” Mathy appears to interpret this language to mean that, whenever Dan-Ash (or its subcontractors) and Mathy are co-defendants in a negligence suit arising from the same incident, Dan-Ash must indemnify Mathy because the damages sought were “caused in whole or in part by” Dan-Ash’s negligence. We disagree.
¶17 The plain terms of the indemnification agreement limit
Dan-Ash’s obligation to defend and indemnify Mathy to those claims that are caused in whole or in
part by the negligence of Dan-Ash or of its subcontractors. That is, Dan-Ash must defend and indemnify
Mathy only for those claims brought against Mathy that the complaint alleges
are caused at least in part by the negligence of Dan-Ash or its
subcontractors. Mathy’s construction of
the indemnification agreement that it is protected against claims that arise
solely from its own causal negligence is an unreasonable reading of the
agreement. The fact that the Iowa
complaints allege that Hartmann and RT&T were at least partially
responsible for the plaintiffs’ damages does not automatically trigger
Dan-Ash’s duty to defend and indemnify Mathy.
Rather, the question of whether Dan-Ash must indemnify Mathy turns on
whether the specific negligence claims against Mathy in the
¶18 Turning to the two
passing David Holmes on a one-lane road … [and] in a construction zone; … failing to yield the right of way; [f]ailing to maintain a proper lookout; [f]ailing to keep an assured clear distance ahead; [e]ntering a one-lane construction zone with a bicyclist already present there; [f]ailing to exercise reasonably [sic] control; [f]ailing to exercise reasonable care under the conditions then and there existing; [f]ailing to operate at a speed which was reasonable and proper under the circumstances; [o]therwise failing to act within a reasonable degree of prudence and care in the circumstances.
As to Mathy and
placing David Holmes in a perilous situation; … passing David Holmes in a construction zone; … leading other traffic past David Holmes in a construction zone and on a one-lane road; [f]ailing to yield the right of way; … leading others to a position where they would or could fail to yield the right of way; [f]ailing to maintain a proper lookout; ... leading others to a position where they might fail to maintain a proper lookout; [f]ailing to keep an assured distance ahead; ... leading others to a position where they might fail to maintain an assured clear distance ahead; [e]ntering a one-lane construction zone with a bicyclist already present there; … leading other traffic into a one-lane construction zone with a bicyclist already present there; [f]ailing to exercise reasonably [sic] control; ... placing other traffic in a positions [sic] where they might fail to exercise reasonable control; [f]ailing to exercise reasonable care under the conditions then and there existing; … leading other traffic into a position where they might fail to exercise reasonable care under the conditions then and there existing; [f]ailing to operate at a speed which was reasonable and proper under the circumstances; … leading other traffic into a position where they might fail to operate a speed which was reasonable and proper under the circumstances; [f]ailing to adequately supervise and/or control traffic within a construction zone; [o]therwise failing to act within a reasonable degree of prudence and care under the circumstances[.]
¶19 The excerpts above show that the claims against Mathy and
¶20 Mathy next contends that West Bend breached its duty to defend
Mathy as a listed “additional insured” under Dan-Ash’s policy with West Bend,
and seeks recovery from West Bend as an additional insured for the costs to
defend and settle the Iowa claims.
¶21 We conclude that Mathy’s coverage as an additional insured is
not triggered by the
conclusion
¶22 In sum, we conclude that the claims against Mathy in the
By the Court.—Order affirmed.
Not recommended for publication in the official reports.
[1] The
fact section of Mathy’s brief-in-chief is peppered with argument. Wisconsin
Stat. § 809.19(1)(d) and (e) (2007-08) requires that briefs include
a separate statement of facts relevant to the issues being reviewed. The fact section of a brief is no place for
argument. Arents v. ANR Pipeline Co.,
2005 WI App 61, ¶5 n.2, 281 Wis. 2d 173, 696 N.W.2d 194. “[F]acts must be stated with absolute,
uncompromising accuracy. They should
never be overstated—or understated, or ‘fudged’ in—any manner.” Judge William Eich, Writing the Persuasive Brief,
[2] One suit was brought by Holmes’ widow, Tammy Holmes, and Holmes’ Estate. The other was brought by Tracy Mahler, the mother of Holmes’ three minor children, on the children’s behalf. The two actions name the same defendants and assert the same claims. Apart from having different plaintiffs, the complaints in the two suits are identical.
[3] We discourage the practice of issuing “Findings of Fact” in a summary judgment order because it increases the risk that the court will err by making a finding as to a disputed issue of fact on summary judgment. Bank of New Glarus v. Swartwood, 2006 WI App 224, ¶11 n.5, 297 Wis. 2d 458, 725 N.W.2d 944.
[4] Mathy
also contends that the circuit court’s decision contains several examples of
clear error requiring reversal.
Specifically, Mathy argues that the circuit court committed the
following errors, among others: Issuing
findings as to disputed issues of fact, contrary to summary judgment
methodology, and considering extrinsic evidence to ascertain the intent of the
parties after concluding that the indemnification provision was
“unambiguous.” Because our review of the
court’s order on summary judgment is de novo, Green Spring Farms v. Kersten,
136
[5] The indemnification section of the hauling agreement provides in full:
Indemnification. (a). To the fullest extent permitted by law, the Hauler shall defend, indemnify and hold harmless Mathy, its officers, stockholders and employees from and against all claims, including claims for which Mathy may be or claimed to be negligent or liable, for damages, losses and expenses, including, but not limited to attorneys’ fees, including legal fees and disbursements paid or incurred to enforce the provisions of this paragraph, arising out of or resulting from the performance of the work in this Agreement or occurring or resulting from the use by Hauler, his agents or employees of materials, equipment, instrumentalities or other property, whether the same be owned by the Hauler, Mathy or third parties, provided that any such claim, damage, loss or expense is:
(i) Attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property, including the loss of use therefrom, and
(ii) Caused in whole or in part by any negligent act or omission of the Hauler, their subcontractors, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, or
(iii) Attributable to injuries sustained by any employee of the Hauler or its subcontractors of any tier during the performance of work under this Agreement, for any cause whatsoever.
(b). Hauler shall obtain, maintain and pay for such Commercial General Liability insurance coverage as will insure the provisions of this paragraph 8, to the fullest extent available.
[6] In
his brief, Mathy states that the
[7] Dan-Ash also points to extrinsic evidence that appears to confirm this interpretation of the indemnification agreement. Mathy’s General Counsel David Coriden, the drafter of the hauling agreement, testified that the intent of the indemnification section was to protect Mathy from liability that might flow to it from work under the hauling agreement, not to require Dan-Ash to cover Mathy for Mathy’s own causal negligence. However, our analysis has not taken this evidence into account, because we have concluded that the agreement is not ambiguous. Stone v. Acuity, 2008 WI 30, ¶67, 308 Wis. 2d 558, 747 N.W.2d 149 (“If the agreement is not ambiguous, ascertaining the parties’ intent ends with the four corners of the contract, without consideration of extrinsic evidence.”) (citation omitted).