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Hoffman Construction v U.S. Fabrication & Erection (05/11/2001) sp-5411
Hoffman Construction v U.S. Fabrication & Erection (05/11/2001) sp-5411
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
HOFFMAN CONSTRUCTION COMPANY )
OF ALASKA, ) Supreme Court No. S-9116
)
Appellant, ) Superior Court No.
) 3AN-96-5153 CI
v. )
) O P I N I O N
U.S. FABRICATION & ERECTION, )
INC., and THE SISTERS OF ) [No. 5411 - May 11, 2001]
PROVIDENCE OF WASHINGTON, )
d/b/a PROVIDENCE HOSPITAL, )
)
Appellees. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
John Reese, Judge.
Appearances: Sanford M. Gibbs, Law Offices of
Brown, Waller & Gibbs, Anchorage, for Appellant. Bruce E. Davison
& Joseph A. Pollock, Davison & Davison, Inc., Anchorage, for
Appellee U.S. Fabrication & Erection, Inc. Robert J. Dickson and
John M. Conway, Atkinson, Conway & Gagnon, Anchorage, for Appellee
The Sisters of Providence of Washington.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
FABE, Chief Justice.
I. INTRODUCTION
Four U.S. Fabrication & Erection, Inc. workers brought
suit alleging that they had been exposed to asbestos while working
at a construction project at Providence Hospital in Anchorage. The
general contractor on the project, Hoffman Construction, settled
the suit, and sought indemnity and defense costs from subcontractor
U.S. Fabrication & Erection, Inc. (USF&E) under a contractual
indemnity provision; however, USF&E simultaneously claimed
indemnity and defense from Hoffman under an implied contractual
theory. Providence also sought indemnity and defense costs from
Hoffman under a contractual indemnity provision. The superior
court held that both USF&E and Providence were entitled to
indemnity and defense from Hoffman. For the reasons stated below,
we affirm in part and reverse in part.
II. FACTS AND PROCEEDINGS
In November 1992 the Sisters of Providence in Washington,
a nonprofit corporation which owns and operates the Providence
Alaska Medical Center in Anchorage, Alaska, entered into a
construction contract with Hoffman Construction Company of Alaska.
Hoffman agreed to be the general contractor for new construction
and renovation of buildings on the Providence Hospital campus.
The renovation work on Providence Hospital was to involve
the abatement of asbestos, and the original Providence/Hoffman
contract included asbestos abatement within the scope of Hoffman's
duties. However, in an amendment to the Providence/Hoffman
contract (Amendment #1), the parties removed asbestos abatement
responsibilities from the scope of Hoffman's duties under the
contract. Asbestos abatement on the project was instead handled by
EHS Alaska, Inc., which provided consulting services, and Locher
Interests, which was the project manager for asbestos abatement.
However, under Amendment #1, Hoffman retained the duty to
coordinate its work and the work of its subcontractors on the
asbestos abatement.
Amendment #1 to the Providence/Hoffman contract also
added seismic upgrade work on the existing South Tower building on
the Providence Hospital campus. This work consisted of
strengthening the structural steel frame of the South Tower by
adding steel beams, braces, and columns to the interior structure
of the building. Hoffman subcontracted with USF&E to do the steel
erection work on the South Tower. Both construction and asbestos
abatement work went on simultaneously at the South Tower throughout
1994.
Both the Providence/Hoffman contract and the
Hoffman/USF&E contract contained indemnity provisions. The
Providence/Hoffman contract's indemnity clause required Hoffman to
indemnify and defend Providence for any claim "arising out of . . .
the performance of this Construction Contract, regardless of
whether or not it is caused in part by a party indemnified
hereunder." The Providence/Hoffman indemnity clause also made
Hoffman responsible for any claims "arising out of or resulting
from [Hoffman's] breach of [the Providence/Hoffman contract], or
any unlawful act or omission of [Hoffman and its agents]." [Fn. 1]
The Hoffman/USF&E contract also contained an indemnity
clause, which required USF&E to indemnify and defend Hoffman for
any claims "directly or indirectly arising out of . . . any failure
of [USF&E] to perform any of the terms and conditions of this
Subcontract," or for any claims arising out of USF&E's "performance
of or failure to perform" its work under the subcontract. The
Hoffman/USF&E indemnity clause also made USF&E responsible for any
claims "arising from injuries, including death to [USF&E's]
employees," unless the injuries were caused by or resulted from
"the sole negligence of [Hoffman]." [Fn. 2]
On July 3, 1996, Floyd Brooks, a former USF&E employee,
filed a personal injury action in Anchorage superior court against
USF&E, Hoffman, and Providence. In this suit, Brooks alleged that,
through the negligence of USF&E, Hoffman, and Providence, Brooks
and other workers were exposed to asbestos in the course of their
work on the South Tower. Brooks initially attempted to maintain
the suit as a class action, but later converted it to a direct
action, with three other USF&E employees as co-plaintiffs. The
plaintiffs specifically alleged that they were exposed to asbestos
while working on the South Tower some time before July 24, 1994.
While working on the structural steel, the Brooks plaintiffs picked
up scraps of material that had been blown into their area by the
wind; later they came to believe that this material was asbestos.
The Brooks plaintiffs claimed that their work area was not cleared
of asbestos until after they entered the area.
During the summer of 1998, the Brooks plaintiffs settled
with all of the parties by accepting a payment of $25,000 from
Hoffman and $75,000 from USF&E's insurance carrier. On January 5,
1998, Providence filed a motion for summary judgment, seeking a
ruling that Hoffman owed Providence a duty of indemnity and a duty
of defense under the indemnity clause in the Providence/Hoffman
contract. On February 27, 1998, Hoffman filed its opposition to
Providence's motion as well as a cross-motion against Providence,
also seeking indemnity and defense costs. On November 20, 1998,
the superior court issued an order granting Providence's motion and
denying Hoffman's cross-motion, ruling that Hoffman owed Providence
a duty of indemnity and a duty of defense. Hoffman now appeals the
superior court's grant of Providence's motion for summary judgment.
On August 11, 1998, Hoffman filed a motion for summary
judgment against USF&E seeking a ruling that USF&E had a duty to
defend and indemnify Hoffman under the indemnity clause in the
Hoffman/USF&E contract. On September 1, 1998, USF&E filed its
opposition to Hoffman's motion as well as a cross-motion for
summary judgment seeking recovery of its defense costs based on an
implied contractual indemnity theory. In its November 20, 1998
order, the superior court denied Hoffman's motion against USF&E and
granted USF&E's cross-motion, holding that Hoffman owed USF&E a
duty of indemnity and a duty of defense. On April 22, 1999, the
superior court issued partial final judgments in favor of
Providence and USF&E pursuant to Civil Rule 54(b). Hoffman now
appeals both the denial of its motion for summary judgment against
USF&E and the grant of USF&E's cross-motion for summary judgment.
III. STANDARD OF REVIEW
This is an appeal of summary judgment entered by the
superior court, and we will apply de novo review. [Fn. 3] We will
affirm a summary judgment if there are no genuine issues of
material fact and if the moving party is entitled to judgment as a
matter of law. [Fn. 4] When making this determination, we will
draw all reasonable inferences in favor of the non-moving party.
[Fn. 5]
We are not bound by the reasoning articulated by the
superior court and can affirm a grant of summary judgment on
alternative grounds, including grounds not advanced by the superior
court or the parties. [Fn. 6] Moreover, we will consider any
matter appearing in the record, even if not passed upon by the
superior court, in defense of the judgment. [Fn. 7] However, we
will not consider arguments that were not raised below, unless the
issues establish plain error, or the issues (1) do not depend upon
new facts, (2) are closely related to other arguments at trial, and
(3) could have been gleaned from the pleadings. [Fn. 8]
This appeal requires us to interpret the
Providence/Hoffman and Hoffman/USF&E contracts. If there is no
dispute about the surrounding circumstances of the formation of an
indemnity contract, the interpretation of the contract's language
is a matter of law for us to determine. [Fn. 9] When interpreting
contracts, the goal is to give effect to the reasonable
expectations of the parties. [Fn. 10] To determine the intent of
the parties, we will look to the written contract as well as
extrinsic evidence regarding the parties' intent at the time the
contract was made. [Fn. 11] Where there is conflicting extrinsic
evidence, the court, rather than the jury, must decide the meaning
except where the written language, read in context, is reasonably
susceptible to both asserted meanings. [Fn. 12]
IV. DISCUSSION
A. The Superior Court Properly Held that Hoffman Has a Duty
to Defend Providence.
The superior court granted Providence's motion for
summary judgment, ruling that Hoffman owed Providence a duty of
indemnity and a duty of defense. Hoffman appeals this decision.
In order to decide whether the superior court properly
granted Providence's motion, we must address three issues: (1) the
distinction between the duty to defend and the duty to indemnify;
(2) the scope of the indemnity clause in the Providence/Hoffman
contract; and (3) any applicable exceptions that could prevent
enforcement of the Providence/Hoffman contract. An analysis of
these three issues shows that, as a matter of law, the indemnity
clause in the Providence/Hoffman contract requires Hoffman to
defend Providence under the circumstances presented here.
1. The distinction between the duty to defend and the
duty to indemnify
The duty to defend in an indemnity clause like the one in
the Providence/Hoffman contract is triggered when the indemnitee
requires a defense; however, the duty to indemnify is not triggered
until the indemnitee is liable for damages. The duty to defend is
triggered merely by claims of injury that fall within the scope of
the indemnity clause, requiring a defense for the indemnitee and
requiring the indemnitor to provide that defense. In Stephan &
Sons, Inc. v. Municipality of Anchorage, we stated that "[w]e think
that the duty to defend attaches as long as the principal case
continues to include a cause of action [within the scope of the
indemnity clause]." [Fn. 13] This means that, for the duty of
defense, the "true facts" are irrelevant; a duty to defend can be
found even if there are genuine issues of material fact concerning
liability for the plaintiffs' injuries. [Fn. 14] However, for the
duty to indemnify, the issue of causation of the plaintiffs'
injuries may be relevant because there is a duty to indemnify only
when the indemnitee is liable for damages. [Fn. 15]
Hoffman claims that summary judgment in favor of
Providence cannot be affirmed because there is an unresolved
factual issue concerning the cause of the Brooks plaintiffs'
alleged exposure. However, as we held in Stephan & Sons, causation
is immaterial to the duty of defense; Hoffman has a duty to defend
Providence as a matter of law if the claims asserted by the Brooks
plaintiffs are within the scope of the indemnity clause in the
Providence/Hoffman contract. [Fn. 16]
2. The Brooks plaintiffs' claims are within the scope
of the Providence/Hoffman indemnity clause.
In the first part of the Providence/Hoffman indemnity
clause, Hoffman promises to indemnify and defend Providence for any
claim "arising out of . . . the performance of this construction
contract, regardless of whether or not it is caused in part by a
party indemnified hereunder." Hoffman claims that the Brooks
plaintiffs' claims did not "arise out of" Hoffman's performance of
the contract because its performance did not include any asbestos
abatement responsibilities. Therefore, Hoffman argues that claims
of asbestos exposure could not arise out of Hoffman's performance
since its performance had nothing to do with asbestos.
We have interpreted similar indemnity clauses very
broadly in the past and found that an employee's claims "arise out
of" an indemnitor's performance if the injury occurs when the
employee is on the job that is the subject of the indemnification
agreement. In Burgess Construction Co. v. State, the state and a
construction contractor (Burgess) contracted to build a road. [Fn.
17] Their contract included an indemnity clause. Two Burgess
employees were killed in an accident, and wrongful death actions
were brought against the state. The state then brought an
indemnity action against Burgess. We summarized the text of the
indemnity clause as follows:
Burgess was required to "indemnify and save
harmless" the State from all claims brought because of injuries
received by any person "on account of the operations of
Contractor."[ [Fn. 18]]
We concluded that the accident in Burgess was within the
scope of the indemnity clause because "the accident victims were
Burgess' employees engaged in operations in fulfillment of the
contract at the time of the accident." [Fn. 19]
In Duty Free Shoppers Group Ltd. v. State, a shop at the
Anchorage International Airport had an indemnity clause as part of
its lease with the state. [Fn. 20] An employee of Duty Free sat
down in a broken airport lounge chair during her coffee break and
was injured. The employee brought suit and the state settled; then
the state sought to enforce the indemnity clause against Duty Free.
The text of the indemnity clause read as follows:
[Duty Free] shall indemnify and save harmless
[the state] . . . from all claims . . . aris[ing] or result[ing]
from any acts or omissions of [Duty Free] . . . in connection with
the use or occupancy of the Premises or any other portion of the
Airport.[ [Fn. 21]]
We concluded that the scope of the Duty Free Shoppers indemnity
clause was broad enough to include the accident in that case,
because the accident happened to the indemnitor's employee while
she was on the job at the airport. [Fn. 22]
In Burgess and Duty Free Shoppers, we held that a clause
requiring indemnity and defense for claims brought "on account of"
or "in connection with" the indemnitor's work is broad enough to
include any claims for injuries sustained by the indemnitor's
employees while on the job that is the subject of the indemnity
clause. [Fn. 23] We also held that fault was immaterial to this
analysis. [Fn. 24]
The Providence/Hoffman indemnity clause is similar to
those considered in Burgess and Duty Free Shoppers. Because the
Brooks plaintiffs were on the jobsite performing work for USF&E,
and in turn, for Hoffman, their claims "arise out of" Hoffman's
performance of the Providence/Hoffman contract, and the claims fall
within the scope of the first part of the Providence/Hoffman
indemnity clause. [Fn. 25]
3. Alaska Statute 45.45.900 and the policy of
"nondelegable duties" do not apply to prevent enforcement of the
Providence/Hoffman indemnity clause.
Hoffman claims that the Providence/Hoffman indemnity
clause is rendered unenforceable by (a) AS 45.45.900, or by (b) the
public policy of "nondelegable duties." However, neither of these
applies under the circumstances here, and the Providence/Hoffman
indemnity clause is fully enforceable.
a. Alaska Statute 45.45.900
Alaska Statute 45.45.900 limits the enforceability of
indemnification clauses: it requires that such clauses not be
enforced if they serve to indemnify the indemnitee from its own
sole negligence or willful misconduct. Hoffman claims that the
trial court read the Providence/Hoffman indemnity clause so broadly
that, under this reading, Hoffman could be responsible to indemnify
Providence for Providence's sole negligence. Because there is an
issue of material fact as to whether the plaintiffs' claims were
caused by Providence's sole negligence, Hoffman claims, as a matter
of law this court cannot decide that the clause creates a duty to
indemnify or defend, because the clause might be invalid under AS
45.45.900. Therefore, Hoffman argues, we should remand this case
for resolution of the issue of material fact.
However, Hoffman's interpretation of AS 45.45.900 is
incorrect. As we have previously held, AS 45.45.900 only
invalidates an indemnity clause if the clause purports to indemnify
the indemnitee for the indemnitee's sole negligence. [Fn. 26] The
Providence/Hoffman indemnity clause does not purport to indemnify
Providence for Providence's sole negligence since the injuries
caused by Providence's sole negligence would be outside the scope
of the indemnity clause. The first part of the Providence/Hoffman
indemnity clause indemnifies Providence for any claim "arising out
of . . . the performance of this construction contract, regardless
of whether or not it is caused in part by a party indemnified
hereunder." (Emphasis added.) The negative implication is that a
claim caused wholly by Providence is not within the scope of the
indemnity clause. The second part of the Providence/Hoffman
indemnity clause makes Hoffman responsible for any claims "arising
out of or resulting from [Hoffman's] breach of [the
Providence/Hoffman contract], or any unlawful act or omission of
[Hoffman and its agents]." An injury caused by Providence's sole
negligence would be outside the scope of this part of the clause as
well, because such an injury could not possibly arise from
Hoffman's "breach" or "unlawful acts." Neither part of the
Providence/Hoffman indemnity clause purports to indemnify Hoffman
for Providence's sole negligence. Therefore, as a matter of law,
AS 45.45.900 does not invalidate the Providence/Hoffman indemnity
clause.
b. The public policy of "nondelegable" duties
Hoffman argues that, because Providence was working with
asbestos, Providence had a nondelegable duty to protect the workers
and independent contractors from asbestos and the
Providence/Hoffman indemnity clause should not be enforced.
However, Hoffman failed to make this argument below, and
therefore it is waived. As a general rule, we will not consider
arguments for the first time on appeal. [Fn. 27] In McConnell v.
State, we provided for an exception to this waiver rule:
We will consider arguments not raised
explicitly in the trial court . . . if the issue is 1) not
dependent on any new or controverted facts; 2) closely related to
the appellant's trial court arguments; and 3) could have been
gleaned from the pleadings.[ [Fn. 28]]
Hoffman admits that it failed to make its argument on
nondelegable duties below, but it claims that the exception stated
in McConnell applies. Hoffman claims that the first two McConnell
requirements are fulfilled, because: (1) the facts supporting
Hoffman's nondelegable duties argument are already in the record;
and (2) Hoffman argued in the superior court that Providence should
not be able to escape liability for its own asbestos abatement
activities. Hoffman does not discuss the third prong of McConnell,
whether its nondelegable duties argument could be "gleaned from the
pleadings."
Hoffman fails to satisfy the exception to the waiver rule
stated in McConnell. The first McConnell requirement is satisfied
because the facts supporting Hoffman's nondelegable duties argument
are already in the record. But Hoffman does not meet the second
McConnell requirement. The nondelegable duties argument made for
the first time on appeal is not like any argument Hoffman made in
the superior court. Hoffman claims that its argument raised below
(already discussed in this opinion) that AS 45.45.900 invalidates
the indemnity clause was similar to the nondelegable duties
argument now raised. However, the argument raised below is not
similar to Hoffman's new argument. The application of AS
45.45.900's statutory limitations to the language of the
Providence/Hoffman indemnity clause does not bear on whether
asbestos abatement is an ultra-hazardous activity that gives rise
to nondelegable duties. Hoffman has waived its nondelegable duties
argument and we will not consider it further. [Fn. 29]
We affirm the superior court's ruling that Hoffman has a
duty to defend Providence. Hoffman's duty is triggered by any
claim of injury that is within the scope of the indemnity clause;
the claims made by the Brooks plaintiffs are in fact within the
scope of the Providence/Hoffman indemnity clause. The indemnity
clause is fully enforceable despite AS 45.45.900, and Hoffman has
waived its nondelegable duties argument.
B. The Superior Court Erred in Holding that Hoffman Has a
Duty to Indemnify Providence.
In its November 20, 1998 order, the superior court
granted Providence's motion for summary judgment and found that
Hoffman has a duty to indemnify Providence. Because there are
issues of material fact as to causation of and liability for the
Brooks plaintiffs' alleged exposure, we reverse this ruling. [Fn.
30]
As discussed earlier, the duty to indemnify in an
indemnity clause like the one in the Providence/Hoffman contract is
not triggered until the indemnitee is liable for damages. [Fn. 31]
Providence has no liability here because the Brooks plaintiffs'
claims were settled by Hoffman (together with USF&E's insurance
carrier) without any payments by Providence. Also, there are
issues of material fact as to ultimate liability for the Brooks
plaintiffs' claims, because there are issues of fact as to
causation of these injuries. [Fn. 32] Therefore, we reverse the
superior court's ruling that Hoffman owes Providence a duty of
indemnity as a matter of law under the Providence/Hoffman contract.
C. The Superior Court Erred in Holding that USF&E Has No
Duty to Defend Hoffman.
In its November 20, 1998 order, the superior court denied
Hoffman's motion for summary judgment, ruling that USF&E did not
have a duty to defend Hoffman. Hoffman appeals this ruling.
In order to decide whether the superior court properly
denied Hoffman's motion, we must address three issues: (1) the
distinction between the duty to defend and the duty to indemnify;
(2) the scope of the indemnity clause in the Hoffman/USF&E
contract; and (3) the exceptions that could potentially apply to
prevent enforcement of the Hoffman/USF&E contract. An analysis of
these three issues shows that, as a matter of law, the indemnity
clause in the Hoffman/USF&E contract requires USF&E to defend
Hoffman under the circumstances presented here.
1. The distinction between the duty to defend and the
duty to indemnify
As discussed in Part IV.A.1 above, the duty to defend in
an indemnity clause like the one in the Hoffman/USF&E contract is
triggered when the indemnitee requires defense; however, the duty
to indemnify is not triggered until the indemnitee is liable for
damages. The duty to defend is triggered merely by claims of
injury that fall within the scope of the indemnity clause. [Fn. 33]
Therefore, USF&E has a duty to defend Hoffman if the Brooks
plaintiffs' claims are within the scope of the Hoffman/USF&E
indemnity clause.
2. The Brooks plaintiffs' claims are within the scope
of the Hoffman/USF&E indemnity clause.
Like the Providence/Hoffman indemnity clause, the
Hoffman/USF&E indemnity clause has two parts. The claims asserted
by the Brooks plaintiffs are within the scope of both.
The first part of the indemnity clause in the
Hoffman/USF&E contract holds USF&E liable for (i) any claims
"directly or indirectly arising out of . . . any failure of [USF&E]
to perform any of the terms and conditions of this Subcontract," or
(ii) any claims arising out of the "performance of or failure to
perform" USF&E's work under the subcontract.
USF&E argues that the Brooks plaintiffs' claims are not
within the scope of this first part of the clause because USF&E did
not breach any of its contractual obligations under the
Hoffman/USF&E contract, and USF&E's performance had nothing to do
with asbestos.
But, as we discussed in the context of the
Providence/Hoffman contract, the phrase "arising out of [the
indemnitor's] performance" is very broad and includes claims for
any injuries sustained by the indemnitor's employees while on the
job fulfilling the contract with the indemnitee. [Fn. 34] It is
undisputed that the alleged asbestos exposure occurred while USF&E
employees were performing work contracted for by Hoffman -- the
"performance" referred to by the first part of the indemnity clause
in the Hoffman/USF&E contract. Therefore, the Brooks plaintiffs'
claims are within the scope of the first part of the Hoffman/USF&E
indemnity clause. [Fn. 35]
The second part of the Hoffman/USF&E indemnity clause
makes USF&E responsible for any claims "arising from injuries,
including death to [USF&E's] employees," unless the injuries were
caused by or resulted from "the sole negligence of [Hoffman]."
The Brooks plaintiffs' claims are also within the scope
of this second part of the indemnity clause. USF&E is responsible
to defend Hoffman for all claims of injury to USF&E employees,
unless the injury was caused by Hoffman's sole negligence. Since
the Brooks plaintiffs were USF&E employees, and their alleged
injuries were not caused by Hoffman's sole negligence, their claims
are also within the scope of this second part of the indemnity
clause.
3. Alaska Statute 45.45.900, the "public duty"
exception, the policy of "nondelegable duties," and the doctrine of
"unclean hands" do not apply to prevent enforcement of the
Providence/Hoffman indemnity clause.
USF&E claims that the Hoffman/USF&E indemnity clause is
rendered unenforceable for four reasons: (a) AS 45.45.900, (b) the
"public duty" exception, (c) the policy of "nondelegable duties,"
and (d) the doctrine of "unclean hands." However, none of these
apply under the circumstances, and the Hoffman/USF&E indemnity
clause is fully enforceable.
a. Alaska Statute 45.45.900
As discussed earlier, AS 45.45.900 limits the
enforceability of indemnification clauses, requiring that such
clauses will not be enforced if they serve to indemnify the
indemnitee from its own sole negligence or willful misconduct.
USF&E claims that, "[b]ecause [the indemnity language in the
Hoffman/USF&E subcontract] could be construed as requiring
indemnity for Hoffman's sole negligence or willful misconduct, the
entire indemnity clause is void."
But AS 45.45.900 only invalidates an indemnity clause if
the clause purports to indemnify the indemnitee for the
indemnitee's sole negligence or willful misconduct. [Fn. 36] The
Hoffman/USF&E indemnity clause does not purport to indemnify
Hoffman for the sole negligence or willful misconduct of Hoffman or
its abatement contractors; claims arising from the sole negligence
or willful misconduct of Hoffman would be outside the scope of the
indemnity clause.
The first part of the Hoffman/USF&E indemnity clause
explicitly excludes USF&E from liability for any claims "caused by
the sole negligence or willful misconduct of [Hoffman]."
Therefore, this part of the Hoffman/USF&E indemnity clause complies
with AS 45.45.900.
The second part of the Hoffman/USF&E indemnity clause,
which makes USF&E responsible for any injuries sustained by USF&E
employees while on the job, also explicitly excludes claims of
injury caused by Hoffman's sole negligence, but does not explicitly
exclude injuries caused by Hoffman's willful misconduct.
Theoretically, the clause could be read to require a duty of
defense for claims caused by Hoffman's willful misconduct.
However, AS 45.45.900 does not apply to invalidate an indemnity
clause merely because there is a theoretical possibility that the
clause could be applied to indemnify the indemnitee for its willful
misconduct. Instead, AS 45.45.900 only applies to invalidate an
indemnity clause if the clause is actually applied, as between the
parties, to indemnify an indemnitee for the indemnitee's own sole
negligence or willful misconduct. [Fn. 37] USF&E has not alleged,
and no evidence in the record suggests, that the Brooks plaintiffs'
alleged exposure was caused by Hoffman's willful misconduct.
Therefore, AS 45.45.900 does not apply to invalidate the second
part of the Hoffman/USF&E indemnity clause.
b. The "public duty" exception
We established the "public duty" exception to the
enforcement of indemnity clauses in Manson-Osberg Co. v. State [Fn.
38] and Burgess Construction Co. v. State. [Fn. 39] We held in
those cases that an indemnity clause will not be enforced where the
clause serves to indemnify an indemnitee from its own negligence
and tends to promote a breach of the indemnitee's duty to the
public. [Fn. 40] In Burgess, we articulated the two principles
behind the "public duty" exception: (1) the exception applies to
entities that must guard against negligence at all times, since
indemnity agreements would create improper incentives for them to
breach a duty owed to the public; and (2) public service entities
should not be able to impose liability on those they are supposed
to serve, since the recipients of the public service would have no
choice but to accept that liability. [Fn. 41]
USF&E claims that the "public duty" exception applies
here to invalidate the Hoffman/USF&E indemnity clause because
Hoffman "had an express contractual and legal duty to ensure safety
of the workplace." USF&E claims that Hoffman breached this duty by
allowing the Brooks plaintiffs' exposure to occur.
However, an examination of our decisions in which we have
applied the "public duty" exception shows that the exception does
not apply to the Hoffman/USF&E contract.
In two cases, State v. Korean Air Lines Co. [Fn. 42] and
Kuhn v. State, [Fn. 43] we considered the "public duty" exception
and held that it applied to invalidate the indemnity clauses at
issue. In Korean Air Lines, the state attempted to enforce a
clause indemnifying the state for its own alleged negligence in
design of Anchorage International Airport. [Fn. 44] In Kuhn, the
state attempted to enforce an indemnity clause that was
incorporated into required permits for use of the Dalton Highway.
[Fn. 45] The indemnity clause in Kuhn indemnified the state for
claims related to maintenance of the Dalton Highway. [Fn. 46] In
these cases, we found that both of the "public duty" principles
demanded that the indemnity clauses be invalidated because: (1) the
clauses gave the state, as the owner and operator of the airport,
and as the maintainer of the Dalton Highway, an incentive to
exercise less caution in operating the airport and maintaining the
Dalton Highway, to the detriment of its duty to protect the
traveling public; [Fn. 47] and (2) it is unfair for the state as a
public service organization to shift its responsibilities to the
public, since users of the airport and the Dalton Highway have no
choice but to accept the state's terms in order to use the
services. [Fn. 48]
The Hoffman/USF&E indemnity clause is unlike the clauses
considered in either Korean Air Lines or Kuhn. Hoffman's duties to
its subcontractors are not public duties like the duties owed by
the state to travelers on highways or at airports. Also, it is not
unfair to impose a liability-shifting agreement on USF&E as it was
in Korean Air Lines and Kuhn. In both Korean Air Lines and Kuhn,
the indemnitors had no choice but to accept the indemnity clauses
because they were dealing with a public service entity (the state)
that controlled a unique resource (respectively, the Anchorage
Airport and the Dalton Highway) critical to the indemnitors'
business. USF&E, on the other hand, could have chosen other
employment and rejected Hoffman's terms. Therefore, the "public
duty" exception does not apply to the Hoffman/USF&E indemnity
clause.
c. The public policy of "nondelegable" duties
In two separate arguments, USF&E claims that the
Hoffman/USF&E indemnity clause is unenforceable because the burdens
it purports to shift from Hoffman to USF&E are "nondelegable."
These burdens are (1) duties to protect its subcontractors'
employees from harm, and (2) strict liability for asbestos
activities.
First, USF&E claims that Hoffman has a nondelegable duty
to protect its subcontractors' workers, and USF&E claims that this
duty cannot be shifted to USF&E through an indemnity contract.
Although USF&E cites several cases for the proposition that a
general contractor has a legal duty to maintain a safe working
environment for its subcontractor's employees, these cases do not
apply to Hoffman's ability to shift liability contractually. [Fn.
49] Even if Hoffman has a nondelegable duty that makes it liable
under such circumstances, it can always shift this liability under
Alaska law through an indemnity contract. Under Alaska law,
indemnity agreements that shift liability from the indemnitee to
the indemnitor are valid, subject to the restrictions of AS
45.45.900. As we held in Burgess v. State and Duty Free Shoppers
Group Ltd. v. State, if an indemnity clause is broad enough it may
indemnify regardless of the parties' liabilities or fault. [Fn. 50]
Second, USF&E claims that Hoffman is strictly liable for
its asbestos activities and that this strict liability cannot be
transferred to another party, like USF&E, through an indemnity
contract. USF&E cites several authorities for the proposition that
asbestos work creates strict liability for the person directing the
work. [Fn. 51] It does not, however, cite any relevant authority
for the proposition that Hoffman cannot contractually shift this
liability. [Fn. 52] Strict liability, like the duties discussed
above, can be freely shifted through an indemnity clause, as
Hoffman and USF&E have done. We decline to create a new exception
to the enforceability of indemnity agreements where these duties
and liabilities are involved.
d. "Unclean Hands"
USF&E, citing Knaebel v. Heiner, [Fn. 53] claims that
Hoffman cannot enforce the Hoffman/USF&E indemnity clause because
Hoffman has "unclean hands."
Knaebel indicates that "unclean hands" is an equitable
defense that requires a showing of "wrongdoing" by the other party:
"In order to successfully raise the defense of 'unclean hands,' the
defendant must show: (1) that the plaintiff perpetrated some
wrongdoing; and (2) that the wrongful act related to the action
being litigated." [Fn. 54]
USF&E's "unclean hands" defense to enforcement of an
indemnity clause is novel, but it is foreclosed by our previous
decisions construing indemnity clauses. The only "wrongdoing" that
USF&E has alleged here for the purposes of "unclean hands" is that
Hoffman breached its "legal and contractual duty" to ensure
workplace safety and protect USF&E employees from asbestos exposure
-- in other words, the "wrongdoing" consists only of negligence.
However, in Burgess v. State, [Fn. 55] Duty Free Shoppers Group
Ltd. v. State, [Fn. 56] and C.J.M. Construction, Inc. v. Chandler
Plumbing & Heating, Inc., [Fn. 57] we held that an indemnity clause
that indemnifies the indemnitee for its own negligence is
enforceable. [Fn. 58] Thus, an allegation of negligence cannot
suffice to raise the defense of "unclean hands." Allowance of
this claim would create a broad exception to the enforceability of
indemnity agreements, and would defeat the entire purpose of
indemnification, which is to shift liability from one who is
legally liable for an injury to another party in exchange for
consideration. We conclude that the "unclean hands" defense should
not be available to indemnitees merely because the indemnitor's
negligence caused or had a role in the claim or injury that is the
subject of indemnification.
We reverse the superior court's ruling that USF&E had no
duty to defend Hoffman. USF&E has such a duty because the duty to
defend requires only that the claimed injury be within the scope of
the indemnity clause; the claims made by the Brooks plaintiffs are
within the scope of the Providence/Hoffman clause. The indemnity
clause is fully enforceable despite AS 45.45.900, the "public duty"
exception, the policy of "nondelegable duties," and the "unclean
hands" defense.
One further point must be made here concerning the scope
of USF&E's duty to defend Hoffman. We have concluded that USF&E
has a duty to defend Hoffman, and that therefore Hoffman is
entitled to reimbursement of its defense costs from USF&E. We have
also concluded that Hoffman has a duty to defend Providence, and
that therefore Providence is entitled to reimbursement of its
defense costs from Hoffman. USF&E's duty to defend does not extend
to Hoffman's costs for reimbursing Providence, and USF&E is not
required to reimburse Hoffman for the payments that Hoffman must
make to Providence. This is because USF&E only has a duty to
defend Hoffman, and in this opinion we decline to hold as a matter
of law that USF&E has a duty to indemnify Hoffman. Reimbursement
of Hoffman's costs to Providence would be indemnification, rather
than provision of a defense to Hoffman.
D. The Superior Court Properly Held that Hoffman Is Not
Entitled to Summary Judgment on USF&E's Alleged Duty to Indemnify
Hoffman.
In its order denying Hoffman's motion for summary
judgment against USF&E, the superior court held that Hoffman was
not entitled to a ruling that USF&E had a duty to indemnify Hoffman
as a matter of law. As noted earlier, we could only decide as a
matter of law that there is a duty to indemnify if the indemnitee
is liable for damages. Hoffman claims that it was liable for
damages because it paid $25,000 in settlement to the Brooks
plaintiffs, and Hoffman seeks indemnification from USF&E to cover
this amount.
Where there is an indemnity contract that includes both
a duty to defend and a duty to indemnify, and the indemnitee makes
a settlement payment to a third party, the indemnitee is entitled
to indemnification for that payment when: (1) the indemnitor
received adequate notice of underlying proceedings, (2) the
indemnitee was potentially liable to the third party, and (3) the
settlement was reasonable. [Fn. 59] If the indemnitor did not
receive actual notice, then the indemnitee must show actual
liability in order to be entitled to indemnification. [Fn. 60]
While it is clear that USF&E received adequate notice of the
underlying proceedings, [Fn. 61] and of Hoffman's claim for
indemnification, [Fn. 62] we cannot say as a matter of law whether
the $25,000 settlement payment was reasonable. Therefore, the
superior court properly denied Hoffman's motion for summary
judgment on USF&E's alleged duty to indemnify Hoffman.
E. The Superior Court Erred in Holding that USF&E Was
Entitled to Implied Contractual Indemnity from Hoffman.
Hoffman argues that the superior court's summary judgment
in favor of USF&E on the issue of implied contractual indemnity
should be reversed. The superior court granted USF&E's cross-
motion for summary judgment against Hoffman. In doing so, the
superior court implicitly held that Hoffman owed a duty of
indemnity and defense to USF&E, since in this cross-motion USF&E
requested such a ruling under a theory of implied contractual
indemnity. In its order, the superior court did not explicitly
hold that USF&E was entitled to implied contractual indemnity.
However, the final judgment in favor of USF&E against Hoffman seems
to indicate that USF&E is entitled to reimbursement of its defense
costs. Because USF&E is not entitled to implied contractual
indemnity as a matter of law, we reverse the superior court's
ruling.
The only other occasion that we have had to discuss
implied contractual indemnity was in Fairbanks North Star Borough
v. Kandik Construction, Inc. [Fn. 63] In Kandik Construction, a
design firm (Roen) contracted with Fairbanks North Star Borough to
design a subdivision. The borough in turn contracted with a
construction company (Kandik) to construct the subdivision. Kandik
sued both Roen and the borough on contractual theories for defects
in design of the subdivision, and sued Roen alone for professional
malpractice. The borough filed a cross-claim against Roen for
implied contractual indemnity. In Kandik Construction, we
described implied contractual indemnity as a "three-part implied
promise":
The Borough's indemnity action was one for
implied contractual indemnity, which rests on the principle that a
contract to perform a service contains a three-part implied
promise: 1) the indemnitor will perform the service in a proper
manner, or 2) the indemnitor will discharge foreseeable damages
resulting from improper performance, unless 3) the indemnitee's own
participation in causing the damages precludes recovery.[ [Fn. 64]]
This model cannot be applied to the Hoffman/USF&E contract, because
the contract "to perform a service" runs the other way in the
Hoffman/USF&E contract: it was USF&E that contracted to perform a
service for Hoffman, and yet USF&E is the party that seeks implied
indemnity here. In Kandik Construction, the implied indemnitor was
the party providing the service; however, if we were to apply
implied contractual indemnity here, the implied indemnitor would be
Hoffman, the party receiving the service. The Kandik Construction
model for implied contractual indemnity simply does not fit the
circumstances of the Hoffman/USF&E contract.
Moreover, to apply implied contractual indemnity here
would contradict the express contractual will of the parties.
Hoffman and USF&E signed a contract that shifted certain risks from
Hoffman to USF&E. USF&E asks this court to completely reverse this
shift, so that Hoffman would be fully liable for these risks.
USF&E cites no authority and provides no argument supporting the
superior court's decision, and the superior court's decision itself
is not supported. Because there is no support for such a radical
shift in the contractual relationship between Hoffman and USF&E, we
reverse the superior court's grant of USF&E's cross-motion on
implied contractual indemnity.
V. CONCLUSION
Because the Brooks plaintiffs' claims of injury are
within the scope of both the Providence/Hoffman and Hoffman/USF&E
indemnity contracts, we AFFIRM the ruling that Hoffman owes
Providence a duty to defend, and we REVERSE the ruling that USF&E
does not owe Hoffman a duty to defend. Because there are issues of
material fact that preclude a ruling on the duty to indemnify under
both contracts, we REVERSE the ruling that Hoffman owes Providence
a duty to indemnify, and AFFIRM the ruling denying summary judgment
on the issue of USF&E's duty to indemnify Hoffman. Finally,
because implied contractual indemnity does not apply in this case,
we REVERSE the grant of summary judgment for USF&E on the issue of
implied contractual indemnity. We REMAND this case for proceedings
consistent with this opinion.
FOOTNOTES
Footnote 1:
The full text of the Providence/Hoffman indemnity clause read
as follows:
14.2. Indemnity
14.2.1. To the fullest extent permitted by
law, CONTRACTOR shall indemnify, defend, and hold harmless
PROVIDENCE, the Project Coordinator, ARCHITECT, and their employees
and agents, from and against all claims, damages, losses,
liabilities and expenses, including attorney's fees, arising out of
or resulting from the performance of this Construction Contract,
regardless of whether or not it is caused in part by a party
indemnified hereunder.
14.2.2. To the fullest extent permitted by
law, CONTRACTOR shall indemnify, defend, and hold harmless
PROVIDENCE, the Project Coordinator, ARCHITECT, and their employees
and agents, from and against all claims, damages, losses,
liabilities and expenses, including attorney's fees, arising out of
or resulting from CONTRACTOR'S breach of this Construction
Contract, or any unlawful act or omission of CONTRACTOR, any
subcontractor, anyone directly or indirectly employed by CONTRACTOR
or any subcontractor, or anyone for whose acts CONTRACTOR or any
subcontractor may be liable.
Footnote 2:
The full text of the Hoffman/USF&E indemnity clause reads as
follows:
Subcontractor in addition to his
obligations to provide insurance as required by this Subcontract,
shall indemnify, defend and save harmless Contractor and its
officers, agents and employees from and against all claims, loss,
damage, liability, costs, charge or expense (including attorneys'
fees) directly or indirectly arising out of or resulting from any
failure of Subcontractor to perform any of the terms and conditions
of this Subcontract or the performance of or failure to perform the
Work or in any manner caused or claimed to be caused by any act,
inaction, fault or negligence of Subcontractor or anyone acting on
his behalf, even though the same may have resulted from the joint,
concurring or contributory act or negligence of Contractor, or
those in privity of contract with Contractor, unless the same be
caused by the sole negligence or willful misconduct of Contractor,
or those in privity of contract with Contractor. . . .
In addition to the insurance and
indemnity requirements set forth above, Subcontractor expressly
agrees to defend, indemnify and hold Owner, Its Architects and
Engineers, Hoffman Corporation, Its subsidiaries, their officers,
agents and employees harmless from all claims and loss (including
reasonable attorney fees) arising from injuries, including death,
to its employees and employees of its subcontractors. . . . The
indemnities assumed by Subcontractor shall not, however, extend to
injuries or damages caused by or resulting from the sole negligence
of the Contractor.
Footnote 3:
See Moore v. Allstate Ins. Co., 995 P.2d 231, 233 (Alaska
2000).
Footnote 4:
See id.; Alaska R. Civ. P. 56(c).
Footnote 5:
See Moore, 995 P.2d at 233.
Footnote 6:
See Wright v. State, 824 P.2d 718, 720 (Alaska 1992); Moore,
995 P.2d at 233.
Footnote 7:
See Wright, 824 P.2d at 720.
Footnote 8:
See State Farm Auto Ins. Co. v. Raymer, 977 P.2d 706, 711
(Alaska 1999).
Footnote 9:
See Duty Free Shoppers Group Ltd. v. State, 777 P.2d 649, 652
(Alaska 1989); C.J.M. Constr., Inc. v. Chandler Plumbing & Heating,
Inc., 708 P.2d 60, 64 (Alaska 1985).
Footnote 10:
See Larsen v. Municipality of Anchorage, 993 P.2d 428, 431
(Alaska 1999).
Footnote 11:
See id.
Footnote 12:
See id.
Footnote 13:
629 P.2d 71, 76 (Alaska 1981).
Footnote 14:
See id. at 76-77.
Footnote 15:
See id. at 73, 75-76.
Footnote 16:
Id. at 76-77.
Footnote 17:
614 P.2d 1380 (Alaska 1980).
Footnote 18:
Id. at 1381.
Footnote 19:
Id. at 1383.
Footnote 20:
777 P.2d 649 (Alaska 1989).
Footnote 21:
Id. at 651.
Footnote 22:
Id. at 652-53.
Footnote 23:
Burgess, 614 P.2d at 1381-83; Duty Free Shoppers, 777 P.2d at
651-53. Several other jurisdictions have also concluded that
similar indemnity clauses are broad enough to include all claims
for injury incurred by the indemnitor's employees working at the
jobsite. See Cirrito v. Turner Constr. Co., 458 A.2d 678, 681
(Conn. 1983); Perkins v. Rubicon, Inc., 563 So. 2d 258, 259 (La.
1990); Vitty v. D.C.P. Corp., 633 A.2d 1040, 1043 (N.J. Super. Ct.
App. Div. 1993); O'Connor v. Serge Elevator Co., 444 N.E.2d 982,
983 (N.Y. 1982); Wallace v. Sherwood Constr. Co., 877 P.2d 632,
633-34 (Okla. App. 1994). However, we acknowledge that courts in
other jurisdictions have come to the opposite conclusion, holding
that the employee's mere presence and work activity on the jobsite
is not enough to trigger such an indemnity clause. See National
Hydro Systems v. M.A. Mortenson Co., 529 N.W.2d 690, 693 (Minn.
1995); Hershey Foods Corp. v. General Elec. Serv. Co., 619 A.2d
285, 290 (Pa. Super. Ct. 1992); Smith v. Tennessee Tile, Inc., 719
S.W.2d 385, 388 (Tex. App. 1986); Jones v. Strom Constr. Co., Inc.,
527 P.2d 1115, 1118 (Wash. 1974). Because of our earlier decisions
in Burgess and Duty Free Shoppers, we decline to follow these
latter jurisdictions.
Footnote 24:
Duty Free Shoppers, 777 P.2d at 652-53; Burgess, 614 P.2d at
1382-83.
Footnote 25:
Hoffman also claims that extrinsic evidence shows that the
Providence/Hoffman indemnity clause should be read narrowly.
Hoffman notes that while Providence's contracts with its abatement
contractors contained asbestos risk insurance requirements, the
Providence/Hoffman contract contained no such requirement. Hoffman
claims that this indicates that the parties reasonably expected
that Hoffman would have no asbestos-related responsibilities under
the Providence/Hoffman contract. However, this is irrelevant. As
previously noted, even if Hoffman had no asbestos-related
responsibilities, the scope of the Providence/Hoffman indemnity
clause is broad enough to include any claims of injury brought by
employees on the job working for Hoffman. Because we find that the
Brooks plaintiffs' claims are within the scope of the first part of
the Providence/Hoffman indemnity clause, we need not address the
second part of that clause.
Footnote 26:
See Aetna Cas. & Sur. Co. v. Marion Equip. Co., 894 P.2d 664,
670 (Alaska 1995). Additionally, AS 45.45.900 only applies to
invalidate an indemnity clause if the clause is actually applied,
as between the parties, to indemnify an indemnitee for the
indemnitee's own sole negligence. See Rogers & Babler v. State,
713 P.2d 795, 798 (Alaska 1986) ("We think AS 45.45.900 should come
into effect only when it is determined, as between [the parties],
that the [indemnitee] is solely negligent."). In the present case,
this second requirement is irrelevant because we find that the
Providence/Hoffman indemnity clause fails the first requirement: it
does not purport to indemnify Providence for its sole negligence.
Providence claims that AS 45.45.900 does not apply to invalidate
the clause unless Providence alone is 100% at fault. However, this
is not strictly correct; AS 45.45.900 would invalidate the clause
if applied when Providence and its abatement contractors were
collectively 100% at fault. As we held in Rogers & Babler: "The
indemnity provision involved here . . . is only against public
policy in those instances that it purports to indemnify [the
indemnitee] for its negligence in the absence of [the indemnitor's]
negligence." Rogers & Babler, 713 P.2d at 798. If Providence and
its abatement contractors were jointly negligent, while Hoffman was
not at all at fault, the indemnity clause would serve to indemnify
Providence "for its negligence in the absence of Hoffman's
negligence," an outcome forbidden by Rogers & Babler. See also AS
45.45.900 ("[D]amage or expense arising . . . from the sole
negligence or wilful misconduct of the promisee or the promisee's
agents, servants or independent contractors who are directly
responsible to the promisee, is against public policy and is void
and unenforceable.") (emphasis added).
Footnote 27:
See Frost v. Ayojiak, 957 P.2d 1353, 1355-56 (Alaska 1998).
Footnote 28:
991 P.2d 178, 183 (Alaska 1999) (internal quotations and
citations omitted).
Footnote 29:
We have also stated that waiver will not be found if the issue
raises plain error. See State Farm Auto Ins. Co. v. Raymer, 977
P.2d 706, 711 (Alaska 1999). There is no such plain error here.
Footnote 30:
In addition, the judgment declaring that Hoffman is liable for
indemnification may be moot, since Providence asserted at oral
argument that it had no claim for indemnification separate from
defense costs.
Footnote 31:
See Stephan & Sons, Inc. v. Municipality of Anchorage, 629
P.2d 71, 73, 75-76 (Alaska 1981).
Footnote 32:
There is conflicting evidence in the record to support
causation of the Brooks plaintiffs' alleged exposure by several
different parties working at the Providence construction project.
As Hoffman points out, the asbestos abatement contractors may have
caused the alleged exposure by not adequately isolating the
abatement areas where the construction was going on. Also,
Providence may have caused the alleged exposure because Providence
actually directed and coordinated the asbestos abatement efforts,
departed from the recommendations of its consultant EHS, and made
the decision to proceed with asbestos abatement and other
construction simultaneously. USF&E may have caused the alleged
exposure because USF&E failed to inspect the area or provide safety
gear before commencing work. And finally, Hoffman may have caused
the alleged exposure by failing to coordinate the efforts of its
subcontractors with the abatement contractors, as the superior
court found.
Footnote 33:
See Stephan & Sons, 629 P.2d at 73, 75-76.
Footnote 34:
See supra Part IV.A.2 (applying Burgess v. State, 614 P.2d
1380 (Alaska 1980) and Duty Free Shoppers Group Ltd. v. State, 777
P.2d 649 (Alaska 1989)).
USF&E asserts that extrinsic evidence that supports its
claims should be considered. USF&E argues that because USF&E was
not required to purchase insurance that would insure it from
asbestos-related risks, and because USF&E was not able to do so
even if it had tried, this indicates that the parties did not
expect that the liability clause would shift asbestos-related
liability to USF&E. This extrinsic evidence is not enough to narrow
the scope of the broad Hoffman/USF&E indemnity clause.
Footnote 35:
Since the Brooks plaintiffs' claims "arise out of" USF&E's
performance, we need not decide whether the Brooks plaintiffs'
claims arose out of any breach by USF&E.
Footnote 36:
See supra Part IV.A.3.a (applying Aetna Cas. & Sur. Co. v.
Marion Equip. Co., 894 P.2d 664, 670 (Alaska 1995)).
Footnote 37:
See Rogers & Babler v. State, 713 P.2d 795, 798 (Alaska 1986).
Footnote 38:
552 P.2d 654, 659-60 (Alaska 1976).
Footnote 39:
614 P.2d 1380, 1382 (Alaska 1980).
Footnote 40:
See Manson-Osberg, 552 P.2d at 659-60; Burgess, 614 P.2d at
1381-82.
Footnote 41:
See Burgess, 614 P.2d at 1381-82.
Footnote 42:
776 P.2d 315 (Alaska 1989).
Footnote 43:
692 P.2d 261 (Alaska 1984).
Footnote 44:
776 P.2d at 315-16.
Footnote 45:
692 P.2d at 262-63.
Footnote 46:
Id.
Footnote 47:
See Korean Air Lines, 776 P.2d at 318; Kuhn, 692 P.2d at 266.
Footnote 48:
See id.
Footnote 49:
See Bachner v. Rich, 554 P.2d 430, 444 (Alaska 1976) (holding
that AS 18.60.075 creates legal duty for employers to keep
workplace safe for employees); State v. Marathon Oil Co., 528 P.2d
293, 297 (Alaska 1974) (same); Kelley v. Howard S. Wright Constr.
Co., 582 P.2d 500, 506 (Wash. 1978) (general contractor has
"nondelegable" duty to provide to subcontractor employees safe
workplace).
Footnote 50:
Burgess, 614 P.2d 1380, 1382-83 (Alaska 1980); Duty Free
Shoppers, 777 P.2d 649, 652-53 (Alaska 1989).
Footnote 51:
See Karjala v. Johns-Manville Products Corp., 523 F.2d 155,
159 (8th Cir. 1975) (holding that a manufacturer of asbestos can be
strictly liable for asbestos exposure); Jenkins v. T&N PLC, 53 Cal.
Rptr. 2d 642, 647 (Cal. App. 1996) (holding that supplier of
asbestos can be strictly liable for asbestos exposure); Livingston
Bd. of Ed. v. U.S. Gypsum Co., 592 A.2d 653, 656 (N.J. Super. Ct.
App. Div. 1991) (same).
Footnote 52:
USF&E cites Burgan v. City of Pittsburgh, 542 A.2d 583, 589
(Pa. Commw. Ct. 1988) and Widson v. International Harvester Co.,
200 Cal. Rptr. 136, 146-47 (Cal. App. 1984). However, these
authorities do not support the proposition that strict liability
cannot be shifted through indemnity contract. The court in Burgan
refused to enforce an indemnity clause because of something similar
to the "public duty" exception discussed earlier in this opinion:
the indemnitee, as a blasting company, had a public duty to
exercise the utmost care to protect the public from its operations;
therefore, it was not allowed to transfer liability through an
indemnity clause because of the incentive to exercise less care.
542 A.2d at 589. In Widson, the court was merely interpreting the
scope of a general indemnity clause, and the court refused to
enforce the indemnity clause in Widson because the liability was
strict liability and the clause concerned was only general in
language, and not specific enough to cover the liability. 200 Cal.
Rptr. at 146-47.
Footnote 53:
663 P.2d 551 (Alaska 1983).
Footnote 54:
Id. at 554.
Footnote 55:
614 P.2d 1380, 1382-83 (Alaska 1980).
Footnote 56:
777 P.2d 649, 652-53 (Alaska 1989).
Footnote 57:
708 P.2d 60, 64 (Alaska 1985).
Footnote 58:
Of course, this is subject to AS 45.45.900, discussed above.
Footnote 59:
See Atlantic Richfield Co. v. Interstate Oil Transp. Co., 784
F.2d 106, 110-12 (2d Cir. 1986); Compania Sud Americana de
Vaapores, S.A. v. I.T.O. Corp. of Baltimore, 940 F. Supp. 855, 869
(D. Md. 1996); In re Cooper Mfg. Corp., 131 F. Supp. 2d 1238, 1252-
55 (N.D. Okla. 2001). Cf. Theodore v. Zurich General Accident &
Liability Ins. Co., 364 P.2d 51, 54-56 (Alaska 1961) (holding that
insurer's duty to defend included obligation to reimburse insured
for prudent settlement, where insured faced potential liability and
insurer refused tender of defense against that liability).
Footnote 60:
See id.
Footnote 61:
USF&E, along with Hoffman and Providence, was sued in the
underlying proceedings.
Footnote 62:
Hoffman's cross-claim against USF&E asserted Hoffman's claim
that USF&E had a duty to defend and indemnify Hoffman.
Footnote 63:
823 P.2d 632 (Alaska 1991).
Footnote 64:
Id. at 636.
