Hawthorne v. EDIS Co., et al. v. Summit Steel.

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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY JAY HAWTHORNE, ) ) Plaintiff, ) ) v. ) C.A. No. 01C-09-183 HLA ) EDIS COMPANY, EDIS BUILDING ) SYSTEMS INC., ERNEST ) DISA BAT INO & SO NS, IN C., ) CONSTRUCTION SAFETY ) CONSULTANTS, INC., ATLAS LAB ) ASSOCIATES, ATLAS POIN T, LLC, ) and C RYS TAL HOL DINGS, IN C., ) Defendant/ ) Third-Party Plaintiff, ) ) v. ) SUM MIT STEEL, INC., ) ) Third-Party Defendant, ) ) ) ) Date Submitted: December 31, 2002 Date Decided: January 15, 2003 ORDER U PON T HIRD-P ARTY D EFENDANT S A PPLICATION O F INTERLOCUTORY A PPEAL DENIED Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 2 Christian J. Singewald, Esquire, White and Williams, LLP, 824 Market Street, Suite 902, P.O. B ox 709 , Wilmi ngton, DE 19 899. Attor ney for Third -Party Defen dant. Dawn Courtney Doherty, Esquire, Norman H. Brooks, Jr., Esquire, and Megan T. Mantzavinos, Esquire, Marks, O Neill, O Brien & Courtney, P.C., 913 North Market Street, # 800 , W ilmingto n, DE 19 801. Co- counsel fo r Third-Pa rty Defenda nt. Joseph J. Rhoades, Esquire, and A. Dale Bowers, Esquire, 1225 King Street, #1200, Wilmington, DE 19801. Attorneys for Plaintiff. Mark J. LeW inter, Es quire, A napol, S chwa rtz, We iss, Coh an, Feld man a nd Sm alley, P.C., 1900 Delancey Place, Philadelphia, PA 19103. Attorney for Plaintiff. Louis J. Rizzo, Jr., Esquire, Reger and Rizzo, LLP, Legal Arts Building, #900, 1225 North King Street, Wilmington, DE 19801. Attorney for Defendant/Third-Party Plaintiffs EDIS Company, EDIS Building Systems, Inc. and Ernest DiSabatino and Sons, Inc. This 15th day of January 2003 upon review of the record below, it appears to the Court that: STATEMENT OF FACTS Before th e Court is an application f iled by Third-P arty Defend ant Sum mit Steel, Inc. ( Summit ) for certification of an interlocutory appeal to the Supreme Court of the State of Delaw are from this Court s N ovember 25, 20 02, Order wh ich denied Sum mit s Motio n for S umm ary Judg ment. On April 6, 2000, Jay Hawthorne ( Plaintiff ) was working on a roof as an ironworker for Summit when he fell and became severely injured. An unsecured sheet of metal deck ing was c arried by a gus t of wind and beca me airborn e, striking the P laintiff in Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 3 the back causing him to lose his balance and fall to the decking below. Plaintiff was rendered a quadripleg ic as a result of the fall. Plaintiff was an e mployee w ith Summ it, which was under contract with EDIS Company ( EDIS ) for the erection of structural steel, including, but not limited to, metal decking. Plaintiff filed a lawsuit on September 25, 2001, alleging negligence. Defendants, EDIS Company, EDIS Building Systems, Inc., Ernest DiSabtino and Sons, Inc., Atlas Lab Associates, Atlas Point, LLC and Crystal Holdings, Inc. filed an answer to plaintiff s Complaint and a Third-Party Complaint against Summit on December 13, 2001. On April 22, 2002, paragraphs three and four of the Third-P arty Compla int were strick en, leaving o nly a contractua l indemnif ication claim agains t Summ it. On December 17, 1999, EDIS and Summit entered into a Subcontract Agreement ( Agree ment ) w hich conta ins the prov isions that are th e subject of the Third-P arty Comp laint. Article V II of the A greemen t expressly sets fo rth Summ it s indemnity liability to EDIS. On August 28, 2002, the Court ruled that Article VII violated title 10, section 270 4 of the D elaware C ode findin g that it was a n attempt to m ake Sum mit responsible for ED IS s neglige nt acts or om issions. Thu s Article V II was dete rmined to be void and unenforceable. However, the Court did not agree with Summit s contention that the entire contract is void. A Renewed Motion for Summary Judgment was filed by Summ it on Octob er 16, 2002 . Summit a rgued that th e languag e of Article VI is Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 4 ambig uous a nd ther efore s hould b e struck as it shou ld be co nstrued agains t the draf ter. However the Court found the following language u nambiguous: ARTICLE VI. Subcontractor hereby assumes entire responsibility and liability in and for any and all damage or injury of any kind or nature whatever to all persons and to all property growing out of or resulting from the act or omission of the Subcontractor in the performance of the work provided for in this Subcontract. The Renewed Motion for Summary Judgment was denied on November 25, 2002. After Summit was granted an extension of time, a Notice of Application for Certification of Interlocutory Appeal was filed on December 16, 2002. Third-Party Plaintiff, EDIS, filed its Response on December 30, 2002 and filed an Amended Response on December 31, 2002. Summit s Application for Certification of Interlocutory Appeal is now before the Court. STANDARD OF REVIEW In order for an interlocutory decision of this Court to be certified for an interlocutory appeal pursuant to Supreme Court Rule 42, the decision must 1) determine a substantial issue, 2) establish a legal right, and 3) satisfy one or more of the five alternative criteria set out in subpart (b) to Supreme Court Rule 42. Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 5 ANA LYSIS The Court agrees that the order denying Summit s motion for summary judgment with respect to the ambiguity of Article VI of the Agreement determines a substantial issue and establishes a legal right. The Court s determination that Article VI of the Agreement is unambiguous involved a substantial issue in the instant case, as it allows the third-party claim to continue a gainst Sum mit. The C ourt s findin g that the lang uage in Article VI of the Agreement is not overbroad, but establishes a possible legal right in that it allows EDIS the p ossibility of indemnification for the neg ligence of Sum mit. Howeve r, it does n ot allow EDIS to be ind emnif ied for i ts own neglige nce as S umm it conten ds. Pursuant to Supreme Court Rule 42(b) Summit must also demonstrate that the order meets one or more of the additional criteria set forth at Rule 42(b)(i)-(v). Of those five possible criteria, Summit asserts that Rule 42(b)(iii)applies. That provision states as follows: An order of the trial court has reversed or set aside a prior decision of the court, a jury, or an administrative agency from which an appeal was taken to the trial court which had determined a substantial issue and established a legal right, and a review of the interlocutory order may terminate the litigation, substantially reduce further litigation, or otherwise serve consid erations of justic e;... Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 6 Summit argues that the trial court s order of November 25, 2002, set aside the decision of Precision Air, Inc. v. Standard Chlorine of Delaware, Inc.1 In that case the Court held that the exclusivity provision of the Worker s Compensation Act precludes the imposition of joint tort liability upon an employer in a suit brought by an employee against a third party where the employer has paid compensation benefits to an employee.2 Precision A ir further held that an employer can be held liable to a third party where a contract between the employer and the third party contains provisions requiring the employer to (i) p erform in a workm an like ma nner and (ii)indemnif y the third-party indemnitee for any claims arising out of the employer-indemnitor s own negligence.3 How ever , Sum mit m ainta ins th at be caus e suc h pro visio ns m ust clearl y, or ex pres sly, appear in the terms of the governing agreement4 then Precis ion Air w ould hold a party which has paid Worker s Compensation benefits to an injured employee liable to a thirdparty only w here the intent to indem nify clear ly appear s in the g overni ng agre emen t. 1 654 A.2d 40 3 (Del. Supr. 1995 ). 2 Precision Air, Inc. v. Standard Chlorine of Delaware, Inc., 654 A2d 403, 407 (Del. Supr. 1995)(citing How ard, Need les, Tamm en & Berg endoff v. Stee rs, Perini & Pomeroy, 321 a.2d 621, 623 (Del. Supr. 1973)). 3 4 Precis ion Air , 654 A.2d at 407. Precision Air, Inc. v. Standard Chlorine of Delaware, Inc., 654 A2d 403, 407 (Del. Supr. 1995)(citing Sta te v. Inter state Am iesite Co rp., 297 A.2d 41 , 44 (Del. Supr. 1972) and H ollingsw orth v. C hrysler Corp ., 208 A.2d 61 , 65 (Del Supr. 196 5)). Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 7 Summit argues that the Court read such an agreement into a portion of a provision addressing the obligation to maintain in surance, an d which did not clea rly establish its agreeme nt to underta ke a duty in de rogation of its statutory protectio n from tor t liability to its own employees under the Worker s Compensation Act. Summit thus contends that the Court disregarded the rule of law in Precis ion Air . Further, Summit states that the Court s decisio n leave s room for ED IS to ob tain inde mnific ation fo r its own neglige nce. EDIS argues that the third-party Complaint is solely based in breach of contract pleading f or indemn ification from Summ it for any neglig ence attributa ble to Sum mit in the und erlying ac tion, and that the C ompla int does not inclu de a co unt for contrib ution. EDIS maintains that this distinguishes the instant case from Precision A ir because in Precision Air the Supreme C ourt held that the exclusivity provision of the W orkmen s Compensation Act precluded the owner from asserting a contribution claim against the contractor, which had paid benefits to the employee, but the provision did not preclude the contrac tual indemnification claim.5 EDIS argues that Summit misinterprets Precision A ir as the Supreme C ourt specifically held that if there is a basis for finding an implied promise of indemnity, then the exclusiv ity provision of th e Work men s C ompens ation Law is no bar to a third party 5 Precision Air, Inc. v. Standard Chlorine of Delaware, Inc., 654 A2d 403 (De l. Supr. 1995)(emp hasis added). Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 8 suit against an employer. 6 EDIS argues that the basis of finding of indemnification in the instant case is A rticle VI of th e Agreem ent. This Co urt s Nov ember 25 , 2002, ruling neither disreg arded, nor s et aside the ru le of law as propounded by the Supreme Court in Precision Air.7 As ED IS correctly poin ts out, Precision A ir is not a b ar to this in demn ification claim. The Co urt does no t agree that the interpretation o f Article V I is so broad as to allow ED IS to obtain in demnific ation for its ow n negligen ce, nor is the lan guage in Article VI strictly related to a requirement to obtain insurance as Summit contends. Summit further states that the defendants, EDIS Company, EDIS Building Systems, Inc., Ernest DiSabatino and Sons, Inc., Atlas Lab Associates, Atlas Point, LLC, and Crystal Holdings, Inc., all filed the Third-Party Complaint for contractual indemnification against S ummit even thou gh the Agreem ent is only between ED IS Company and Summit. Since only EDIS was a party to the Agreement, Summit requested summary judgment as a matter of law on the contractual indemnification claims asserted by the other Third-Party plaintiffs. The Court addressed this issue when ruling on 6 Id. at 407(citing SW (Del.), Inc. v. American Consumers Indus., 450 A.2d 887, 888-89 (Del. Su pr. 1982))(emphasis ad ded). 7 Id. Hawthorne v. Edis C.A. No. 01C-09-183 HLA January 15, 2003 (Corrected Date) Page 9 Summit s second motion for summary judgment and decided to wait before dismissing these parties. For the forgoing reasons Third-Party Defendant s application for entry of an order certifying an interlocutory appeal to the Supreme Court of the State of Delaware is hereby DENIED. Thus, Defendant s Application for Certification of Interlocutory Appeal filed on December 16, 2002 is DENIED. IT IS SO ORDERED. ______________________________________ ALFORD , J. Original: Prothonotary s Office - Civil Division

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