GOLDMAN v. ECCO PHOENIX ELECTRIC CORPORATION (1964)

Plaintiffs Goldman and Staggers, doing business as Clovis Construction Company, hereafter referred to as general contractor or Clovis, filed this action for declaratory relief after the defendant Ecco-Phoenix Electric Corporation, hereafter referred to as subcontractor or Ecco, refused to defend them in a personal injury action filed by L. Butlar, an employee of the subcontractor. Butlar was injured when he fell from an unprotected platform in the hose tower of a fire house that Clovis was building for the owner, the City and County of San Francisco, hereafter referred to as City. The trial court found that by their subcontract, the parties intended that the subcontractor indemnify the general contractor to the same extent that the general contractor was required to indemnify the City, under paragraphs 12 and 35 of the primary contract. On this appeal, Ecco contends that the trial court erred in its construction of the contracts.

The facts leading to Butlar's injury on April 28, 1960, are not in dispute. The hose tower, a vertical enclosed shaft where the fire hose is hung to dry, at Fire House No. 15, was about 58 feet high and extended from the ground floor to a height well above the rest of the two story building. At the second floor level, a door opened onto a concrete platform in the shaft. This door was at a right angle to and about 10 to 12 inches from the edge of the platform. Several weeks before the accident, Clovis had installed a horizontal 2 x 4 guard rail at the exposed edge of the concrete platform. Some time later, to facilitate the finishing of the inside tower walls by the cement masons, Clovis placed a solid plywood platform completely inside the hose tower. Thereafter, the 2 x 4 guard rail was removed and the plywood platform was replaced by scaffolding.

When Clovis' foreman Richardson arrived on the morning of the 28th, he saw that his men had removed the scaffolding from the hose tower but had not yet replaced the guard rail. At that time, the door to the concrete platform was blocked from the other side by a rolling scaffold used by the lathers. In accordance with an industry custom, Richardson immediately placed one of Clovis' aluminum extension ladders on the floor of the tower so that it rested against the exposed edge of the platform and extended about 3 or 4 feet beyond. He did this partly to provide access to the roof, as the roofers were at work and could reach the roof only from the second floor platform, but chiefly to provide a substitute for the missing guard rail. At the same time, Richardson specifically instructed his carpenters to replace the ladder with a guard rail as soon as the rolling scaffold had been removed from the outside of the door and the roofers had another access to the platform. By mid-afternoon of the 28th, both the rolling scaffold and the extension ladder had been removed but no guard rail had yet been installed.

During the middle of the afternoon, Butlar, who was Ecco's vice president and the supervisor in charge of the work at the fire house, and one of his electricians, Gossett, entered the platform to discuss the location of certain wires which Gossett was to install in a junction box further up in the tower. As they went through the second floor doorway leading to the platform, Butlar was about two steps ahead of Gossett and immediately plunged some 16 feet to the floor of the tower. Within 20 thereafter, i. e., by the time Gossett had returned from putting Butlar in an ambulance, Clovis had reinstalled the missing guard rail.

Clovis had the responsibility of the construction of the hose tower and platform while Ecco's responsibility was limited to the electrical work. Prior to the accident, Ecco had had nothing to do with the construction of the hose tower except the installation of the conduit before the setting of the cement. Clovis' responsibility to provide and maintain a guard rail to safeguard persons entering the hose tower platform was undisputed. Foreman Richardson testified that if a subcontractor discovered an unsafe area such as this, the general contractor would expect to be notified but it would still be his duty and not that of the subcontractor to erect the necessary railing. Furthermore, the erection of guard rails for the platform is the work of carpenters and not electricians. Regardless of who had removed the guard rail ladder, it was the duty of the general contractor to replace the guard rail. Butlar's complaint alleged that Clovis and the City had negligently caused the hose tower to be in a dangerous and defective condition by failing to erect a guard rail or other safety device across the opening.

In the subcontract dated June 19, 1959, Ecco agreed to perform all the electrical work in the fire house (section 1) and to furnish all labor, equipment, materials, supervision and appurtenances required for that work (section 2a). Ecco also agreed to comply with all provisions of the primary contract ‘insofar as the same are applicable to the work referred to in this agreement’ (section 2b), and ‘[t]o be bound to Clovis Construction Co. in the same manner and to the same extent as Clovis is bound to the Owner under the General Contract, to the extent of work provided for in this agreement.’ (Section 2c). It is further provided that: ‘The Subcontractor acknowledges that he is familiar with the terms and conditions of said general contract.’ (Section 1.)

The primary contract between Clovis and the City imposed the following obligations on Clovis: to take and assume all responsibility for the work, to bear all losses and damages directly, or indirectly resulting to him, to the City, or others on account of the performance or character of the work, unforeseen difficulties, and accidents, or any other causes whatsoever; to ‘* * * assume the defense of and indemnify and save harmless the City and County of San Francisco, the Director of Public Works, and their officers and employees, from all claims, loss, damage, injury and liability of every kind, nature and description, directly or indirectly arising from the performance of the contract or work, regardless of responsibility for negligence; and from any and all claims, loss, damage, injury and liability, howsoever the same may be caused, resulting directly or indirectly from the nature of the work covered by the contract, regardless of responsibility for negligence’ [emphasis supplied] (paragraph 12) and to take out and maintain public liability and property damage insurance, to ‘* * * protect him * * * from claims for damages for bodily injury including wrongful death, as well as from claims for property damages, which may arise because of the nature of the work or from operations under this contract, whether such operations be by himself or by any subcontractor or anyone directly or indirectly employed by either of them even though such damages be not caused by the negligence of the Contractor, or any subcontractor, or anyone employed by either of them. The said Public Liability and Property Damage Insurance shall also directly protect the City and County of San Francisco, as well as the Contractor and his subcontractors, and all insurance policies issued hereunder shall so state.’ (Paragraph 35.)

Clovis obtained insurance to protect the City and itself but failed to obtain it to protect the subcontractors.

The primary contract also provided that the general contractor would at all times observe all laws, ordinances, regulations and safety orders (paragraph 6) and that no subcontractor was to relieve the general contractor of any liabilities or obligations under the primary contract (paragraphs 20, 29.)

Safety Order No. 1620 of the Division of Industrial Safety provided, so far as relevant: ‘(a) If sheathing or any other surfacing provides a passageway that extends to any side of a floor or roof opening through which a man might fall, such opening shall be covered with planks or other secure covering of adequate strength to support any load that might be placed thereon, or it shall be fenced on all sides by a railing.’ (8 Cal.Admn.Code, ch. 4, subch. 4 [Construction Safety Orders], art. 18, § 1620.)

This appeal requires a determination of the effect of the language of section 2c of the subcontract whereby Ecco agreed to be bound to Clovis in the same manner as Clovis was bound to the City under the primary contract ‘to the extent of work provided for in this agreement.’ Clovis argues that the trial court properly construed section 2c of the subcontract with the last paragraph of section 1 thereof whereby the subcontractor acknowledged his familiarity with the terms and conditions of the primary contract, to conclude that the parties intended full indemnity to Clovis ‘regardless of responsibility for negligence’ as stated in paragraph 12 of the primary contract. We do not agree.

The construction which should be placed on the contracts here involved is solely a question of law and we are not bound by the trial court's conclusions (Continental Mfg. Corp. v. Underwriters at Lloyds London, 185 Cal.App.2d 545, 548, 8 Cal.Rptr. 276, 9 Cal.Rptr. 115). A contract must be interpreted to give effect to the mutual intention of the parties existing at the time of the contract insofar as it is ascertainable and lawful (Civ.Code § 1636). Moreover, as we stated in Indenco, Inc. v. Evans, 201 Cal.App.2d 369, 374, 20 Cal.Rptr. 90, 93: ‘It is a primary rule of interpretation that contracts must be construed from their four corners, and the intention of the parties must be collected from the entire instrument and not detached portions thereof, it being necessary to consider all of the parts to determine the meaning of any particular part as well as of the whole.’

Clovis bases its argument on that portion of the subcontract incorporating the provisions of the primary contract, and completely disregards the limiting language of the subcontract itself. Each provision thereof limits the subcontractor's responsibility. He is required to furnish labor, equipment, etc., ‘required for the work,’ and to comply with all provisions of the primary contract ‘insofar as the same are applicable to the work referred to in this agreement.’ The language ‘the work,’ ‘work provided for’ or ‘referred to in this agreement’ can only refer to the electrical work. Basically, what Ecco undertook was to do the electrical work called for by the primary contract, in accordance with the plans and specifications prepared by others. It was to install the electrical components in a building which it did not design and which was to be built by Clovis and its other subcontractors. Clovis, not Ecco, was to provide guard rails to protect persons on the premises. The accident did not arise as the result of Ecco's affirmative negligence in the course of the electrical work but out of an independent operation beyond its control and unrelated to its performance. We think the trial court's construction goes too far and disregards the limiting language in the subcontract, that Ecco is bound by the primary contract ‘to the extent of work provided for in this agreement.’

In Patrick J. Ruane, Inc. v. Parker, 185 Cal.App.2d 488, 8 Cal.Rptr. 379, the court found a similar limitation in a subcontract for plastering and lathing which provided that the subcontractor was bound by the primary contract ‘insofar as applicable.’ The court said at 498 of 185 Cal.App.2d, page 386 of 8 Cal.Rptr.: ‘It may be that a party can, by contract, place himself in such a position as Parker [the general contractor] asserts, a question that we need not now consider. But we would be reluctant so to hold in any case where the language does not compel such a result. ‘A contract must receive such an interpretation as will make it * * * reasonable * * *.’ Civil Code, § 1643. ‘Particular clauses of a contract are subordinate to its general intent.’ Civil Code, § 1650. ‘Stipulations which are necessary to make a contract reasonable * * * are implied * * *.’ Civil Code § 1655.' The court also pointed out that since, as in the instant case, the subcontract was on the printed form supplied by the general contractor, it must be construed in favor of the subcontractor (Civ.Code § 1654) and that the relationship between a prime contractor and an owner is naturally much different that that between a subcontractor and an owner.

Here, the responsibilities of the general contractor towards the City are necessarily greater than those of the subcontractor. Clovis had the responsibility for the entire construction project, including the work of all of the other subcontractors. It was unreasonable to construe the subcontract to mean that Ecco was to indemnify Clovis to the same extent that Clovis had agreed to indemnify the City. When carried to its logical conclusion, such construction implies not only that Ecco relieved the general contractor of his own negligence, but also that Ecco assumed the general contractor's responsibilities towards the other subcontractors.

The cases cited by Clovis are not applicable here. In both Kuntz v. Del E. Webb Constr. Co., 57 Cal.2d 100, 18 Cal.Rptr. 527, 368 P.2d 127, and Indenco, Inc. v. Evans, 201 Cal.App.2d 369, 20 Cal.Rptr. 90, the affirmative negligence was that of the subcontractor, and the indemnity a reasonable aspect of the contract bargained for between the parties. Furthermore, as we noted at page 376 of 201 Cal.App.2d, page 95 of 20 Cal.Rptr.: ‘* * * the trial court properly limited Evans' assumption of Indenco, Inc.'s obligations to the county, to roofing operations.’ Harvey Mach. Co. v. Hatzel & Buehler, Inc., 54 Cal.2d 445, 6 Cal.Rptr. 284, 353 P.2d 924, is likewise distinguishable. As the Supreme Court said at 448 of 54 Cal.2d, 287 of 6 Cal.Rptr. 927 of 353 P.2d: ‘The situation here presented, where Harvey [the owner] contracted for the complete construction on its plant and exacted from the defendants, and through them, from the subcontractors, hold harmless and indemnification clauses in the case of injuries to the defendants' employees, requires a realistic conclusion that the parties knowingly bargained for the very protection here in issue. Where, as in the case at bar, the contractors had practical control of the structures on the premises, any negligence for the condition of the structures would obviously not be that of the owner alone. The accident, in these circumstances, was one of if not the most obvious risk against which Harvey sought to be covered.’ Here, the uncontroverted evidence established that maintaining the railing was the duty of Clovis, who had practical control of the structures on the premises. Before and after the accident, Clovis performed this duty. At the time of the accident, Clovis' foreman had instructed a carpenter to reconstruct the protective railing.

Clovis owed to Butlar the statutory duty of providing a safe place of employment (Lab.Code §§ 6304, 6305). Clovis was Butlar's ‘employer’ within the terms of the statute as Clovis had the responsibility and control over the hole in the hose tower platform (Kuntz v. Del E. Webb Constr. Co., 57 Cal.2d 100, 18 Cal.Rptr. 527, 368 P.2d 127; Atherley v. MacDonald, Young & Nelson, 142 Cal.App.2d 575, 298 P.2d 700). Clovis' duty to comply with the safety order was nondelegable (Atherley v. MacDonald, Young & Nelson, supra). Its failure to so comply constituted affirmative negligence as well as a breach of the contract.

Clovis argues that its disregard of the safety order and violation of its statutory duty is not determinative of the appeal, as the subcontract provides for indemnification even in case of Clovis' own affirmative negligence. Clovis contends that by the incorporation of paragraph 12 of the primary contract, the subcontract meets the requirements set forth in Vinnell v. Pacific Elec. Ry. Co., 52 Cal.2d 411, 340 P.2d 604. However, the court in that case stated: ‘Both by precedent and good reason, if an indemnitor such as the plaintiff is to be made responsible for the negligent acts of an indemnitee over whose conduct it has no control, the language imposing such liability should do so expressly and unequivocally so that the contracting party is advised in definite terms of the liability to which it is exposed.’ (52 Cal.2d p. 416, 340 P.2d p. 608.) The indemnification clause in the present case by not expressly stating that Clovis was to be protected by Ecco against acts of its own negligence, failed to meet this standard. While in Rosendahl v. H. K. Ferguson Co., 211 Cal.App.2d 313, 27 Cal.Rptr. 56, the court held that where the parties so intend, an indemnitee can recover under an indemnity agreement despite his own active negligence, the trial court justifiably rejected a finding of such intent in the instant case.

We think that even if the agreement had clearly expressed an intent to indemnify Clovis from its own affirmative negligence, such indemnification would have been contrary to public policy under the facts of this case. The state has long recognized that its public policy requires full provision for securing safe places of employment (Const., art. XX, § 21; Bragg v. Mobilhome Co., 145 Cal.App.2d 326, 335, 302 P.2d 424). We allowed the owner indemnification in Pacific Tel. & Tel. Co. v. Chick, 202 Cal.App.2d 708, 21 Cal.Rptr. 326, where the general contractor had complete control of and was responsible for the dangerous situation which violated the county safety ordinance. But in that case, the injured party was not an employee and the owner merely had knowledge of the situation and did not actively participate in its creation. In the instant case, Clovis participated in the conduct or omission which caused the injury beyond the mere failure to perform a duty imposed by law. As stated previously, Butlar was one of Clovis' ‘employees' and was within the class intended to be protected by the safety legislation which was violated (Atherley v. MacDonald, Young & Nelson, supra). Employers cannot be allowed to shift the risk of their violations of safety ordinances which are ‘the minimum standard of care stated to meet the charge of wilful misconduct or of a criminal violation.’ (Campbell v. Fong Wan, 60 Cal.App.2d 553, 557–558, 141 P.2d 43, 45). Safety regulations, such as here involved, affect the public interest and any agreement to exempt one from liability arising from the negligent or purposeful non-compliance therewith is invalid under Civil Code section 1668.1 (Tunkl v. Regents of University of California, 60 A.C. 38, 42, 32 Cal.Rptr. 33, 383 P.2d 441; Hanna v. Lederman, 223 A.C.A. 887, 893, 36 Cal.Rptr. 150).

We conclude that the subcontract entered into between Clovis and Ecco evinces no intention to indemnify Clovis from its own affirmative act of negligence in removing the guard rail and omitting its replacement and that, in any event, such an attempt by Clovis to exculpate itself from financial liability for injuries caused by a failure to comply with a state safety regulation is contrary to established public policy.

The judgment is reversed and the trial court is directed to enter judgment in accordance with this opinion.

FOOTNOTES

FN1. ‘All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.’.  FN1. ‘All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.’

TAYLOR, Justice.

SHOEMAKER, P. J., and AGEE, J., concur.