Complete Gen. Constr. v. Koker Drilling, Unpublished Decision (9-12-2002)
Complete Gen. Constr. v. Koker Drilling, Unpublished Decision (9-12-2002)
Opinion of the Court
{¶ 2} This appeal arises out of the city of Westerville's ("Westerville") construction of a bridge over Alum Creek as part of the Polaris/Maxtown Connector road project ("bridge project"). In March 1998, Complete General Construction Company ("Complete General") entered into a contract with Westerville to serve as the general contractor on the bridge project. As contemplated by the contract, Complete General subsequently entered into numerous subcontracts, including one with Koker Drilling Company ("Koker") for the installation of 40 drilled shafts that were required to establish the foundations for the piers that would support the bridge.
{¶ 3} Koker commenced work on its subcontract on July 13, 1998, intending to drill approximately one shaft per day in order to complete the work on schedule. However, the first three shafts that Koker drilled were rejected by Westerville as defective. By late November 1998, Koker had failed to drill even a single shaft that met the requirements of its subcontract. Consequently, Complete General terminated Koker's contract and hired a replacement subcontractor to drill the 40 shafts.
{¶ 4} On December 2, 1998, Complete General sued Koker for breach of contract. On January 25, 1999, Koker filed an answer, together with a counterclaim that asserted claims for breach of contract and unjust enrichment. On April 22, 1999, Complete General responded to Koker's counterclaim by filing a third-party complaint against Westerville for breach of contract, which alleged that Westerville was liable for all or part of any liability Complete General was found to have to Koker. On May 28, 1999, Westerville filed its answer to Complete General's third-party complaint together with a counterclaim. Westerville's counterclaim alleged that Complete General had "failed to honor its indemnification and hold harmless obligations [under sections
{¶ 5} On June 19, 2000, Westerville moved for summary judgment on Complete General's third-party complaint. On July 14, 2000, Complete General moved for summary judgment on its claims against Koker and on Koker's counterclaim. However, before the trial court could rule on any of the pending summary judgment motions, Koker voluntarily dismissed its counterclaim. In response, Complete General voluntarily dismissed its third-party complaint against Westerville.
{¶ 6} On May 1, 2001, Westerville filed a motion for summary judgment on its third-party counterclaim seeking to recover the attorney fees it expended in defending against Complete General's third-party complaint. On May 24, 2001, Complete General moved for summary judgment on Westerville's claims against it. On November 13, 2001, the trial court issued a decision denying Westerville's motion for summary judgment, and on January 9, 2002, the court entered final judgment in the case. Westerville appeals from the trial court's decision and entry assigning the following error:
{¶ 7} "The Trial Court Committed Reversible Error By Concluding That The City of Westerville May Not Recover Its Attorney Fees From Complete General Construction Company."
{¶ 8} Preliminarily, because this matter arises out of the trial court's grant of summary judgment pursuant to Civ.R. 56, we review the trial court's determination independently, and without deference. Brown v. Scioto Cty. Bd. of Commrs. (1993),
{¶ 9} Westerville presents two related but distinct arguments in support of its claim to recover the attorney fees it expended in defending against Complete General's third-party complaint. First, Westerville argues that it is entitled to recover its attorney fees as compensatory damages resulting from Westerville's breach of the hold harmless provisions contained in sections
{¶ 10} In addressing Westerville's claim to recover its attorney fees as contract damages, we initially note that the "American Rule," under which each party is responsible for paying its own attorney fees, Sorin v. Bd. of Edn. (1976),
{¶ 11} "The CONTRACTOR will indemnify and save the OWNER or the OWNER'S agents harmless from all claims growing out of the lawful demands of SUBCONTRACTORS, laborers, workman, mechanics, materialmen, and furnishers of machinery and parts thereof, equipment, tools, and all supplies, incurred in the furtherance of the performance of the WORK. * * *"
{¶ 12} The interpretation of a written contract is a matter of law to be determined by the court. Alexander v. Buckeye Pipe Line Co. (1977),
{¶ 13} When the quoted portion of section
{¶ 14} "1119. PAYMENTS TO CONTRACTOR
{¶ 15} "1119.1 At least 10 days before each progress payment falls due (but not more often than once a month), the CONTRACTOR will submit to the ENGINEER a partial payment estimate filled out and signed by the CONTRACTOR covering the WORK performed during the period covered by the partial payment estimate and supported by such data as the ENGINEER may reasonably require. If payment is requested on the basis of materials and equipment not incorporated in the WORK but delivered and suitably stored at or near the site, the partial payment estimate shall also be accompanied by such supporting data, satisfactory to the OWNER as will establish the OWNER'S title to the material and equipment and protect his interest therein, including applicable insurance. The ENGINEER will, within 10 days after receipt of each partial payment estimate, either indicate in writing his approval of payment and present the partial payment estimate to the ONWER, or return the partial payment estimate to the CONTRACTOR indicating in writing his reasons for refusing to approve payment. In the latter case, the CONTRACTOR may make the necessary corrections and resubmit the partial payment estimate. The OWNER will, within 30 days of presentation to him of an approved partial payment estimate, pay the CONTRACTOR for the WORK at the rate of 90% of the amount as approved by the ENGINEER. The 10% withheld will be paid upon full PROJECT completion to the OWNERS satisfaction.
{¶ 16} "
{¶ 17} "
{¶ 18} "1119.04 The OWNER shall have the right to enter the premises for the purpose of doing WORK not covered by the CONTRACT DOCUMENTS. This provision shall not be construed as relieving the CONTRACTOR of the sole responsibility for the care and protection of the WORK, or the restoration of any damaged WORK except such as may be caused by agents or employees of the OWNER.
{¶ 19} "
{¶ 20} "
{¶ 21} "1119.7 If the OWNER fails to make payment 30 days after approval by the ENGINEER, in addition to other remedies available to the CONTRACTOR, there shall be added to each such payment interest at the maximum legal rate commencing on the first day after said payment is due and continuing until the payment is received by the CONTRACTOR."
{¶ 22} When section
{¶ 23} In the present case, Koker's claims alleged that Complete General breached its subcontract with Koker when it terminated the contract for nonperformance, because Koker's inability to complete its work was the result of work site conditions which differed from those anticipated by the contract, Complete General's failure to properly prepare the work site, and Complete General's failure to provide Koker with access to the site, application of unreasonable procedures and specifications to Koker's work, and delay in approving Koker's procedures. Nothing in any of Koker's claims alleged that Complete General failed to make progress payments or final payment to Koker as required by the contract. Consequently, Complete General's attempt to pass any liability it incurred as a result of Koker's claims on to Westerville by filing a third-party complaint against Westerville did not breach the hold harmless provision of section
{¶ 24} Westerville also claims that Complete General breached the hold harmless provision of section 1124.1 when it filed its third-party complaint. Section 1124.1 provides as follows:
{¶ 25} "The CONTRACTOR will indemnify and hold harmless the OWNER and the ENGINEER and their agents and employees from and against all claims, damages, losses and expenses including attorney's fees arising out of or resulting from the performance of the WORK, provided that any such claims, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury or to destruction of tangible property, including the loss of use resulting therefrom; and is caused in whole or in part by any negligent or willful act or omission of the CONTRACTOR, and SUBCONTRACTOR, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable."
{¶ 26} Westerville argues that section 1124.1 required Complete General to hold Westerville harmless for Koker's claims against Complete General, and that Complete General breached this provision when it filed its third-party action against Westerville. Westerville contends that Koker's claims against Complete General are governed by 1124.1 because the claims are "attributable to injury or to destruction of tangible property." Specifically, Westerville argues that Koker's claims are so "attributable" in that Koker's work on the bridge project involved tangible property, in the form of the land into which Koker drilled the shafts, and the steel rebar and concrete used to complete the drilled shafts; that Koker's work resulted in injury or destruction of that tangible property, in the sense that the drilled shafts were unusable as completed by Koker; and that Koker's failure to adequately complete the drilled shafts was the underlying cause of its claims against Complete General.
{¶ 27} In reading section 1124.1 to apply to Koker's claims, Westerville has completely ignored the final clause of the section, 1124.1, which provides that the covered claims must have been "caused in whole or in part by any negligent or willful act or omission of the CONTRACTOR, and SUBCONTRACTOR, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable." (Emphasis added). "Negligent" and "willful" are both legal terms of art that refer to tortious conduct. The presence of these terms in section 1124.1 evidences a clear intent that the section applies only to claims arising, at least in part, from tortious conduct, and not to claims arising solely out of contractual disputes related to the project.
{¶ 28} Here, Koker's claims against Complete General arise entirely out of its contract with Complete General and have no tortious component.1 Accordingly, Complete General was not obligated by section 1124.1 to hold Westerville harmless for Koker's claims, and Complete General's third-party action against Westerville did not breach the contract.
{¶ 29} Because Complete General's filing of its third-party action against Westerville did not contravene either section
{¶ 30} As previously noted, Westerville also contends that section 1124.1 of the contract expressly requires Complete General to indemnify it for the attorney fees it incurred as the result of claims brought by subcontractors. While Westerville is correct that the indemnification provision in section 1124.1 expressly includes attorney fees, such indemnification is required only where the underlying claims fall within the coverage of section 1124.1. Consequently, the indemnification provision of section 1124.1 is inapplicable to Koker's claims for the same reason that the hold harmless provision of the section is inapplicable to Koker's claims; the section applies only to claims which arise, at least in part, from tortious conduct, and Koker's claims arise solely from its contract with Complete General. Thus, Complete General is not obligated to indemnify Westerville for the attorney fees it expended in defending against Complete General's third-party claims alleging that Westerville was liable for any liability that Complete General incurred as a result of Koker's claims.
{¶ 31} Westerville's lone assignment of error is overruled.
{¶ 32} Having overruled appellant's assignment of error, we affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
BOWMAN and LAZARUS, JJ., concur.
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