Mitchall & Stark Construction Company, Inc. v. Strand Associates, Inc., as successor In interest to Sieco, Inc.

Pursuant to Ind. Appellate Rule 65(D),
FILED
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of Feb 01 2012, 8:46 am
establishing the defense of res judicata,
collateral estoppel, or the law of the
CLERK
case. of the supreme court,
court of appeals and
tax court
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
GLENN D. BOWMAN JULIA BLACKWELL GELINAS
CYNTHIA M. LOCKE MAGGIE L. SMITH
CHRISTINE M. RIESNER JAMES DIMOS
Stewart & Irwin, P.C. BRIAN M. FALCON
Indianapolis, Indiana Frost Brown Todd, LLC
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
MITCHELL & STARK CONSTRUCTION )
COMPANY, INC., )
)
Appellant, )
)
vs. ) No. 36A04-1103-CT-79
)
STRAND ASSOCIATES, INC., as successor )
In interest to SIECO, INC., )
)
Appellee. )
APPEAL FROM THE JACKSON SUPERIOR COURT
The Honorable Bruce Markel, III, Judge
Cause No. 36D01-0608-CT-12
February 1, 2012
MEMORANDUM DECISION - NOT FOR PUBLICATION
DARDEN, Judge
STATEMENT OF THE CASE
Mitchell & Stark Construction Company, Inc., (“the Contractor”) appeals the trial
court’s grant of summary judgment in favor of Strand Associates, Inc., (“the Engineers”)
in Mitchell & Stark’s third party indemnification action against Strand.
We affirm.
ISSUE
Whether the trial court erred in granting summary judgment in favor of Strand.
FACTS
The city of Seymour, Indiana (“the City”) owns and maintains the Von Fange
Ditch (“the Ditch”), a legal drain and sewer line that flows through the west side of the
City. Many years ago, the Ditch was declared to be in a flood plain, which restricted its
use and required surrounding property owners to maintain flood insurance. In the mid-
1990’s, the Indiana Department of Natural Resources studied the Ditch and determined
that concerns about the flood plain might have been overestimated.
In 1994, the City contracted with the Engineers1 to review the Department’s study
and advise the City about long and short term solutions for improvements to the Ditch.
In 1997, the City hired the Engineers to design those improvements and help the City
implement them. In the initial design phase, the City and the Engineers anticipated they
1
The contract was originally executed between the City and SIECO, Inc. The Engineers acquired SIECO
in 2002.
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would need to excavate the Ditch and reconstruct it. However, when the Engineers’
modeling for the flow of water was completed, it was determined that the construction
and improvements to the Ditch did not need to be as extensive as they previously
believed. Further, the time frame for getting permits to do the excavation and
reconstruction exceeded the time allotted for the project. The City therefore revised the
scope of the project to merely include pulling back vegetation in the bottom of the Ditch
to make sure the water flowed and replacing pipes.
After the City and the Engineers determined the scope of the work and
specifications for the Ditch project, they included this information in a “Proposal,
Specifications, and Contract Documents” provided as part of the public bidding process.
During this process, the Contractor submitted the lowest bid, and the City accepted it.
(Supp. App. 356).
Before the Contractor began working on the Ditch project, the City and the
Engineers entered into an agreement, which provided that the Engineers were to observe
the Contractor’s work and report its observations to the City. However, the contract
expressly prohibited the Engineers from supervising the Contractor and released the
Engineers from any responsibility for the Contractor’s acts or omissions while working
on the Ditch project. Specifically, the agreement provided in relevant part as follows:
Engineer . . . shall not . . . supervise, direct or have control over
Contractors’ work nor shall Engineer have authority over or responsibility
for the means, methods, techniques, sequences or procedures or
construction selected by Contractors, for safety precautions and programs
incident to the work of Contractors or for any failure of Contractors to
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comply with laws, rules, regulations, ordinances, codes, or orders
applicable to Contractors furnishing or performing their work.
Accordingly, Engineer can neither guarantee the performance of the
construction contracts by Contractor nor assume responsibility for
Contractors failure to furnish and perform their work in accordance with the
Contract Documents.
(App. 68). There was no contractual relationship between the Engineers and the
Contractor.
The City and the Contractor also entered into an agreement, which provided in
relevant part that the Contractor was to promptly and carefully remove all excess soil
from the Ditch. Industry practice contemplates that a contractor will determine how he is
going to both remove and dispose of the soil. The contractor typically factors the costs
for these options into its bid. If there is a possibility that the soil is contaminated, it must
be disposed of in a regulated landfill, which is an expensive undertaking for a contractor.
If the soil is not contaminated, adjacent property owners might request the soil for their
own use, which is a less expensive option for a contractor.
Here, the Contractor included the cost of soil removal in its bid and explained that,
consistent with the industry practice, it intended to determine how it would remove and
dispose of the Ditch’s soil. The original plan for disposing of the soil was to find a low
ground that needed fill and dump it. However, Thomas Greemann, an owner of five
acres of property adjacent to the Ditch, told the Contractor that he wanted dirt from the
Ditch added to his property to get as much of his property as possible out of the
floodway. The Contractor and Greemann subsequently entered into a private agreement
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pursuant to which the Contractor would put only “clean,” or uncontaminated, soil on
Greemann’s property. (Supp. App. 223). Although the City, the Engineers, and the
Contractor never tested the soil because they had no reason to believe it might be
contaminated, the Contractor specifically represented to Greemann that it would put only
clean or uncontaminated soil upon his property.
Several years after the Ditch project was completed, Greemann entered into an
agreement for the sale of his property adjacent to the Ditch. In conjunction with the sale,
an Environmental Site Assessment was performed and revealed that the soil from the
Ditch that the contractor had deposited on Greemann’s property was contaminated with
lead, arsenic, petroleum, and other contaminants. The sale of the property was cancelled,
and Greemann was required to remediate the contamination.
In June 2007, Greemann filed a complaint against the City, the Jackson-Jennings
Farm Bureau Cooperative Association, Inc., which operated a bulk fertilizer facility and
stored treated wood on the property immediately to the east of Greemann’s’ property, and
the Contractor alleging negligence, nuisance, trespass, and strict liability based upon the
failure of the City and the Contractor to “comply with applicable federal, state, and local
laws and regulations.” (App. 24-32). Greemann also sought to recover the remediation
costs pursuant to the Indiana Environmental Act.
Almost two years later, in June 2009, the Contractor filed a third-party complaint
against the Engineers wherein it alleged that the Engineers had a common law duty to
indemnify it for all damages of judgments the Contractor might be ordered to pay
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Greemann. The Engineers filed a motion for summary judgment, which the trial court
granted. The Contractor appeals.
DECISION
The Contractor argues that the trial court erred in granting the Engineers’
summary judgment motion. Specifically, the Contractor argues that the Engineers have a
common law duty to indemnify it for all damages or judgments it might be ordered to pay
Greemann.
The purpose of summary judgment is to resolve quickly and inexpensively those
disputes in which no genuine issue of material fact exists and in which one party is
entitled to judgment as a matter of law. Bailey v. Shelter Mut. Ins. Co., 615 N.E.2d 508,
509 (Ind. Ct. App. 1993). A trial court’s grant of summary judgment is “clothed with a
presumption of validity” and the appellant has the burden of demonstrating the trial court
erred. Lytle v. Ford Motor Co., 696 N.E.2d 465, 468 (Ind. Ct. App. 1998). However, we
must carefully scrutinize the trial court’s decision to ensure that the non-prevailing party
was not improperly denied his day in court. Id.On review of a trial court’s decision to grant summary judgment, this Court
applies the same standard as the trial court. Wank v. Saint Francis College, 740 N.E.2d
908, 910 (Ind. Ct. App. 2000). Pursuant to Indiana Trial Rule 56(C), summary judgment
is appropriate when there are no genuine issues of material fact and when the moving
party is entitled to judgment as a matter of law.
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The party moving for summary judgment bears the burden of making a prima
facie showing that there are no genuine issues of material fact and that the movant is
entitled to judgment as a matter of law. Markley Enters., Inc. v. Grover, 716 N.E.2d 559,
564 (Ind. Ct. App. 1999). All evidence is construed in favor of the opposing party and all
doubts as to the existence of a material issue must be resolved against the moving party.
Mahan v. Am. Standard Ins. Co., 862 N.E.2d 669, 675 (Ind. Ct. App. 2007).
Indemnity has been defined as “[t]he right of an injured party to claim
reimbursement for its loss, damage or liability from a person who has such a duty.”
BLACKS LAW DICTIONARY 784 (8th ed. 2004). A right of indemnification may arise
from an express contractual obligation or a statutory obligation or may be implied at
common law. Sears, Roebuck & Co. v. Boyd, 562 N.E.2d 458, 461 n. 2 (Ind. Ct. App.
1990).
Indiana adheres to the general rule that in the absence of an express contractual or
statutory right to indemnity, a party may bring an action for indemnification only if he is
without fault. Mullen v. Cogdell, 643 N.E.2d 390, 400 (Ind. Ct. App. 1995). The right to
indemnity may be implied at common law only in favor of one whose liability to another
is solely derivative or constructive and only against one whose wrongful act has caused
such liability to be imposed. Id.Some jurisdictions have recognized exceptions to this general rule in cases where
there is a disparity in the conduct of the parties. Id. However, Indiana has refused to
adopt any of these exceptions, instead reaffirming the rule that there may be no indemnity
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where the party claiming indemnity is guilty of actual negligence whether malfeasance,
misfeasance, or nonfeasance. Id. This is so because Indiana does not recognize degrees
of fault. Id.Here, to recover in its indemnity action, the Contractor must show that it is
without fault and that the Engineers caused the harm to Greemann. The Contractor can
make neither showing. First, our review of the facts reveals that it is undisputed and
consistent with industry practice that the Contractor assumes sole responsibility for
disposing of any soil removed from the Ditch and includes the cost of such removal in its
bid. Furthermore, the Contractor herein entered into a private agreement with Greemann
to remove dirt from the Ditch and place it on Greemann’s property. The Contractor told
Greemann that it would not put any contaminated soil on his property, but the Contractor
failed to have the soil tested. The Contractor also failed to ask the Engineers if the soil
had been tested or if it was free from contaminants before entering into the contract with
Greemann. The Contractor subsequently placed contaminated soil on Greemann’s
property. These undisputed facts prevent the Contractor from establishing that it is
without fault. Because the Contractor bore some fault, it was not entitled to indemnity.
See id.Further, the Engineers did not cause the harm to Greemann. Rather, the evidence
reveals that the Contractor placed the soil on Greemann’s property without inquiring
about its content or testing it for contamination. Further, the Engineers were expressly
prohibited from assuming any type of supervisory role or responsibility for the
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Contractor’s work on the Ditch. Lastly, we agree with the Engineers that the City’s
decision regarding the change in the scope of the Ditch project is irrelevant to whether
the Contractor should have tested the soil before placing it on Greemann’s property.
Because the Engineers did not cause the harm to Greemann, the Contractor is not entitled
to indemnity. The trial court did not err in granting the Engineers’ summary judgment
motion.
Affirmed.
FRIEDLANDER, J., and VAIDIK, J., concur.
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