Coley v. Cohen

This is an action by plaintiff to recover for damages resulting from concussion and vibrations produced by blasting operations carried on without fault by the defendant contractor. Plaintiff owned premises near West Delavan avenue in the city of Buffalo along which the contractor was engaged in a sewer construction job under a contract with the Buffalo Sewer Authority. Plaintiff's premises were damaged as the result of concussion and vibrations produced by blasting operations solely as an unavoidable consequence of the proper performance of this necessary public work by this defendant contractor.

Plaintiff originally brought suit upon two causes of action, the first based upon negligence and the second upon a claim that defendant's contract with the Sewer Authority imposed an obligation to pay for any damage due to blasting without regard to fault. Pursuant to stipulation the two causes of action were severed and only the cause of action in contract was tried, the cause of action in negligence awaiting the disposition of the cause at bar.

It is the contention of plaintiff that under the terms of the contract between the contractor and the Sewer Authority, the contractor assumed an absolute liability with respect to all damages resulting from blasting operations. Defendant-appellant, on the other hand, contends that the contractor's liability under the contract with reference to blasting and excavating is limited to indemnification of the Sewer Authority and the city of Buffalo.

At the trial evidence was introduced solely as to causation and amount of damage because the trial court held, in accordance with a prior decision of the Appellate Division upon motion to dismiss, that defendant was liable under the contract without regard to negligence. The trial court then submitted to the jury only these two questions of causation and damages, and the jury returned a verdict in favor of plaintiff in the amount of $2,750.

The main question to be decided upon this appeal is the construction of the contract made between this defendant and the Buffalo Sewer Authority. Upon the trial, a subsidiary question arose because of the exclusion by the trial court of parole evidence offered by defendant as bearing upon the intention of the parties to the contract. In view of the decision reached herein, the contention of defendant that this parole evidence is admissible becomes immaterial.

We pass at once to a consideration of the contract and the specifications. The contract is voluminous, running over one hundred legal size pages of single space typing. Appended to the contract are specifications numbered from section 1 to section 8.06. The provisions upon which plaintiff bases his theory of absolute liability, do not appear in the contract itself. So far as appears from the provisions of the contract, responsibility of the contractor is expressly limited to indemnifying and saving harmless from legal damage the city of Buffalo and the Sewer Authority. This obligation is set out in article X entitled "Contractor's Responsibility," wherein it is provided that: "The Contractor will indemnify and save harmless the City of Buffalo and the Authority from all claims, suits or actions and damages or costs of every name and description to which the City of Buffalo and/or the Authority may be subjected or put by reason of injury to the person or property of another resulting from negligence or carelessness on the part of the Contractor * * * and the whole or so much of the moneys due or to grow due under this agreement as shall or may be considered necessary by the Authority may, at its option, be retained by the Authority until all * * * claims for damages shall have been * * * disposed of and evidence to that effect furnished to its satisfaction."

The provision relied upon by plaintiff appears, as noted, only in the specifications, being section 1.02 of part II of the specifications. Part II bears the general heading "Methods and Materials of Construction." Section 1.02 appears under the sub-heading "Excavation in Tunnel," and reads as follows:

"1.02. Contractor's Responsibility. The Contractor in accepting this contract agrees to accept full responsibility for all damages and claims and for the defense of all actions against the Authority or City of Buffalo arising from any excavation made in connection with the work done under these specifications.

"All blasting necessary on this contract shall be done with the express provision that the Contractor shall be and is hereunder responsible for any and all damages and claims arising from such blasting or by accidental explosions, and for the defense of all actions arising from such causes."

Plaintiff urges that by means of these two paragraphs quoted above from the specifications there was created a new and absolute liability upon the contractor with reference to excavation and blasting work, and that this liability runs in favor of any and all persons who may suffer damage therefrom. It is submitted, however, that this contract and specifications are not capable of such a construction.

Article X of the contract is clearly a provision of indemnity whereby the contractor agrees to save harmless the city of Buffalo and the Sewer Authority from claims arising on account of the acts or faults of himself, his servants, agents, or subcontractors. As it stands, this provision, of course, does not afford complete indemnity to the city and the Authority because it is clearly insufficient to cover the acts or neglects imputable to the indemnitees themselves. (Thompson-Starrett Co. v. Otis Elevator Co., 271 N.Y. 36.) There is room, therefore, for a further provision supplementing this indemnity agreement so as to afford more complete protection to the indemnitees. With this thought in mind we examine section 1.02 of the specifications which, by reason of its heading, "Contractor's Responsibility," is obviously intended to supplement article X of the contract. In construing this section of the specifications, we must take into account the direction contained in article I-a of the contract, which provides that in the event of conflict or inconsistency between the provisions of the contract and those of the specifications, the provisions of the contract shall control. Thus we should expect to find in the language of section 1.02 merely a supplemental agreement confined to indemnity and a natural construction of the language contained therein would seem to bear out that expectation. A perfectly reasonable construction of the language contained in this section is that, with reference to the specific subjects of excavation and blasting, the contractor agrees to afford a more complete protection to the indemnitees by assuming full responsibility for acts or neglects imputable to the latter. That this is the correct construction of the section in question is further borne out by looking to section 33 of the contract which expressly limits structural damage to the negligence or fault of the contractor, and section 1.05 of the specifications, which expressly define and limit the liability of the contractor with reference to the work of blasting. It is obvious, of course, that if specification 1.02 imposed the absolute liability contended for by plaintiff, the provisions of section 33 and of specification 1.05 would be altogether unnecessary.

Plaintiff's construction of specification 1.02 is likewise completely out of harmony with the other provisions of the contract. An inspection of this document demonstrates the extreme nicety with which absolute liability, when intended, was imposed upon the contractor by the terms of the contract. For example, in article XXXVI of the contract, the contractor is required to take full precaution to protect the completed work until the entire contract is completed. This clause expressly provides, however, that the taking of proper precaution shall not relieve the contractor from absolute liability to the Authority on account of the completed work. This is an instance in which the draftsman of the contract intended to distinguish sharply between an obligation to use due care and an obligation to assume absolute liability and used language unmistakably imposing the latter kind of liability. This provision is in sharp contrast to the ambiguous words of specification 1.02, upon which plaintiff relies as imposing the same kind of absolute liability upon the contractor.

A brief examination of the other provisions of the contract discloses that no such sweeping liability as that contended for by plaintiff was intended to be imposed upon defendant contractor. The city of Buffalo and the Sewer Authority are the prime beneficiaries under this contract and, when any other person or class of persons is intended to be benefited thereunder, such person or class of persons is unmistakably pointed out in explicit terms. Thus, for instance, article XVIII of the contract which authorizes the withholding of payments from the contractor, in addition to providing for the Authority and the city, permits the withholding of payments only in favor of claimants for labor and materials. Again, when a duty to repair is placed upon the contractor, the liability thus imposed is not left high in the air but is expressly confined to certain enumerated classes of subjects and certain enumerated classes of persons. The entire contract, therefore, so carefully limiting the extent of the liability imposed upon the contractor, is entirely out of harmony with the theory of plaintiff that an absolute liability was intended to be imposed upon the contractor in favor of an indeterminate class of persons without regard to geographical limitations, time limitations upon the filing of claims, or other reasonable restrictions.

The contention urged by plaintiff would give a construction to one paragraph of the specifications entirely inconsistent both with the provisions of article I-a of the contract, limiting the specifications merely to the supplementing of the contract, and also with the general contract rule relegating the specifications to performing merely the function of bills of particulars with reference to the main contract. (McGarry Contr. Co. v. Boardof Education, 284 N.Y. 218.) Under the settled law of this State there is no liability resulting from vibrations from blasting performed without fault and with all due care. (Booth v. Rome,Watertown O.T.R.R. Co., 140 N.Y. 267.) If it had been the intention to override this settled principle and create a new and absolute liability, would there not have been inserted in the contract itself a clear and unambiguous provision to that effect?

It is urged that the second paragraph in subdivision 1.02 of the specifications was entirely unnecessary if it were intended to limit liability of the contractor to indemnity of the city of Buffalo and of the Authority for the negligence of the contractor. As already noted, that was the very purpose of this provision of that section since without that express provision, the city and the Authority would not be covered for their own negligence. (Thompson-Starrett Co. v. Otis Elevator Co., supra.)

Where the contract itself provides only for indemnity to the city and the Authority against negligence and it is sought to read a part of the specifications as creating absolute liability on the part of the contractor wholly apart from negligence, then it is submitted that that portion of the contract is controlling which provides that in case of any conflict or inconsistency between the provisions of this contract and those of the specifications, the provisions of the contract shall govern.

It is urged that the use of the words "accidental explosions" in the second provision of subdivision 1.02 of the specifications is of great significance. Aside from the fact that accidental explosions may be due to carelessness, it is to be noted that these words are immediately followed in the same sentence by the phrase "and for the defense of all actions arising from such causes" thus showing that the words "accidental explosions" are a part of the general indemnity provided for the city and the Authority. Otherwise there would be no need to cast the obligation to defend actions brought against the city and the Authority from "such causes."

Article X of the contract expressly provides for the withholding of moneys until all suits or claims for damages against the city and the Authority shall have been settled or otherwise disposed of. It is contended, therefore, that article XVIII which also provides for the withholding of money, indicated an intention to make the contractor liable to third parties without regard to fault on his part, but a careful reading of that provision limits the withholding of money "to protect the Authority and the City of Buffalo from loss * * * caused by the act or neglect of the Contractor or of any of his sub-contractors."

It is also urged that under article XXXIX of the contract, the contractor is required to take out public liability insurance and property damage insurance, but in the absence of a provision for additional coverage, this provision to take out insurance is merely for the coverage of the undertaking of the contractor, namely, to indemnify the city of Buffalo and the Authority.

Plaintiff-respondent relies chiefly upon Wilson v. CostichCo. (231 App. Div. 346; affd., 256 N.Y. 629) and Trumpbour v.Johnson Corp. (250 App. Div. 856; affd., 277 N.Y. 609). The contract in the Wilson case, however, specifically compelled the contractor to repair whatever damage he caused without regard to ordinary legal liability. In the Trumpbour case two paragraphs of the contract, numbered 5 and 6, were relied upon by the plaintiff as imposing absolute liability upon the contractor on account of blasting operations. Paragraph 5 was obviously a contract of indemnity which had this feature that distinguishes it from article X of the contract in the case at bar; it was a complete indemnity agreement because it was sufficiently broad to cover acts and neglects imputable to the indemnitees in accordance with the Thompson-Starrett rule. (Thompson-StarrettCo. v. Otis Elevator Co., supra.) Consequently, the subject of indemnity had been completely covered by this provision and the other provisions of the contract would be completely meaningless unless they dealt with some different subject. The provisions of paragraph 6 may be said fairly to impose the kind of absolute liability contended for by plaintiff, especially because of the use of the explicit words that "all damages of whatever nature * * * from whatever cause" shall be borne and sustained by the contracting party. On the other hand, defendant's construction of the contract in the case at bar finds authoritative support in a number of Federal cases construing similar language in public works contracts. (United States v. Massachusetts Bonding Ins. Co., 18 Fed. Rep. [2d] 203; Corrigan Transit Co. v.Sanitary Dist. of Chicago, 137 Fed. Rep. 851; Twin Falls CanalCo. v. American Falls Reservoir Dist. No. 2,59 Fed. Rep. [2d] 19, cert. denied, 287 U.S. 638.)

The judgment appealed from should be reversed and the contract cause of action in the complaint dismissed, but without costs.

CONWAY, DESMOND and ^*LAZANSKY, JJ., concur with RIPPEY, J.; FINCH, J., dissents in opinion in which LEHMAN, Ch. J., and LOUGHRAN, J., concur.

Judgment affirmed.

^* Designated pursuant to section 5 of Article VI of State Constitution in place of Lewis, J., disqualified.