The opinion of the court was delivered by: FISHER
This matter comes before this Court on third-party defendant's motion for summary judgment pursuant to F.R.Civ.P. 56. The action was instituted by the plaintiff who was injured in a crane accident; the equipment being owned by the defendant, Sievers Hauling Corporation.
Plaintiff's complaint alleges that Sievers' employees were negligent, careless and reckless in their operation of the crane, thus making the employer vicariously liable under the doctrine of respondeat superior. Plaintiff further alleges that the defendant Sievers was negligent in hiring "incompetent and unfit" employees to operate the crane. (Plaintiff's Complaint paras. 5, 6). The defendant Sievers is in the business of renting construction equipment to construction firms, but has no operators of heavy equipment in its direct employ. (L. Siever's dep. p. 33). Sievers does have a contractual arrangement with Local 825 of the International Union of Operating Engineers (hereinafter referred to as "union") whereby the defendant-third-party plaintiff will call the union hiring hall whenever it needs employees for a particular job. Such employees are usually sent along with the equipment to a construction site. Sievers has named the union as a third-party defendant in this action claiming that if the jury finds for the plaintiff regarding the incompetency of the employee operators, the union must indemnify the defendant-third-party plaintiff Sievers. The union has moved for summary judgment.
Viewing all the facts in a light most favorable to the third-party plaintiff, Sievers, Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870 (3d Cir. 1972), it appears that a crane was rented to McKinney Drilling Company, Inc., and that said company requested a crew to operate it. Pursuant to its contract, Sievers called the union hiring hall and requested a crew for the crane.
The union sent one Decker as an operator and one Anderson as an oiler/apprentice engineer to Sievers who processed their paper work (i.e. W-2 tax forms, etc.), and sent them on to the job site. There, they were under the direction and control of McKinney. At the time of the accident, Anderson was operating the crane. There is a factual dispute over whether it was union policy to permit an apprentice engineer to operate a crane for certain periods of time. As the subsequent determination of the instant motion makes clear, this issue is one of material fact.
As was noted earlier, Sievers contends that if the employees are found to have been incompetent, it should be indemnified by the union. This indemnity claim is based upon two theories: (1) a breach of contract by the union; (2) an implied right of indemnity. The union contends that Sievers cannot recover under the indemnification theories as a matter of law and, in the alternative, that Sievers is estopped from asserting the competency issue against it.
The third-party plaintiff, Sievers, and the union entered into a collective bargaining agreement which, inter alia, specifically required that whenever Sievers desired to employ workmen, it should call upon the union who would refer the needed and contractually specified workers from an open employment list. (Art. III, para. 1 of Agreement -- Exh. B Third Party Defendant's Brief). The contract goes on to state:
"[the] Employer [Sievers] shall retain the absolute and unconditional right to reject any workmen referred by the Union."
"The Union, in referring workmen, shall give consideration to and shall be governed by the following criteria . . .:
(c) Competency and experience in the performance of the particular tasks involved in the job to which referral is being made; * * *"
Art. III, para. 4. Article IV, Part C, para. 6 entitled "Work Rules", states:
"(c) If an Engineer, Apprentice Engineer, [or] Oiler . . . is employed and is found incompetent, his services may be dispensed with and he shall be paid for actual time worked."
Sievers contends that if the employees are found to have been incompetent, and said incompetence proximately caused the injury, the union, being contractually obligated to refer competent workmen, should be held liable for the breach of this duty, thus creating indemnification through contract damages. The union asserts the defense of estoppel, relying largely on the contractual provisions permitting the rejection or discharge of any workmen referred by the union.
While it is true that the union did not warrant each workman against negligent conduct or agree to indemnify Sievers for liability imposed by such acts, this Court finds that the union did have an express duty under the contract to provide and refer competent workmen to perform the tasks requested. ...