On appeal from the Superior Court of New Jersey, Law Division, Passaic County.
Approved for Publication February 24, 1997.
Before Judges King, Keefe and Conley. The opinion of the court was delivered by King, P.j.a.d.
The opinion of the court was delivered by: King
The opinion of the court was delivered by
This case involves interpretation of a contractual indemnification clause in an agreement between a general contractor and a subcontractor. The case arises from a personal injury claim made by the subcontractor's employee sustained at a June 4, 1990 job-site accident during installation of a drainage system. The Law Division Judge dismissed the general contractor's claim for contractual indemnity, finding the "hold harmless" clause in the contract nonefficacious. We disagree and reverse. We find that the clause expressly and unambiguously provides for partial indemnity, to the extent the subcontractor's negligent acts or omissions contributed to its employee's injury.
In 1992 plaintiff Derek Mautz sued several defendants for his severe personal injury, partial amputation of an arm, suffered on June 4, 1990 while installing a drainage grate in a catch-basin at a construction site in Ringwood Industrial Park, Ringwood, New Jersey. Plaintiff was an employee of Gagliano Brothers Excavating Company (Gagliano), a subcontractor. Plaintiff sued Remy Associates (Remy), the owner acting as general contractor on the job-site; Caterpillar, Inc., the manufacturer of the front-end loader involved in the accident; and Foley Machinery Co., which sold the loader to his employer, Gagliano. Remy then joined plaintiff's employer, Gagliano, as a third-party defendant seeking contractual indemnification.
In August 1994 Gagliano moved to dismiss Remy's claim for contractual indemnity. Remy responded by filing a cross-motion for summary judgment. After argument, the Law Division Judge granted Gagliano's motion and denied Remy's motion, ruling as a matter of law that the contractual indemnity clause was ambiguous and ineffective in shifting any portion of the cost of plaintiff's claim from Remy to Gagliano.
After this adverse ruling, Remy settled plaintiff's claim for about $1,150,000. A consent judgment memorialized the settlement. A few months later plaintiff settled with the remaining defendants, Caterpillar and Foley, for $400,000. Remy then appealed from the adverse ruling on its indemnity claim.
Plaintiff was working for Gagliano laying pipe and installing a catch-basin in an excavated trench about five-feet deep. Joe Gagliano was operating a Caterpillar 920 front-end loader. While plaintiff was lowering a two-hundred-pound steel grate for the catch-basin into the excavation, the Caterpillar lunged forward, fell into the excavation, and trapped plaintiff's arm and hand between the catch-basin and the bucket. Plaintiff lost part of his arm.
Remy was the general contractor. (Patti Roofing, an affiliate of Remy, was actually the owner.) Gagliano was a subcontractor hired to perform site clearing, excavation and drainage work. Remy contracted with Gagliano in a standard-form written subcontract entitled "Standard Form of Agreement Between Contractor and Subcontractor," ...