Can a Washington construction subcontractor be made to indemnify the owner or GC for their own negligence?
Not for their sole negligence, and only partly for concurrent negligence. Under RCW 4.24.115 an indemnity promise in, or in connection with, a contract for construction, alteration, repair, improvement or maintenance of a structure or improvement attached to real estate (and in architectural, landscape architectural, engineering or land surveying services contracts and motor carrier transportation contracts), "purporting to indemnify, including the duty and cost to defend", against liability for damages arising from bodily injury or property damage: caused by the SOLE negligence of the indemnitee is against public policy and void; caused by the CONCURRENT negligence of indemnitee and indemnitor is valid only to the extent of the indemnitor's negligence and only if the agreement specifically and expressly provides for it. Such an agreement may waive the indemnitor's industrial insurance immunity under Title 51 RCW only if it specifically and expressly provides for that and the waiver was mutually negotiated. The Supreme Court of Washington has construed and applied that second condition. In Moen it read the amended subsection as permitting "the enforcement of contracts to indemnify against loss occasioned by concurrent negligence", valid "only to the extent of the indemnitor's negligence and only if the agreement specifically and expressly provides therefor", with the industrial-insurance waiver good "only if the agreement specifically and expressly provides, and the waiver was mutually negotiated"; and it enforced an indemnification addendum that "specifically and expressly provides for the waiver of employer immunity", limited indemnity to the extent of the subcontractor's negligence, and on its face "certifies the Indemnification Addendum was mutually negotiated": holding the subcontractor "to the contract it negotiated", but enforceable "only to the extent" its negligence caused the injury. The applicability sentence sits at the end of (1)(b): "This subsection applies to agreements entered into after June 11, 1986."
The trap
The Title 51 waiver is the one drafters miss. Without it, an employer-subcontractor's indemnity does not reach claims brought by its own injured employees, because the employer is immune under the Industrial Insurance Act. Brown v. Prime Construction held such an indemnity enforceable only if it clearly and specifically waives that immunity, either by saying so or by stating that the indemnitor assumes liability for actions brought by its own employees; the statute now also requires the waiver to be mutually negotiated. What satisfied that condition in Moen was the agreement's own certification (the Supreme Court recorded that the addendum "certifies the Indemnification Addendum was mutually negotiated" and enforced it), so the certification belongs in the document, not in a recollection of the negotiation. A published Court of Appeals opinion sets out a subcontract that wrote it this way: "CONTRACTOR and SUBCONTRACTOR hereby certify that these indemnification provisions were mutually negotiated and agreed to by the parties." (MacLean Townhomes; that court was deciding how broad the indemnity was, and did not rule on whether the certification sufficed). Watch the numbering when reading Moen: the concurrent-negligence and Title 51 waiver conditions now sit in subsection (1)(b), and Moen calls the same language "subsection (2)" because that is how the 1986 Tort Reform Act numbered it: Moen's own footnote quotes the section as it then read, with sole negligence at (1) and concurrent negligence at (2). Both texts carry the mutually-negotiated words, so the renumbering changes the label and nothing else. The clause that failed in Brown promised to indemnify "from and against any and all suits, claims, actions, losses, costs, penalties, and damages of whatsoever kind or nature ... except that caused by the sole negligence of the contractor" (broad words that never mention the subcontractor's own employees or Title 51), and the clause incorporated by reference from the prime contract did not meet the test either. Two more from the text and the case. The section voids the DUTY TO DEFEND on the same terms as the indemnity ("including the duty and cost to defend" is in the operative words), so a clause that shifts only defense costs for the indemnitee's sole negligence is as void as one shifting the judgment. And Brown's incorporation holding is specific: where the subcontract incorporated the prime contract's indemnity and said the subcontract controls in a conflict, the Court read the two "together" and found they "fail to clearly express an intent on the part of Ace to waive its immunity", so the prime's clause cannot be pulled down into the subcontract by reference to supply the specific waiver the statute demands. The Court gave a second, independent reason the incorporated clause failed: read with the main contract, Ace owed indemnity only "if Prime had to indemnify the Owner", and "Plaintiff Brown never sued the Owner", so "the main contract provision was never triggered". The general contractor lost outright: the trial court "granted Ace's motion for summary judgment, and dismissed Prime's third party complaint with prejudice", and the Supreme Court affirmed, with no dissent. The author and seven concurring justices signed. One boundary in the text: "motor carrier transportation contract" is defined in subsection (2), which excludes "agreements providing for the interchange, use, or possession of intermodal chassis, containers, or other intermodal equipment".
16 authorities
- statuteRCW 4.24.115enactment date not established
The words that state the rule
(1) A covenant, promise, agreement, or understanding in, or in connection with or collateral to, a contract or agreement relative to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of, any building, highway, road, railroad, excavation, or other structure, project, development, or improvement attached to real estate, including moving and demolition in connection therewith, a contract or agreement for architectural, landscape architectural, engineering, or land surveying services, or a motor carrier transportation contract, purporting to indemnify, including the duty and cost to defend, against liability for damages arising out of such services or out of bodily injury to persons or damage to property: (a) Caused by or resulting from the sole negligence of the indemnitee, his or her agents or employees is against public policy and is void and unenforceable; (b) Caused by or resulting from the concurrent negligence of (i) the indemnitee or the indemnitee's agents or employees, and (ii) the indemnitor or the indemnitor's agents or employees, is valid and enforceable only to the extent of the indemnitor's negligence and only if the agreement specifically and expressly provides therefor, and may waive the indemnitor's immunity under industrial insurance, Title 51 RCW, only if the agreement specifically and expressly provides therefor and the waiver was mutually negotiated by the parties. This subsection applies to agreements entered into after June 11, 1986.
- statuteRCW 4.24.115enactment date not established
The words that state the rule
(2) As used in this section, a "motor carrier transportation contract" means a contract, agreement, or understanding covering: (a) The transportation of property for compensation or hire by the motor carrier; (b) entrance on property by the motor carrier for the purpose of loading, unloading, or transporting property for compensation or hire; or (c) a service incidental to activity described in (a) or (b) of this subsection, including, but not limited to, storage of property, moving equipment or trailers, loading or unloading, or monitoring loading or unloading. "Motor carrier transportation contract" shall not include agreements providing for the interchange, use, or possession of intermodal chassis, containers, or other intermodal equipment.
- statuteRCW 51.04.010enactment date not established
The words that state the rule
The common law system governing the remedy of workers against employers for injuries received in employment is inconsistent with modern industrial conditions. In practice it proves to be economically unwise and unfair. Its administration has produced the result that little of the cost of the employer has reached the worker and that little only at large expense to the public. The remedy of the worker has been uncertain, slow and inadequate. Injuries in such works, formerly occasional, have become frequent and inevitable. The welfare of the state depends upon its industries, and even more upon the welfare of its wage worker. The state of Washington, therefore, exercising herein its police and sovereign power, declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workers, injured in their work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this title; and to that end all civil actions and civil causes of action for such personal injuries and all jurisdiction of the courts of the state over such causes are hereby abolished, except as in this title provided.
- case128 Wash. 2d 745Gilbert H. Moen Co. v. Island Steel Erectors, Inc.Wash.decided 1996read it at the source ↗
The words that state the rule
The parties ask this court to determine the validity of an indemnification agreement in a construction contract pursuant to RCW 4.24.115. RCW 4.24.115 permits the enforcement of indemnification agreements involving concurrent negligence of parties in the construction setting. RCW 4.22.070, adopted in the same 1986 legislative session as amendments to RCW 4.24.115, provided for several liability in cases based on fault as the policy of the State of Washington. Notwithstanding RCW 4.22.070, we hold that an indemnification agreement negotiated pursuant to RCW 4.24.115 is valid and enforceable to the extent of the indemnitor’s negligence in a case of concurrent negligence by the indemnitor and indemnitee. We reverse the Court of Appeals and remand this case to the King County Superior Court for trial.
- case128 Wash. 2d 745Gilbert H. Moen Co. v. Island Steel Erectors, Inc.Wash.decided 1996read it at the source ↗
The words that state the rule
The Legislature has specifically limited and recognized the enforceability of indemnification provisions in construction contracts. Prior to the 1986 Tort Reform Act (the Act), RCW 4.24.115 precluded indemnification by the indemnitor against the sole negligence of the indemnitee in construction contracts. In the Act, the Legislature added subsection (2) to RCW 4.24.115, which specifically *754 permits the enforcement of contracts to indemnify against loss occasioned by concurrent negligence. 3 This subsection states such agreements are "valid and enforceable only to the extent of the indemnitor’s negligence and only if the agreement specifically and expressly provides therefor.” It further states the indemnitor "may waive . . . immunity under industrial insurance” only if the agreement specifically and expressly provides, and the waiver was mutually negotiated.
- case128 Wash. 2d 745Gilbert H. Moen Co. v. Island Steel Erectors, Inc.Wash.decided 1996read it at the source ↗
The words that state the rule
Island’s argument based upon its employer immunity is controlled by RCW 4.24.115(2). The Indemnification Addendum complies with RCW 4.24.115(2). It specifically and expressly provides for the waiver of employer immunity, and provides Island will indemnify Moen, where Moen and Island are concurrently negligent, to the extent of Island’s negligence. It also certifies the Indemnification Addendum was mutually negotiated. Because the Indemnification Addendum complies with RCW 4.24.115(2), it is valid and enforceable, but only to the extent Island’s negligence caused Hotchkiss’ injuries. RCW *755 4.24.115(2). We hold Island to the contract it negotiated with Moen.
- case128 Wash. 2d 745Gilbert H. Moen Co. v. Island Steel Erectors, Inc.Wash.decided 1996read it at the source ↗
The words that state the rule
RCW 4.24.115 presently states: A covenant, promise, agreement or understanding in, or in connection with or collateral to, a contract . . . relative to the construction ... of, any building . . . purporting to indemnify against liability for damages arising out of bodily injury to persons or damage to property: (1) Caused by or resulting from the sole negligence of the indemnitee, his agents or employees is against public policy and is void and unenforceable; (2) Caused by or resulting from the concurrent negligence of (a) the indemnitee or the indemnitee’s agents or employees, and (b) the indemnitor or the indemnitor’s agents or employees, is valid and enforceable only to the extent of the indemnitor’s negligence and only if the agreement specifically and expressly provides therefor, and may waive the indemnitor’s immunity under industrial insurance, Title 51 RCW, only if the agreement specifically and expressly provides therefor and the waiver was mutually negotiated by the parties. This subsection applies to agreements entered into after June 11, 1986.
- case138 P.3d 155MacLean Townhomes v. America 1st Roofing & Builders Inc.Wash. Ct. App.decided 2006read it at the source ↗
The words that state the rule
SUBCONTRACTOR specifically and expressly waives any immunity that may be granted under the Washington State Industrial Act, Title 51, RCW. Further, the indemnification obligation under this Subcontract shall not be limited in any way by any limitation on the amount or type of damages, compensation, benefits payable to or by any third party under Worker's Compensation Acts, Disability Benefit Acts, or other employee benefits acts. SUBCONTRACTOR'S duty to defend, indemnify, and hold CONTRACTOR harmless as to all claims, demands, losses, and liabilities shall include CONTRACTOR'S personnel related costs, reasonable attorney fees, court costs, and all related expenses. *158 CONTRACTOR and SUBCONTRACTOR hereby certify that these indemnification provisions were mutually negotiated and agreed to by the parties.
The words that state the rule
We hold that an indemnity clause of this type is enforceable only if it clearly and specifically contains a waiver of the immunity of the workers' compensa *240 tion act, either by so stating or by specifically stating that the indemnitor assumes potential liability for actions brought by its own employees. The subcontract's clause does not meet this test.
The words that state the rule
Thus, indemnity provisions in effect waive the immunity of the Industrial Insurance Act. RCW 51.04.060, however, voids pro tanto any attempt by an employee or employer to exempt themselves from the benefits or burdens of the act. While RCW 51.04.060 appears absolute, we have allowed enforcement of a properly worded indemnity agreement. See Redford v. Seattle, 94 Wn.2d 198 , 615 P.2d 1285 (1980); see also Seattle-First Nat'l Bank v. Shoreline Concrete Co., 91 Wn.2d 230 , 588 P.2d 1308 (1978); Tucci & *239 Sons, Inc. v. Carl T. Madsen, Inc., 1 Wn. App. 1035 , 467 P.2d 386 (1970). However, we have stated that (1) such agreements are disfavored and (2) any intent to provide indemnification must be clearly expressed in the agreement. Glass v. Stahl Specialty Co., 97 Wn.2d 880, 886 , 652 P.2d 948 (1982). While this statement in Glass might be characterized as dicta because there was in fact no contractual indemnity agreement, it is a correct statement of our policy.
The words that state the rule
However, we cannot adopt Prime's construction of the effect of the incorporation clause. First, it would create a conflict between the subcontract and main contract because Ace would have to indemnify under one provision and not the other. By the terms of the subcontract, see footnote 1, in cases of conflict the subcontract controls and, therefore, Ace would not be bound to indemnify Prime. Second, the indemnification and incorporation provisions of the subcontract create a manifest ambiguity and such confusion must be construed against the drafter, Prime. Jones v. Strom Constr. Co., 84 Wn.2d 518, 520 , 527 P.2d 1115 (1974); accord, Dirk v. Amerco Mktg. Co., 88 Wn.2d 607 , 565 P.2d 90 (1977). Finally, even if not manifestly ambiguous, both subcontract provisions, read together, fail to clearly express an intent on the part of Ace to waive its immunity under the workers' compensation provisions of RCW Title 51.
The words that state the rule
The subcontractor agrees to indemnify and save harmless the contractor, its officers, agents and employees, from and against any and all suits, claims, actions, losses, costs, penalties, and damages of whatsoever kind or nature, including attorney fees, arising out of, in connection with, or incident to, the work of this subcontract, except that caused by the sole negligence of the contractor. In the event of litigation between the parties to enforce the rights under this paragraph, reasonable attorney fees shall be allowed to the prevailing party.
The words that state the rule
1 Clause A of the subcontract reads in pertinent part: "It is agreed that the subcontractor will assume toward the contractor all obligations and responsibilities which the contractor has assumed toward the owner under the main contract, and shall be entitled to all protection granted the contractor by the owner, under the main contract. In case of conflict between the terms of the obligation and the responsibilities of the parties of this subcontract and the main contract, this subcontract shall control."
The words that state the rule
The trial court denied Prime's motion for summary judgment, granted Ace's motion for summary judgment, and dismissed Prime's third party complaint with prejudice. We affirm.
The words that state the rule
When *242 clause A of the subcontract is read in conjunction with the main contract indemnification provisions the proper construction is that Ace must indemnify Prime under the main contract provisions if Prime had to indemnify the Owner for loss caused by reason of Ace's negligence or willful act. Plaintiff Brown never sued the Owner. Therefore, the main contract provision was never triggered and Prime is not entitled to indemnification under it.
- statuteRCW 51.04.060enactment date not established
The words that state the rule
No employer or worker shall exempt himself or herself from the burden or waive the benefits of this title by any contract, agreement, rule or regulation, and any such contract, agreement, rule or regulation shall be pro tanto void. [ 1977 ex.s. c 350 s 3; 1961 c 23 s 51.04.060. Prior: 1911 c 74 s 11; RRS s 7685.]
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.