LARRY E. JACKSON, Administrator of the Estate of JEREMY SCOTT
JACKSON,
Plaintiff
v
.
ASSOCIATED SCAFFOLDERS AND EQUIPMENT COMPANY, INC. and VAN THOMAS
CONTRACTORS, INC.,
Defendants
______________________________
ASSOCIATED SCAFFOLDERS AND EQUIPMENT COMPANY, INC.,
Third-Party Plaintiff-Appellant
v.
COMFORT ENGINEERS, INC.,
Third-Party Defendant-Appellee
Millberg & Gordon, PLLC, by William W. Stewart and John C.
Millberg, for the third-party plaintiff.
Howard, Stallings, From & Hutson, PA, by B. Joan Davis, Brian
E. Moore and Joseph H. Stallings, for the third-party
defendant.
BRYANT, Judge.
On 27 October 1997, third-party defendant Comfort Engineers,
Inc., contracted with third-party plaintiff Associated Scaffolders
and Equipment Company, Inc., for Associated to erect a scaffold on
the campus of the University of North Carolina at Chapel Hill. The
scaffold was to be used by Comfort to install an exhaust system at
the Medical Sciences Building. The agreement between Comfort andAssociated for the erection of the scaffold was memorialized in a
written rental agreement prepared by Associated.
While working on the installation project, Comfort employee
Jeremy S. Jackson, fell from the scaffold, and died as a result of
the fall. Through its insurer, Comfort paid workers' compensation
benefits to Jackson's estate.
On 14 April 1999, a representative of Jackson's estate
instituted a wrongful death action against Associated and Van
Thomas General Contractors, Inc. On 2 July 1999, Associated filed
a third-party complaint against Comfort claiming contractual
indemnification and breach of contract. Comfort made a motion for
judgment on the pleadings pursuant to Rule 12(c) of the North
Carolina Rules of Civil Procedure. This matter came on for hearing
at the 13 March 2000 session of Durham County Superior Court with
the Honorable James C. Spencer, Jr., presiding. By order filed 17
March 2000, Comfort's Rule 12(c) motion was granted.
On 11 December 2000, Jackson's estate settled its suit with
Associated and Van Thomas; and that case was voluntarily dismissed
with prejudice. On 10 January 2001, Associated filed notice of
appeal from the order granting Comfort's Rule 12(c) motion.
Associated relies on the following provisions of its contract
with Comfort, as evidence of Comfort's obligation to indemnify
Associated as relates to the underlying action:
Comfort Engineers will hold harmless and
defend Associated Scaffolding Co., Inc. and
its agents and employees from all suits and
action, including attorney's fees and all
costs of litigation and judgment of any name
and description arising out of or incidental
to the performance of this contract or work
performed thereunder.
16.
SAFETY REGULATIONS:
LESSEE SHALL: (1)
erect, maintain and use the leased equipment
in a safe and proper manner; (2) comply with
all applicable laws, ordinances, rules,
regulations and orders of any public
authority, including, but not limited to, ALL
FEDERAL OCCUPATIONAL SAFETY AND HEALTH ACT
(OSHA) and State regulations, having
jurisdiction for the safety of persons or
property; and (3) comply with any rules or
regulations promulgated by lessor with respectto the leased equipment, its manner of
erection and use.
17. Lessee agrees to indemnify and hold lessor
free and harmless from any and all liability
for loss, damage, or personal injury which
results from non-compliance with any portion
of this Paragraph, or from non-compliance with
any law, regulation or other safety order.
Associated argues before this Court that in its action against
Comfort, Associated only seeks indemnification for costs it may
incur as a result of Comfort's negligence. Moreover, Associated
concedes in its brief that N.C.G.S. § 22B-1 prevents Associated
from being indemnified for its own negligence. However, the
indemnification provisions at issue here violate N.C.G.S. § 22B-1
and are not severable from the remainder of the contract. Because
the agreements at issue here undeniably purport to indemnify
Associated for its own actions, they are void and unenforceable
under this statute.
The case of Miller Brewing Co. v. Morgan Mechanical
Contractors, Inc., 90 N.C. App. 310, 368 S.E.2d 438 (1988), is more
applicable to the instant case than the case relied on by
Associated, Bridgestone/Firestone, Inc. v. Ogden Plant Maint. Co.
of N.C., 144 N.C. App. 503, 548 S.E.2d 807, review on add'l issues
denied, 354 N.C. 360, 556 S.E.2d 297 (2001), aff'd, 355 N.C. 274,
559 S.E.2d 786 (2002) (per curiam). In Miller, the plaintiff filed
a declaratory judgment action seeking to pursue indemnification
from a contractor, Morgan Mechanical, after one of Morgan's
employees was injured on the plaintiff's premises. See Miller at
311, 368 S.E.2d at 438. The indemnification provisions were on theback of the contract, and stated:
Seller is to save harmless and indemnify Buyer
from any and all judgments, costs, expenses,
including attorneys' fees, and claims on
account of damaged property or personal and
bodily injuries (including death) which may be
sustained by Seller, Buyer, Seller's or
Buyer's employe [sic], or other persons
arising out of or in any way connected with
the work done or goods furnished under this
[agreement] . . . .
Id. at 313, 368 S.E.2d at 438. This Court held that these
provisions were invalid under N.C.G.S. § 22B-1, and were not
converted into an "insurance contract" by language requiring that
Morgan obtain insurance to cover any such losses. Id. at 316-17,
368 S.E.2d at 439.
The contract language at issue here is not distinguishable in
any meaningful respect from the language this Court held void in
Miller. In addition, the related agreement under which Comfort
leased equipment for the job, contained similar provisions, and
included the language, "PURPOSE OF THIS CLAUSE: IT IS THE PURPOSE
OF THIS CLAUSE TO SHIFT THE RISK OF ALL CLAIMS RELATED TO THE
LEASED PROPERTY TO THE LESSEE [Comfort] DURING THE ENTIRE TERM OF
THE LEASE."
Comfort argues that the language which violates N.C.G.S.
§ 22B-1 is not severable from the remainder of the contract. We
agree with this argument since, as Comfort points out, we would be
required to add language, rather than simply excise portions of the
agreements which violate the statute. See Carson v. National Co.,
267 N.C. 229, 233, 147 S.E.2d 898, 901 (1966) ("Courts cannot underthe guise of construction rewrite contracts executed by the
litigants."). The trial court correctly granted the motion for
judgment on the pleadings in favor of Comfort. This assignment of
error is therefore overruled.
EAGLES, Chief Judge, dissenting.
I respectfully dissent. I disagree with the majority'sconclusion that the illegal part of the contract cannot be severed
from the rest of the contract. First, the illegal provision is not
a central feature of the contract, so it may be severed. Second,
the contract may be fully enforced without the illegal section
since no other part of the contract would be affected by removal of
the offending paragraph.
All parties concede that Paragraph 15 of the contract is
illegal under G.S. § 22B-1, because it indemnifies Associated from
its own negligence. The other two indemnification clauses referred
to in the majority opinion do not violate the mandate of G.S. §
22B-1. Paragraphs 16 and 17 of the contract indemnify the lessor
for liability for personal injury as a result of the lessee's
failure to comply with safety regulations. Since these provisions
are enforceable, I vote to sever the unenforceable paragraph and
leave the remainder of the contract intact.
First, the indemnity agreement in Paragraph 15 of the contract
is not a central feature of the contract. The overall purpose of
the contract concerns the lease of scaffolding equipment, not the
division of liability. When a contract provision violates G.S. §
22B-1, but is not a central feature of that contract, the illegal
provision is severable from the otherwise valid agreement. See
International Paper Co. v. Corporex Constructors, Inc., 96 N.C.
App. 312, 315-16, 385 S.E.2d 553, 555 (1989). Since the
indemnification clause of Paragraph 15 is not a central feature of
the contract, it is severable.
When a contract contains provisions which are severable froman illegal provision and are in no way dependent upon the
enforcement of the illegal provision for their validity, such
provisions may be enforced. Rose v. Materials Co., 282 N.C. 643,
658, 194 S.E.2d 521, 531-32 (1973). Here, Paragraph 15 of the
contract is an illegal provision. However, its enforcement is not
dependent on any other provision of the contract. Paragraph 15 may
be removed, leaving the rest of the contract fully enforceable,
since the remainder of the contract is not dependent on the
existence of Paragraph 15.
I disagree with the majority's opinion that this Court would
be required to add language to the contract, instead of severing
the one paragraph that violates G.S. § 22B-1. In this case
Paragraph 15 is a specific and distinct part of the contract which
may be severed without any great difficulty. Once the illegal
portion is removed, the contract will be given effect as if the
provision so violative of public policy had not been included
therein. Gore v. Ball, Inc., 279 N.C. 192, 203, 182 S.E.2d 389,
395 (1971). There is no necessity to add language to the contract
in order to enforce it. Instead, the lease contract would be
interpreted as if Paragraph 15 never existed, with Paragraphs 16
and 17 constituting the parties' indemnity agreement.
For these reasons, I would sever Paragraph 15 from the
remainder of the contract, reverse the trial court, and remand for
a hearing to determine defendant-appellee's liability.
*** Converted from WordPerfect ***