Krien et al v. Harsco Corporation

Filing 66

ORDER signed by Judge Lynn Adelman on 5/14/13 denying 50 Harsco's Motion for Summary Judgment and granting third-party defendant Riley Construction Company's motion for summary judgment. (cc: all counsel) (dm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
ROBERT KRIEN, et al.,
Plaintiffs,
v.

Case No. 10-CV-01004

HARSCO CORPORATION,
Defendant,
and Third-Party Plaintiff,
v.
RILEY CONSTRUCTION COMPANY, INC.,
Third-Party Defendant.

DECISION AND ORDER
Riley Construction Company, Inc. (“Riley”) was the general contractor on a
construction project in Kenosha, Wisconsin. Riley engaged the Harsco Corporation
(“Harsco”) as a subcontractor to provide temporary scaffolding. Riley employee, Robert
Krien, was injured when a wooden plank on one of Harsco’s scaffolds broke. Harsco had
not installed the plank, a Riley employee had, but Harsco allegedly supplied it. After
receiving worker’s compensation benefits from Riley’s insurer, Krien brought this diversity
action against Harsco asserting negligence and strict liability theories. Harsco settled
Krien’s claims for $900,000 and asserted a third-party claim against Riley seeking
indemnification for the sum it paid Krien plus its costs and fees. I have supplemental
jurisdiction over Harsco’s claim. Before me now are Harsco’s and Riley’s cross motions for

summary judgment.1
To resolve the parties’ motions, I must construe the contract between Riley and
Harsco. The contract is a form subcontractor agreement that the parties edited. Section
4.8 in Article 4 of the agreement provides as follows:
If Riley Construction or any of its agents, employees or suppliers utilize any
of [Harsco’s] equipment, including . . . scaffolding . . . owned, leased or under
the control of [Harsco], Riley Construction shall defend, indemnify and be
liable to [Harsco] as provided in Article 9 for any loss or damage (including
bodily injury or death) which may arise from such use, except to the extent
that such loss or damage is caused by the negligence of [Harsco’s]
employees operating [Harsco’s] equipment.
(Standard Form Agreement Between Riley Construction & Contractor § 4.8, ECF No. 8-1.)
Section 3.25 of the contract mirrors § 4.8 using identical language to require Harsco to
defend and indemnify Riley “as provided in Article 9" for damages arising from Harsco’s
use of Riley’s equipment. (Id. § 3.25.)
Article 9 is titled “Indemnity, Insurance and Waiver of Subrogation,” but the parties
crossed out all language regarding indemnification. Article 9 does, however, incorporate
Exhibit A by reference. Exhibit A provides:
To the fullest extent permitted by Law, [Harsco] shall indemnify, defend, protect and
hold harmless Riley Construction Company, Inc. . . . from and against any and all
liabilities, injuries, claims, demands, damages, loss, costs and expenses including
but not limited to, reasonable attorney’s fees . . . to the extent caused or alleged to
be caused in whole or in part by the negligent acts or omissions of
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Harsco asks me to disregard Riley’s motion for summary judgment because it
was incorporated into Riley’s brief in opposition to Harsco’s motion and not filed
separately. I will deny this request because I asked the parties to combine their briefs in
opposition to their opponent’s motion with their briefs in support of their own motion to
avoid repetition. Both parties were notified of this procedure in advance and Harsco had
the chance to fully respond to Riley’s arguments. See also Fed. R. Civ. P. 56(f)
(allowing a court to enter summary judgment in favor of a nonmovant if it provides the
moving party with “notice and a reasonable time to respond”).
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[Harsco] . . . regardless of whether or not such claim, damage, loss or expense is
caused in part by a party indemnified hereunder.
(Id. Ex. A § I.1.) Exhibit A further provides that “the Indemnification obligations of this
provision shall not be limited in any way by a limitation of the amount or type of damages,
compensation, or benefits payable by or for [Harsco] under worker’s compensation
acts . . . .” (Id. Ex. A § I.2.)
Summary judgment is appropriate where “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). When considering a motion for summary judgment, I view the evidence in the light
most favorable to the non-moving party and may grant the motion only if no reasonable
juror could find for plaintiff. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 255 (1986).
The parties’ contract is governed by Wisconsin law. (Standard Form Agreement § 12.1
(“This Agreement shall be governed by the law in effect at the location of the Project.”).)
Under Wisconsin law, the interpretation of a contract presents a question of law. Estate of
Kriefall v. Sizzler USA Franchise, Inc., 342 Wis. 2d 29, 45 (2012). And the goal of contract
interpretation is to ascertain the parties’ intentions by giving the language used in the
contract its “plain and ordinary meaning.” Town & Bank v. City Real Estate Development,
LLC, 330 Wis. 2d 340, 358 (2010). If the language of the contract is unambiguous, it
controls. Danbeck v. Am. Family Mut. Ins. Co., 245 Wis. 2d 186, 193 (2001).
Although Krien’s injury arose out of Riley’s use of Harsco’s scaffolding, Riley objects
to indemnifying Harsco on two grounds: first, Krien accused Harsco of being negligent, and
the contract does not require Riley to indemnify Harsco for damages caused by Harsco’s
negligence; second, even if Riley’s negligence contributed to Krien’s injury, Wisconsin’s
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worker’s compensation laws protect Riley from a claim for contribution. An indemnification
agreement will not be construed to require indemnification for damages caused by a party’s
own negligence unless it is clear that “the purpose and unmistakable intent of the parties”
was to cover losses caused by the indemnitee’s own conduct. Dykstra v. Arthur G. McKee
& Co., 100 Wis. 2d 120, 124–25 (1981) (quoting Spivey v. Great Atlantic & Pacific Tea Co.,
79 Wis. 2d 58, 63–64 (1977)). Since § I.1 of Exhibit A expressly requires Harsco to
indemnify Riley for damages caused by Harsco’s negligence, the parties clearly did not
intend that Riley indemnify Harsco for such damages. The contract unambiguously
provides that Harsco is to be liable for its own wrongdoing. Therefore, Riley is not liable for
Krien’s injury to the extent that it was caused by Harsco’s negligence.
Harsco argues that, even if it is responsible for its negligent acts, Riley nevertheless
must cover the damages related to Krien’s strict liability claim because that claim does not
require proof of negligence. A strict liability claim, however, is a type of negligence claim.
A defendant is strictly liable whenever it sells an unreasonably dangerous product because
there is a presumption of negligence. The defendant is considered “negligent as a matter
of law.” See Dippel v. Sciano, 37 Wis. 2d 443, 464 (1967) (Hallows, J. concurring) (quoted
with approval in Howes v. Hansen, 56 wis. 2d 247, 252 (1972)); see also Deminsky v.
Arlington Plastics Machinery, 259 Wis. 2d 587, 603–06 (2003) (applying the holding in
Dykstra to a case involving a claim of strict liability). Thus, even if Harsco was strictly liable
to Krien, Riley need not reimburse Harsco for the damages arising therefrom.
What if Krien’s damages were caused in part by Riley’s negligence? Harsco seeks
contribution from Riley because it claims Riley’s employees negligently installed the

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defective plank without inspecting it. Ordinarily, Wisconsin’s worker’s compensation laws
prohibit a third-party tortfeasor, like Harsco, from seeking contribution from a negligent
employer who has paid worker’s compensation benefits to an injured employee. See Wis.
Stat. § 102.03(2); see also Mulder v. Acme-Cleveland Corp., 95 Wis. 2d 173, 177–78
(1980). An employer can, however, waive its statutory immunity by entering into an
indemnification agreement. Larsen v. J.I. Case Co., 37 Wis. 2d 516, 520 (1968). In the
present case, Riley did not waive its statutory immunity. Although §§ 3.25 and 4.8 could
conceivably be read as impliedly waiving each party’s statutory immunity whenever
damages arise from their use of the other’s equipment, the parties did not intend that the
provisions be read in this way. This is made clear by § I.2 of Exhibit A which expressly
waives Harsco’s immunity under “worker’s compensation acts.” If § 3.25 and the much
broader indemnification language in § I.1 of Exhibit A are read as impliedly waiving
Harsco’s immunity, then § I.2 is redundant. Thus, § 3.25 does not waive Harsco’s immunity
under worker’s compensation laws and § 4.8, which contains identical language, does not
waive Riley’s. This construction gives reasonable meaning to every provision of the
contract. See Maas by Grant v. Ziegler, 172 Wis. 2d 70, 79 (1992) (“A construction which
gives reasonable meaning to every provision of a contract is preferable to one leaving part
of the language useless or meaningless.”); see also Koenings v. Joseph Schlitz Brewing
Co., 126 Wis. 2d 349, 366 (1985) (“[A]n agreement should be given a reasonable meaning
so that no part of the contract is surplusage.”). As a result, Riley’s liability for Krien’s injury
is limited to the amount due under worker’s compensation.
THEREFORE, IT IS ORDERED that third-party plaintiff Harsco Corporation’s motion

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for summary judgment is DENIED, and third-party defendant Riley Construction Company,
Inc.’s motion for summary judgment is GRANTED.
Dated at Milwaukee, Wisconsin, this 14th day of May 2013.
s/ Lynn Adelman
_______________________
LYNN ADELMAN
District Judge

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