Joe Adams & Son v. McCann Construction Company

ON MOTION FOR REHEARING

Rehearing denied.

CALVERT, Chief Justice.

The decision in this case establishes not only bad contract law but also bad summary judgment law.

While the majority has carefully avoided stating that the indemnity provision in the instant contract is ambiguous, or that its meaning is doubtful, and thus that it is subject to explanation by extrinsic evidence, counsel for Adams & Son has been less cautious. In Adams’ answer to McCann’s *734 motion for rehearing we find this argument:

“While the language of this contract can be construed to include the sole negligence of the indemnitee, it is difficult for Petitioner to see how it must not be admitted that the language can reasonably be construed the other way. The language is so general as to obscure the intent. It is not easily perceived or understood. It has two or more possible meanings.” 1

Counsel thus concedes, indeed expressly stipulates, that the meaning of the indemnity provision is both doubtful and subject to more than one reasonable construction. The provision is, therefore, ambiguous, whether tested by the rule applied in Universal C. I. T. Credit Corp. v. Daniel, 150 Tex. 513 , 243 S.W.2d 154, 157 (1951), or by the somewhat more liberal rule applied in Neece v. A. A. A. Realty Co., 159 Tex. 403 , 322 S.W.2d 597 (1959).

I am strongly committed to the view that the “in-connection-with-the-work” provision of the contract requires in clear and unequivocal language that Adams indemnify McCann in the instant case. I suggest that if Adams had contracted with each of his three employees to pay $50.00 weekly, in addition to compensation benefits, during any period of total disability sustained as a result of injuries incurred “in connection with the work” undertaken by the contract, there is not a single judge on this court who would hesitate to hold in the instant fact situation that the obligation to pay was stated in clear and unequivocal language. The meaning of the language cannot be clear and unequivocal in the hypothesized case and unclear and equivocal here. However, if that be not so, then surely the provision which, according to Adams, “has two or more possible meanings,” “is not easily perceived or understood,” and “can be construed to include the sole negligence of the indemnitee,” is subject to clarification and explanation by resort to extrinsic evidence.

We said in Mitchell’s, Inc. v. Friedman, 157 Tex. 424 , 303 S.W.2d 775, 778 (1957), without equivocation, that “[i]n determining the rights and liabilities of the parties [to an indemnity contract], . . . their intention will first be ascertained by rules of construction applicable to contracts generally” ; and, even more recently, we stated just as emphatically in Spence & Howe Construction Co. v. Gulf Oil Corp., 365 S.W.2d 631, 637 (Tex.1963), that “[t]he general rules relating to the construction of contracts are applicable to indemnity contracts.” The majority opinion in this case quotes the statement from Spence & Howe with approval.

If we are to do more than give lip service to our own most recent declarations concerning the rules to be followed in the construction of indemnity contracts, we should first recognize that the primary object in construing such contracts, as with all contracts, is to seek and give effect to the intention of the parties. McMahon v. Christmann, 157 Tex. 403 , 303 S.W.2d 341 (1957). This rule is too well established to require citation of additional authorities. If the intention of the parties is not made clear by the contract’s language, that is, if its meaning is doubtful or ambiguous, the burden is on one seeking to give it a particular meaning to show by competent extrinsic evidence that the parties intended it to have that meaning. Thus, in a conventional trial the plaintiff would lose if he failed to discharge the burden. See Neece v. A. A. A. Realty Co., 159 Tex. 403 , 322 S.W.2d 597 (1959). But the parties to this suit have not had a conventional trial. Each of the parties moved for summary judgment on the wording of the contract, and neither party tendered summary judgment evidence as to its meaning or the parties’ intention. Granting for the sake of argument that the trial court erred in rendering summary judgment for McCann, this does not mean that summary judgment should be rendered for Adams.

*735 The summary judgment for Adams is improper and clearly contrary to our recent carefully considered summary judgment decisions, unless the majority is prepared to hold that our courts will not concern themselves with intention of the parties in the construction of ambiguous indemnity contracts, and that to be entitled to summary judgment the indemnitor need not discharge the burden imposed on summary judgment movants in other contract cases. In Gibbs v. General Motors Corp., 450 S.W.2d 827 (Tex.1970), and Torres v. Western Casualty and Surety Co., 457 S.W.2d 50 (Tex.1970), we gave effect to the literal wording of Rule 166-A, Texas Rules of Civil Procedure, and held that a defendant is not entitled to summary judgment unless he establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of a plaintiff’s cause of action; and in Prestegord v. Glenn, 441 S.W.2d 185 (Tex.1969), second appeal, Glenn v. Prestegord, 456 S.W.2d 901 (Tex.1970), we made quite clear that the announced rule obtains even though it may appear that a plaintiff will not be able to raise a fact issue on a conventional trial. These are the rules which would control if we were concerned with the interpretation of other contracts, and according to our own pronouncements they should be applied to this indemnity contract.

To test the soundness of the judgment rendered for Adams by this court, I pose these questions: If a conventional trial had been held and counsel for Adams had stipulated that he agreed that he would indemnify McCann for all damages paid for injuries which were proximately caused solely by McCann’s negligence, and that the doubtful language of the contract was intended to express that agreement, would we hold, nevertheless, that an instructed verdict against McCann was in order because the language of the contract did not state the parties’ agreement in clear and unequivocal language? In this summary judgment proceeding, if Adams had testified on deposition, or had answered a request for an admission, that the parties agreed that Adams would indemnify McCann for all damages paid for injuries which were proximately caused solely by McCann’s negligence, and that the doubtful language was intended to express that agreement, would we hold, nevertheless, that summary judgment should be rendered for Adams because the language of the contract did not state the parties’ agreement in clear and unequivocal language? Unless we can answer “yes” to these questions, Adams has not discharged its burden of showing as a matter of law that there is no issue of fact as to the intention of the parties in including the “in-connection-with-the-work” provision in the contract, the judgment rendered herein for Adams is improper and this cause should be remanded to the trial court for a conventional trial.

STEAKLEY, McGEE and DENTON, JJ., join in this dissent.

. Emphasis Counsel’s.