Monday, November 24, 2014

Intermediate Form of Indemnity Agreement in Contractor-Subcontractor Construction Agreement Found

In its recent unpublished "non-precedential" decision in the construction accident case of Bracken v. Burchick Construction, 1432 WDA 2012 (Pa. Super. Oct. 10, 2014 Panella, J.), the Pennsylvania Superior Court found that language used in the parties’ Subcontractor Agreement was sufficient to establish an intent to enter into an intermediate form of an indemnity agreement such that, after waiving its immunity under the Workers’ Compensation Act, a subcontractor may be deemed to possibly be required to reimburse the general contractor for a $3.1 million dollar settlement owed after the death of the subcontractor’s own employee as a result of a work place accident.  

According to the Opinion, the decedent Plaintiff’s representative filed a lawsuit against the general contractor for the construction project.  The general contractor then filed a Complaint to join the Plaintiff’s decedent’s employer, who was a subcontractor on the same work site.  

The court found that under language contained in the Subcontractor Agreement, the subcontractor agreed to assume the entire liability for any injury or death suffered by its employees as a result of the subcontractor’s negligence.   The court viewed the language of the subcontract to be considered an intermediate form of an indemnity agreement.   Accordingly, the subcontractor was found to have agreed to indemnify the general contractor for the entire liability if the liability stems from the subcontractor’s partial or sole negligence.
Judge Panella's majority Opinion can be viewed HERE.
Judge Olsen's dissenting Opinion can be viewed HERE.

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