PA Court Holds Incorporation of Prime Contract Indemnity Provision Into Subcontract Insufficient to Require Subcontractor To Indemnify General Contractor For Its Own Negligence

Integrated Project Services v. HMS Interiors, Inc.
2007 Pa.Super 246, 2007 Pa.Super.LEXIS 2606 (Pa.Super Ct., April 16, 2007)

This is an appeal from a decision in the lower court wherein a general contractor, “Integrated Project Services, (“General Contractor”) sued a subcontractor, HMS Interiors, Inc. (“Subcontractor”) for a declaratory judgment that the Subcontractor was obligated to indemnify the General Contractor for the General Contractor’s negligence. The Subcontractor filed a motion for judgment on the pleadings which was granted by the lower court and the General Contractor appealed that decision.

The General Contractor entered into a contract (“Prime Contract”) with Wyeth-Ayerst Laboratories (“Owner”) to provide renovations for Owner’s building. The Prime Contract contained an indemnification clause that required the General Contractor indemnify the Owner from, inter alia, bodily injuries that resulted from performance of the work that are caused by the negligent acts of the General Contractor or any Subcontractor. The General Contractor entered into a contract (“Subcontract”) with the Subcontractor which contained general provisions for incorporating the Prime Contract into the Subcontract.

Subsequently, an employee of the Subcontractor was injured at the work site after falling off the roof of the building being renovated. The employee, barred by the worker’s compensation act from suing the Subcontractor, sued the Owner and General Contractor seeking damages for his injuries. The General Contractor then filed a complaint against the Subcontractor for, inter alia, a declaratory judgment that the Subcontractor was obligated to indemnify the General Contractor pursuant to the indemnification clauses.

The Superior Court of Pennsylvania affirmed the lower court’s decision, agreeing that the Subcontractor was not contractually obligated to indemnify the General Contractor for its liability because the Subcontract pass-through indemnification provisions were ineffective to require the Subcontractor to indemnify General Contractor for its own negligence. The lower court found, consistent with the Pennsylvania Supreme Court decision in Bernotas v. Super Fresh Food Markets, Inc., 581 Pa. 12, 863 A.2d 478 (Pa.2004), that the Subcontract, even though it incorporates the Prime Contract, “does not contain an unequivocally stated intention to have [Subcontractor] indemnify [General Contractor] for [General Contractor’s] own negligence; instead of being clear and specific, the Sub-Contract is, at best, ambiguous on the issue.”

 

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