Construction Accident

construction-accident-litigation

      INTRODUCTION

Construction accidents in the United States account for over 1,000 deaths and over 400,000 injuries per year, according to government statistics.  See Census of Fatal Occupational Injuries Summary, United States Department of Labor, Bureau of Labor Statistics, 2003, Private Industry Fatalities, Construction,  and Survey of Occupational Injuries and Illnesses, 2002, United States Department of Labor, Bureau of Labor Statistics, March 2004, Summary 04-01, Numbers of Nonfatal Injuries and Illnesses By Industry Type and Case Types, 2002, Table 2.

In Wisconsin, as in most states, the victim of a construction accident is employed by some person or entity involved in the construction, and is eligible for worker’s compensation benefits. See Worker’s Compensation Benefits in Wisconsin Worker’s compensation benefits are provided by the immediate employer and worker’s compensation insurer, and usually include the following five broad categories of benefits:

  1. all reasonable and necessary medical expenses, Wis. Stat. § 102.42;
  2. temporary total disability (TTD) benefits, payable at the rate of two-thirds of the employee’s average weekly wage, subject to an annual maximum set by the state, during the healing period, until the employee reaches a healing point (also known as the point of maximum medical improvement), Wis. Stat. § 102.43 , § 102.44 and § 102.52;
  3. permanent partial disability (PPD) benefits, payable at a rate less than the TTD rate, subject to an annual maximum set by the state, for a period of time that is determined by the percentage of disability times the maximum number of weeks allowed for the particular body parts that were injured, Wis. Stat § 102.11;
  4. if the employee is laid off due to permanent restrictions resulting from the work injury, retraining benefits, payable at the TTD rate, during the time that the employee attends vocational rehabilitation schooling authorized by the Division of Vocational Rehabilitation, Wis. Stat. § 102.43 and § 102.61; and
  5. only in the case of injuries to the head, neck and back, loss of earning capacity benefits, payable at the PPD rate, based on the percentage of lost wages resulting from the accident times 1,000 weeks, Wis. Stat. § 102.44.

Worker’s compensation benefits are not designed to make the injured employee whole.  Such benefits are by no means sufficient to compensate completely for the injury.  The benefits are extremely limited as prescribed by the state statutes.  No attempt is made by the worker’s compensation system to award anything for pain, suffering, disability, mental anguish, or the spouse’s loss of consortium.  In addition, the loss of earning capacity benefits, if any, are not measured by the actual loss, but only by a percentage loss, and only at the extremely low PPD rate.

By way of illustration, the PPD rate for injuries in calendar year 2004 is only $232 per week!  A 25 year old construction worker who earns $50,000 per year before a 2004 accident, and who can only get a job flipping burgers for $15,000 per year after the accident due to injuries sustained in the accident, has an actual loss of earning capacity of $35,000 per year for the next 40 years, amounting to $1,400,000, but can only recover $162,400 in loss of earning capacity benefits from his employer and worker’s compensation insurer.

While worker’s compensation benefits are the employee’s exclusive remedy against his employer and worker’s compensation insurer, Wis. Stat. § 102.03(2),  Wisconsin law also allows injured workers who collect worker’s compensation benefits to pursue third party cases against any person, firm or corporation that negligently caused the injury. See Third Party Claims in Wisconsin Wis. Stat. § 102.29; Estate of Thompson v. Jump River Electric Cooperative, 225 Wis.2d 588, 593 N.W.2d 901 (Ct. App. 1999).  In the third party case, the victim is entitled to recover the following items:

  1. all reasonable and necessary past and future medical expenses;
  2. all damages for actual loss of earning capacity both before and after the accident, to the end of work life expectancy;
  3. reasonable damages for past and future pain, suffering and disability;
  4. loss of consortium for the spouse;
  5. if there is proof that the defendant acted maliciously or in reckless disregard

of the rights of the plaintiff, punitive damages.  Wischer v. Mitsubishi Heavy Industries America, Inc., 267 N.W.2d 638, 673 N.W.2d 303 (Ct. App. 2003), pet. for review granted, 271 Wis.2d 108, 679 N.W.2d 544 (2004)($94,000,000 award for deaths of three steel workers in Miller Park accident reversed on appeal, for failure to satisfy statutory criteria for punitive damages, Wis. Stat. § 895.85).

One of major practical problems with third party cases, from the plaintiff’s perspective is that the worker’s compensation insurer is entitled to recoup part of the benefits it has paid or will pay, pursuant to a statutory formula.  Wis. Stat. § 102.29.  When there is a recovery in a third party case that also involves the recovery of worker’s compensation benefits, the statute requires that attorney fees and other costs of collection be paid first; out of the balance, the injured worker receives one-third; the worker’s compensation is then reimbursed in full, to the extent of the balance; and if there is anything remaining, it goes to the injured worker as a cushion or credit against future worker’s compensation benefits.

Wisconsin has a comparative negligence statute, Wis. Stat. § 895.045.  It provides that the plaintiff’s causal negligence reduces the plaintiff’s claim by the plaintiff’s percentage of negligence; and that any defendant whose causal negligence is equal to or greater than that of the plaintiff is subject to liability to the plaintiff for the defendant’s percentage of the plaintiff’s damages, unless such negligence is greater than 51%, in which event, said defendant is jointly and severally liable for all damages.

The employer is immune from liability to the plaintiff and, in the absence of an indemnity agreement, also immune from contribution claims by other negligent parties. Mulder v. Acme-Cleveland Corp., 95 Wis.2d 173, 290 N.W.2d 276 (1980).  In third party cases, this requires the plaintiff to prove that someone other than the employer negligently caused the plaintiff’s damages.

In many cases, either the employer or the plaintiff is the major party to blame for the accident.  Because of the individual comparison required by the comparative negligence statute between the plaintiff’s negligence and the negligence of each defendants or other tortfeasor, it is sometimes difficult to identify a party that is subject to liability, or to identify a party whose damage exposure is great enough to justify pursuing the case, in light of the costs of litigation.  In Wisconsin, the negligence of all tortfeasors must be apportioned on the verdict form in accordance with their degree of negligence. Payne v. Bilco Co., 54 Wis.2d 424, 195 N.W.2d 641 (1972).   This is true even if one or more of the parties is immune from liability or has already settled the case with the plaintiff.  Haase v. R & P Industrial Chimney Repair Co., 140 Wis.2d 187, 409 N.W.2d 423 (Ct. App. 1987); Connar v. W. Shore Equip. Co., 68 Wis.2d 42, 227 N.W.2d 660 (1975).

For example, assume the damages are $100,000; that the employer is 80% at fault; that the plaintiff is 5% at fault; and a third party is 15% at fault. In this situation, the plaintiff can only recover $10,000 of the plaintiff’s damages, so the case would probably not be pursued, considering the worker’s compensation insurer’s right to partial reimbursement out of that $10,000, together with the costs of litigation.

The theories of liability and the various persons who are target defendants in justifiable third party construction accident litigation cases are described below.

     INITIAL CONSIDERATIONS

One of the most important initial steps in evaluating the feasibility of a construction accident lawsuit is the review of contract documents. The agreements among the various parties often control who will be responsible for construction safety.  The party with the greatest bargaining power often solicits bids for the work, and in the agreements insists that safety be a primary objective, but that the responsibility for safety rest with someone else, and be insured by someone else’s insurer.  This fact of life in the construction industry illustrates the importance of a detailed review of contracts so that fault can be identified and allocated appropriately.

The contracts consist of three categories of items:

  1. Agreements among the parties:
    1. between the owner and architect, engineer or other design professional;
    2. between the owner and general contractor or construction manager;
    3. between the owner and prime contractors;
    4. between the general contractor and subcontractors; and
    5. between the manufacturers and suppliers of construction equipment or materials and the users.
  2. Specifications of the contracts.
  3. Blueprints and other drawings.

The construction agreements often are either pattern forms provided by outfits such as the American Institute of Architects or modified forms of the same general type.  The forms govern all aspects of construction, including responsibility for safety precautions. Some of the most popular standard form agreements are the owner-contractor agreements, forms A-101 and A-111, the General Conditions of the Contract for Construction form, A-201, the standard agreement between owner and architect, form B-141, and the standard agreement between contractor and subcontractor, form A-401.  These agreements address safety responsibility between the various parties.  The agreements often incorporate by reference the safe place statute, state and local building codes, as well as OSHA safety requirements. 29 U.S.C. § 654; 29 C.F.R. § 1926.1 et seq.

The failure of a party to comply with a federal or state safety statute, federal or state administrative code regulation or local building code standard may constitute negligence per se. Walker v. Bignell, 100 Wis.2d 256, 301 N.W.2d 447 (1981). In some cases, if an OSHA regulation is adopted by the state to protect a particular interest of a class of persons from a particular kind of harm and a particular hazard, then a violation of the regulation may create a viable claim of negligence, without any additional proof.  Nordeen v. Hammerland, 132 Wis.2d 164, 389 N.W.2d 828 (Ct. App. 1986).  However, a violation of the general duty clause in the OSHA Act does not constitute negligence per se in a third party case,  Taft v. Derricks, 235 Wis.2d 22, 613 N.W.2d 190 (Ct. App. 2000), although it can give rise to a statutory violation claim and 15% penalty in a worker’s compensation claim against the immediate employer. Wis. Stat. § 102.57.

The construction agreements are often modified during construction by frequent change orders, requests for information, and responses to requests for information.  What usually happens is that the construction workers encounter a problem that either was not addressed in the original documents, or that requires a work-around solution, so the contractor must obtain clarification, change orders and approvals from the architect, engineer, other design professional or owner.  These types of modifications may include safety, as well as any other subject of the construction project.

Construction agreements are supplemented by technical documents, meeting minutes, field reports, safety policies and contractors’ logs that address safety issues.  All of these documents are a fertile source of discovery in construction accident litigation.

The Wisconsin Commercial  Building Code, Wis. Adm. Code, Comm, Ch. 61 regulates commercial construction of buildings containing greater than 50,000 cubic feet total volume.  Design plans must be authored and stamped by a registered architect, engineer or designer, and approved by the state or local building inspector. Comm.

§ 61.30. A registered architect or engineer must be designated as the person who is in charge of “supervision of construction,” which means “the performance, or the supervision thereof, of reasonable on-the-site observations to determine that the construction is in substantial compliance with the approved plans and specifications.”  Comm. § 61.50(2).  Safety issues are always a part of the design criteria.

The specifications of the contract contain detailed requirements for construction materials, means and methods.  They often incorporate by reference various industry standards covering everything from the tensile strength of nails to the capacity of I-beams.   Safety rules may or may not be set by the specifications.  It is important to review specifications if the work or materials are relevant to the plaintiff’s injury.  In many cases, the designers have made industry standard specifications a part of the contract without necessarily having studied them or knowing how they apply to the injury at hand.  The standards can establish a standard of care that determines whether negligence occurred.

Blueprints and other drawings provide the technical design criteria, which often comes into play when structural or mechanical defects result in injuries.

 LIABILITY OF OWNERS OF CONSTRUCTION SITES

Owners of places of employment and public buildings have certain duties at common law, as well as under the Wisconsin safe place statute, Wis. Stat. §§ 101.01  101.11.  They must take precautions to ensure that the premises are reasonably safe.  Stated another way, owners are subject to liability for unsafe conditions that cause injuries to persons on the premises, if they are negligent in the construction, maintenance or repair of the premises.  Either common law negligence, or safe place negligence, can justify a lawsuit.  Megal v. Green Bay Area Convention & Visitors Bureau, Inc., 2004 WI 98, 682 N.W.2d 857 (2004).

Pursuant to the Wisconsin safe place statute, the owner of a place of employment or a public building has a duty to construct, repair or maintain the premises in as safe a condition as the nature of the premises reasonably permits. Hofflander v. St. Catherine’s Hosp., Inc., 262 Wis.2d 539, 664 N.W.2d 545 (2003).  The safe place statute does not create a distinct cause of action, but instead, establishes a duty greater than that of ordinary care imposed at common law.  Topp v. Continental Ins. Co., 83 Wis.2d 780, 266 N.W.2d 397 (1978); Dykstra v. Arthur G. McKee & Co., 92 Wis.2d 17, 284 N.W.2d 692 (Ct. App. 1979).

The General Conditions for the Contract of Construction, AIA form A-201 provides that the “means, methods, techniques, sequences or procedures,” and “safety precautions and programs,” are solely the responsibility of the general contractor.  Unless otherwise provided in the contract documents, this clause places a heavy burden on the general contractor.

As a general rule, an owner is subject to liability for his own torts, but is not subject to liability for the torts of an independent contractor. Lofy v. Joint School District No. 2, 42 Wis.2d 253, 166 N.W.2d 809 (1969). However, there are exceptions for:

  1. affirmative acts of negligence that increase the risk of harm, Barth v. Downey Co., Inc., 71 Wis.2d 775, 239 N.W.2d 92 (1976);
  2. abnormally dangerous activities, Snyder v. Northern States Power Co., 81 Wis.2d 224, 260 N.W.2d 260 (1977) and Wagner v. Continental Cas. Co., 143 Wis.2d 379, 421 N.W.2d 835 (1988); and
  3. non-delegable duties.  A non-delegable duty may be imposed by statute, contract, franchise or charger, or common law.  Brooks v. Hayes, 133 Wis.2d 228, 395 N.W.2d 167 (1986); Majorowicz v. Allied Mut. Ins. Co., 212 Wis.2d 513, 569 N.W.2d 472 (Ct. App. 1997);

Some duties imposed on property owners and employers under the safe place statute are non-delegable. Barry v. Employers Mut. Cas. Co., 245 Wis.2d 560, 630 N.W.2d 517 (2001); Novak v. City of Delevan, 31 Wis.2d 200, 143 N.W.2d 6 (1966); Criswell v. Seaman Body Corp., 233 Wis. 606, 290 N.W. 177 (1940).

There is often a dispute over whether a particular hazardous condition is a “structural defect” or a “condition associated with the structure.”  The distinction is significant, because liability will often depend on whether the owner had notice of the problem, and there are different notice requirements, depending on the type of condition involved.

Outside of the construction accident context, an owner of a place of employment or of a public building is subject to liability for unsafe “structural defects” in the building, whether or not the owner has actual or constructive notice.  However, an owner of a place of employment or of a public building is not subject to liability for unsafe “conditions associated with the structure” unless the owner had either actual or constructive notice of the defect. An owner of a place of employment (but not an owner of a public building), and employer may also be liable for “unsafe conditions unassociated with the structure,” if he had prior actual or constructive notice of the unsafe condition.  Niedfeldt v. Joint School District No. 1 of City of Viroqua, 23 Wis.2d 641, 127 N.W.2d 800 (1964).  For cases dealing with the distinction between what is a structural defect and what is a condition associated with the structure, see Rizzuto v. Cincinnati Ins. Co., 261 Wis.2d 581, 659 N.W.2d 476 (Ct. App. 2003)(granite tile that fell from elevator wall in building was not a structural defect, but rather, a condition associated with the structure, thereby requiring actual or constructive notice to impose liability); Barry v. Employers Mut. Cas. Co., 245 Wis.2d 560, 630 N.W.2d 517 (2001)(loose stairway nosing was an unsafe condition associated with the structure, rather than a structural defect, thereby requiring actual or constructive notice to impose liability); and Jankee v. Clark County, 222 Wis.2d 151, 585 N.W.2d 913 (1998)(owner of psychiatric hospital subject to liability for defective and unsafe windows, a structural condition, that allowed mental health patient to escape, thereby leading to his fall).  Conditions associated with the structure are deemed to be conditions that result from breach of the statutory duty to repair or maintain (as distinct from the statutory duty to safely construct) the edifice.  Boutin v. Cardinal Theatre Co., 267 Wis. 199, 64 N.W.2d 848 (1954).

Owners and employers are not subject to safe place liability in every situation, however.  To be subject to liability for injuries sustained on a construction site during construction, they must have retained some control and supervision of the premises, or committed some affirmative acts of negligence. Barth v. Downey Co., Inc., 71 Wis.2d 775, 239 N.W.2d 92 (1976); Berger v. Metropolitan Sewerage Commission, 56 Wis.2d 741, 203 N.W.2d 87 (1973).  The rationale for this rule is that it would be unfair to hold the owner responsible for the safety of a construction site after the owner has turned over to an independent contractor the complete control and custody of the premises.  If the contractor creates a place of employment for his employees or the subcontractors’ employees, and the owner has no right of supervision or control of the work, except to inspect the work or change the plan to make sure that the work is performed in accordance with the contract, the owner is not responsible for unsafe conditions during construction. Potter v. Kenosha, 268 Wis. 361, 68 N.W.2d 4 (1955).

An owner who has contracted with a reliable and qualified independent contractor to implement all safety precautions associated with the work, has fulfilled its duty of reasonable care to employees of the general contractor or subcontractor.  Katelbrun v. City of Port Washington, 156 Wis.2d 634, 457 N.W.2d 527 (Ct. App. 1990). An owner’s negligent hiring of an independent contractor does not necessarily constitute an act of misconduct sufficient to hold the owner liable to the contractor’s employee for an injury sustained in the course of construction, in the absence of the owner’s retention of control or supervision over the project, affirmative acts of negligence or abnormally dangerous activities.  Wagner v. Continental Cas. Co, 143 Wis.2d 379, 421 N.W.2d 835 (1988).

A building owner’s failure to check the credentials of an independent contractor  does not constitute active misconduct sufficient to hold the owner liable to an employee of the independent contractor who was injured in performing demolition work on the building, unless such work was not abnormally dangerous or extra hazardous.  Wagner v. Continental Cas. Co., 143 Wis.2d 179, 421 N.W.2d 835 (1988).

 LIABILITY OF ARCHITECTS, ENGINEERS AND DESIGN PROFESSIONALS

In general, an architect, engineer or other design professional can be held liable for negligence in the in connection with the design of a construction project that causes death or personal injury. A/E Investment v. Link Builders, Inc., 62 Wis.2d 479, 214 N.W.2d 764 (1974).  A designer may also be liable for negligent supervision of construction that results in death or injury, under circumstances where by contract or statute the designer’s responsibilities extend beyond ensuring that the work conforms to the contract documents.  The standard form of agreement between owner and architect, form AIA form B-141, seeks to insulate the architect by providing that the architect’s responsibility to visit the site and to observe the work is limited to verification that the work is being completed in accordance with contract documents.

An architectural firm was dismissed from an action alleging negligent design and supervision of a shopping mall’s ceiling suspension system that collapsed, where the proof showed that the general contractor and subcontractors were familiar with fabrication technology, and by industry custom, they designed and performed the work without supervision.  Transportation Ins. Co. v. Hunzinger Construction Co., 179 Wis.2d 281, 507 N.W.2d 136 (Ct. App. 1993).

An architectural and engineering firm had general supervisory powers arising out of its contract with the owner to ensure that the work complied with the contact, but had no duty with regard to ensuring the safety of the construction site, because those duties fell to the general contractor. Kaltenbrun v. City of Port Washington, 156 Wis.2d 634, 457 N.W.2d 527 (Ct. App. 1990).

In a case involving the construction of a hospital, an architect was not in control of the premises and did not have a duty under the safe place statute to an injured employee of a general contractor to make the premises reasonably safe.  Hortman v. Becker Construction Co., Inc., 92 Wis.2d 210, 284 N.W.2d 621 (1979).

An architect was not deemed an owner within the meaning of the safe place statute, and therefore did not have a duty to maintain the safety of an excavation site that should have had shoring and bracing, in Luterbach v. Mochon, Schutte, Hackworthy, Juerisson, Inc., 84 Wis.2d 1, 267 N.W.2d 13 (1978).  An architect is not liable for non-design related injuries based on a general duty to supervise construction.  Vonasek v. Hirsch and Stevens, Inc., 65 Wis.2d 1, 221 N.W.2d 815 (1974).

An architect’s failure properly to take into account the condition of the subsoil when designing and supervising the construction of a building was negligence that could forseeably cause harm to someone, and thereby subject the architect to liability, in A.E. Investment Corp v. Link Builders, Inc., 62 Wis.2d 479, 214 N.W. 764 (1974).

In Kerry v. Angus-Young Associates, Inc., 694 N.W.2d 407 (Ct. App 2005), the court of appeals held that an architectural firm was subject to liability for not having questioned the adequacy of an inspection report prepared by a building renovator to the property owner when the structural adequacy of a building became suspect.  The court restated the responsibility of architects to perform up to the standard of care of their profession.

 LIABILITY OF GENERAL CONTRACTORS AND CONSTRUCTION MANAGERS

In general, a general contractor is not liable under common law rules or the safe place statute for the negligence of a subcontractor that results in the death or injury of a subcontractor’s employee.  Barth v. Downey Co., Inc., 71 Wis.2d 775, 239 N.W.2d 92 (1976).  A general contractor need not superintend the employees of a subcontractor.  The reserved right to inspect or control the work to the extent necessary to make sure that it conforms with the contract documents is not sufficient to hold the general contractor responsible for the negligence of subcontractors.

A general contractor who sublets all or part of the contract to a subcontractor has a common law duty not to commit affirmative acts which would increase the risk of injury to employees of the subcontractor.  Ozello v. Peterson Builders, Inc., 743 F.Supp. 1302 (E.D. Wis. 1990). A general contractor may also have a safe place duty to a subcontractor’s employee if the general contractor has reserved a right of supervision and control over the subcontractor’s employee. Barrons v. J.H. Findorff & Sons, Inc., 89 Wis.2d 444, 278 N.W.2d 827 (1979).  The general contractor’s duty to furnish a safe place of employment for employees of the subcontractor extends only to such use of the premises as the general contractor made and the effect produced by its own work, materials and equipment over which it had control or supervision. Lemacher v. Circle Construction Co., Inc., 72 Wis.2d 245, 240 N.W.2d 179 (1976).  Restatement (Second) of Torts, § 414 (1965).

A builder who invited prospective purchasers into a building for purposes of inspection owned a nondelegable duty to keep the place safe for their inspection and could be held liable for injuries sustained when a plywood covering of the stairwell gave way and the purchaser fell to a basement floor, even though the builder had hired a contractor to do carpentry work and was unaware of condition which caused the injury. Singleton v. Kubiak & Schmitt, Inc., 9 Wis.2d 472, 101 N.W.2d 619 (1960).

The Restatement (Second) of Torts, section 414, provides as follows:

One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.

This authority may be used by the plaintiff’s attorney, in an appropriate case, to blame the general contractor for an injury to a subcontractor’s employee.

LIABILITY OF PRIME CONTRACTORS AND SUBCONTRACTORS

Because owners, designers and general contractors are usually in control of the work site and have statutory or contractual duties to ensure the safety of the work, they are usually better targets, and prime contractors and subcontractors are usually not the focus of third party cases in construction accident litigation unless they have affirmatively performed some negligent act that increased the risk of harm to employees of another contractor, or they have contractually agreed to indemnify some other party. Since indemnity agreements are so pervasive, the construction contracts should be reviewed in all cases.  Prime contractors and subcontractors are often at risk by contract, even though they may not have direct tort liability.  This is especially important when the liability insurance covering the responsible tortfeasor is insufficient.

LIABILITY OF MANUFACTURERS AND SUPPLIERS OF DEFECTIVE EQUIPMENT

Liability for the manufacture, sale or lease of defective, unreasonably dangerous products or equipment is a topic onto itself.  See Products Liability Law in Wisconsin for a detailed discussion of this topic.  Suffice it to say that there is a significant amount of litigation involving defective products or equipment that cause serious construction accidents.  In appropriate cases, inquiry should be made into the liability of the responsible parties.

SHIFTING OF LIABILITY BY HOLD HARMLESS AND INDEMNITY AGREEMENTS

 Wisconsin has a statute, § 895.49, providing that any agreement to limit or eliminate tort liability in any construction contract is against public policy and void.  However, this statute does not void indemnity clauses in construction contracts between owners, designers and contractors.  Gerdmann v. United States Fire Ins. Co., 119 Wis.2d 367, 350 N.W.2d 730 (Ct. App. 1984).  The statute operates to void exculpatory agreements that bar remedies of injured victims in construction accidents, but does not prevent risk shifting clauses among contracting parties.

There are often indemnification and other risk-shifting provisions in construction contracts, including clauses providing for waivers of employer immunity from suit by employees.  The subcontractor may have been forced to indemnify the general contractor in order to get the work, and thereby either waived the exclusive remedy provisions of the worker’s compensation act or made itself liable as an indemnitor.  A subcontractor often must make sure that the general contractor is named as an additional insured under the subcontractor’s comprehensive general liability insurance policy.

The general rule is that indemnity clauses in construction contracts are valid and are not against public policy.  Herchelroth v. Mahar, 36 Wis.2d 140, 153 N.W.2d 6 (1967).  However, indemnity agreements are strictly construed. Time Warner, Inc. v. St. Paul Fire and Marine Ins. Co., 247 Wis.2d 367, 633 N.W.2d 640 (Ct. App. 2001). Wisconsin courts will not allow a party to seek indemnity for the consequences of its own negligent acts unless there is a clear and unequivocal statement to that effect in the contract.  Barrons v. J.H. Findorff & Sons, Inc., 89 Wis.2d 444, 278 N.W.2d 827 (1979).

When there is clear, unequivocal indemnification clause providing that the subcontractor will indemnify the general contractor for injuries to the subcontractor’s employee, even though the general contractor violated the safe place act and was solely responsible for the damages, the court will uphold the agreement.  Dykstra v. Arthur G. McKee & Co., 92 Wis.2d 17, 284 N.W.2d 692 (Ct. App. 1979).

Liability insurers are subject to direct action liability to the plaintiff, and can be sued along with the insured in Wisconsin courts.  Wis. Stat. § 803.04.

In Schaub v. West Bend Mut. Ins. Co., 195 Wis.2d 181, 536 N.W.2d 123 (Ct. App. 1995), a subcontractor had agreed to indemnify a general contractor as part of the construction agreement.  When the subcontractor’s employee was injured and brought a third party claim against the general contractor, the court enforced the indemnity contract, and required the subcontractor’s insurer to pay the claim, even though the injury was caused by the negligence of the general contractor.  The subcontractor’s exclusive liability under the worker’s compensation act was deemed waived.

In Larsen v. J. I. Case Co.,37 Wis.2d 516,155 N.W.2d 666 (1968), a subcontractor’s employee was injured in a construction accident.  The subcontractor had agreed to indemnify the general contractor for liability arising out of claims by injured employees.  The court held that if the general contractor was found negligent only because he violated a nondelegable duty under safe-place statute and the negligent acts that caused injury to the subcontractor’s employee were those of the subcontractor, then the subcontractor would be required to indemnify general contractor.

GOVERNMENT CONTRACTOR IMMUNITIES

Governmental bodies and their employees have a quilified immunity, pursuant to Wis. Stat. §893.80(4) for personal liability for injuries resulting from the negligent performance of acts within the scope of their public office, to the extent that the acts are performed within the exercise of legislative, quasi-legislative, judicial or quasi-judicial functions.  This is known as the governmental discretionary acts immunity law.  It applies not only to governmental defendants, but also to governmental contractors in the construction context, if the governmental authority approved reasonable precise specifications, the contractor conformed tot he specifications, and the contractor warned the supervising governmental authority about the possible dangers associated with those specifications that were known to the contractor but not to the governmental officials.  In re Estate of Lyons, 207 Wis.2d 446,558 N.W.2d 658 (Ct. App. 1996).

LINKS