Jury Rules Indemnity Provisions Do Not Indemnify Landowner’s Employee

Valenti v. Central Parking System, et al., Nos. 385 and 726 EDA 2007 (Pa. Super. Ct., Nov. 26, 2008)


Following trial in the Philadelphia Court of Common Pleas, a jury returned a verdict of $5,000,000.00 in favor of Plaintiff, an employee of Landowner, and against the Parking Contractor, and found no liability on the Landowner. Following the verdict, Judge Gary DiVito found in favor of the Landowner on the Parking Contractor’s contractual and common law indemnity claims against the Landowner. Judge DiVito ruled that the indemnity provisions in the contract between the Landowner and the Parking Contractor did not provide sufficient waiver language to permit the Contractor to obtain indemnity for injury to the Landowner’s employee, consistent with the Pennsylvania Workers’ Compensation Act and the holding in Bester v. Essex Crane Rental Corp., 619 A.2d 304 (Pa. Super. 1993)(en banc). Following the denial of the Parking Contractor’s Post Trial Motions, the Contractor appealed the Court’s rulings on indemnity and other issues to the Pennsylvania Superior Court. The Superior Court (Judges Bender, Donahue and Freedberg) affirmed Judge DeVito’s rulings on the indemnity issues on the merits and, for procedural reasons, denied Contractor’s other appeal arguments. Contractor’s request for En Banc argument was denied.

The Litigation

This matter involves Plaintiff’s claims for personal injuries filed in the Philadelphia Court of Common Pleas and tried before a jury and the Honorable Gary F. DiVito.

The underlying facts are as follows. On September 19, 2003, Plaintiff was working as a security guard employed by the Landowner Sports Complex. During the course of his employment, Plaintiff sustained significant personal injuries when a 1,700 pound parking booth blew over upon him in parking lots for a sports complex. During the course of the litigation, a dispute arose between the Landowner Sports Complex and the Parking Contractor regarding the actual entity which employed the Plaintiff, the duty to maintain the parking booth in question, and the applicability of indemnity provision in the Parking Licensing Agreement between Landowner and Contractor.

Following the completion of the presentation of evidence and closings, at Landowner’s request, the Court charged the jury and instructed them to make an initial finding identifying which entity actually employed the Plaintiff. After very brief deliberations, the jury found that the Plaintiff was an employee of Landowner, and not another related corporation, also a party in the matter. Consistent with the Pennsylvania Workers’ Compensation Act, the Court provided the jury with additional instructions and a verdict slip which requested the jury’s findings on negligence, proximate cause, and apportionment of negligence between the Parking Contractor and the remaining Additional Defendants in the matter. After additional deliberations, the jury found the Defendants were negligent, that the Defendants’ negligence was the proximate cause of Plaintiff’s injury, and allocated 100% of the liability against the Parking Contractor, and none against the remaining Additional Defendants.

During the course of the trial, Judge DiVito had found that the interpretation and applicability of the indemnity clauses in the Licensing Agreement were questions of law to be determined by the Court following the jury’s initial determination of Plaintiff’s employer. At the conclusion of the trial, the Court accepted all the relevant evidence presented during trial and heard argument from counsel on the indemnity issue. Thereafter, Judge DiVito issued an Opinion agreeing with Landowners’ arguments. The Court found that because Plaintiff had been determined to be an employee of the Landowner, the indemnity provisions which Parking Contractor sought to enforce against Landowner did not sufficiently waive Landowner’s protections under the Pennsylvania Workers’ Compensation Act. The Court found the case of Bester v. Essex Crane Rental Corp., 619 A.2d 304 (Pa. Super. 1993)(en banc), was controlling in the matter, and denied Parking Contractor’s request for indemnification.

Parking Contractor’s counsel filed Post Trial Motions, arguing that the Court’s finding on indemnity was in error, and taking the position that Bester was inapplicable because the indemnity provisions in the Licensing Agreement dealt with specific conduct, as opposed to general indemnity. The Parking Contractor also complained in their Post Trial Motion, among other things, that Judge DiVito’s rulings regarding the applicability of the Doctrine of Res Ipsa Loquitur, allowing representatives of the parties to testify as to their understanding of the contract, and failing to find as a matter of law that the Landowner was responsible for the booth maintenance, all were in error. Following Judge DiVito’s denial of the Post Trial Motions, the Contractor appealed the Court’s rulings to the Superior Court of Pennsylvania.

The Superior Court Opinion

On appeal, Parking Contractor’s counsel limited their appeal arguments to four areas. Contractor argued that the Trial Court erred by (1) failing to rule as a matter of law that Landowner was responsible for booth maintenance; (2) failing to rule as a matter of law that Plaintiff failed to establish a breach of duty by Contractor; (3) instructing the jury on the Doctrine of Res Ispa Loquitur; and (4) failing to rule as a matter of law that the Licensing Agreement obligated Landowner to indemnify Contractor. Following briefing and argument before Judges Bender, Donahue and Freedberg, the Pennsylvania Superior Court affirmed the Trial Court’s decisions.

Specifically, in a Memorandum Opinion, the Superior Court denied the Contractor’s appeal on the first three grounds for procedural reasons, holding that counsel had failed to sufficiently preserve those arguments for appellate purposes at trial and at the post trial stage. However, on the indemnity issue, the Superior Court reiterated the Bester standard, finding that neither of the indemnity provisions Contractor sought to enforce, “contain the express provisions (for waiver of the employers’ workers’ compensation immunity) required by law. Accordingly, we find that the trial court committed no error in concluding that the licensing agreement does not obligate (Landowner) to indemnify (Parking Contractor) for its losses in this case.”

For a copy of the Superior Court Opinion or the Trial Court’s Opinions on this matter, or for further information, please contact George McCool, at Wright & O’Donnell, P.C., directly at (610) 940-4092.