J. A. Jones Construction Co. v. Zack Co.
232 So. 2d 447, 1970 Fla. App. LEXIS 6845 (1970)
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Rule of Law:
An indemnitor's contractual duty to defend its indemnitee against claims is broader than its duty to indemnify for liability and is triggered by the allegations in the complaint. If the claim falls within the scope of the indemnity agreement, the duty to defend and reimburse defense costs exists regardless of the ultimate outcome of the litigation.
Facts:
- J. A. Jones Construction Co. (Jones) entered into a contract with Eastern Airlines, Inc. to construct a hangar.
- Jones subcontracted the roof and siding work to Zack Co. (Zack) and H. H. Robertson Company (Robertson).
- The subcontracts contained an agreement where Zack and Robertson would indemnify Jones against claims for damages 'arising from accidents' connected to their work and would defend Jones in any suits brought on account of such accidents.
- Construction was completed and the hangar was accepted by Eastern on June 18, 1963.
- On August 26-27, 1964, a hurricane caused substantial damage to the hangar's roof and siding, the portions constructed by the subcontractors.
- Eastern informed Jones it intended to hold Jones responsible for the damage.
- Jones then notified the subcontractors, Zack and Robertson, of Eastern's claim against it.
Procedural Posture:
- Eastern Airlines, Inc. sued its general contractor, J. A. Jones Construction Co., and the subcontractors, Zack Co. and H. H. Robertson Company, in the circuit court of Dade County for property damage.
- Jones demanded that the subcontractors defend the suit on its behalf pursuant to their indemnity agreement, but they refused.
- Jones filed a cross-claim against the subcontractors seeking indemnity for any potential judgment and reimbursement for its costs and expenses in defending the suit.
- By stipulation, the trial on the cross-claim was deferred until after the trial on Eastern's main claim.
- A jury returned a verdict in favor of all defendants on Eastern's claim, and the trial court entered judgment accordingly.
- The trial court then heard the cross-claim and entered a final judgment in favor of the subcontractors, dismissing Jones's claim for defense costs.
- Jones, as the appellant, appealed the dismissal of its cross-claim to the District Court of Appeal of Florida.
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Issue:
Does a subcontractor's contractual duty to defend a general contractor against claims for damages 'arising from accidents' obligate the subcontractor to reimburse the contractor's legal defense costs when the underlying claim alleged faulty workmanship leading to hurricane damage, even if a jury ultimately finds no party liable for the damage?
Opinions:
Majority - Carroll, Judge
Yes. A subcontractor's duty to defend a general contractor is triggered by the nature of the claim, not its ultimate success, and an allegation of property damage from a hurricane caused by faulty work qualifies as a claim 'arising from accidents.' The obligation to defend is separate from the obligation to indemnify for liability. The court reasoned that the term 'accident' is broad and includes unusual and unexpected events, even if they result from negligence. The damage to the hangar during the hurricane fits this definition. The purpose of the indemnity agreement was to protect the contractor from such claims. Because Eastern's lawsuit alleged damages that represented a potential liability for which Jones would have been entitled to indemnification, the subcontractors' duty to defend was triggered when the suit was filed. The fact that the defendants ultimately won the case and were found not liable is irrelevant to the separate contractual duty to defend.
Dissenting - Pearson, Chief Judge
No. A suit for alleged improper construction resulting in hurricane damage is not a suit for 'damages arising from accidents.' The majority's interpretation of 'accident' as any unfortunate occurrence is too broad. The claim was based on theories of either improper workmanship or inadequate design, neither of which should be classified as an 'accident' under the terms of the indemnity agreement.
Analysis:
This decision solidifies the legal principle that the duty to defend is broader and distinct from the duty to indemnify. It establishes that the trigger for the duty to defend is the content of the allegations in the complaint, not the ultimate merits of the case. By broadly interpreting the term 'accident' to include property damage resulting from alleged construction defects, the court expands the scope of an indemnitor's obligations. This precedent significantly impacts construction law and contract interpretation, requiring subcontractors to potentially bear defense costs for claims on which they are ultimately exonerated, thus emphasizing the importance of precise language in indemnity clauses.
