{ "id": 8524989, "name": "THE CITY OF WILMINGTON, Plaintiff v. NORTH CAROLINA NATURAL GAS CORPORATION, Defendant", "name_abbreviation": "City of Wilmington v. North Carolina Natural Gas Corp.", "decision_date": "1994-12-06", "docket_number": "No. 935SC1301", "first_page": "244", "last_page": "250", "citations": [ { "type": "official", "cite": "117 N.C. App. 244" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "71 S.E.2d 133", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1952, "pin_cites": [ { "page": "137" } ], "opinion_index": 0 }, { "cite": "235 N.C. 705", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626633 ], "year": 1952, "pin_cites": [ { "page": "710" } ], "opinion_index": 0, "case_paths": [ "/nc/235/0705-01" ] }, { "cite": "210 S.E.2d 285", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "pin_cites": [ { "page": "287", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "24 N.C. App. 285", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550329 ], "year": 1974, "pin_cites": [ { "page": "287", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/24/0285-01" ] }, { "cite": "280 S.E.2d 632", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1981, "pin_cites": [ { "page": "634" }, { "page": "634", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "53 N.C. App. 306", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8520868 ], "weight": 2, "year": 1981, "pin_cites": [ { "page": "307" }, { "page": "308", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/53/0306-01" ] } ], "analysis": { "cardinality": 629, "char_count": 15297, "ocr_confidence": 0.741, "pagerank": { "raw": 1.515589349341987e-07, "percentile": 0.6683327869694333 }, "sha256": "f774c6899f9b2b9f08778dedb531e9c13c33378e9df763d42682edf4f465dd2b", "simhash": "1:9ffcdf0a35169b40", "word_count": 2314 }, "last_updated": "2023-07-14T20:31:41.091249+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges ORR and JOHN concur." ], "parties": [ "THE CITY OF WILMINGTON, Plaintiff v. NORTH CAROLINA NATURAL GAS CORPORATION, Defendant" ], "opinions": [ { "text": "EAGLES, Judge.\nPlaintiff asserts that the trial court erred by granting defendant\u2019s motion for summary judgment based on defendant\u2019s third, fourth, fifth, and eighth defenses in its answer. After careful review of the record, we affirm. We will separately address each defense on which the trial court granted summary judgment.\nFirst, we review the standard for granting a summary judgment motion. A court grants a motion for summary judgment when \u201cthe evidence before the court demonstrates that there is no genuine issue as to any material fact and that a party is entitled to a judgment as a matter of law.\u201d Kirkpatrick & Associates v. Wickes Corp., 53 N.C. App. 306, 307, 280 S.E.2d 632, 634 (1981), citing G.S. 1A-1, Rule 56(c).\nI.\nDefendant\u2019s third defense in its answer stated that plaintiff\u2019s negligence proximately caused the explosion and resulting damage and that defendant never agreed to indemnify plaintiff from plaintiff\u2019s own negligence. In contrast, plaintiff claims that defendant signed an indemnity provision that indemnified plaintiff from all liability for any damages that its actions might cause. We do not agree with plaintiff\u2019s contention. Courts do not favor indemnity contracts that relieve the indemnitee from liability for its own negligence. New River Crushed Stone v. Austin Powder Co., 24 N.C. App. 285, 287, 210 S.E.2d 285, 287 (1974) (citations omitted). Accordingly, courts strictly construe indemnity clauses against the party asserting it. Hill v. Carolina Freight Carriers Corp., 235 N.C. 705, 710, 71 S.E.2d 133, 137 (1952). Courts will not read into an indemnity agreement provisions \u201cwhich are neither expressly nor reasonably inferable from the terms.\u201d Kirkpatrick & Associates v. Wickes Corp., 53 N.C. App. 306, 308, 280 S.E.2d 632, 634 (1981) (citations omitted).\nHere, there is no language in the indemnity agreement that explicitly provides that plaintiff will be insulated from its own negligence. In contrast, the agreement clearly provides only that defendant will hold plaintiff harmless for all damages resulting from defendant\u2019s operation of a gas system. Plaintiff points to the language at the end of the first paragraph of the indemnity clause to argue that the intention of the parties was for defendant to hold plaintiff harmless for all actions. However, this language, stating that the parties will construe the provision broadly in favor of the plaintiff, is not clear and unequivocal. \u201cMere general, broad, and seemingly all-inclusive language in the indemnifying agreement has been said not to be sufficient to impose liability for the indemnitee\u2019s own negligence.\u201d 41 Am. Jur. 2d, Indemnity, \u00a715. Accordingly, the trial court did not err in granting summary judgment for defendant on defendant\u2019s third defense.\nII.\nDefendant\u2019s fourth defense provided that the franchise agreement was void under G.S. 22B-1 insofar as it might require defendant to indemnify plaintiff from plaintiff\u2019s own negligence. G.S. 22B-1 provides that construction indemnity agreements are invalid insofar as they insulate the promisee from liability for its own negligence. Plaintiff argues that the franchise agreement is not a construction contract and therefore G.S. 22B-1 does not apply to void the indemnity provision of the franchise agreement. Plaintiffs argument fails for several reasons.\nFirst, the franchise agreement explicitly provides that the indemnity provision is subject to the limitations of G.S. 22B-1. If G.S. 22B-1 did not apply, there would have been no reason for plaintiff, who drafted the agreement, to include it in the franchise agreement. Secondly, G.S. 22B-1 applies to the franchise agreement because the franchise agreement includes much of the same language which appears in G.S. 22B-1. G.S. 22B-1 provides that it applies to any indemnity agreement that relates \u201cto the design, planning, construction, alteration, repair or maintenance of a building, structure, highway, road, appurtenance or appliance, including moving, demolition and excavating connected therewith.\u201d The indemnity provision in the franchise agreement provides that defendant will indemnify plaintiff for damages related to \u201cthe design, construction, installation, maintenance, or operation of a gas system by [defendant].\u201d Plaintiff cannot persuasively argue that G.S. 22B-1 does not apply to the franchise agreement when the franchise agreement, which plaintiff drafted, describes the scope of defendant\u2019s activities by using many of the same terms that G.S. 22B-1 uses.\nFinally, plaintiff cannot legitimately assert that G.S. 22B-1 does not apply to the franchise agreement because plaintiff admitted during discovery that \u201cthe ordinance granting a natural gas franchise to [defendant] as agreed to between [plaintiff] and [defendant] gives [defendant] the right to construct, repair, and maintain natural gas structures in the public streets, rights-of-way, and other public places.\u201d A contract for constructing, repairing, and maintaining structures is exactly what G.S. 22B-1 contemplates. Plaintiff\u2019s argument that the statute does not apply to the indemnity provision is without merit. This assignment of error fails.\nIII.\nIn its fifth defense, defendant claimed that plaintiff was not entitled to indemnification because of its own negligence. Plaintiff again contends that the indemnity clause provides that defendant will hold plaintiff harmless for plaintiffs own negligence. As we stated in discussing defendant\u2019s fourth defense supra, we do not accept plaintiff\u2019s interpretation of the indemnity clause. Accordingly, we conclude that the trial court did not err in granting summary judgment for defendant on its fifth defense.\nIV.\nIn its eighth defense, defendant asserted that because plaintiff voluntarily paid the injured workers sums of money above the required workers\u2019 compensation payments, defendant was not required to reimburse plaintiff for these voluntary settlement payments. Plaintiff claims that it made these payments pursuant to a City ordinance which provided that plaintiff could provide injured workers with up to twenty-one days of injury leave in addition to the required workers\u2019 compensation payments. However, the ordinance does not mandate additional leave, but merely gives plaintiff the discretionary authority to award the additional days of leave.\nIndemnity does not cover payments to a third person for which the indemnitee is not liable and which the indemnitee voluntarily or improperly pays. 41 Am. Jur. 2d, Indemnity, \u00a7 35. Here, plaintiff was not legally obligated to pay the amount in excess of the required workers\u2019 compensation payments; plaintiff\u2019s actions were voluntary. Accordingly, we hold that defendant was not required to reimburse plaintiff for these payments. Here too, the trial court did not err in granting summary judgment for defendant.\nAffirmed.\nJudges ORR and JOHN concur.", "type": "majority", "author": "EAGLES, Judge." } ], "attorneys": [ "Johnson & Lambeth, by Maynard M. Brown, for plaintiff-appellant City of Wilmington.", "McCoy, Weaver, Wiggins, Cleveland & Raper, by Jeffrey N. Surles, and Ragsdale, Liggett & Foley, by Peter M. Foley and Stephanie H. Autry, for defendant-appellee North Carolina Natural Gas Corporation." ], "corrections": "", "head_matter": "THE CITY OF WILMINGTON, Plaintiff v. NORTH CAROLINA NATURAL GAS CORPORATION, Defendant\nNo. 935SC1301\n(Filed 6 December 1994)\n1. Indemnity \u00a7 9 (NCI4th)\u2014 plaintiff not indemnified against own negligence \u2014 summary judgment for defendant proper\nIn an indemnity action where plaintiff city demanded that defendant gas company indemnify and defend plaintiff against all claims arising as a result of a gas fire, the trial court properly granted summary judgment for defendant on its defense that plaintiff\u2019s negligence proximately caused the explosion and resulting damage and that defendant never agreed to indemnify plaintiff from plaintiffs own negligence, since courts do not favor indemnity contracts which relieve the indemnitee from liability and will strictly construe indemnity clauses against the parties asserting them; there was no language in this clause explicitly providing that plaintiff would be insulated from its own negligence; and the agreement clearly provided only that defendant would hold plaintiff harmless for all damages resulting from defendant\u2019s operation of a gas system.\nAm Jur 2d, Indemnity \u00a7\u00a7 15 et seq.\n2. Indemnity \u00a7 4 (NCI4th)\u2014 construction of natural gas system \u2014 applicability of N.C.G.S. \u00a7 22B-1 \u2014 plaintiff not indemnified against own negligence\nA franchise agreement between the parties was void under N.C.G.S. \u00a7 22B-1 insofar as it might require defendant to indemnify plaintiff from plaintiff\u2019s own negligence, and there was no merit to plaintiff\u2019s contention that the franchise agreement was not a construction contract and the statute therefore did not apply, since the franchise agreement explicitly provided that the indemnity provision was subject to the limitations of the statute; the franchise agreement included much of the same language which appeared in the statute; and the franchise agreement was a contract for the construction of a natural gas system, the kind of contract the statute contemplated.\nAm Jur 2d, Indemnity \u00a7\u00a7 15 et seq.\n3. Indemnity \u00a7 7 (NCI4th)\u2014 voluntary payments by indemni-tee \u2014 no reimbursement required\nPursuant to a franchise agreement entered into by the parties, defendant was not required to reimburse plaintiff for amounts voluntarily paid to injured workers above the required workers\u2019 compensation payments, since indemnity does not cover payments to a third person for which the indemnitee is not liable and which the indemnitee voluntarily or improperly pays.\nAm Jur 2d, Indemnity \u00a7\u00a7 15 et seq.\nAppeal by plaintiff from order granting summary judgment entered 31 October 1993 by Judge James D. Llewellyn in New Hanover County Superior Court. Heard in the Court of Appeals 15 September 1994.\nThe City of Wilmington (hereinafter plaintiff) and North Carolina Natural Gas Corporation (hereinafter defendant) entered into a franchise agreement in December 1984 whereby defendant could construct, operate and maintain a gas system in Wilmington, North Carolina. Included in the franchise agreement was an indemnity clause which provided as follows:\nSection 18. Indemnity and Insurance\n(l)The corporation shall release, indemnify, keep and save harmless the City, its agents, officials and employees, from any and all responsibility or liability for any and all damage or injury of any kind or nature whatever (including death resulting therefrom) to all persons, whether agents, officials or employees of the City or third persons, and to all property proximately caused by, incident to, resulting from, arising out of, or occurring in connection with, directly or indirectly, the design, construction, installation, maintenance, or operation of a gas system by the corporation (or by any persons acting for the corporation of for whom the corporation is or is alleged to be in any way responsible), whether such claim may be based in whole or in part upon contract, tort (including alleged active or passive negligence or participation in the wrong), or upon any alleged breach of any duty or obligation on the part of the corporation, its agents, officials and employees or otherwise. The provisions of this section shall include any claims for equitable relief or for damages (compensatory or punitive) against the City, its agents, officials, and employees including alleged injury to the business of any claimant and shall include any and all losses, damages, injuries, settlements, judgments, decrees, awards, fines, penalties, claims, costs and expenses. Expenses as used herein shall include without limitation the costs incurred by the City, its agents, officials and employees, in connection with investigating any claim or defending any action, and shall also include reasonable attorneys\u2019 fees by reason of the assertion of any such claim against the City, its agents, officials or employees. The corporation expressly understands and agrees that any performance bond or insurance protection required by the corporation or the City, shall in no way limit the corporation\u2019s responsibility to release, indemnify, keep and save harmless and defend the City as herein provided. The intention of the parties is to apply and construe broadly in favor of the City the foregoing provisions subject to the limitations, if any, set forth in N.C.G.S. 22B-1.\n(2) Corporation shall take out and maintain during the life of this agreement Comprehensive General Liability insurance in an amount not less than $1,000,000 for injuries, including accidental death, and/or property damage for any one occurrence. The insurance must be written on an occurrence basis and must provide for protection against liability arising from the operations of the corporation or its contractors under this franchise. Corporation shall also purchase and maintain Contractual Liability insurance for protection against liability assumed under the indemnity provisions of this agreement, in an amount not less than that specified above for Comprehensive General Liability insurance. The corporation shall furnish the schedule of insurance carried under this franchise in the form of a document attested by the insurance carrier or his agent, stating and itemizing the several coverages as provided above. The corporation shall have the appropriate insurance carriers attach a copy of the Contractual Liability endorsements required evidencing the fact that they are providing this coverage. The insurance carrier shall also certify on these documents that it will notify the City by registered mail at least ten (10) days prior to any cancellation or non-renewal of these coverages. The City reserves the right to inspect any policy and to approve its form, including all exclusions and endorsements.\nOn 5 August 1987, a tragic gas fire occurred in Wilmington in which several employees of plaintiff were injured or killed. Several employees of defendant and one bystander also were injured. Many of the injured people filed lawsuits or workers\u2019 compensation claims against plaintiff. On 9 November 1987, plaintiff demanded that defendant indemnify and defend plaintiff against the claims and against any other claims that might arise as a result of the fire. On 13 November 1987, defendant responded that it was not required to indemnify plaintiff under the franchise agreement. Nevertheless, plaintiff included a third-party indemnity claim against defendant in plaintiffs answer to the claims by the injured workers. Plaintiff eventually moved for summary judgment on all of the claims, but Judge Coy E. Brewer, Jr. denied the motion on 2 August 1991. In November 1991, the claimants signed releases and plaintiff received dismissals with prejudice.\nOn 19 November 1992 plaintiff filed suit against defendant claiming that defendant\u2019s refusal to indemnify plaintiff damaged plaintiff in an amount in excess of one million dollars. On 10 August 1993, defendant moved for summary judgment. Judge James D. Llewellyn entered an order granting the motion on 31 October 1993 as to the third, fourth and fifth defenses of defendant\u2019s answer and granted the motion on the eighth defense for those payments made in excess of the workers\u2019 compensation payments. Plaintiff appeals.\nJohnson & Lambeth, by Maynard M. Brown, for plaintiff-appellant City of Wilmington.\nMcCoy, Weaver, Wiggins, Cleveland & Raper, by Jeffrey N. Surles, and Ragsdale, Liggett & Foley, by Peter M. Foley and Stephanie H. Autry, for defendant-appellee North Carolina Natural Gas Corporation." }, "file_name": "0244-01", "first_page_order": 276, "last_page_order": 282 }