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May 1st, 2018
construction
FOURTH DISTRICT COURT OF APPEAL OF FLORIDA DETERMINES DUTY OF SUBCONTRACTOR TO DEFEND AND INDEMNIFY GENERAL CONTRACTOR DID NOT EXTEND TO PROJECT OWNER

In Blok Builders, LLC v. Katryniok, No. 4D16-1811, 2018 WL 637399 (Fla. Dist. Ct. App. Jan. 31, 2018), the District Court of Appeal of Florida, Fourth District, overturned a trial court’s decision requiring a subcontractor to defend and indemnify a project owner based on a reference in the Subcontract which adopted and incorporated by reference the terms of the General Contract, that include an indemnification provision between the Owner and General Contractor.

In an effort to improve its telecommunications services, BellSouth contracted with Mastec North America, Inc. (“Mastec”) to perform all work necessary to provide access to underground lines. In turn, Mastec subcontracted with Blok Builders, LLC (“Blok”) to perform certain excavation work. After Blok performed excavation work near a homeowner’s driveway, the driveway suddenly collapsed, causing injuries to the homeowner. The homeowner sued BellSouth, Mastec, and Blok.

Mastec asserted a crossclaim against Blok, alleging that Blok had agreed in the Subcontract between Mastec and Blok to contractually indemnify Mastec for such homeowner claims. BellSouth also filed a crossclaim against Blok, arguing that Blok also agreed to contractually indemnify it pursuant to the Blok/Mastec Subcontract.

BellSouth’s basis for asserting this claim was based upon the fact that the Blok/Mastec subcontract incorporated the terms of the General Contract between Mastec and BellSouth. The Mastec/BellSouth General Contract included a similar indemnification provision as the one contained in the Blok/Mastec Subcontract; however, that indemnity provision did not mention Blok. The trial court agreed with BellSouth and entered an order requiring Blok to defend and indemnify BellSouth against the homeowner’s claims.

Blok appealed the decision. In deciding the appeal, the Court of Appeals began by looking at the specific language contained in the Blok/Mastec subcontract. They noted that the subcontract included a provision for indemnification, and under that provision, Blok had contractually agreed to indemnify Mastec. The Court pointed out that while that agreement extended to Mastec’s directors, officers, and agents, it did not specifically require Blok to indemnify BellSouth.

The Court acknowledged that the Subcontract did incorporate the provisions of the BellSouth/Mastec General Contract and the BellSouth/Mastec contract contained an indemnification provision. Despite this, the Court found that language contained in the BellSouth/Mastec General Contract indemnity provision only referenced Mastec’s obligation, not any subcontractor obligation, to indemnify BellSouth. Thus, based upon longstanding rules governing contract interpretation, the Court held that the trial court erred in declaring that Blok had a contractual duty to indemnify and defend BellSouth, even though the Subcontract incorporated the General Contract and the General Contract required the General Contractor to defend and indemnify BellSouth. 

This is a good reminder that a Court will not guess what obligation the parties intended to place on each other if a dispute arises. The only way to ensure a duty, including a duty to indemnify and defend, is upheld, is to make sure specific language is included in your contract which leaves no room for interpretation. It is not sufficient to simply reference obligations in a separate document and hope the Court understands the purpose for doing so.

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