Court: Supreme Court of Iowa; December 20, 1988; Iowa; State Supreme Court
Defendant Ankeny Construction Company appeals the district court's summary judgment in favor of co-defendant Paul J. Naughton regarding Ankeny's cross-claim for contractual indemnity. The case stems from an accident on December 3, 1982, at an apartment construction site in Fairfield, Iowa, where Ankeny was the general contractor and Naughton the dry wall subcontractor. Naughton had subcontracted work to Merle Daugherty, who brought his wife Lucille to the site. Lucille fell from the second floor landing, suffering serious injuries. The Daughertys sued Ankeny and Naughton, but only Lucille's claim was submitted to the jury, while Merle's consortium claim was not. Ankeny and Naughton filed cross-claims against each other but later moved to sever these claims for separate trial, emphasizing issues related to contract interpretation that were not relevant to the Daughertys' claims.
The trial court granted the severance. Naughton subsequently moved for a directed verdict on Lucille's claim, which was not resisted by her, but Ankeny opposed it. The court granted Naughton's motion and denied Ankeny’s, allowing the case to proceed to the jury solely against Ankeny. The jury found Lucille sustained $188,000 in damages, attributing 66% of the negligence to Ankeny and 33% to Lucille, resulting in a judgment against Ankeny for $126,334 plus interest. Neither the judgment nor Naughton's directed verdict was appealed.
After the trial, Naughton and Ankeny sought summary judgment on their cross-claims, with the court ruling that the trial's negligence determinations were dispositive. Naughton’s cross-claim was deemed moot, and his motion was granted, while Ankeny’s motion was denied. Ankeny’s appeal raises the issue of whether Naughton’s directed verdict precludes Ankeny from arguing Naughton's negligence. The criteria for issue preclusion require that the issues be identical, litigated, material to the prior action, and essential to the judgment.
In this case, the court references Trushcheff v. Abell-Howe Co. to evaluate the applicability of res judicata and issue preclusion principles concerning negligence claims and indemnity. In Trushcheff, a construction worker and his wife sued the general contractor, Abell-Howe, and subcontractor Holman, who cross-petitioned against other subcontractors. Holman received a directed verdict against the Trushcheffs’ claim, while a jury ruled against Abell-Howe. On appeal, the court considered whether Abell-Howe could challenge Holman's directed verdict. It concluded that the circumstances of Holman's success, based on a directed verdict rather than a jury verdict, did not distinguish the case from other issue preclusion scenarios. The court affirmed that Abell-Howe and Holman were in adversarial positions and had fully litigated liability issues.
The current case mirrors these dynamics, with Ankeny and Naughton also occupying adversary positions, despite their cross-claims being severed. The court determined that the negligence issue regarding Lucille's claim was relevant to both parties, and Ankeny was precluded from contesting Naughton’s negligence due to the prior litigation context. Ankeny argued that this preclusion did not undermine its contractual indemnity claim against Naughton, which includes a clause mandating indemnification for any losses due to the subcontractor's negligence, regardless of fault.
Ankeny claims that the Iowa Supreme Court's decision in Payne Plumbing, Heating Co. v. Bob McKiness Excavating, Grading, Inc. should apply in this case, where a subcontractor's negligence triggers indemnification for a general contractor. However, the current case differs from Payne because the subcontractor was not negligent. Ankeny argues that the indemnity provision should cover acts by any individuals employed by the subcontractor or working under its direction. Specifically, Ankeny posits that Lucille was either indirectly employed by Naughton or was performing the subcontract work under Naughton’s direction. Ankeny contends that the district court erred by not granting its summary judgment motion and instead siding with Naughton. Additionally, Ankeny claims there are unresolved factual issues regarding Lucille’s employment and work status. However, the record indicates that Ankeny’s cross-claim only alleged Naughton’s negligence without addressing Lucille's role, meaning the trial court did not consider these issues. The court upheld Naughton’s summary judgment, affirming the lower court's decision.
