The Alabama Supreme Court found that an indemnification provision was enforceable that required a subcontractor to indemnify a general contractor on a proportional-fault basis against liability for death or personal injury.
JohnsonKreis Construction Company, Inc. subcontracted with Howard Painting, Inc. to perform work on a hotel project in Birmingham, Alabama. The subcontract included an indemnification provision that required Howard to indemnify JohnsonKreis for “personal injury, death […] and/or property damage arising out of or related to Subcontractor’s […] negligence or fault […] but only to the proportional extent of Subcontractor’s responsibility for same.” The subcontract also required Howard to name JohnsonKreis as an additional insured. During the project, an employee of one of Howard’s subcontractors died after falling from a window on an upper floor of the hotel. The deceased employee’s estate filed a lawsuit against JohnsonKreis and Howard.
Disputes arose between Howard and JohnsonKreis regarding the scope of indemnity and coverage. JohnsonKreis and its insurer sued Howard and its insurer for breach of the subcontract for various claims, including (a) failing to comply with safety protocols, (b) failing to comply with stated insurance requirements (which included naming JohnsonKreis as an additional insured), (c) bad faith against Howard’s insurer, and (d) subrogation/contribution.
Howard argued in its motion for summary judgment that JohnsonKreis was not entitled to indemnification because Alabama does not permit the apportionment of damages among joint and several tortfeasors. The trial court agreed with Howard’s argument and entered summary judgment in its favor.
JohnsonKreis and its insurers appealed. The Alabama Supreme Court held that the subcontract’s proportional indemnification provision was valid and enforceable and reversed the trial court. Specifically, the court explained:
It is true, as [Howard] argues, that the damages available on a wrongful-death claim under Alabama law are punitive in nature and that a wrongful-death plaintiff is entitled to a single recovery that “cannot be apportioned [by a jury] among joint tort-feasors,” i.e., neither Alabama’s wrongful-death statute, see § 6-5-410, Ala. Code 1975, nor our common law provides for indemnity or contribution in a wrongful-death case. Tatum v. Schering Corp., 523 So. 2d 1042, 1045 (Ala. 1988). However, this is not a wrongful-death case — it is a contractual dispute based on the language of a particular subcontract agreement — and that general rule may be altered by an indemnification agreement between the parties. See Holcim (US), Inc. v. Ohio Cas. Ins. Co., 38 So. 3d 722, 728 n.1 (Ala. 2009) (“Here, the indemnity agreement is part of a contractual relationship between two parties, and the dispute between them is not one of a claimant and a tortfeasor.”). Specifically, as we most recently reiterated in Mobile Infirmary Ass’n v. Quest Diagnostics Clinical Laboratories, Inc., 381 So. 3d 1133 (Ala. 2023), this Court has recognized that “parties may enter into agreements that allow an indemnitee to recover from the indemnitor even for claims resulting solely from the negligence of the indemnitee,” i.e., this Court has recognized that parties may freely reach “a contractual agreement providing a form of otherwise barred joint-tortfeasor contribution.” 381 So. 3d at 1141. See also Holcim, 38 So. 3d at 729 (“[I]f two parties agree that the respective liability of the parties will be determined by some type of agreed-upon formula, then Alabama law will permit the enforcement of that agreement as written.”), and Parker Towing Co. v. Triangle Aggregates, Inc., 143 So. 3d 159, 167 (Ala. 2013) (“The general rule in Alabama is that, in the absence of a statutory or contractual basis otherwise, there is no contribution or indemnity among joint tortfeasors.” (emphasis added)). Cf. Industrial Tile, Inc. v. Stewart, 388 So. 2d 171, 176 (Ala. 1980) (“[I]f the parties enter into an agreement whereby one party agrees to indemnify the other, including indemnity against the indemnitee’s own wrongs, if expressed in clear and unequivocal language, then such agreements will be upheld.”). In fact, in Mobile Infirmary, supra, the main opinion specifically referenced the legality and the enforceability of an agreement requiring “that each party was required to indemnify the other for any proportional share of fault in the case of potential joint liability” — almost the exact language included in the subcontract agreement at issue in this case. 381 So. 3d at 1143.
Thus, the subcontract agreement, to the extent that it required Howard to indemnify JohnsonKreis against liability for personal injury or death occurring on the project site to the proportional extent of Howard’s responsibility for such injury and death, appears, contrary to the trial court’s sole finding, to have been valid and enforceable under Alabama law. Accordingly, the trial court’s decision is due to be reversed.
The Alabama Supreme Court remanded the case to the trial court for further proceedings. A copy of the court’s entire decision can be found here.