Owner of a tract of land (Wilevco) leased the land to a general merchandising store (Fred’s), and Wilevco then hired a contractor who constructed a new store. Five years after construction, a shopper fell on a curb in front of the main door to the store. This occurred because there was a several inch drop in the concrete at the curb. At trail, the judge granted summary judgment to the owner and the store against the construction contractor on the basis of equitable (“common-law”) indemnification on the theory that the accident was due to construction defect. This was reversed on appeal because the two Indemnitees failed to prove that they were without fault. Specifically, they owed a duty of care to the store invitee and failed to paint the curb yellow or otherwise warn the customer of the unsafe condition.
NOTE: The court provides an excellent definition of indemnification as follows: “Indemnity is that form of compensation in which a first party is liable to a second party to pay a second party for a loss or damage the second party incurs due to a third party.” Fountain v. Fred’s, Inc. and Wildevco, LLC, 871 S.E.2d 166 (South Carolina, 2022).
The shopper filed a premises liability suit against the landowner and the store owner asserting that they breached their duty to invitees by failing to maintain and inspect the premises and failing to discovery and make safe or warn of unreasonable risks. She sustained serious injuries as a result of her fall on the sidewalk curb. In defending against her claim the two defendants filed third-party claims against the contractor that constructed the sidewalk. Before trial, the case between the plaintiff and the defendants settled. Those defendants then continued with their litigation against the contractor for equitable indemnity to recover what they paid the plaintiff in the settlement.
At trial the court determined that the contractor had deviated from the plans and specifications in building the curb they way he did. Relying exclusively on construction defects case law, the court concluded that neither the property owner or store owner breached any duty to the customer regarding inspection and maintenance because the court found “the defects were such that could not reasonable have been discovered.”
In reversing the trial court, the appellate court held that construction defect law was not appropriate for determining the duties owed in this case. Instead, the court explained that the principle of equitable indemnification has long been recognized in the state, and that a key element to this indemnity is “the absence of fault by the party seeking equitable indemnification. A party is not entitled to equitable indemnification if any ‘negligence of his own has joined in causing the injury.”
In this case, the court stated that for the defendants to prove they were without fault and thus entitled to equitable indemnity, they would have been required to demonstrate that the breached no duty of care to the invitee. “To be entitled to equitable indemnity, … [they] were required to show not just that [Contractor’s] construction of the ramp was a proximate cause of the injuries but also that Respondent’s failure to warn or remedy the unsafe condition was not a proximate cause.”
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 24, No. 5 (June 2022).
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