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01/27/95 HUMANA MEDICAL CORPORATION D/B/A HUMANA

January 27, 1995

HUMANA MEDICAL CORPORATION D/B/A HUMANA HOSPITAL MONTGOMERY
v.
BAGBY ELEVATOR COMPANY, INC.



Appeal from Montgomery Circuit Court. (CV-91-2340). William R. Gordon, Trial Judge.

Released for Publication April 25, 1995.

Shores, Maddox, Kennedy, Ingram, and Cook, JJ. concur.

The opinion of the court was delivered by: Shores

SHORES, JUSTICE.

The issue is whether Humana Medical Corporation d/b/a Humana Hospital Montgomery ("Humana") is entitled to indemnification for legal fees and litigation expenses based on an indemnification clause in an agreement previously entered into with Bagby Elevator Company, Inc. ("Bagby").

On October 23, 1991, Elaine Baker sued Humana and Bagby for damages, based on injuries she sustained while boarding an elevator located on Humana's premises. Humana owned the elevator, but, before Baker's accident, Humana and Bagby had entered into an "Elevator Protective Maintenance Agreement" ("Maintenance Agreement").

Pursuant to the terms of the Maintenance Agreement, Bagby, acting as an independent contractor, agreed to be responsible for the service, maintenance, repair, inspection, and periodic examinations of all safety devices on eight of Humana's passenger elevators, in exchange for a monthly fee. Those tasks were delegated to Bagby, and neither Humana nor any of its employees ever performed any of those tasks. Instead, if one of Humana's elevators malfunctioned, then Humana had its maintenance department take the elevator out of service, and Humana turned the matter over solely to Bagby. A later amendment to the Maintenance Agreement contained the following indemnity language:

"....

"3. In addition, Vendor [Bagby] hereby indemnifies and holds the Hospital [Humana], its directors, officers and employees harmless from and against any and all claims, demands, suits (including legal expenses in connection therewith), judgments or awards arising out of or in any way connected with the activities of Vendor, its employees, during the term of this agreement.

"....

"5. Under no circumstances will employees of Vendor be considered as employees or agents of Hospital. Vendors' employees will be acting as independent contractors, under this Agreement, and as such, agree to indemnify Hospital against all claims for liability pertaining to their actions...."

(Emphasis added.) According to the Maintenance Agreement and the parties' mutual understanding, Bagby was to indemnify Humana for those acts of Bagby for which Humana might be found responsible or liable. Both parties agree that the Maintenance Agreement was in effect at the time of Baker's accident and that it applied as to the elevator on which Baker's injury occurred. After Baker sued Humana and Bagby, Humana filed a cross-claim against Bagby, seeking indemnification based upon the indemnity provision in the Maintenance Agreement.

On January 21, 1993, Humana moved for a summary judgment as to all eight claims in Baker's complaint, including: Count I (alleging that the defendants had negligently injured the plaintiff); Count II (alleging that the defendants had wantonly injured her); Count III (alleging a negligent failure to maintain, repair, and/or inspect the elevator); Count IV (alleging a wanton failure to maintain, repair, and/or inspect the elevator); Count V (alleging that the defendants had negligently failed to remove the elevator from service); Count VI (alleging that the defendants had wantonly failed to remove the elevator from service); Count VII (alleging that the defendants had negligently failed to warn of an unsafe or unreasonably dangerous condition); and Count VIII (alleging that the defendants had wantonly failed to warn of an unsafe or unreasonably dangerous condition). However, Humana's supporting memorandum brief sought a summary judgment only with respect to Count III and Count IV. Humana argued that it was entitled to a summary judgment on these two counts because, it argued, under the Maintenance Agreement, it was not responsible for Bagby's acts. Humana also filed a motion for summary judgment on its cross-claim against Bagby, but this motion made no distinction between the plaintiff's eight claims. The trial court denied both of Humana's motions for summary judgment.

On August 26, 1993, Bagby moved for a summary judgment as to Humana's cross-claim. While Bagby's motion was pending, the case was settled with respect to all of Baker's claims, and Bagby paid the entire settlement amount. Humana then moved to submit the cross-claim to the trial court, arguing that it presented only a question of law. The trial court conducted a hearing, *fn1 and, on ...


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