Catastrophic Losses – Insight into the Surfside Condominium Collapse Litigation
November 29, 2022
45 Fla. L. Weekly D259b
Third District Court of Appeals
This matter stemmed from a fire within a condominium unit that was under renovation. It was alleged that the painting subcontractor left a solvent-soaked rag in a garbage bin that spontaneously combusted and caused damage to the unit. Earlier that day, the general contractor’s employees left the unit due to the fumes caused by the oil-based stain and leaving only the subcontractor employees on site.
The condominium owner and principals filed suit against the general contractor and a painting subcontractor. The Complaint against the general contractor alleged breach of contract, negligence (standard and vicarious liability for subcontractor), and sought indemnification. The Complaint against the subcontractor alleged negligence related to its negligent storage of the rags which combusted and started the fire. The general contractor then filed a cross-claim against the subcontractor seeking common law indemnity and argued that the subcontractor was solely negligent for the fire. There was no mention of any contractual indemnification so it is assumed that the subcontract did not contain such a clause.
During the trial, a responding fireman testified that his “best determination” was that the oily rag spontaneously combusted and caused the fire. The Plaintiffs filed a Motion for Partial Summary Judgment arguing that the general contractor was vicariously liable for the actions of the subcontractor. The general contractor argued it was only passively liable and that therefore the subcontractor had an indemnification obligation. The trial court granted the Motion and stated, “[t[here is no contrary evidence to show that the fire which occurred at the subject property was not caused by the improper disposal of oily rags…”
The general contractor moved for Partial Summary Judgment as to liability on its common law indemnification claim against the subcontractor. The subcontractor filed a response stating that the general contractor was, in fact, an active tortfeasor and therefore not entitled to common-law indemnification. The subcontractor also argued that the trial court did not affirmatively determine the cause of the fire. Rather, the court only found that there was no contrary evidence to show that the subcontractor’s disposal of the rag was improper.
During litigation, the subcontractor settled with the Plaintiffs for $343,000. The Plaintiff and general contractor later settled all claims and, therefore, the only remaining issue was related to the cross-claim for common law indemnity. The trial court granted the general contractor’s Motion for Partial Summary Judgment as to ultimate liability. An Order was entered which stated that the general contractor’s negligence was merely passive and therefore it was entitled to indemnification. The parties subsequently filed a Joint Motion for Clarification on the Plaintiffs’ Motion for Partial Summary Judgment as to the breach of contract and negligence counts and the general contractor’s Motion for Partial Summary Judgment regarding indemnification. The trial court entered an Order stating that the only issue remaining was whether the amount paid by the general contractor to settle with the Plaintiffs was reasonable and necessary in light of the subcontractor’s settlement with Plaintiffs. The court later granted the general contractor’s Motion for Summary Judgment as to the reasonableness of the settlement and entered final judgment against the subcontractor.
The Third District Court of Appeals affirmed the ruling and agreed that the trial court properly entered summary judgment in favor of the general contractor on the common law indemnity claim. Citing to Houdaille Industries, Inc. v. Edwards, 374 So. 2d 490 (Fla. 1979), the Court stated that “indemnity is a right that inures to one who discharges a duty owed by him and is allowable only where the whole fault is in the one against whom indemnity is sought.” Further, the Court noted that weighing the relative fault of a tortfeasor has no place in the concept of indemnity because the one seeking indemnity must be without fault.
The undisputed facts show that the subcontractor was solely negligent for the fire and that the general contractor was only vicariously negligent, therefore, the general contractor was entitled to indemnity. More specifically, the general contractor’s failure to empty the garbage bin and/or provide specialized bins for disposal of oily rags did not amount to active negligence. The fact that the Plaintiff’s Complaint alleged negligence against the general contractor could not destroy a valid claim for indemnification. The Court also rejected the argument that the general contractor’s and subcontractor’s settlements with the Plaintiff’s precluded the general contractor from prevailing on its indemnity claim.
In situations where a party is making a claim for common law indemnity, courts will conduct an analysis to determine whether the seeking party’s negligence is passive or active. This is even true for a general contractor who usually retains oversight and supervision obligations in its contract. As a rule, a party does not have a valid claim for indemnification (provided that there is no contractual indemnification provision in the contract) if it is actively negligent in causing the harm. Here, had the facts been different and the general contractor’s employees were still on site when the rags were disposed, the court may have found that its negligence was not merely passive and therefore it was not entitled to common-law indemnification.