Trouble With Subs and Sub-Subs

Reading Contract Language Carefully Yields Good Outcome

We represented a general contractor who was sued by a plaintiff seeking damages for injuries sustained while working on a construction project. The general contractor had entered into a contract with a subcontractor to provide steel for the construction project. The subcontractor then contracted with a sub-subcontractor to perform the steel erection work. The subcontractor and the sub-subcontractor were parties to an Annual Subcontract Agreement which governed all work performed under purchase orders issued during a stated time period, which encompassed the date of the accident. This contract included an indemnity provision which required the sub-subcontractor to indemnify and hold harmless certain individuals, including general contractors, from any and all claims, damages, losses and expenses. The general contractor who had been sued did not directly contract with the sub-subcontractor for steel erection services on the project. Based on the language of the contract between the subcontractor and the sub-subcontractor, however, we brought a third-party complaint against the sub-subcontractor seeking contribution and indemnification for the plaintiff’s injuries. The sub-subcontractor filed a Motion for Summary Judgment contending that there was no valid and enforceable indemnification agreement between it and the general contractor. The court found that the general contractor was an intended third-party beneficiary of the Annual Subcontract Agreement and denied the sub-subcontractor’s Motion for Summary Judgment. Based upon the court’s decision and the facts of the case, the insurer for the sub-subcontractor agreed to assume the defense of the general contractor.

Other Cases / Wins: Construction Litigation