Pacific Gas and Electric Co. v. G.W. Thomas Drayage & Rigging Co.

Facts

Defendant entered into a contract with the Plaintiff to furnish the labor and equipment necessary to remove and replace the upper metal cover of Plaintiff’s steam turbine. Defendant agreed to perform the work at its own expense and risk and to indemnify Plaintiff against any loss, damage and liability resulting from injury to property arising out of the performance of the contract. During work the cover fell and damaged the exposed rotor of the turbine. Plaintiff brought action to recover for repairs in the amount of $25,144.51. During the trial it dismissed a count based on negligence and secured judgment on the theory that the indemnity provision covered injury to all property regardless of ownership. Defendant offered evidence to prove that the indemnity clause covers injury to property of third parties only and not to Plaintiff’s property. The trial court held that the plain language of the agreement also required defendant to indemnify Plaintiff for injuries to Plaintiff’s property. The court refused to admit extrinsic evidence that would contradict its interpretation.