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Contracts Keyed to Summers
Pacific Gas and Electric Co. v. G.W. Thomas Drayage & Rigging Co.
Citation:
69 Cal.2d 33, 442 P.2d 641
ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Facts
Pacific Gas and Electric Company (“Pacific”) (plaintiff) contracted with G.W. Thomas Drayage & Rigging Company (“Thomas”) (defendant) for the latter to furnish labor and equipment to remove and replace its steam turbine. The parties’ contract contained an indemnity clause that stated Thomas “at [its] own risk and expense” would “indemnify” Pacific “against all loss, damage, expense and liability resulting from […] injury to property, arising out of or in any way connected with the performance of this contract.” During the work, the cover fell and damaged the turbine. It cost Pacific $25,144.51 to repair the turbine and it sued Thomas for damages. At trial, Thomas offered to prove by extrinsic evidence that the indemnity clause was meant to cover only injury to property of third parties, not to Pacific’s property. The trial court determined that the plain language of the agreement required Thomas to indemnify Pacific for injuries to property. The trial court refused to admit Thomas’ extrinsic evidence.
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