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

The defendant entered into a contract with the plaintiff to furnish the labor and equipment necessary to remove and replace the upper metal cover of the plaintiff’s steam turbine. The defendant agreed to perform the work at its own risk and expense and indemnify the plaintiff against all loss, damage, expense and liability resulting from injury to the property arising out of or in anyway connected with the performance of this contract. The defendant also got insurance for the property and added the plaintiff as an additional named insured. The policy also included coverage extending to the plaintiff’s property. During the work , the cover fell and injured the exposed rotor of the turbine. The plaintiff brought this action to recover approximately $25,000. During trial, the defendant offered to prove by admission of the plaintiff’s agents, by defendant’s conduct under similar contracts entered into with the plaintiff, and by other proof that in the indemnity clause the parties meant to cover injury to property of third parties only and not to plaintiff’s property. The court refused to admit any extrinsic evidence.