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Heritage at Deer Creek Associates8/8/2005
hold harmless the OWNER and its agents and employees from and against claims, damages, losses, and expenses, including but not limited to attorneys' fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury or destruction of tangible property including economic loss for loss of use resulting therefrom (collectively the 'Loss'), but subject to the following limitation.
CONTRACTOR'S duty to indemnify and hold harmless the OWNER and its agents shall not apply where the Loss was caused or resulted from the sole negligence of OWNER and its agents and employees. CONTRACTOR'S duty to indemnify and hold harmless the OWNER and its agents, however, shall apply where the Loss was caused or resulted from the concurrent negligence of OWNER and its agents and employees.
Kirtley-Cole has a duty to indemnify Heritage for Condominium Act violations only if the condominium owners' harm was within the scope of personal injury , which was clearly not the case, or if the harm was 'injury or destruction of tangible property.' The owners association's claims concern the quality of construction, not injury or destruction of property.
The distinction between construction defects and injury to tangible property turns on the nature of the defect and the manner in which the damage occurred. Injury to tangible property occurs when property is damaged and thus decreases in value. A construction defect is not 'injury,' but rather poor craftsmanship or design and it occurs during production, adversely affecting the quality and value when complete. The harm is inherent in the finished project, rather than caused by subsequent 'destruction.'
Heritage points to extrinsic evidence in support of its position that the parties intended 'injury or destruction of tangible property' to include harm caused by construction defects. We must look to the circumstances surrounding the making of the contract in order to discern the parties' intent, regardless of whether the language is ambiguous.
The parties crossed out the standard indemnification clause in their form contract, and attached the indemnity agreement as exhibit 'A.' Unlike the parties' indemnity agreement, the form indemnity clause limited the claims involving tangible property to property 'other than the Work itself.'
Heritage contends that the parties removed this language because they did not intend to limit the scope of tangible property to property other than the work itself. While this may be true, there still must be injury or destruction of tangible property. As discussed above, construction defects are inherent in the product and not injury or destruction.
Courts may also look to subsequent acts of the parties to discern their intent at the time the contract was made. Heritage points to the fact that Kirtley-Cole purchased insurance that allegedly covers all of the claims for which Heritage is seeking indemnity. But a party's decision to protect itself by purchasing comprehensive insurance coverage does not cause us to interpret this indemnity agreement other than in accordance with its clear meaning.
Heritage argues that the superior court erred by excluding additional evidence it presented in support of its motion for summary judgment. We review the trial court's evidentiary rulings made in connection with a summary judgment motion de novo. On a motion for summary judgment, we may only consider evidence that will be admissible at trial.
Heritage contends that the court should have considered the deposition testimony of Ralph Kirtley, the Presi
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