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Milliken & Co. v. Georgia Power Co.

Supreme Court of Georgia

June 3, 2019

MILLIKEN & COMPANY
v.
GEORGIA POWER COMPANY.

          WARREN, JUSTICE.

         In 2013, a small business jet crashed into a Georgia Power Company transmission pole on Milliken & Company's property near the Thomson-McDuffie Regional Airport in Thomson, Georgia. The two pilots were injured and the five passengers died. In the wake of the crash, the pilots and the families of the deceased passengers filed a total of seven lawsuits against multiple defendants, including Georgia Power and Milliken. The complaints in those seven suits alleged that a transmission pole located on Milliken's property was negligently erected and maintained within the airport's protected airspace. The record evidence shows that Georgia Power constructed the transmission pole on Milliken's property for the purpose of providing electricity to Milliken's manufacturing-plant expansion, and that the pole was constructed pursuant to a 1989 Easement between Georgia Power and Milliken. In each of the seven suits, Milliken filed identical cross-claims against Georgia Power, alleging that Georgia Power was contractually obligated to indemnify Milliken "for all sums that Plaintiffs may recover from Milliken" under Paragraph 12 of the 1989 Easement, which provides:

[Georgia Power] Company, its successors or assigns shall hold [Milliken], its successors or assigns harmless from any damages to property or persons (including death), or both, which result from [Georgia Power] Company's construction, operation or maintenance of its facilities on said easement areas herein granted.

         Georgia Power moved for summary judgment on the cross-claims. The trial court granted summary judgment to Georgia Power in all seven actions, reasoning that Paragraph 12 of the 1989 Easement operates as a covenant not to sue, rather than as an indemnity agreement, because it "nowhere contains the word 'indemnity'" and "it is not so comprehensive regarding protection from liability." All seven cases were appealed to the Court of Appeals.[1]

         Case Number S18G0876.

         The Court of Appeals affirmed the trial court's grant of summary judgment in favor of Georgia Power in the six cases underlying our Case Number S18G0876. Milliken & Co. v. Georgia Power Co., 344 Ga.App. 560 (811 S.E.2d 58) (2018). In its opinion, the Court of Appeals did not rely on the trial court's rationale that the 1989 Easement provision was a covenant not to sue. Id. at 564. Instead, employing a "right for any reason" approach, it held that the provision was an indemnity agreement and affirmed the trial court by applying Georgia's anti-indemnity statute, OCGA § 13-8-2 (b), to determine that Paragraph 12 of the Easement was "void as against public policy"-a theory argued before the trial court but not argued or briefed before the Court of Appeals. Milliken, 344 Ga. at 562-564. To support its holding, the Court of Appeals quoted the pleadings filed in support of Milliken's cross-claims, which alleged that "Georgia Power is contractually liable to Milliken 'for all sums that Plaintiffs may recover from Milliken.'" Id. at 561 (emphasis supplied). Reasoning that "Milliken's cross-claims against Georgia Power are necessarily based on the contention that the easement provision at issue makes Georgia Power contractually liable to indemnify Milliken for any damages that the plaintiffs recover against Milliken caused solely by Milliken's negligence," id. at 564, the Court of Appeals concluded that "assuming the easement provision requires the contractual indemnity alleged in Milliken's cross-claims, the provision makes Georgia Power liable to indemnify Milliken for damages caused solely by Milliken's negligence and is void and unenforceable as against public policy as provided in OCGA § 13-8-2 (b)." Id. (emphasis supplied).

         We granted Milliken's petition for certiorari and posed a single question: Did the Court of Appeals err in its construction and application of OCGA § 13-8-2 (b)? Because our answer to that question is yes, we vacate the Court of Appeals' judgment and remand the case for the Court of Appeals to consider, in the first instance, the trial court's rationale for granting Georgia Power's motions for summary judgment and any other arguments properly before the Court of Appeals.

         1. On appeal from a grant of summary judgment, we review legal questions de novo and review the evidence in the light most favorable to the nonmoving party to determine whether there is a genuine issue of material fact. Barnett v. Caldwell, 302 Ga. 845, 845-846 (809 S.E.2d 813) (2018).

         "As a general rule[, ] a party may contract away liability to the other party for the consequences of his own negligence without contravening public policy, except when such agreement is prohibited by statute." Lanier at McEver v. Planners & Eng'rs Collaborative, 284 Ga. 204, 205 (663 S.E.2d 240) (2008) (citation and punctuation omitted). When the easement at issue here was executed, OCGA § 13-8-2 (b) provided one such public-policy limitation:

A covenant, promise, agreement, or understanding in or in connection with or collateral to a contract or agreement relative to the construction, alteration, repair, or maintenance of a building structure, appurtenances, and appliances, including moving, demolition, and excavating connected therewith, purporting to indemnify or hold harmless the promisee against liability for damages arising out of bodily injury to persons or damage to property caused by or resulting from the sole negligence of the promisee, his agents or employees, or indemnitee is against public policy and is void and unenforceable . . . .

         (Emphasis supplied).[2] In analyzing the text of OCGA § 13-8-2 (b), we have explained that an indemnification provision is void if it "(1) relate[s] in some way to a contract for 'construction, alteration, repair, or maintenance' of certain property and (2) promise[s] to indemnify a party for damages arising from that own party's sole negligence." Kennedy Dev. Co. v. Camp, 290 Ga. 257, 259 (719 S.E.2d 442) (2011) (emphasis supplied).[3]

         (a) Against this backdrop, we turn to the 1989 Easement and evaluate it under former OCGA § 13-8-2 (b). With respect to the first of the two conditions contained in former OCGA § 13-8-2 (b), the 1989 Easement that contains Paragraph 12 also gave Georgia Power a right of way

to construct, erect, install, operate, maintain, inspect, reconstruct, repair, rebuild, renew and replace thereon a substation and overhead and underground electric transmission, distribution and communication lines, with necessary or convenient towers, frames, poles, wires, manholes, conduits, transformers, switches, breakers and communication equipment, with the necessary wires, fixtures, appliances, protective wires and devices, buildings, sewers, drains, fences and other facilities in connection therewith . . . . including the right . . . to clear, grade, fill excavate, ditch and drain said substation tract.

         This language relates "to the construction, alteration, repair, or maintenance of a building structure, appurtenances, and appliances, including moving, demolition, and excavating connected therewith." Former OCGA § 13-8-2 (b). See, e.g., Newton's CrestHomeowners' Assn. v. Camp, 306 Ga.App. 207, 216 (702 S.E.2d 41) (2010) (first condition met where "although [indemnitor] did not actually construct any buildings on the subdivision property, its work consisted of, among other things, clear-cutting and grading the land, installing utility lines, and putting in streets"); see also Kennedy, 290 Ga. at 259 (noting that with respect to the first condition, Georgia courts have "consistently construed" the statute "broadly"). Moreover, Milliken admits that the 1989 Easement was requested in order to provide the electricity needed to facilitate Milliken's own construction of an addition to its new manufacturing plant in 1989. In other words, it is "relative to the construction, alteration, repair, or maintenance of a building structure, appurtenances, and appliances," as the ...


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