PRESENT: Hassell, C.J., Koontz, Kinser, Goodwyn, Millette, and
Mims, JJ., and Lacy, S.J.
UNIWEST CONSTRUCTION, INC., ET AL.
v. Record No. 091495
AMTECH ELEVATOR SERVICES, INC.,
N/K/A ABM AMTECH, INC., ET AL.
AMTECH ELEVATOR SERVICES, INC.,
N/K/A ABM AMTECH, INC., ET AL.
OPINION BY
v. Record No. 091496 JUSTICE WILLIAM C. MIMS
September 16, 2010
UNIWEST CONSTRUCTION, INC., ET AL.
FEDERAL INSURANCE COMPANY
v. Record No. 091521
AMTECH ELEVATOR SERVICES, INC.,
N/K/A ABM AMTECH, INC., ET AL.
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Marcus D. Williams, Judge
In these companion appeals we consider whether Amtech
Elevator Services, Inc., now known as ABM Amtech, Inc.,
(“Amtech”) had a contractual duty to defend and indemnify
Uniwest Construction, Inc. (“Uniwest”) in an action brought
against Uniwest by an injured Amtech employee and the estate of
a deceased Amtech employee. We also consider whether Uniwest
was insured under Amtech’s insurance policies.
I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW
A. THE CONTRACT DOCUMENTS
The Fountains at Logan Square, L.L.C. (“Fountains”)
executed a written agreement (the “Prime Contract”) with
Uniwest in August 1999 to renovate a building Fountains owned
in Philadelphia, Pennsylvania. The Prime Contract was drafted
using a form American Institute of Architects (“AIA”) document
that included AIA’s General Conditions of the Contract for
Construction (the “General Conditions”). Paragraph 3.18.1 of
the General Conditions obligated Uniwest to defend and
indemnify Fountains
[t]o the fullest extent permitted by law . . .
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
injury to or destruction of tangible property,
(other than the Work itself) including loss of
use resulting therefrom, but only to the extent
caused in whole or in part by negligent acts or
omissions of [Uniwest], a Subcontractor, anyone
directly or indirectly employed by them or
anyone for whose acts they may be liable,
regardless of whether or not such claim, damage,
loss or expense is caused in part by a party
indemnified hereunder.
The General Conditions also obligated Uniwest to “require each
Subcontractor . . . to be bound to [Uniwest] by [the] terms of
the Contract Documents, and to assume toward [Uniwest] all the
obligations and responsibilities which [Uniwest], by these
Documents, assumes toward [Fountains].”
2
The renovations set forth in the Prime Contract included
modernization of three existing passenger elevators and
installation of a new service elevator. Uniwest subcontracted
this elevator work to Amtech in March 2000 by a written
agreement (the “Subcontract”) governed by Virginia law. The
Subcontract expressly incorporated the Prime Contract “to the
extent not otherwise excluded or modified by the terms of th[e]
Subcontract.” Paragraph 3 of the Subcontract amplified this
obligation:
[Amtech] agrees to be bound to Uniwest by all
the terms of the [Prime Contract] and to assume
towards Uniwest all of the obligations and
responsibilities that Uniwest has by the [Prime
Contract] assumed toward [Fountains]. All terms
and conditions contained in the [Prime Contract]
which, by the [Prime Contract] or by operation
of law, are required to be placed in [the]
Subcontract[] are hereby incorporated herein as
if they were specifically written herein.
Additionally, Paragraph 10 of the Subcontract required
Amtech to defend and indemnify Uniwest:
[Amtech] hereby assumes entire responsibility
for any and all damage or injury of any kind or
nature whatever, including death resulting
therefrom, to all persons, whether employees of
[Amtech], its subcontractors or agents. If any
claims for such damage or injury be made or
asserted, whether or not such claim(s) are based
upon the negligence of Uniwest or [Fountains],
[Amtech] agrees to indemnify and save harmless
Uniwest from any and all such claims, and
further from any and all loss, costs, expense,
liability, damage or injury, including legal
fees and disbursements, that Uniwest may
sustain, suffer or incur as a result thereof.
3
Further [Amtech] agrees to and does hereby
assume the defense of any action at law or in
equity which may be brought against Uniwest or
[Fountains] arising by reason of such claims.
Finally, Exhibit B of the Subcontract required Amtech to
“[f]urnish and install elevator work in accordance with
‘Elevator Installation and Modernization Specifications for
Logan Square East’ as prepared by Zipf Associates, Inc.” (the
“Zipf Specifications”). The Zipf Specifications required
Amtech to “name [Uniwest] as [an] Additional Insured” to its
insurance policies or “submit a separate . . . Liability
Insurance policy” for Uniwest.
B. THE INSURANCE POLICIES
Amtech had a commercial general liability insurance policy
(the “CNA Policy”) from Continental Casualty Company
(“Continental”) with a $1,000,000 coverage limit. 1 The CNA
Policy included an errors and omissions endorsement stating:
In the event, you are required to add a person
or organization as an additional insured on this
policy under a written agreement or contract but
you inadvertently fail to issue such
endorsement, that person or organization is
included as an insured. Provided that, the
additional insured is an insured only with
respect to liability arising out of . . . your
ongoing operations performed for that additional
insured if the additional insured is an owner,
lessee or contractor for whom you are performing
1
The first $500,000 of coverage was a self-insured
retention managed by ABM Insurance Services, a division of
Amtech’s parent company, ABM Industries, Inc. We refer to ABM
Insurance Services and ABM Industries, Inc. as ABM.
4
work . . . . Provided, further, that: [t]he
additional insured is an insured only to the
extent that it is required to be indemnified by
your written agreement or contract with the
additional insured; and [t]he insurance afforded
to the additional insured shall not exceed the
coverage and the limits of insurance required in
the written agreement or contract, or the
coverage and limits of insurance of this policy,
whichever is less.
Amtech also had a commercial umbrella insurance policy
(the “AIU Policy”) from AIU Insurance Company (“AIU”) with a
$25,000,000 coverage limit. This policy insured any entities
covered by the CNA Policy by including as an insured “[a]ny
person . . . included as an additional insured in the policies
listed in the Schedule of Underlying Insurance.” 2 The Schedule
of Underlying Insurance included the CNA Policy.
The AIU Policy also included as an insured “[a]ny person
. . . to whom you are obligated by a written Insured Contract
to provide insurance such as is afforded by this policy but
only with respect to . . . liability arising out of operations
conducted by you or on your behalf . . . .” 3 The AIU Policy
defined “Insured Contract” to mean “any oral or written
contract or agreement entered into by you and pertaining to
your business under which you assume the tort liability of
another party.”
2
We refer to this provision of the AIU Policy as
Subdivision E-4.
3
We refer to this provision of the AIU Policy as
Subdivision E-7.
5
Uniwest had a general liability insurance policy from
Pennsylvania Manufacturers’ Association Insurance Company
(“PMA”) with a $1,000,000 coverage limit. Uniwest also had a
commercial umbrella insurance policy from United States Fire
Insurance Company (“U.S. Fire”) and a second tier excess policy
from Federal Insurance Company (“Federal”), each with a
$5,000,000 coverage limit.
C. THE ACCIDENT AND RESULTING LAWSUIT
Thomas Stinson and Robert Bruce were employees of Amtech
assigned to the elevator project. Stinson and Bruce were
working on a scaffold in an elevator shaft on January 15, 2001,
when the scaffold collapsed and they plummeted to the bottom of
the shaft. Stinson died and Bruce sustained serious injury.
Stinson’s estate and Bruce sued Uniwest and others in
Pennsylvania. 4
PMA, Uniwest’s principal insurer, notified Amtech that
Uniwest and PMA expected it to defend and indemnify Uniwest
against the Employees’ lawsuit. ABM retained a Pennsylvania
attorney, Richard Hohn, to determine whether the Subcontract
required it to defend and indemnify Uniwest. Hohn determined
that Paragraph 10 of the Subcontract was valid under
Pennsylvania law but noted that the Subcontract was governed by
4
We refer to Stinson’s estate and Bruce collectively as
the Employees.
6
Virginia law. He opined that the provision was valid under
Virginia law as well.
Based on Hohn’s opinion that Amtech had a duty to defend
and indemnify Uniwest, ABM directed him to negotiate the terms
of Uniwest’s defense with PMA. PMA retained its own counsel,
Joseph Gibley, for the negotiation. Thereafter ABM agreed to
defend and indemnify Uniwest “pursuant to the terms and
conditions” of the Subcontract. PMA accepted the offer and ABM
retained James Lynn to be Uniwest’s counsel with day-to-day
control of Uniwest’s defense. 5
In July 2005, ABM notified Continental and AIU that Lynn
and Hohn expected the Employees to demand damages exceeding
$20,000,000. AIU subsequently informed Lynn that it had not
joined in ABM’s agreement to defend and indemnify Uniwest. ABM
objected, contending that AIU had been informed of the accident
as early as 2001 and was aware that ABM had agreed to defend
and indemnify Uniwest for more than a year.
In November 2005, Continental informed AIU that litigation
expenses already had exhausted Amtech’s self-insured retention
and were eroding coverage under the CNA Policy. Continental
determined that the AIU Policy umbrella coverage was exposed
5
Gibley continued to represent Uniwest on claims by
Fountains against it and Amtech incidental to the Employees’
lawsuit. Hohn continued to represent Amtech to preserve its
defense that the Pennsylvania workers’ compensation statute
barred the Employees’ further recovery from it.
7
and tendered the remaining coverage under the CNA Policy to
AIU. Soon thereafter, AIU notified ABM, Lynn, and Gibley that
it considered Paragraph 10 of the Subcontract void under
Virginia law and reserved its rights under the AIU Policy,
asserting that there was no Insured Contract which required it
to cover the defense and indemnification of Uniwest. 6
Nevertheless, AIU retained Robert Devine as counsel to
participate in the defense of the Employees’ lawsuit. Although
Devine undertook some defense responsibilities in preparation
for trial, Lynn remained lead counsel for Uniwest. Lynn also
participated with Gibley in settlement conferences; Devine did
not.
By February 2006, AIU had ignored repeated demands from
ABM, Uniwest, and Uniwest’s insurers to participate in
settlement discussions and fulfill what they asserted to be its
contractual obligation to defend and indemnify Uniwest. At
that time Uniwest and its insurers settled the Employees’
claims against Uniwest for $9,500,000.
D. THE LITIGATION PRECEDING THESE APPEALS
Uniwest and its insurers filed a complaint against Amtech
and its insurers in the Circuit Court for Fairfax County in
October 2006. Uniwest and its insurers alleged, among other
6
Uniwest promptly objected to AIU and Amtech and notified
its own insurers, PMA, U.S. Fire, and Federal.
8
things, that Amtech breached its contractual duty to defend and
indemnify Uniwest in the Employees’ lawsuit. The circuit court
determined that the defense and indemnification provision in
Paragraph 10 of the Subcontract was void pursuant to Code § 11-
4.1 because it indemnified Uniwest for its own negligence.
Uniwest and its insurers then non-suited their action.
Thereafter, Amtech, ABM, and AIU filed a complaint in the
circuit court in May 2008 seeking declaratory judgment that
they were not liable to Uniwest or its insurers “in any amount
or on any basis.” Uniwest and its insurers responded by filing
counterclaims in which they again alleged Amtech had a duty to
defend and indemnify Uniwest under the Subcontract, under
either Paragraph 10 or Paragraph 3.18.1 of the General
Conditions incorporated through the Prime Contract. They
further alleged that the negotiation between Hohn and Gibley
formed an independent agreement to defend and indemnify. They
also claimed AIU had a duty to defend and indemnify Uniwest
under Subdivisions E-4 and E-7 of the AIU Policy, that AIU had
acquiesced to defending and indemnifying Uniwest by not timely
reserving its rights, and that AIU was estopped from denying
its obligation to defend and indemnify because it retained
Devine and he participated in the Employees’ lawsuit. Uniwest
and its insurers also filed third-party complaints bringing
similar claims against Continental.
9
By agreement of all parties, the circuit court entered an
order expressly incorporating its earlier ruling in the non-
suited action that Paragraph 10 was void pursuant to Code § 11-
4.1. The circuit court entered a separate order by agreement
of the parties, expressly limited to Continental, finding that
Uniwest was an additional insured under the CNA Policy. 7 It
stated that “[f]or [the] purposes of all claims asserted in
this action against [Continental] only, the [c]ourt finds that
Continental has admitted that [Uniwest] is an additional
insured under [the CNA Policy] . . . . This order is without
prejudice to any claims or defenses of any other party to this
action.”
After a five-day bench trial, the circuit court determined
that Amtech did not have a duty to defend and indemnify Uniwest
based on Paragraph 3.18.1 of the General Conditions. To the
extent the Subcontract incorporated Paragraph 3.18.1, it did so
only to place Amtech in Uniwest’s shoes with regard to
Uniwest’s duty to defend and indemnify Fountains. The court
also determined that communications between Hohn and Gibley
7
The agreed order found that the limits of the CNA Policy
had been eroded by the defense of Amtech and Uniwest by Hohn
and Lynn in the Employees’ lawsuit and by the defense of Amtech
and ABM in the litigation brought against them by Uniwest and
its insurers. To the extent those expenses exhausted the
coverage amount, Continental was discharged of further
obligation. Any unexhausted balance would be contributed to
satisfy the judgment against Amtech and ABM in this case.
10
negotiating the terms for Amtech’s defense and indemnification
of Uniwest did not create an independent agreement by Amtech to
defend and indemnify Uniwest. Rather, those communications
arose solely from Amtech’s belief at the time that it owed such
a duty based on Paragraph 10 of the Subcontract, although that
provision was in fact void pursuant to Code § 11-4.1.
Consequently, Amtech had no duty to defend or indemnify
Uniwest.
The circuit court also determined that AIU had no duty to
defend and indemnify Uniwest under either Subdivision E-4 or
Subdivision E-7 of the AIU Policy. Because there was no valid
provision requiring Amtech to defend and indemnify Uniwest,
Uniwest was not an additional insured under the CNA Policy and
Subdivision E-4 was not implicated. Likewise, in the absence
of a valid defense and indemnification provision, there was no
“Insured Contract” as defined by the AIU Policy to impose such
a duty on AIU under Subdivision E-7.
The circuit court further determined that AIU had not
acquiesced to or become estopped from denying a duty to defend
and indemnify Uniwest. Although AIU retained Devine and he
participated in the Employees’ lawsuit, there was no
acquiescence or estoppel because he merely supplemented and did
not replace Lynn as lead counsel for Uniwest. Likewise the
court held that AIU had not waived its ability to reserve its
11
rights. Because Uniwest never demanded that AIU defend and
indemnify it, the timing of AIU’s reservation of rights did not
constitute a waiver under California law, which governed the
AIU Policy.
The circuit court then determined that Amtech had a duty
to procure insurance for Uniwest because the Subcontract
incorporated the insurance requirements of the Zipf
Specifications. Amtech breached this duty by failing to add
Uniwest as an additional insured under the CNA and AIU
Policies. Accordingly, the court found Amtech liable to
Uniwest and its insurers for the $9,500,000 settlement between
Uniwest and the Employees.
The circuit court entered a final order awarding Uniwest
and its insurers $9,500,000 in compensatory damages plus
prejudgment interest. Uniwest and its insurers filed petitions
for appeal assigning error to the court’s determinations that
neither Amtech nor AIU had a duty to defend and indemnify
Uniwest. Amtech, ABM, and AIU filed a separate petition
assigning error to the determination that Amtech had a duty to
procure insurance for Uniwest and, if it did breach such a
duty, to the amount of damages awarded. We awarded these
appeals.
II. ANALYSIS
A. STANDARD OF REVIEW
12
We review the interpretation of a contract de novo. PMA
Capital Ins. Co. v. US Airways, Inc., 271 Va. 352, 357-58, 626
S.E.2d 369, 372 (2006). Thus, “we have an equal opportunity to
consider the words of the contract within the four corners of
the instrument itself.” Eure v. Norfolk Shipbuilding & Drydock
Corp., 263 Va. 624, 631, 561 S.E.2d 663, 667 (2002). However,
“[i]t is the function of the court to construe the contract
made by the parties, not to make a contract for them.” Wilson
v. Holyfield, 227 Va. 184, 187, 313 S.E.2d 396, 398 (1984).
Accordingly,
[t]he contract is construed as written, without
adding terms that were not included by the
parties. When the terms in a contract are clear
and unambiguous, the contract is construed
according to its plain meaning. Words that the
parties used are normally given their usual,
ordinary, and popular meaning. No word or
clause in the contract will be treated as
meaningless if a reasonable meaning can be given
to it, and there is a presumption that the
parties have not used words needlessly.
PMA Capital Ins. Co., 271 Va. at 358, 626 S.E.2d at 372-73
(internal quotation marks and citations omitted). In addition,
the contract is “construed as a whole. [Its] provisions are to
be harmonized when possible, [and] effect is to be given to
every stipulation when it can reasonably be done.” Virginian
Ry. Co. v. Hood, 152 Va. 254, 258, 146 S.E. 284, 285 (1929).
Nevertheless, a provision that violates public policy is
void and has no legal effect. Shuttleworth, Ruloff & Giordano,
13
P.C. v. Nutter, 254 Va. 494, 497, 493 S.E.2d 364, 366 (1997).
The public policy of the Commonwealth is determined by the
General Assembly, for “it is the responsibility of the
legislature, not the judiciary, . . . to strike the appropriate
balance between competing interests . . . . Once the
legislature has acted, the role of the judiciary is the narrow
one of determining what [it] meant by the words it used in the
statute.” Dionne v. Southeast Foam Converting & Packaging,
Inc., 240 Va. 297, 304, 397 S.E.2d 110, 114 (1990) (internal
quotation marks and citations omitted).
B. AMTECH’S DUTY TO DEFEND AND INDEMNIFY UNIWEST
Uniwest and its insurers assert that the circuit court
erred when it ruled that the defense and indemnification
requirement in Paragraph 10 of the Subcontract violated public
policy pursuant to Code § 11-4.1. We disagree.
The statute states, in relevant part, that:
Any provision contained in any contract relating
to the construction, alteration, repair or
maintenance of a building, structure or
appurtenance thereto, including moving,
demolition and excavation connected therewith,
or any provision contained in any contract
relating to the construction of projects other
than buildings by which the contractor
performing such work purports to indemnify or
hold harmless another party to the contract
against liability for damage arising out of
bodily injury to persons or damage to property
suffered in the course of performance of the
contract, caused by or resulting solely from the
negligence of such other party or his agents or
14
employees, is against public policy and is void
and unenforceable.
Code § 11-4.1.
Uniwest and its insurers argue that the statute is not
implicated because the accident was not the result of Uniwest’s
sole negligence. Rather, they contend it resulted at least
partly from Amtech’s negligence because Amtech built the
defective scaffolding and was responsible for the safety of its
employees working on the elevator project. However, the
unambiguous language of Code § 11-4.1 requires us to look to
the contract containing the provision, not the circumstances
from which the claim for indemnification arose, to determine
whether an indemnification provision violates Code § 11-4.1.
The operative language of Paragraph 10 states “If any
claims . . . be made or asserted, whether or not such claim(s)
are based upon the negligence of Uniwest or [Fountains],
[Amtech] agrees to indemnify and save harmless Uniwest from any
and all such claims . . . .” (Emphasis added.) The plain
meaning of this language clearly obligates Amtech to indemnify
Uniwest whether or not the claim is based upon the negligence
of Uniwest. These words irreconcilably conflict with the
public policy expressed in Code § 11-4.1, which voids any
contractual provision “which . . . purports to indemnify or
hold harmless [Uniwest] against liability for damage . . .
15
caused by or resulting solely from the negligence of
[Uniwest].”
Uniwest’s argument that the statute does not apply because
Paragraph 10 is written broadly enough to encompass claims
arising from the negligence of Uniwest and other parties is
unavailing. Because the phrases “caused by” and “resulting
solely from” are disjunctive in the statute, it voids any
indemnification provision that reaches damage caused by the
negligence of the indemnitee, even if the damage does not
result solely from the negligence of the indemnitee. Thus, the
issue is not whether an indemnification provision is written so
broadly that it encompasses the negligence of parties in
addition to the indemnitee. Rather, the issue is whether the
provision is so broad that it indemnifies the indemnitee from
its own negligence.
Paragraph 10 clearly reaches beyond the negligence of
other parties and indemnifies Uniwest. Therefore it violates
Code § 11-4.1 and is void. 8
8
In its separate brief, Federal argues that Code § 11-4.1
does not apply because of its language stating that it “shall
not affect the validity of any insurance contract, workers’
compensation, or any agreement issued by an admitted insurer.”
That language is irrelevant here where the question is whether
the indemnification provision of a construction subcontract is
void pursuant to Code § 11-4.1. The Subcontract is not an
insurance contract and neither Uniwest nor Amtech, the parties
who executed it, are admitted insurers.
16
Uniwest and its insurers next assert that the circuit
court erred when it found that Paragraph 3.18.1 of the General
Conditions did not obligate Amtech to indemnify Uniwest. We
agree.
The circuit court determined that to the extent Paragraph
3.18.1 was incorporated into the Subcontract its effect merely
was to require Amtech to step into the shoes of Uniwest and
indemnify Fountains. 9 The relevant language from Paragraph 3 of
the Subcontract is that “[Amtech] agrees . . . to assume
towards Uniwest all of the obligations and responsibilities
that Uniwest has by the [Prime Contract] assumed toward
[Fountains].” (Emphasis added.) The plain meaning of these
words is that Uniwest’s duty to defend and indemnify Fountains
became a duty by Amtech to defend and indemnify Uniwest.
Two other courts have reached the same conclusion when
considering similar subcontract language incorporating AIA
indemnification provisions. In Binswanger Glass Co. v. Beers
Construction Co., 234 S.E.2d 363 (Ga. Ct. App. 1977), the
subcontract required the subcontractor “to assume toward the
Contractor all the obligations and responsibilities that the
Contractor, by [the contract between the Contractor and the
Owner], assumes toward the Owner.” Id. at 364. Georgia’s
9
There is no question that Paragraph 3.18.1 required
Uniwest to indemnify Fountains.
17
Court of Appeals ruled that language sufficient to incorporate
the indemnification provision in the AIA General Conditions
against the subcontractor. Id. at 365. Similarly, in Whittle
v. Pagani Bros. Construction Co., 422 N.E.2d 779 (Mass. 1981),
the subcontract stated: “The Subcontractor agrees . . . to
assume to the Contractor all the obligations and
responsibilities that the Contractor by [its contract] assumes
to” the town awarding the construction contract. Id. at 780.
The highest court of Massachusetts held that language
incorporated the AIA General Conditions’ indemnification
provision. Id. at 781. We find these decisions persuasive and
agree with them. 10
We therefore find that the Subcontract incorporated
Paragraph 3.18.1 and hold that it imposed on Amtech a duty to
defend and indemnify Uniwest. 11
10
While the provisions of the Prime Contract applied only
“to the extent not otherwise excluded or modified by the terms
of th[e] Subcontract,” we have found that Paragraph 10 was void
ab initio. Thus, it could not have excluded or modified
Paragraph 3.18.1. Nevertheless, Amtech, ABM, and AIU now argue
that Paragraph 3.18.1 should not apply because the existence of
Paragraph 10 in the Subcontract led the parties to believe
Paragraph 3.18.1 would not apply. Even if this argument had
merit, it was not presented to the circuit court and we will
not consider it for the first time on appeal. Rule 5:25;
Hawthorne v. VanMarter, 279 Va. 566, 581, 692 S.E.2d 226, 235
(2010).
11
In light of this holding, we do not reach the argument
by Uniwest and its insurers that the negotiations between Hohn
and Gibley created an independent agreement by Amtech to defend
and indemnify Uniwest.
18
C. AIU’S DUTY TO DEFEND AND INDEMNIFY UNIWEST
Uniwest and its insurers assert that the circuit court
erred when it held that Subdivision E-4 and Subdivision E-7 did
not create a duty by AIU to defend and indemnify Uniwest. We
agree.
Subdivision E-4 requires AIU to defend and indemnify any
entity insured under the CNA Policy. 12 Under the errors and
omissions endorsement of the CNA Policy, Continental insured
any entity Amtech was required by a written agreement to
provide with insurance “to the extent that it is required to be
indemnified by [the] written agreement.” Similarly,
Subdivision E-7 requires AIU to defend and indemnify any entity
“to whom [Amtech was] obligated by a written Insured Contract
to provide insurance.” For this purpose, an “Insured Contract”
is defined as “any oral or written contract or agreement . . .
under which [Amtech] assume[d] the tort liability of another
party.”
The circuit court concluded that neither provision applied
because the Subcontract did not impose on Amtech a duty to
12
Uniwest and its insurers argue that the circuit court’s
finding that Uniwest was an additional insured under the CNA
Policy compels a finding that it was an additional insured
under Subdivision E-4. We reject that argument. The circuit
court clearly limited that finding to claims “against
[Continental] only” and expressly stated that the order was
“without prejudice to any claims or defenses of any other party
to this action.”
19
defend and indemnify Uniwest. As we have determined, that
conclusion was error because Paragraph 3.18.1 of the General
Conditions was incorporated into the Subcontract and created
such a duty.
Amtech, ABM, and AIU argue that Subdivision E-4 and
Subdivision E-7 still do not apply because Amtech had no
obligation to provide insurance to Uniwest. We disagree.
The Zipf Specifications require Amtech either to include
Uniwest as an additional insured under its existing policies or
to purchase separate insurance for Uniwest. 13 The clear
language of the Subcontract contradicts the assertions by
Amtech, ABM, and AIU that it did not incorporate the insurance
requirement in the Zipf Specifications.
As we noted, we interpret the unambiguous terms of a
contract according to their plain meaning. PMA Capital Ins.
Co., 271 Va. at 358, 626 S.E.2d at 372-73; see also Bentley
Funding Group, L.L.C. v. SK&R Group, L.L.C., 269 Va. 315, 329,
609 S.E.2d 49, 56 (2005); American Spirit Ins. Co. v. Owens,
261 Va. 270, 275, 541 S.E.2d 553, 555 (2001). In addition, we
read the contract as a whole and give effect to every provision
13
The actual term used in the Zipf Specifications is
“Construction Manager.” Although the Zipf Specifications do
not define that term, the circuit court interpreted it to refer
to Uniwest. In addition, Uniwest and Federal reiterate that
interpretation in their briefs in Record No. 091496. Amtech,
ABM, and AIU have never disputed that Uniwest is the
Construction Manager.
20
when possible. Hood, 152 Va. at 258, 146 S.E. at 285; see also
Dowling v. Rowan, 270 Va. 510, 518, 621 S.E.2d 397, 400 (2005);
American Spirit Ins. Co., 261 Va. at 275, 541 S.E.2d at 555.
Amtech, ABM, and AIU rely on our decision in VNB Mortgage
Corp. v. Lone Star Industries, Inc., 215 Va. 366, 209 S.E.2d
909 (1974), and argue that the Zipf Specifications were
incorporated only for a limited purpose. In that case we
determined that in agreeing to provide materials and perform
work in accordance with specifications incorporated in a
contract between an owner and a general contractor, a
subcontractor was bound to those specifications only for the
purpose of providing the materials and performing the work.
Id. at 369-70, 209 S.E.2d at 912-13.
While a similar provision appears in the Subcontract in
this case, it is distinguishable on two grounds. First, the
Zipf Specifications are incorporated into the Subcontract not
only by that provision’s reference to the Prime Contract but by
reference in Exhibit B as well. Moreover that provision of the
Subcontract, unlike the one in VNB Mortgage, states that the
specifications are “incorporated herein and made a part of this
Subcontract for all intents and purposes.”
Second, the Subcontract also states “[t]he attached
exhibits shall form the contract” and explicitly lists Exhibit
B. Exhibit B required Amtech to “furnish and install” its work
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“in accordance with” the Zipf Specifications. Nothing in the
plain meaning of these words limits the incorporation of the
Zipf Specifications to the technical requirements for the
elevators to the exclusion of other requirements, including the
insurance provision.
Therefore we find that both predicates of the CNA Policy
and Subdivision E-7 are met: the Subcontract required Amtech
to defend and indemnify Uniwest and to provide insurance to
Uniwest. Consequently, Uniwest was an insured under the CNA
and AIU policies. Therefore, we hold that AIU had a duty to
defend and indemnify Uniwest under both Subdivision E-4 and
Subdivision E-7. 14
D. DAMAGES
Amtech, ABM, and AIU argue that our conclusions
necessarily require that we remand for further proceedings to
determine the extent to which the accident giving rise to the
Employees’ lawsuit was caused by Uniwest’s negligence. We
agree.
As we have determined, the Subcontract does not require
Amtech to indemnify Uniwest for its own negligence. Amtech is
14
In light of this holding, we do not reach the arguments
by Uniwest and its insurers that AIU acquiesced in or is
estopped from denying a duty to defend and indemnify or waived
its ability to reserve its rights. Finally, because we find
that Uniwest is an additional insured under the AIU Policy, the
remaining arguments by Amtech, ABM, and AIU are moot.
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not liable to contribute to Uniwest’s settlement with the
Employees to the extent, if any, the accident was caused by
Uniwest’s own negligence.
Accordingly, we will remand for trial to determine the
issue of relative liability for the accident and for entry of
judgment against Amtech and AIU for compensatory damages based
upon Amtech’s relative liability. Damages shall further
include the costs of Uniwest’s defense in the Employees’
lawsuit for which Amtech and AIU are liable based on their duty
to defend it in that litigation, to the extent such costs have
not yet been paid by Amtech and its insurers.
III. CONCLUSION
We affirm the circuit court’s holding that Paragraph 10 of
the Subcontract is void against the public policy expressed in
Code § 11-4.1. However, because we hold that Paragraph 3.18.1
of the Prime Contract imposed a duty on Amtech to defend and
indemnify Uniwest and we find that Uniwest was insured under
Subdivision E-4 and Subdivision E-7 of the AIU Policy, we will
reverse the contrary rulings of the circuit court and remand
for further proceedings consistent with this opinion.
Affirmed in part,
reversed in part,
and remanded.
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