In an action for indemnification brought by the lessor of a trash compactor against the lessee, whose employee was injured by the compactor, summary judgment was correctly entered against the lessor, where the lease agreement contained no indemnity provision and where the lessor's trash collection invoice, which did contain indemnity language on its reverse side, did not operate to modify the contract, either under the Uniform Commercial Code or under common law principles. [593-595]
CIVIL ACTION commenced in the Superior Court Department on September 4, 1987.
A motion for partial summary judgment on the third-party claim was heard by Robert H. Bohn, Jr., J., and entry of separate and final judgment was ordered by him.
Marc LaCasse (Marjorie O. Dresser with him) for P&T Container Service Co., Inc.
Bryan C. Bolden for Crusader Paper Co., Inc.
GILLERMAN, J. Seeking a shorter path to a coffee truck on the premises of Crusader Paper Co., Inc. (Crusader), the plaintiff Magliozzi, an employee of Crusader, walked through the inside of a large trash compactor leased to Crusader by P&T Container Co. Inc. (P&T), under a written lease agreement. Magliozzi's foot caught in the compactor, he was injured, and he brought suit against P&T, which was the owner, manufacturer, and installer of the compactor. P&T, in turn, brought a third-party action
against Crusader for indemnification of any costs for which P&T might be liable to the employee based upon an alleged contract of indemnification between Crusader and P&T. [Note 1] Crusader's motion for summary judgment on the third-party complaint was allowed on the basis that there was no valid contract of indemnification between the parties, and a separate and final judgment under Mass.R.Civ.P. 54(b), 365 Mass. 821 (1974), was entered in its favor. [Note 2] P&T appeals, and we affirm.
The agreement between Crusader and P&T appears in a letter dated November 3, 1983. It is in the form of an offer to lease a two cubic yard compaction unit with a forty-two to forty-five yard closed container for the disposal of rubbish at Crusader's facility, as well as an offer to provide the service of emptying the container. The monthly rental for the compactor is $282, and the charge for the pickup and dumping of the container is $175 per load. The letter contains various specifications, but there are none of the provisions commonly found in a lease of equipment or in an agreement to perform service. Of particular importance is the fact that there is no indemnity agreement in the letter running in favor of P&T. Nonetheless, the parties do not now dispute the fact that the November 3 letter was a binding agreement between them.
It is also undisputed that in order to bill for the pickup and dumping services P&T prepared a pickup ticket. The pickup ticket comes into play in the following manner. Crusader would contact P&T in order to empty a compactor of its rubbish. P&T would then generate a standard form "pickup order ticket," in triplicate, with a pickup number and a description of the number of containers to be emptied and dumped. A driver of P&T would empty the compactor and obtain the signature of a Crusader employee on the face of
the pickup ticket. The driver would keep two copies and leave a copy with the Crusader employee; P&T would later staple a copy of the pickup ticket to Crusader's invoice for the services performed.
There is no language on the face of the ticket calling attention to, or referring in any way to, the reverse side of the ticket, nor is there any such reference on P&T's invoice to Crusader. On the reverse side of the pickup ticket, however, an indemnity provision is printed, [Note 3] and that provision is the basis of the claim of P&T against Crusader.
P&T asks us to treat this case as a "battle of the forms" under art. 2 of the Uniform Commercial Code, arguing that the indemnification clause became an additional term of the contract because Crusader did not object to the term within a reasonable period of time. G. L. c. 106, Section 2-207(2)(c). Crusader responds that art. 2 does not apply to leases.
We need not decide whether art. 2 applies to the lease at issue in this case [Note 4] because the only relevant consideration is whether there was a valid amendment to the November 3 agreement. Under the analogous provision of art. 2, see Dazien's, Inc. v. Hodgman Rubber Co., 7 Mass. App. Ct. 901 (1979) (UCC applied by analogy), and under the common law, the conclusion is the same: in the circumstances presented here, the pickup ticket did not modify the completed contract between the parties. [Note 5]
The principles expressed in G. L. c. 106, Section 2-207, provide no assistance to P&T because those provisions bear on the formation of a contract. See 2 Anderson, Uniform Commercial Code Section 2-207:5, at 273 (3d ed. 1982). Thus, for example, where a "definite and seasonable" acceptance contains additional terms, those additional terms, as between merchants, may become part of the contract under Section 2-207(2) unless precluded by subdivisions (a), (b) or (c) of that section. Here, it is undisputed that P&T's letter of November 3 was a completed contract between the parties, and we may assume that the compactor was installed, in place, and in use for Crusader's refuse before the first pickup ticket was cut by P&T. Once agreement has been reached and performance has commenced, Section 2-207 does not operate to make additional terms that are proposed unilaterally in a later writing part of the complete agreement. Lorbrook Corp. v. G&T Indus., Inc., 162 A.D.2d 69, 73 (1990). See also 2 Anderson, Uniform Commercial Code Section 2-207:5, at 272-273 ("When a written contract is formed based on a purchase order, a later writing does not call UCC Section 2-207 into operation") and Section 2-209:17, at 323-324 ("When a sales contract has been made, the seller cannot unilaterally modify the contract by adding in the invoice a term, such as a term requiring that payment be made at a particular and different place").
The result is no different under common law principles. Generally, it is a question of fact whether a party intended to relinquish contractual rights by entering into a subsequent agreement. Roddy & McNulty Ins. Agency, Inc. v. A.A. Proctor & Co., 16 Mass. App. Ct. 525 , 536 (1983). An inference of assent is not warranted, however, where the subsequent writing (1) is used for other purposes -- here, the acknowledgment of a refuse pickup: (2) does not purport to be a contract and is not contractual in form; and (3) gives no notice whatsoever of proposed additional terms which are not visible on the face of the writing. In these situations, the
"party without knowledge or reason to know that the . . . [pickup ticket] purports to be a contract is then not bound by terms printed on the [ticket]." Restatement (Second) of Contracts Section 211 comment d & illustration 3 (1979). See also Kergald v. Armstrong Transfer Express Co., 330 Mass. 254 , 255-256 (1953), and cases cited. Contrast Polonsky v. Union Fed. Sav. & Loan Assn., 334 Mass. 697 , 701 (1956) (conditions in bank book are part of contract whether or not brought to the attention of depositor because it is common knowledge that bank books "frequently contain provisions defining the rights between the bank and its depositors").
In sum, there is nothing, save the words of indemnification printed on the back of the refuse pickup tickets, to give notice that P&T was extending an offer to modify the existing contract for Crusader's assent. As matter of law, Crusader was not bound by the indemnity clause. Were we to hold otherwise we would sanction an "unsuccessful ploy by . . . [P&T] unilaterally to add a term not covered by the preexisting binding contract." Lorbrook Corp. v. G&T Indus., Inc., 162 A.D.2d at 73. There is no genuine issue as to any material fact, and Crusader is entitled to judgment as matter of law. Flesner v. Technical Communications Corp., 410 Mass. 805 , 808-809 (1991).
[Note 1] "[A] third-party tortfeasor may recover indemnity from an employer only if the employer had expressly or impliedly contracted to indemnify the third party or if the employer and the third party stand in a relationship that carries with it the obligation to indemnify the third party." Liberty Mut. Ins. Co. v. Westerlind, 374 Mass. 524 , 526 (1978).
[Note 2] The employee's suit is not before us. The Superior Court docket indicates that the parties stipulated to a dismissal based on a settlement.
[Note 3] The relevant portion of the indemnity reads as follows: "The customer agrees to defend, indemnify and hold harmless P&T Container from and against any and all claims for loss or damage to property, or injury to or death of person or persons resulting from or arising in any manner out of customer's use, operation or possession of the equipment furnished under the agreement."
[Note 4] While the Legislature has amended G. L. c. 106, Section 2-318, by St. 1973, c. 750, so that under Sections 2-314 and 2-318 a warranty of merchantability is implied in the lease of goods, the Legislature has not amended the scope of c. 106, Section 2-102, to include leases within all of art. 2's provisions. See Back v. Wickes Corp., 375 Mass. 633 (1978); Mason v. General Motors Corp., 397 Mass. 183 (1986).
[Note 5] The judge below treated the indemnity clause as though it were a disclaimer of warranties, holding that the indemnification clause was not a part of the contract because it was not conspicuous. See Hunt v. Perkins Mach. Co., 352 Mass. 535 (1967); G. L. c. 106, Section 2-316. We may, however, affirm on grounds not relied on by the judge. See Aetna Cas. & Sur. Co. v. Continental Cas. Co., 413 Mass. 730 , 734-735 (1992).