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PacifiCorp v. Jacobsen Construction Co. Inc.

United States District Court, D. Utah, Central Division

May 29, 2019

PACIFICORP, an Oregon corporation, Plaintiff,
v.
JACOBSEN CONSTRUCTION COMPANY, INC., a Utah Corporation, Defendant.

          MEMORANDUM DECISION AND ORDER

          DALE A. KIMBALL United States District Judge.

         This matter is before the court on Defendant Jacobsen Construction Company, Inc.'s Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court held a hearing on the Motion on May 2, 2019. At the hearing, Defendant was represented by Julianne P. Blanch and Alan S. Mouritsen, and Plaintiff was represented by Rick L. Rose and Kristine M. Larsen. The court took the matter under advisement. The court considered carefully the memoranda and other materials submitted by the parties, as well as the law and facts relating to the Motion. Now being fully advised, the court issues the following Memorandum Decision and Order granting Defendant's Motion to Dismiss.

         BACKGROUND

         PacifiCorp is an Oregon corporation with its principal place of business in Portland, Oregon and does business in Utah under the name Rocky Mountain Power. PacifiCorp is the successor in interest to Utah Power & Light (“UPL”). Jacobsen Construction Company, Inc. (“Jacobsen”) is a Utah corporation with its principal place of business in Salt Lake City, Utah. In the 1970s, Jacobsen was part of a joint venture known as Jelco-Jacobsen with Jelco Incorporated. In 1972, UPL hired and entered into a contract (the “Contract”) with Jelco- Jacobsen[1] to build a power plant complex (the “Huntington Plant”) in Emery County, Utah. UPL hired Jacobsen to be the general contractor for the Huntington Plant, which included the responsibility of organizing, planning, managing, directing, and scheduling the Huntington Plant's construction work. Pursuant to the Contract, Jacobsen was in charge of hiring all subcontractors, technical workers, and laborers. Additionally, Jacobsen had the responsibility of establishing and maintaining the Huntington Project Safety Program to ensure that Jacobsen and its subcontractors were in compliance with state and federal safety standards, including the Williams-Steiger Occupational Safety and Health Act (“OSHA”), as well as implementing protocols to prevent accidents and injuries to employees. To fulfill these obligations, Jacobsen employed a full-time safety engineer to make daily tours of the jobsite to check for any unsafe working conditions.

         Among other things, the Contract contained indemnification provisions in which Jacobsen was required to indemnify UPL (now PacifiCorp) against any and all claims, liabilities, obligations, and causes of action for injury to or death of any person. For example, § II.11 of the Contract provides:

[Jacobsen] agrees to indemnify [PacifiCorp] and the Engineer against and hold [PacifiCorp] harmless from any and all claims, liabilities, obligations, and causes of action of whatsoever kind or nature for injury to or death of any person . . . resulting from any and all acts or omissions of [Jacobsen] . . . in connection with the performance of the work covered by this contract. [Jacobsen] agrees that the public liability . . . insurance . . . which [Jacobsen] is required to maintain pursuant to Article INSURANCE hereof shall cover the obligations set forth above.

         Similarly, § II.29 of the Contract states:

C. [Jacobsen] shall comply with all Federal . . . rules and regulations governing safety and the safe performance of the work, including but not limited to, all applicable provisions of [OSHA].
[. . .]
E. [Jacobsen] agrees to indemnify and hold harmless [PacifiCorp] and Engineer from and against any and all claims, liabilities, obligations and causes of action of whatsoever kind or nature as a result of failure to comply with the above safety requirements.

         Moreover, pursuant to § II.12 of the Contract, Jacobsen was required to (1) procure and maintain a comprehensive liability policy to cover bodily injury and death with limits of $1, 000, 000 and $4, 000, 000 for claims arising out of Jacobsen's work on the Huntington Plant and (2) name UPL as an insured.

         In April 2016, a man named Larry Boynton (“Boynton”) sued PacifiCorp as the successor in interest to UPL (the “Boynton Action”). Boynton contends that he was exposed to asbestos while working at the Huntington Plant, and that his wife, Barbara Boynton, died as a result of her exposure to the hazardous asbestos fibers on Boynton's work clothes that he brought home after working. Boynton further asserts that, among other things, PacifiCorp failed to (1) provide him with a safe work environment; (2) provide him with industrial hygiene measures that would have prevented the transportation of asbestos fibers home on his clothing; and (3) warn him of the dangers of asbestos. As such, Boynton asserted claims for strict liability, negligence, and loss of consortium. Boynton claims to have been employed by Jacobsen as an electrician working at the Huntington Plant in 1973. On April 18, 2017, PacifiCorp tendered the Boynton Action to Jacobsen, but Jacobsen has not accepted PacifiCorp's tender.

         In July 2018, a man named Kyle Zoellner (“Zoellner”), individually and on behalf of his deceased father's estate and heirs, filed an asbestos lawsuit (the “Zoellner Action”) against PacifiCorp. Like the Boynton Action, Zoellner alleges that PacifiCorp failed to provide his father, Max Zoellner, with a safe work environment such that he was exposed to hazardous levels of asbestos that ultimately caused his death. Zoellner claims that his father was employed by Jacobsen as an electrician and worked at the Huntington Plant during its construction. PacifiCorp also tendered the Zoellner Action to Jacobsen, but Jacobsen has declined to accept that tender.

         PacifiCorp filed the instant suit on December 6, 2018, asserting breach of contract and requesting declaratory relief. Specifically, PacifiCorp alleges that under the indemnification provision of the Contract, Jacobsen is obligated to indemnify and hold harmless PacifiCorp, as successor in interest to UPL, from the claims and damages alleged in the Boynton and Zoellner Actions. PacifiCorp also avers that Jacobsen was obligated to obtain an insurance policy to cover any and all causes of action arising under the Contract's indemnification provision. Accordingly, PacifiCorp claims that Jacobsen and/or its insurer is obligated to provide a defense to PacifiCorp and pay for all legal costs, including attorneys' fees and costs, incurred in defending the Boynton and Zoellner Actions. Because Jacobsen has refused such obligations, PacifiCorp asserts ...


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