                   IN THE COURT OF APPEALS OF IOWA

                                   No. 14-1583
                             Filed October 28, 2015

UNITED FIRE AND CASUALTY
COMPANY,
     Plaintiff-Appellee,

vs.

GETHMANN CONTRUCTION
COMPANY, INC.,
     Defendant-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Linn County, Sean McPartland,

Judge.



      Defendant appeals the district court decision finding the plaintiff insurance

company had no duty to defend it in an underlying lawsuit. AFFIRMED.



      Kermit B. Anderson of Finley, Alt, Smith, Scharnberg, Craig, Hilmes &

Gaffney, P.C., Des Moines, for appellant.

      Brenda K. Wallrichs of Lederer, Weston & Craig, P.L.C., Cedar Rapids, for

appellee.



      Heard by Danilson, C.J., Potterfield, J., and Sackett, S.J.*

      *Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2015).
                                         2



SACKETT, Senior Judge.

      Defendant Gethmann Construction Company, Inc. (Gethmann) appeals

the district court decision finding United Fire and Casualty Company (United Fire)

had no duty to defend it in an underlying lawsuit. Gethmann is another insured

on a subcontractor’s policy with United Fire and United Fire has a duty to defend

where the subcontractor’s liability may be imputed to Gethmann.            After a

previous appeal the only issue remanded to the district court involves

Gethmann’s negligence, rather than the subcontractor’s negligence, and thus,

United Fire does not have a duty to defend Gethmann. We affirm the decision of

the district court granting summary judgment to United Fire.

I.    Background Facts & Proceedings

      Badger State Ethanol, L.L.C., decided to expand its ethanol plant in

Monroe, Wisconsin. It hired Gethmann as the general contractor for the project.

One of the subcontractors hired by Gethmann was American Piping Group, Inc.

(APG). APG agreed to furnish the labor and material to complete “the front end,

mill building structural steel fabrication and erection.” APG also agreed to obtain

an insurance policy that would protect both Gethmann and APG from bodily

injury claims arising from project operations and to name Gethmann as an

additional insured on the liability coverage. The contract provided:

      [APG] agrees to indemnify and save harmless [Gethmann] and
      [Badger] from any and all loss or damage . . . occasioned wholly or
      in part by any negligent act or omission of [APG] or that of anyone
      directly or indirectly employed by them or performing the work of
      this Subcontract under the direction of [APG] or anyone for whose
      acts any of them may be liable in carrying out the provisions of the
      general contract and of this Subcontract regardless of whether or
      not it is caused in part by a party indemnified hereunder.
                                         3




       APG obtained a commercial general liability insurance policy from United

Fire that included an Ultra Liability Plus Endorsement.       Under the provision

detailing, “Who is an Insured,” the policy provided:

       Any person or organization for whom you are performing operations
       when you and such person or organization have agreed in writing in
       a contract or agreement that such person or organization be added
       as an additional insured on your policy.           Such person or
       organization is an additional insured only with respect to your
       liability which may be imputed to that person or organization directly
       arising out of your ongoing operations performed for that person or
       organization. A person’s or organization’s status as an insured
       under this endorsement ends when your operations for that insured
       are completed.

The policy provided United Fire had the duty to defend an insured against a suit

seeking damages for bodily injury or property damage, but had no duty to defend

against a suit for which the insurance coverage did not apply.

       APG entered into an agreement with Trillium Staffing Solutions to provide

labor for the ethanol plant project. An employee of Trillium, Jeffrey Wheeler, was

assigned to work on the project for APG. On February 4, 2006, Wheeler fell from

the second floor of the building while working and sustained severe and

permanent injuries.

       Wheeler filed suit against APG and Gethmann alleging each company’s

negligence was the proximate cause of his injuries. United Fire assumed the

duty to defend APG and Gethmann under the terms of the insurance policy, with

a reservation of rights. United Fire stated the ultra liability plus endorsement’s

coverage was “limited to liability for APG’s negligence that may be imputed to
                                          4



Badger and/or Gethmann.”        United Fire specified that it did not provide any

coverage for Gethmann’s own negligence.

       In September 2010, Gethmann filed a motion for summary judgment,

claiming that it could not be liable for Wheeler’s injuries based on a general rule

that a contractor is not responsible for injuries caused by a subcontractor or its

employees. The district court considered the peculiar risk exception, the inherent

risk exception, the retained control exception, and the affirmative duty

(nondelegable duty) exception, and determined none applied. The court entered

a decision on November 15, 2010, concluding:

              In sum, the Court concludes as a matter of law Gethmann is
       not liable for Jeffrey’s injuries because Gethmann did not owe a
       duty for the safety of the employees on the construction site. None
       of the exceptions to the non-liability rule regarding general
       contractors apply in this case. Therefore, as a general contractor,
       Gethmann cannot be held liable for physical harm caused to Jeffrey
       by the negligence of the subcontractor or its employees.

       On August 15, 2012, Wheeler released APG and United Fire “from any

and all liability whatsoever including all claims, demands and causes of action of

every nature affecting us,” including any and all claims made by any health care

providers or any insurance subrogation claims, as a result of the incident on

February 4, 2006. Due to the release, the court entered an order on August 20,

2012, dismissing APG as a party from the lawsuit.1



1
   We note there is some confusion about the timeline in this case because some
sources have the date of the summary judgment ruling in the underlying lawsuit as
November 15, 2012, thereby putting the release before the summary judgment ruling.
This is incorrect. The district court granted summary judgment to Gethmann in the
underlying lawsuit on November 15, 2010. The release of APG occurred afterwards, on
August 15, 2012. The court’s order of August 20, 2012, dismissing APG from the lawsuit
specified that it served as a final dismissal of all matters in the case so that an
                                          5



       Wheeler appealed the district court’s decision granting summary judgment

to Gethmann, claiming the nondelegable duty and retained control exceptions to

the general rule applied. We entered a decision on May 15, 2013, reversing the

decision of the district court granting summary judgment to Gethmann and

remanding for further proceedings. Security Nat’l Bank v. Am. Piping Group,

Inc., No. 12-1466, 2013 WL 2145763 (May 15, 2013). We determined:

       [T]he defendant general contractor assumed a duty under its
       contract with the construction site owner for the safety of the
       workers. Once contractually assumed, the duty was nondelegable.
       We recognize the term nondelegable is somewhat of a misnomer,
       because the general contractor is free to delegate the duty of
       performing the task, but cannot avoid the liabilities arising from the
       delegated duties if breached.

Id. at *5 (citations omitted). We concluded, “Under its contract with Badger,

Gethmann incurred a nondelegable duty to keep the workplace safe and Wheeler

was a third-party beneficiary of that contract.”     Id. at *7.   We also stated,

“Because we find Gethmann’s contractual assumption of a nondelegable duty for

workplace safety precludes summary judgment, we need not address the

alternative exception for retained control.” Id.

       On June 27, 2013, United Fire notified Gethmann it would no longer

defend the company, stating, “We do not at this time believe that Gethmann

qualifies as an additional insured under APG’s policy with United Fire.” It stated

that APG’s liability was extinguished by the release, and asserted “it would not

appear that APG would have any liability to impute to Gethmann.” Gethmann

continued to demand that United Fire provide a defense.


appropriate appeal could be taken. Wheeler then appealed the order of November 15,
2010, granting summary judgment to Gethmann.
                                        6



      United Fire filed a petition for declaratory judgment on November 26,

2013, asking to be relieved of the duty to provide a defense for Gethmann and

seeking to recoup the costs of providing a defense to Gethmann after June 27,

2013. United Fire also asked for a determination that Gethmann was not entitled

to coverage under the policy.

      Both United Fire and Gethmann filed motions for summary judgment.

After a hearing the court granted United Fire’s motion and denied Gethmann’s

motion. The court concluded, “Wheeler’s claims against Gethmann do not seek

to make Gethmann liable for APG’s negligence imputed to Gethmann, but rather

are based on claims of Gethmann’s own negligence and contractual assumption

of a duty for ensuring workplace safety.” The court also stated, “The claims in

the petition in the underlying action, before the release of APG, may have been

construed as involving claims of APG’s liability potentially being imputed to

Gethmann, but these claims against APG, and the potential imputation of those

claims on to Gethmann, were dismissed.” The court found Wheeler’s remaining

claims against Gethmann sought to hold Gethmann liable for its own negligence,

and therefore, United Fire did not have a duty to defend or indemnify Gethmann

in the underlying action. Gethmann now appeals.

II.   Standard of Review

      “We review a district court’s summary judgment ruling that interprets an

insurance policy for correction of errors at law.” Amish Connection, Inc. v. State

Farm Fire & Cas. Co., 861 N.W.2d 230, 235 (Iowa 2015). Summary judgment

may be granted when the moving party establishes there is no genuine issue of
                                          7



material fact and it is entitled to judgment as a matter of law. Iowa R. Civ. P.

1.981(3). Summary judgment is appropriate if a conflict concerns only the legal

consequences of undisputed facts. Boelman v. Grinnell Mut. Reins. Co., 826

N.W.2d 494, 501 (Iowa 2013).          “The construction and interpretation of an

insurance policy are questions of law for the court.”            Essex Ins. Co. v.

Fieldhouse, Inc., 506 N.W.2d 772, 775 (Iowa 1993).           We review the district

court’s decision in a light most favorable to the nonmoving party. Boelman, 826

N.W.2d at 501.

III.   Duty to Defend

       An insurer’s duty to defend is broader than the insurer’s duty to indemnify.

Godfrey v. State, 847 N.W.2d 578, 587 (Iowa 2014). “This difference between

the duty to defend and the duty to indemnify ‘exists because it is impossible to

determine the basis, if any, upon which the plaintiff will recover until the action is

completed.’”   Employers Mut. Cas. Co. v. Cedar Rapids Television Co., 552

N.W.2d 639, 642 (Iowa 1996) (citation omitted).        “[T]he duty to defend rests

solely on whether the petition contains any allegations that arguably or potentially

bring the action within the policy coverage.” A.Y. McDonald Indus., Inc. v. Ins.

Co. of N. Am., 475 N.W.2d 607, 627 (Iowa 1991).

       “In determining whether there is a duty to defend, we look to the petition

and decide whether the facts alleged ‘bring the claim within the liability covered

by the policy.’” Stine Seed Farm, Inc. v. Farm Bureau Mut. Ins. Co., 591 N.W.2d

17, 18 (Iowa 1999) (citation omitted). We look at the facts at the outset of the

case, meaning those facts alleged in the petition. Employers Mut. Cas. Co., 552
                                             8



N.W.2d at 642. We look at the allegations of fact in the petition, rather than the

legal theories raised. See id.

       The factual allegations in Wheeler’s petition state: (1) on February 4,

2006, Wheeler was involved in a construction project; (2) while involved in the

construction project, Wheeler fell from a structure at the construction site; and (3)

Wheeler sustained injuries as a result of the fall.              He alleged APG was

responsible for safety on the job site and then listed several grounds in which he

believed APG acted negligently. 2         The petition also alleged Gethmann was

responsible for safety on the job site. He listed the same grounds of negligence

against Gethmann as in his claims against APG.

       After an investigation, based on the factual allegations in the petition

United Fire agreed to defend Gethmann, albeit with a reservation of rights that its

coverage was limited to liability for APG’s negligence that may be imputed to

Gethmann and it did not provide coverage to Gethmann for its own acts of

negligence. United Fire noted APG might possibly be required to assume the tort

liability of Badger or Gethmann. Thus, at the time the petition was filed United

Fire believed it had a duty to defend Gethmann because the policy arguably or

potentially contained claims that could bring the action within the policy’s

coverage for APG’s liability which could be imputed to Gethmann directly arising

out of APG’s operations performed for Gethmann. See A.Y. McDonald Indus.,

Inc., 475 N.W.2d at 627.         We conclude United Fire had a duty to defend


2
   These grounds are: (1) failing to properly train; (2) failing to maintain a safe work
environment; (3) failing to supervise; (4) failing to require usage of safety equipment; (5)
violating state and federal laws and regulations; and (6) other matters not yet known but
which might become known through discovery.
                                          9



Gethmann because the facts alleged in the petition “bring the claim within the

liability covered by the policy.” See Stine Seed Farm, Inc., 591 N.W.2d at 18.

       We turn to the issue of whether subsequent events terminated United

Fire’s duty to defend Gethmann. United Fire asserts that because of the release

and the previous court of appeals decision the only claims remaining against

Gethmann are claims of its own negligence, which are not covered by the policy.

United Fire argues there are no longer any allegations that could arguably or

potentially bring the action within the policy coverage.

       In the underlying lawsuit the district court granted summary judgment to

Gethmann, stating “as a general contractor, Gethmann cannot be held liable for

physical harm caused to [Wheeler] by the negligence of the subcontractor or its

employees.” See Lunde v. Winnebago Indus., Inc., 299 N.W.2d 473, 475 (Iowa

1980) (“The general rule is that an employer of an independent contractor is not

vicariously liable for injuries arising out of the contractor’s negligence. Although

various reasons have been suggested as the basis for this rule, the commonly-

accepted reasoning is the lack of control by the employer over the details of the

contractor’s work.”); see also Restatement (Second) of Torts § 409 (1965)

(noting that except where otherwise stated, “the employer of an independent

contractor is not liable for physical harm caused to another by an act or omission

of the contractor or his servants”).

       We reversed the grant of summary judgment to Gethmann based upon an

exception to the general rule for a nondelegable duty. See Security Nat’l Bank v.
                                          10



Am. Piping Group, Inc., No. 12-1466, 2013 WL 2145763, at *7 (Iowa Ct. App.

May 15, 2013). The Iowa Supreme Court has stated:

              Where public interest or some statutory prohibition is not
       involved, generally contracts exempting parties from liability for
       their own negligence are not against public policy. However, “[o]ne
       who owes, and is personally bound to perform, an absolute and
       positive duty to the public or an individual cannot escape the
       responsibility of seeing that duty performed by delegating it to an
       independent contractor, and will be liable for injuries resulting from
       the contractor’s negligence in the performance thereof, whether the
       duty is imposed by law or by contract . . . .”
              “In some circumstances duties may devolve upon an
       employer which he cannot delegate to another, and in such cases
       the employer is liable for breach or nonperformance of such duties
       even though he employs an independent contractor to do the work.”
              “Where one person owes another a contractual duty to act,
       the law imposes upon the person owing that duty the further duty of
       acting with due care in the performance of his contract so as not to
       injure the contractee’s person or property.               This duty is
       nondelegable. That is, the performance of the contract may be
       delegated to another, but this delegation does not relieve the
       contractor of the duty to act, or of his duty to act with due care.”

Giarratano v. Weitz Co., 147 N.W.2d 824, 831-32 (Iowa 1967) (citations omitted)

(emphasis added), abrogated on other grounds by Van Fossen v. MidAmerican

Energy Co., 777 N.W.2d 689, 694 n. 6 (Iowa 2009); see also Farris v. Gen.

Growth Dev. Corp., 354 N.W.2d 251, 254-55 (Iowa Ct. App. 1984) (discussing

nondelegable duty).     We conclude the exception pertains to a party’s own

negligence, not to whether a party may be liable for the negligence of another.3



3
   A concise statement of this exception is found in Iowa Civil Jury Instruction 500.6,
Liability Of Person Engaging Services Of Independent Contractor – Nondelegable Duty
Imposed by Statute, Ordinance Or Contract:
                Persons who hire an independent contractor and who are under a
         duty to provide specified safeguards or precautions for the safety of
         others by [statute] [ordinance] [contract] cannot escape responsibility by
         delegating it to an independent contractor.
                ...
                                          11



       This is also the reasoning in our previous opinion, stating, “where a

contract imposes responsibility on the general contractor for the safety of the

employees of the subcontractor, the general contractor may not escape the

responsibility of seeing that duty performed by delegating it to an independent

contractor.”   Security Nat’l Bank, 2013 WL 2145763, at *2. We stated, “the

defendant general contractor assumed a duty under its contract with the

construction site owner for the safety of the workers.            Once contractually

assumed, the duty was nondelegable.” Id. at *5. We concluded, “Under its

contract with Badger, Gethmann incurred a nondelegable duty to keep the

workplace safe and Wheeler was a third-party beneficiary of that contract.” Id. at

*7.

       We conclude the case was remanded based on a finding that Gethmann

had a contractual duty to provide a safe workplace, which was nondelegable, and

the only issue presented is whether Gethmann negligently exercised that duty. 4

Thus, the issue is whether Gethmann was negligent, not whether Gethmann may

be liable for APG’s negligence. APG’s insurance policy with United Fire provided

United Fire had the duty to defend an insured against a suit seeking damages for

bodily injury or property damage, but had no duty to defend against a suit for




               A violation of this duty is negligence.
The instruction cites Giarratano, 147 N.W.2d 824, and Restatement (Second) of Torts
§ 424 (Precautions Required by Statute or Regulation).
4
   As an aside we note that while the issue of the retained control exception was raised
in the previous appeal, we expressly did not address that issue. Security Nat’l Bank,
2013 WL 2145763, at *7. The district court granted summary judgment to Gethmann on
the issue of the retained control exception and that ruling was not reversed on appeal.
Thus, the only issue present on remand is that arising from the nondelegable duty
exception.
                                      12



which the insurance coverage did not apply. The policy provided coverage for

“[APG’s] liability which may be imputed to [Gethmann] directly arising out of

[APG’s] ongoing operations performed for [Gethmann].” Because the only issue

on remand involves Gethmann’s negligence, rather than APG’s negligence,

United Fire does not have a duty to defend Gethmann. In addition, after the

release APG does not have any liability that could be imputed to Gethmann.

      We affirm the decision of the district court granting summary judgment to

United Fire.

      AFFIRMED.
