In June 2001, Lanier at McEver, L.P. “Lanier”, a large construction developer, retained Planners and Engineers Collaborative, Inc. “PEC”, a civil engineering firm, to design a storm-water drainage system for a 220-unit apartment complex Lanier was constructing. In the contract for services, Lanier and PEC agreed to the following clause:In recognition of the relative risks and benefits of the project both to Lanier and PEC, the risks have been allocated such that Lanier agrees, to the fullest extent permitted by law, to limit the liability of PEC and its sub-consultants to Lanier and to all construction contractors and subcontractors on the project or any third parties for any and all claims, losses, costs, damages of any nature whatsoever, or claims expenses from any cause or causes, including attorneys’ fees and costs and expert witness fees and costs, so that the total aggregate liability of PEC and its subconsultants to all those named shall not exceed PEC’s total fee for services rendered on this project. It is intended that this limitation apply to any and all liability or cause of action however alleged or arising, unless otherwise prohibited by law. After the apartment building was completed, Lanier discovered erosion and other physical damage which an expert attributed to PEC’s negligent design of the storm-water drainage system. Lanier has spent $250,000 in repairs to the system thus far and expects to spend a total of $500,000 by the time repairs are complete. To recoup its damages, Lanier sued PEC for negligent construction of the drainage system, breach of contractual warranty and litigation expenses. In response, PEC filed a motion for partial summary judgment, seeking to invoke the parties’ agreement and limit its liability for any damages owed to Lanier to $80,514, which was PEC’s total fee for services. The trial court granted PEC’s motion for partial summary judgment and the Court of Appeals affirmed. Lanier at McEver, L.P. v. Planners & Engineers Collaborative, Inc. , 285 Ga. App. 411 646 SE2d 505 2007. We granted Lanier’s petition for certiorari to determine whether the limitation of liability clause in the parties’ construction contract violates Georgia’s public policy. Because the clause violates Georgia’s public policy as set forth in OCGA § 13-8-2 b, we reverse. 1. “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 an agreement is prohibited by statute. . . .” Smith v. Seaboard Coast Line R. Co. , 639 F2d 1235, 1239 5th Cir. 1981. At the time the parties entered into their contract in June 2001, OCGA § 13-8-2 b provided as follows: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, provided that this subsection shall not affect the validity of any insurance contract, workers’ compensation, or agreement issued by an admitted insurer.The purpose of OCGA § 13-8-2 b “is to prevent a building contractor, subcontractor, or owner from contracting away liability for accidents caused solely by his negligence, whether during the construction of the building or after the structure is completed and occupied.” Smith v. Seaboard Coast Line R. Co. , 639 F2d at 1242. Under the statute, a provision in an agreement whereby a building contractor purports to waive liability for property damages allegedly resulting from the sole negligence of the contractor’s agents or employees is void and unenforceable.” Borg-Warner Ins. Finance Corp. v. Executive Park Ventures , 198 Ga. App. 70, 71 400 SE2d 340 1990.
2. Georgia law defines indemnity as “the obligation or duty resting on one person to make good any loss or damage another has incurred by acting at his request or for his benefit.” Holmes v. Clear Channel Outdoor, Inc. , 284 Ga. App. 474, 477 644 SE2d 311 2007.1 Although the clause at issue in this case does not exculpate PEC from all monetary liability, it is an indemnity as defined above and as prohibited by OCGA § 13-8-2 b, particularly regarding claims for which PEC may be solely negligent for injuries to third parties i.e., members of the public who are not agents or construction subcontractors of Lanier or PEC. This is because the clause applies to “any and all claims” by third parties and shifts all liability above the fee for services to Lanier no matter the origin of the claim or who is at fault. Thus, while a third party is not precluded from suing PEC for any negligent actions in constructing the storm-water drainage system, the clause at issue here allows PEC to recover any judgment amount entered against it from Lanier once the $80,514 threshold has been surpassed, including judgment amounts on third-party claims for which PEC is solely negligent.
